Rogers v. Meiser, 96,885.

• Decision Date: 04 February 2003
• Docket Number: No. 96,885.,96,885.
• Citation: 977 Okla 2003,68 P.3d 967,2003 OK 6
• Parties: Steven M. ROGERS and Ellen M. Rogers, Husband and Wife, Plaintiffs/Petitioners, v. Charles A. MEISER and Barbara S. Meiser, Husband and Wife, Defendants/Respondents.
• Court: Oklahoma Supreme Court

68 P.3d 967

2003 OK 6

977 Okla 2003

Steven M. ROGERS and Ellen M. Rogers, Husband and Wife, Plaintiffs/Petitioners, v. Charles A. MEISER and Barbara S. Meiser, Husband and Wife, Defendants/Respondents.

No. 96,885.

Supreme Court of Oklahoma.

February 4, 2003.

Rehearing Denied May 8, 2003.

Edward O. Lee and Cara Jenkins Raney, Edmond, OK, for Plaintiffs/Petitioners.

Timothy A. Mitchell, Edmond, OK, and Libby A. Mercer, Bethany, OK, for Defendants/Respondents.

LAVENDER, J.:

¶ 1 Plaintiffs, Steven M. and Ellen M. Rogers purchased a house from defendants, Charles A. and Barbara S. Meiser. After experiencing flooding problems they sued defendants for common law actual fraud and violation of the Residential Property Condition Disclosure Act (RPCDA), 60 O.S.Supp. 1995, § 831 et seq. (now O.S.2001).¹ Their petition sought rescission of the purchase contract, restoration of all monies paid by them, and actual and punitive/exemplary damages. The RPCDA allows recovery of actual damages for violation of its provisions (including the cost of repairing the defect), but excludes an exemplary damage recovery. § 837(B).

¶ 2 Upon defendants' motion, the trial court, in effect, dismissed any theory of liability and any remedy not arising under or permitted by the RPCDA on the basis that Act abrogated/supplanted any such theory or remedy, which would include the common law actual fraud claim pled by plaintiffs.² The trial judge certified his order for immediate appeal and we previously granted plaintiffs' quest for certiorari to review the certified interlocutory order. We reverse because the RPCDA, neither expressly nor by necessary implication, can be held to have been legislatively intended to supplant/abrogate a common law actual fraud claim anchored on alleged misrepresentations concerning material defects in residential real property made in connection with its sale, or the remedies associated with such a claim, including the potential of a punitive damage award.

PART I. STANDARD OF REVIEW.

¶ 3 The first impression question before us is one of law because its resolution will come from interpretation of the RPCDA to decide if that Act can be held to have been legislatively intended to supplant/abrogate a common law actual fraud claim and the remedies available upon proof of such a claim. A legal question involving statutory interpretation is reviewed de novo, i.e. by a non-deferential, plenary and independent examination of the trial court's legal ruling. Samman v. Multiple Injury Trust Fund, 2001 OK 71, ¶ 8 and f.n. 5, 33 P.3d 302, 305 and f.n. 5.

PART II. BACKGROUND.

¶ 4 The pertinent allegations of plaintiffs' trial court petition follow. In 1999 plaintiffs and defendants entered into a written contract for the purchase and sale of residential real property located in Edmond, Oklahoma. During the period of their ownership defendants experienced repeated and heavy flooding of the residential structure and defendants tried to stop the flooding problems by installing a small french drain system and a barricade on the property's east boundary. The repairs were inadequate to cure the flooding problems and defendants knew the repairs were inadequate, having experienced flooding after the repairs were completed. In order to deceive plaintiffs, defendants deliberately concealed the nature and scope of the flooding problems during the pre-sale negotiations by, among other devices, stating on a disclosure statement that, although the property had experienced flooding, it had been repaired.

¶ 5 The real estate purchase contract and a residential property condition disclosure statement form are attached to the petition. The latter bears Mr. Meiser's signature and that of both plaintiffs as having received a signed copy. Questions numbered 5 and 6 on the form, which are answered yes, ask: "[a]re you aware of water seepage or leakage in any of the improvements on the property[]" and "[h]as the property been damaged or affected by flood, storm run-off, sewer backup, drainage or grading problems?" In part of the form allowing explanation of a "yes" answer this hand-written language appears: "# 5 & # 6 storm run off on East Side of home repaired by retaining wall, sidewalk and french drain about 3 years ago".³

¶ 6 Plaintiffs' petition also alleges they bought the property believing the flooding had been repaired, but after the purchase the property flooded on numerous occasions. They assert the cost to stop the flooding will exceed $10,000.00. They also claim defendants' conduct was fraudulent, deceitful, willful and intentional. The petition seeks the contract's rescission and restoration of all monies paid by them, including funds sufficient to discharge their liability on the note and mortgage used to pay the balance of the purchase price.⁴ An in personam judgment against defendants for actual damages in excess of $10,000.00 and punitive damages in excess of $10,000.00 is also sought.⁵ ¶ 7 Defendants moved to dismiss any theory of liability or remedy not brought under or allowed by the RPCDA.⁶ In effect, they asserted (as on appeal) any theory or remedy beyond that specified in or allowed by the RPCDA's provisions is supplanted or abrogated by that Act; and that the RPCDA provides the sole and exclusive civil remedy for failure to disclose information concerning defects associated with the sale of residential real property or for providing inaccurate information in connection with a defect.⁷ Plaintiffs argued in the trial court (as on appeal) that no language in the RPCDA can legitimately be interpreted to exhibit a legislative intent to abrogate the common law fraud claim raised in their petition or to limit the remedies for such fraud normally available at common law, including the potential for a recovery of punitive damages.⁸ The trial judge, agreeing with defendants, dismissed any theory or remedy not arising under or allowed by the RPCDA and he certified his order for immediate appeal. We previously exercised our discretion to review the order and now hold the trial judge erred.⁹

PART III. ANALYSIS.

¶ 8 The RPCDA was passed in 1994, effective July 1, 1995 [1994 Okla Sess. Laws, Ch.198, § 10 (West)], and has since remained unchanged.¹⁰ We must decide if the Legislature intended the RPCDA to abrogate or supplant the common law actual fraud claim and the potential exemplary damage recovery pled in plaintiffs' suit. The question needs resolution because the RPCDA precludes a punitive damage award for its violation [§ 837(B)—as already noted], while in certain statutorily-defined circumstances such damages are recoverable in a common law actual fraud case. 23 O.S.Supp. 2002, § 9.1.¹¹ Under § 9.1 punitive damages are allowed (assuming the statutorily-designated level of proof is shown) where a defendant has acted: 1) in reckless disregard for the rights of others [§ 9.1(B)], 2) intentionally and with malice toward others [§ 9.1(C)], or 3) intentionally and with malice, while at the same time engaging in conduct life-threatening to humans [§ 9.1(D)]. There is no doubt a common law claim for actual fraud is a type of claim that holds the potential for properly falling under one or more of the specified provisions of § 9.1. See Z.D. Howard Company v. Cartwright, 1975 OK 89, 537 P.2d 345

(recognizing punitive damages may be recovered where a defendant has engaged in wanton, malicious and intentional fraudulent acts).

¶ 9 The common law remains in force in Oklahoma unless modified by our constitution, statutes, judicial decisions and the conditions and wants of the people.¹²Brown v. Founders Bank and Trust Co., 1994 OK 130, 890 P.2d 855, 863. A presumption favors preservation of common law rights [Satellite System, Inc. v. Birch Telecom of Oklahoma, Inc., 2002 OK 61, ¶ 7, 51 P.3d 585, 588] and the common law may not be abrogated by mere implication; rather, its alteration must be clearly and plainly expressed by the Legislature. Greenberg v. Wolfberg, 1994 OK 147, 890 P.2d 895, 900. Also, an ambiguous, doubtful or inconclusive legislative text is insufficient upon which to rest a presumption of an intent to abrogate. Tate v. Browning-Ferris, Inc., 1992 OK 72, 833 P.2d 1218, 1225. Only by express language or by necessary implication may legislative abrogation be found. Roxana Petroleum Co. v. Cope, 1928 OK 442, 269 P. 1084, 1085 Third Syllabus by the Court; see also National Trailer Convoy, Inc. v. Oklahoma Turnpike Authority, 1967 OK 15, 434 P.2d 238, 244

(citing Roxana Petroleum Co. v. Cope for proposition that valuable right existing by virtue of common law will not be abrogated by a subsequent statute which does not expressly or by necessary implication destroy such previously existing right). Implied abrogation of a common law right will only be found where a statute is enacted which undertakes to cover the entire subject treated and is clearly/unmistakably designed as a substitute for the common law or where the common law and statutory law are so repugnant that both in reason may not stand or coexist. Nicholas v. Baldwin Piano Co., 71 Ind.App. 209, 123 N.E. 226 (1919).

¶ 10 We also note a distinction exists, in terms of an exclusivity resolution, between the situation where a court is considering the question of whether there has been legislative abrogation of an existing common law right and one where a statutory enactment appears to create both a new right and a new remedy. See Tate v. Browning-Ferris, Inc., supra, 833 P.2d at 1225

-1226 and f.n.36. When an enactment imposes some new duty and fashions a remedy for the enforcement of a new right, the statutorily-designated remedy may be deemed the exclusive means by which a breach of the new right becomes redressible. Id. at f.n. 36, 833 P.2d 1218; see Alfe v. New York Life Ins. Co., 1937 OK 243, 67 P.2d 947; Ewing v. Cadwell, 1925 OK 751, 247 P. 665; Lavery v. Brigance, 1925 OK 702, 242 P. 239. In the latter situation, of course, no common law right was...