Osterhaus v. Toth, 97,847.

Decision Date11 March 2011
Docket NumberNo. 97,847.,97,847.
Citation291 Kan. 759,249 P.3d 888
PartiesJason L. OSTERHAUS, Appellant,v.Jean Betty Toth, et al., and Jeffrey S. SCHUNK & TopPros Real Estate, Inc., Appellees.
CourtKansas Supreme Court
OPINION TEXT STARTS HERE

[249 P.3d 891 , 291 Kan. 759]

Syllabus by the Court

1. Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. The trial court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. On appeal the court applies the same rules, and where the court finds that reasonable minds could differ as to the conclusions drawn from the evidence, summary judgment must be denied.

2. A defendant is entitled to summary judgment if the defendant can establish the absence of evidence necessary to support an essential element of the plaintiff's case.

3. The legal effect of a written instrument is a question of law. It may be construed and its legal effect determined by the appellate court regardless of the construction made by the trial court.

4. The primary rule for interpreting written contracts is to ascertain the parties' intent. If the terms of the contract are clear, the intent of the parties is to be determined from the language of the contract without applying rules of construction.

5. A cardinal rule of contract construction requires the court to construe all provisions together and in harmony rather than in isolation.

6. Interpretation of a statute is a question of law; the appellate court standard of review is unlimited. Accordingly, when determining a question of law, the appellate court is not bound by the trial court's interpretation of a statute.

7. When construing a statute, a court should give words in common usage their natural and ordinary meaning.

8. Points raised only incidentally in a party's brief but not argued in the brief are deemed abandoned.

9. Under the facts of this case, where the buyer of a home had a professional inspection performed before closing on the house but the inspection failed to disclose latent defects in the house, the reasonableness of the buyer's inspection was a question of fact that could not be decided on a motion for summary judgment.

10. Under the facts of this case, the district court erred in granting summary judgment to defendants on plaintiff's claims of deceptive and unconscionable acts under the Kansas Consumer Protection Act, K.S.A. 50–623 et seq. , fraud, fraud by silence, negligent misrepresentation, and breach of contract.

James E. Kiley, Jr., of The Kiley Law Firm, LLC, of Overland Park, argued the cause and was on the briefs for appellant.Thomas S. Busch, of Holman, Hansen and Colville, P.C., of Overland Park, argued the cause and was on the briefs for appellees Jean Betty Toth and Toth Trust. John W. Nitcher, of Riling, Burkhead and Nitcher, Chtd., of Lawrence, argued the cause and was on the briefs for appellees Jeffrey S. Schunk and TopPros Real Estate, Inc.Robert S. Caldwell, of Caldwell & Moll, L.C., of Overland Park, was on the brief for amicus curiae Reece & Nichols Realtors, Inc.

The opinion of the court was delivered by NUSS, J.:

This case arises out of the sale of a home which was later discovered to have structural flaws. Jason Osterhaus, a first-time home buyer, brought an action against the seller (Jean Betty Toth), Toth's real estate agent (Jeffrey Schunk), and Schunk's company (TopPros Real Estate, Inc.). Osterhaus alleged deceptive and unconscionable acts under the Kansas Consumer Protection Act (KCPA), K.S.A. 50–623 et seq. , fraud, fraud by silence, negligent misrepresentation, and breach of contract. The district court granted summary judgment to defendants on all claims. The Court of Appeals majority reversed. Toth's and Schunk's separate petitions for review were granted by this court; our jurisdiction is under K.S.A. 20–3018(b).

The parties' issues on appeal, and our accompanying holdings, are as follows:

1. Did the district court err in granting summary judgment for defendants based upon McLellan v. Raines, 36 Kan.App.2d 1, 140 P.3d 1034 (2006), and Osterhaus' signature on the buyer acknowledgment and agreement? Yes.

2. Did the “as is” and release provisions in the form amendment bar Osterhaus' claim for breach of contract? Remand for factual findings.

3. Were Osterhaus' claims for fraud and negligent misrepresentation barred by the 2–year limitations period in K.S.A. 60–513(a)(3)? Remand for factual findings.

4. Were Osterhaus' claims against Toth for violation of the KCPA barred because Toth was not a “supplier” under the provisions of the Act? Remand for factual findings.

5. Did the district court err in granting summary judgment on the fraudulent misrepresentation claim under the Brokerage Relationships in Real Estate Transactions Act? Remand for factual findings.

6. Did the district court err in failing to rule on Osterhaus' motion for leave to amend his petition? Remand for factual findings.

7. Were Osterhaus' claims based on fraud barred because they are identical to those he made for breach of contract? Remand for factual findings.

8. Did the Court of Appeals err in failing to sustain the district court's grant of summary judgment to TopPros because it did not exist until 20 months after the contract between Osterhaus and Toth closed? Abandoned.

9. Did the Court of Appeals err in failing to dismiss the breach of contract claim against Schunk on the grounds that he was not a party to the contract? Abandoned.

Accordingly, we affirm the Court of Appeals panel and remand to the district court for further proceedings.

Factual and Procedural Background

Mark and Cathy Ross sold their Overland Park home to Jean Toth in the spring of 2001. Prior to the sale, the Rosses completed a “Seller's Disclosure” statement which indicated they had experienced cracks in the foundation, wall movement, and water in the basement. In March 2001, Mark showed the house to Toth. He discussed with her cracks in the basement walls, movement of the foundation walls, and repairs the Rosses made. Toth was “very concerned” about water leakage and said she would have the property inspected.

A few days later Toth had the home inspected. The inspection revealed hairline cracks in the foundation walls. But Toth proceeded with the purchase, and the sale closed in May 2001. After Toth's purchase, she called the Rosses on several occasions to ask questions about the property or to seek their assistance. In September 2001, after a heavy rain, Toth called the Rosses and complained of water in her basement. She told Mark that she had hired a foundation inspector who determined that the “sheetrock on the interior wall near the west foundation wall of the house had buckled because the west foundation had shifted inward.” Toth showed Mark the buckled sheetrock wall and asked him how to fix the water problem. At Mark's suggestion, Toth purchased fill dirt which Mark placed around the foundation exterior.

Toth put the house on the market the following spring. That July, she signed an exclusive listing contract with “TopPros Real Estate—Broker Jeff Schunk.” Schunk had Toth complete a form captioned “Seller's Disclosure–Statement of Condition” (disclosure statement). It stated in paragraph 2, under “Seller's Instructions”:

SELLER agrees to disclose to BUYER all material defects, conditions and facts known to SELLER which may materially affect the value of the property. This disclosure statement is designed to assist SELLER in making these disclosures. The listing broker, the selling broker and their respective agents will rely on this information when they evaluate, market and present the Seller's property to prospective Buyers.” (Emphasis added.)

Despite Toth's experience during the past year with the house's foundation walls, cracks and movement, and basement water, and her knowledge of the Rosses' similar experience before that, in paragraph 8 Toth answered “No” to the following questions regarding the “Structural, Basement and Crawl Space Items”:

“Are you aware of:

(a) Any movement, shifting, deterioration, or other problems with walls, foundations, crawl space or slab?

(b) Any cracks or flaws in the walls, ceilings, foundations, concrete slab, crawl space, basement floor or garage?

(c) Any water leakage or dampness in the house crawl space or basement?

....

(h) Any repairs or other attempts to control the cause or effect of any problem described above? (Emphasis added.)

The disclosure statement then provided that [i]f any of the answers in this section are ‘Yes', explain in detail. When describing repairs or control efforts, describe the location, extent, date, and name of the person who did the repair or control effort and attach any inspection reports, estimates or receipts.” Despite Mark's fill dirt control efforts, they were not described. Nor was a copy attached of a report of Toth's foundation inspector regarding the sheetrock buckling or movement of the foundation's west wall. A handwritten notation did provide, however, that “north garage wall moved 1”, it has been repaired.”

In response to paragraph 15 of the disclosure statement, captioned “Other Matters,” Toth denied awareness of things such as fire damage and landfill/underground problems. She then answered “no” to the question asking, “Are you aware of any other conditions that may materially and adversely affect the value or desirability of the property?” (Emphasis added.)

Also on that disclosure statement, in...

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