Lester v. Bird

• Decision Date: 08 July 1991
• Docket Number: No. A91A0157,A91A0157
• Citation: 408 S.E.2d 147,200 Ga.App. 335
• Parties: LESTER et al. v. BIRD et al.
• Court: Georgia Court of Appeals

Page 147

408 S.E.2d 147

200 Ga.App. 335

LESTER et al. v. BIRD et al.

No. A91A0157.

Court of Appeals of Georgia.

July 8, 1991.

Martin D. Chitwood & Associates, Martin D. Chitwood, Craig G. Harley, Atlanta, for appellants.

Scott & Quarterman, Russell T. Quarterman, Bradley S. Wolff, Atlanta, Martin L. Fierman, Eatonton, for appellees.

POPE, Judge.

Plaintiffs/appellants Jess C. Lester and Debra E. Lester appeal the trial court's directed verdict for defendants/appellees on their claims against defendants stemming from insect damage to the subject property.

In 1984, defendant Dorothy L. Bird n/k/a Dorothy L. Bird Moon in contemplation of selling her home in Buckhead, Georgia, ordered a termite inspection of the property. That inspection revealed prior termite infestation and the need for termite treatment, which was performed. In 1986, Bird listed her property for sale with defendant Madison Realty, through its agent, Elizabeth Prior. At the time of the listing, Bird gave to Prior a document she had received from the company that performed the termite treatment in 1984. The undisputed evidence showed that both Prior and Bird thought that document was a "termite bond."

After Madison Realty was unsuccessful in selling the property over a period of several months, Bird removed it from the market. Bird then relisted the property with Madison Realty through Prior in 1988. Later that year, Bird also employed defendant Crown Auctions, Inc., to market and auction the property in conjunction with Madison Realty.

A friend of plaintiffs told them about the auction of the property. Plaintiffs first looked at the property the Sunday before the property was auctioned the following Saturday. Before plaintiffs obtained the property at auction, they visited it three times. Plaintiffs did not employ a professional inspector to inspect the property either before plaintiffs purchased it at auction or during the more than 40-day period after plaintiffs had signed the sales contract but before the closing occurred. During plaintiffs' visits to the property before the auction, plaintiffs performed walk-through inspections of the property, but did not attempt to examine the crawl space area underneath the house, because plaintiffs testified at trial that it was either boarded or bricked closed. Plaintiffs further testified that they did not examine the crawl space area of the house because Prior and/or Dan Jackson, agent of Crown Auctions, assured them that there was no termite damage and no reason to examine that area.

Plaintiffs testified that at the auction they received a brochure on the property. In that brochure in a section titled "Real Estate Bidder Information," the brochure contained the following caveats: "All information contained in the brochure was derived from sources deemed to be correct, but is not guaranteed.... ALL PROPERTIES SELL AS IS.... CROWN AUCTION AND ITS AGENTS ARE REPRESENTING THE SELLERS IN ALL TRANSACTIONS." Plaintiffs were the successful bidders at auction. The sales contract signed that day warranted only that the seller would transfer good and marketable title to the purchaser. The sales contract did not contain any provision or contingency relating to termite inspection and treatment that would allow plaintiffs to cancel the sales contract.

At the closing of the property, Bird made available to the plaintiffs an official Georgia wood infestation inspection report prepared by Cleary Pest Control, Inc., the same company that had inspected and treated the property in 1984. The report given to the plaintiffs at closing stated that there was no active infestation of subterranean termites, powder post beetles, wood boring beetles, dry wood termites or wood decaying fungus, but said that their inspection revealed previous infestations of subterranean termites and powder post beetles. The report also stated that the property had been treated for subterranean termites and powder post beetles on January 4, 1989, six days before the closing. ¹ Plaintiffs became concerned about the purchase and unsuccessfully attempted to contact their attorney before proceeding with the closing. When plaintiffs were informed by Prior and Jackson that the contract did not contain a provision that would allow them to refuse to close based upon the termite inspection report that they received, plaintiffs decided to close on the property.

Shortly after purchasing the property, plaintiffs hired a contractor to remodel the kitchen. When the contractor began his work, he discovered substantial termite damage in the property. In the course of the work, it was also discovered that portions of the house were propped up with wood, stacks of stones and bricks, and railroad ties. Plaintiffs also discovered that the property was not serviced by a septic tank or by the well located on the property as had been represented to them by Prior and/or Jackson.

Plaintiffs filed suit against defendants Bird, Madison Realty and Crown Auctions on May 8, 1989. In the complaint, plaintiffs asserted claims against the defendants for fraud, conspiracy to defraud, and negligent misrepresentation. On July 27, 1990, plaintiffs amended their complaints to add a claim for mutual mistake. A jury trial was conducted in this case on July 30 and 31, 1990.

After the plaintiffs presented their evidence, the trial court encouraged the parties to settle their claims and a satisfactory settlement was reached on the claims stemming from the well. Although it appeared at trial that a settlement had been reached concerning the septic tank as well, because the trial court's ruling on that claim did not conform to the evidence, as it purported to do, that claim is still unsettled. The trial court directed a verdict for the defendants on all claims arising from insect damage on the property. Plaintiffs appeal the directed verdict on their claims stemming from insect damage to the property and seek to have this court either reform the settlement concerning the septic tank to the evidence or remand it to the trial court for resolution.

1. The court will first address whether the trial court properly granted a verdict for defendants on all plaintiffs' claims against them stemming from insect damage to the property. A directed verdict is proper when "there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom, shall demand a particular verdict...." OCGA § 9-11-50(a). "On appeal from an order directing a verdict, the question before this court is whether the evidence was without conflict as it pertains to the material issues in the case and, thus, when viewed in a light most favorable to the losing party, demanded the verdict ordered." Aldridge v. Dixie, etc., Co., 223 Ga. 130, 131, 153 S.E.2d 723 (1967).

As to their claim based on mutual mistake, plaintiffs allege that when defendant Bird and plaintiffs entered into the contract they all thought that the property was free from termite damage, therefore, the sales contract was the product of mutual mistake of fact. The undisputed evidence showed that as early as 1984, Bird knew that her home had to be treated for certain wood destroying insects. The evidence also showed that because she had treated her home in 1984 for subterranean termites and...