Nesbitt v. Frederick

• Decision Date: 05 May 2006
• Docket Number: 1040060.
• Citation: 941 So.2d 950
• Parties: Johnny F. NESBITT and Jan Nesbitt v. Charlie FREDERICK, Jr., et al.
• Court: Alabama Supreme Court

941 So.2d 950

Johnny F. NESBITT and Jan Nesbitt v.Charlie FREDERICK, Jr., et al.

1040060.

Supreme Court of Alabama.

May 5, 2006.

COPYRIGHT MATERIAL OMITTED

Carl E. Chamblee, Jr., of Chamblee, Malone & Associates, L.L.C., Birmingham, for appellants.

Mark D. Hess and John H. McEniry IV of Haskell Slaughter Young & Rediker, LLC, Birmingham, for appelleesCharlie Frederick, Jr., and Jo Anne Frederick.

Harold A. Bowron III and C. Peter Bolvig of Hall, Conerly & Bolvig, P.C., Birmingham, for appelleesAnn McNew and McNew Appraisal Services.

SMITH, Justice.

The plaintiffs below, Johnny F. Nesbitt and Jan Nesbitt, appeal from a summary judgment in favor the of the defendantsCharlie Frederick, Jr., and Jo Anne Frederick on the Nesbitts' claims alleging fraudulent misrepresentation and fraudulent suppression, and in favor of the defendantsAnne McNew and McNew Appraisal Services (hereinafter collectively "McNew") on the Nesbitts' claims alleging negligent, reckless, and innocent misrepresentation.

I.Factual Background and Procedural History

In 1987, the Fredericks built a one-story house with an unfinished basement.The house was designed so that "backfill" or dirt covered the rear of the house to the height of the basement.Charlie Frederick testified that during construction a backhoe operator started "backfilling" one of the basement walls before the concrete blocks had "set."The backfilled material applied pressure to the wall, causing it to tilt slightly.To remedy the problem, the contractor installed a series of angle iron braces against the interior basement wall.

In 2000, the Fredericks decided to sell their house.They listed it with Veronica Stephens, a licensed real-estate agent.Around October 2000, the Nesbitts, who were interested in buying a house, and their realtor, Janice Johnsey, viewed the Fredericks' house.The Nesbitts viewed the house four times before ultimately purchasing the house, the last visit being the "walk through" immediately before the closing.

The Nesbitts first viewed the house in October 2000.The Nesbitts testified that they were immediately impressed with the house and that they did not notice any problems with its structural stability.When the Nesbitts were in the basement, Johnny saw the braces, and he asked Johnsey to find out why the braces had been installed.Johnny testified that Johnsey later told him that the braces had been installed when the house was built.Johnny also testified that this was the only information Johnsey gave him about the braces.Johnny could not say with certainty when he received this information, but he said that it was possible that it was before his second visit to the house.Johnsey testified that she telephoned Stephens after discussing the braces with Johnny.Johnsey testified that Stephens told her that the braces were installed "in homes like that" and that they were "just added reinforcement."Johnsey also testified that she"believed"she relayed this information back to Johnny.Stephens testified that she spoke with Johnsey about the braces and that she told Johnsey that the braces "were put there as a precautionary measure ... just to reinforce."

The Nesbitts' second visit to the house occurred the weekend after the first visit.In addition to Johnsey, the Nesbitts brought the following people with them to view the house: Brian Nesbitt, their adult son; Don Mathews, a friend of the Nesbitts and a paint contractor; and Janice Johnsey's husband.Johnny testified that he brought these people to view the house in order to get their opinion about the house.Each person that viewed the house on that visit indicated that he or she was satisfied with its condition.The Nesbitts visited the house a third time to discuss purchasing the Fredericks' television and entertainment center.

On November 27, 2000, the Nesbitts made a written offer to purchase the Fredericks' house.¹On December 1, 2002, the Fredericks and the Nesbitts entered into a contract pursuant to which the Fredericks would sell their house to the Nesbitts for $160,000.The following portions of the sales contract entered into between the Nesbitts and the Fredericks are relevant to the issues raised in this appeal:

"10.NECESSITY OF INSPECTION: Buyer acknowledges and agrees that Alabama law imposes a duty on Buyer to thoroughly inspect a property, for defects or otherwise, in accordance with the terms of this contract and prior to closing the sale.Buyer further acknowledges and agrees that he/she is aware that professional inspection services and/or contractors may be engaged for this purpose and that RealtySouth[²] and its sales associates strongly recommend the use of such professionals ....After closing of this sale, all conditions of the property are the responsibility of the purchaser.

"11.CONDITION OF THE PROPERTY: Neither seller nor broker nor any sales associate makes any representations or warranties regarding condition of the property except to the extent expressly set forth herein.Buyer has the obligation to determine any and all conditions of the property material to Buyer's decision to buy the property, including but not limited to, ... the roof and basement, including leaks therein; ... construction materials and workmanship; [and] structural condition....Note: Lenders and/or public authorities may require certain investigations such as termite and septic tank inspections (for which repairs may be required), BUT THIS DOES NOT REPLACE BUYER'S DUTY TO THOROUGHLY INSPECT THE PROPERTY PRIOR TO CLOSING.

"(A) Buyer agrees to accept the property in `AS IS' condition, including ordinary wear and tear to the closing.Seller gives no warranties on any systems or appliances being in good working order either now or at the time of closing and in consideration for this sales price, Buyer accepts total responsibility for all repairs, improvements, and/or defects in the property.Walk-through will be to determine only that no further deterioration other than ordinary wear and tear has occurred.

"(B) Buyer has inspected the property, either personally or through others of Buyer's choosing, and, without relying on any representation or warranty from Seller or Broker or any sale associate or any printed or written description of the property, accepts the property in its present `AS IS' condition, including ordinary wear and tear to closing, except that Seller agrees to (1) deliver the heating, cooling, plumbing, electrical systems and built-in appliances in normal operating condition at the time of closing ....

"12.WALK-THROUGH INSPECTION: Buyer has the right and the responsibility to walk through and inspect the property prior to closing and notify Seller immediately if the property is not in the condition agreed under [`B'].This inspection is intended only to verify that the terms of Paragraph 11 have been met.If the Buyer fails to conduct this inspection, Seller's repairs and maintenance obligations will be deemed fulfilled....After closing, all conditions of the property are the responsibility of the Buyer.

"....

"21.ENTIRE AGREEMENT: This contract constitutes the entire agreement between Buyer and Seller regarding the property, and supersedes all prior discussions, negotiations and agreements between the Buyer and Seller, whether oral or written.Neither Purchaser, Seller, Broker, nor any sales associate shall be bound by any understanding, agreement, promise, or representation concerning the property, expressed or implied, not specified herein."

(Capitalization and other emphasis in original.)

The Nesbitts applied for a mortgage loan with Countrywide Home Loans, Inc.("Countrywide"), to pay for a portion of the purchase price.Countrywide contracted with McNew to conduct an appraisal of the house.McNew appraised the house and prepared an appraisal report, dated January 28, 2001, estimating the value of the house to be $160,000.The appraisal report stated that the appraisal was prepared to provide an estimate of the market value of the house and that it was not an opinion of the structural condition of the house.³

The Nesbitts visited the house a fourth time before the closing to conduct a "final walk-through."The Nesbitts visited the house with Johnsey and their son, Brian.Johnny testified that he was satisfied with the condition of the house after inspecting it during the final walk-through.The Nesbitts decided not to hire a professional home inspector to inspect the house before closing.

On April 6, 2001, the Nesbitts closed on the house.The Nesbitts allege that after they moved into the house, they began to notice structural problems.The Nesbitts hired David Carlysle, a home inspector, to perform a professional inspection of the house.Carlysle's inspection report states that there is evidence of the "foundation wracking forward" and evidence indicating that various cosmetic repairs had been undertaken in an attempt to correct the structural problems.

On June 26, 2002, the Nesbitts sued the Fredericks in the Jefferson Circuit Court, alleging fraudulent misrepresentation, fraudulent suppression, and negligence.The claims were based on the Nesbitts' allegation that the Fredericks failed to disclose a structural defect in the basement foundation wall where the braces were located and that this defect had caused the house to shift, resulting in structural problems.On December 3, 2002, the Nesbitts amended their complaint to add McNew as a defendant.The amended complaint alleged that in the appraisal report McNew misrepresented the condition of the house.

The Fredericks filed a motion for a summary judgment on May 26, 2004, and McNew filed a motion for a summary judgment on May 28, 2004.The trial court granted both motions, and the Nesbitts appealed.

II.Standard of Review

The standard of review for the grant or denial of a summary-judgment motion is as follows:

"`We review this casede novo, applying the oft-stated principles...