Lucero v. Van Wie

• Decision Date: 11 August 1999
• Docket Number: No. 20787.,20787.
• Citation: 1999 SD 109,598 N.W.2d 893
• Parties: Marilyn Clark LUCERO, Plaintiff and Appellant, v. Lila VAN WIE, Defendant and Appellee.
• Court: South Dakota Supreme Court

598 N.W.2d 893

1999 SD 109

Marilyn Clark LUCERO, Plaintiff and Appellant, v. Lila VAN WIE, Defendant and Appellee.

No. 20787.

Supreme Court of South Dakota.

Considered on Briefs June 1, 1999.

Decided August 11, 1999.

Rehearing Denied September 9, 1999.

Reed C. Richards of Richards and Richards, Deadwood, South Dakota, Attorneys for plaintiff and appellant.

Timothy J. Vander Heide of Bakewell, Vander Heide & Witt, Custer, South Dakota Attorneys for defendant and appellee.

AMUNDSON, Justice.

[¶ 1.] Marilyn Clark Lucero (Lucero) appeals from the trial court's order granting partial summary judgment¹ in favor of Lila Van Wie (Van Wie). The trial court determined that the property disclosure provisions of SDCL 43-4-38 through SDCL 43-4-44 were waived by the parties freely negotiated contract which provided the property was to be purchased "as is." We affirm.

FACTS

[¶ 2.] Van Wie lived in a rural area outside of Custer, South Dakota, on approximately 82 acres of property. Lucero and Van Wie were close personal friends. Lucero would frequently visit Van Wie at her residence and, on occasion, spend the evening. Throughout the term of this friendship, Lucero frequently expressed a desire to purchase the property when Van Wie was ready to sell.²

[¶ 3.] In 1996, the parties entered negotiations for the sale of the property. Ultimately, a purchase price of $240,000³ was decided upon. An offer and purchase agreement was signed by the parties. Subsequently, the parties signed a contract for deed for the sale of the property. Both the offer and purchase agreement and the contract for deed contained a clause providing that the property was purchased "as is." The "as is" clause provided:

The buyer acknowledges that she has examined the premises and the same are in satisfactory condition and they accept the property in the "as-is" condition, and agree to keep the property and all improvements thereon in a good state of good repair subsequent to closing and throughout the term of this Contract for Deed.

Lucero acknowledges, not once, but twice having read these clauses and having been provided an opportunity to inspect the premises.⁴

[¶ 4.] Prior to closing on the property, Lucero entered the premises and began remodeling and repairing the residence. As the remodeling and repairing of the residence continued, Lucero claims to have encountered unanticipated repairs. The total cost expended for repairing and fixing the premises amounted to approximately $32,510.39.

[¶ 5.] Lucero brought an action seeking reimbursement for repairs, claiming Van Wie was liable for these costs due to her failure to provide a disclosure statement pursuant to SDCL 43-4-37 through 43-4-44. The trial court denied Lucero's claim, concluding the contractual provisions in the contract for deed, which provided that the property was purchased "as is," waived statutory disclosure requirements. Lucero's sole issue on appeal is whether statutory disclosure requirements (SDCL 43-4-37 through 43-4-44) can be waived through a contractual provision which provided that the property was to be purchased "as is."

STANDARD OF REVIEW

[¶ 6.] The issue on appeal raises a question of statutory interpretation. The construction and application of statutes are reviewed de novo, with no deference to the trial court. LPN Trust v. Farrar Outdoor Advertising, Inc., 1996 SD 97, ¶ 8, 552 N.W.2d 796, 798 (citing In re Estate of Pierce, 531 N.W.2d 573, 575 (S.D.1995); Muhlenkort v. Union County Land Trust, 530 N.W.2d 658, 660 (S.D.1995)). "Since there are no factual issues in this case, summary judgment will be affirmed if the trial court correctly decided the legal issues presented." Ward v. Midcom, Inc., 1998 SD 10, ¶ 9, 575 N.W.2d 233, 236 (citing Weiss v. Van Norman, 1997 SD 40, ¶ 9, 562 N.W.2d 113, 115 (citations omitted)).

DECISION

[¶ 7.] Whether parties can waive statutory disclosure requirements through a contract providing that the property was to be purchased "as is."

[¶ 8.] Lucero cites this Court's decision in Engelhart v. Kramer, 1997 SD 124, 570 N.W.2d 550, as determinative of the present issue. However, Engelhart is not determinative. While in Engelhart, we held that a disclosure statement must be given in good faith, we did not address whether under the statutory scheme such disclosure statements could be waived through a party's freely entered and negotiated contract. 1997 SD 124, ¶ 12, 570 N.W.2d at 553. In the present case, a disclosure statement was not completed. Instead, the parties entered into a freely negotiated contract, which contained an "as is" clause. The "as is" clause provided that the buyer acknowledged she had been provided an opportunity to inspect the premises and had so inspected and accepted the property "as is." We now address whether a party to a private transaction can contractually waive entitlement to a real estate disclosure statement as contemplated by statute. We conclude that nothing in the statutory framework precludes that possibility.

[¶ 9.] SDCL 43-4-38 provides in relevant part: "The seller of residential real property shall furnish to a buyer a completed copy of the disclosure statement before the buyer makes a written offer." This disclosure shall be made "in good faith." SDCL 43-4-41; Engelhart, 1997 SD 124, ¶ 10, 570 N.W.2d at 552. However, SDCL 43-4-42 provides that transfer is not invalidated for failure to comply with these disclosure statutes. SDCL 43-4-42 provides:

A transfer that is subject to §§ 43-4-37 to 43-44, inclusive, is not invalidated solely because a person fails to comply with §§ 43-4-37 to 43-4-44, inclusive. However, a person who intentionally or who negligently violates §§ 43-4-37 to 43-4-44, inclusive, is liable to the buyer for the amount of the actual damages and repairs suffered by the buyer as a result of the violation or failure. A court may also award the buyer costs and attorney fees. Nothing in this section shall preclude or restrict any other rights or remedies of the buyer.

[¶ 10.] In applying legislative enactments, we must accept them as written. South Dakota Subsequent Injury Fund v. Casualty Reciprocal Exchange, 1999 SD 2, ¶ 17, 589 N.W.2d 206, 209. This Court has frequently stated:

While it is fundamental that we must strive to ascertain the real intention of the lawmakers, it is equally fundamental that we must confine ourselves to the intention as expressed in the language used. To violate the rule against supplying omitted language would be to add voluntarily unlimited hazard to the already inexact and uncertain business of searching for legislative intent.

Id.; Delano v. Petteys, 520 N.W.2d 606, 608 (S.D.1994) (quoting In re Famous Brands, Inc., 347 N.W.2d 882, 884-85 (S.D. 1984)). Finding no language within the statutory framework precluding the possibility of waiving the furnishing of a disclosure statement, we refuse to supply omitted language to achieve such result. Therefore, we conclude that under the statutory framework, waiver is not precluded.⁵

[¶ 11.] However, this does not end the inquiry. In order to decide whether waiver is allowable, we must determine whether private or public interests are at issue. "Anyone may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement." Loughrin v. Superior Court, 15 Cal.App.4th 1188, 1193, 19 Cal.Rptr.2d 161, 163 (1993) (quoting Cal. Civ.Code § 3513 (West 1998)). See also, Tunkl v. Regents of University of California, 60 Cal.2d 92, 32 Cal.Rptr. 33, 39, 383 P.2d 441 (1963). See also, Kobbeman v. Oleson, 1998 SD 20, ¶ 22, 574 N.W.2d 633, 640 (concluding statute of limitations could not be waived because of the combined private and public interests involved).

[¶ 12.] In addressing the issue whether the disclosure requirements and the waiver thereof involved public or private interests, the California Court of Appeals in Loughrin v. Superior Court, 15 Cal. App.4th 1188, 1193, 19 Cal.Rptr.2d 161, 163 (1993) stated:

A transaction involving the public interest is one...which exhibits some or all of the following characteristics:

It concerns a business of a type generally thought suitable for public regulation. The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. Finally as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents. Tunkl v. Regents of University of California, 60 Cal.2d 92, 32 Cal.Rptr. 33, 37-38, 383 P.2d 441 (1963).

[¶ 13.] Considering the facts of the present case, we determine none of the characteristics for creating a "public interest" exist in this private real estate purchase and sale transaction. See Loughrin, 15 Cal.App.4th at 1193, 19 Cal.Rptr.2d at 163. This is not a case where property was listed by a real estate broker and there was no opportunity to negotiate the price. Further, this does not involve a contract of adhesion where a real estate broker attempted to include an exculpatory clause in a contract. Loughrin, 15 Cal. App.4th at 1194, 19 Cal.Rptr.2d at 164 n. 2. Quite the contrary, in the present case, the...