Schnell v. Gustafson, 80CA0879
| Decision Date | 24 December 1981 |
| Docket Number | No. 80CA0879,80CA0879 |
| Citation | 638 P.2d 850 |
| Parties | James G. SCHNELL and Ann H. Schnell, Plaintiffs-Appellants, v. Velmar O. GUSTAFSON and Barbara Lee Gustafson, and Homequity, Inc., Defendants-Appellees. . I |
| Court | Colorado Court of Appeals |
Duncan & Chew, Rick Chew, Durango, for plaintiffs-appellants.
Hamilton, Hamilton, Shand & McLachlan, P. C., E. B. Hamilton, Jr., Durango, for defendants-appellees.
Contending that the jury was improperly instructed, the plaintiffs, Schnells, appeal a judgment entered on a jury verdict in favor of the defendants, Gustafsons. We reverse and remand for a new trial.
The Gustafsons owned a home in Durango, Colorado. In 1973, they received a letter from the Colorado Department of Health informing them that radioactive uranium mine tailings had been found under their home and recommending that corrective measures be taken. The Gustafsons did nothing to correct the situation.
On June 2, 1975, Mr. Gustafson was informed by his employer that he was to be transferred out of state. He was also told that the employer provided a service to employees being transferred to minimize financial difficulties they might encounter in selling a home. Under this policy, a corporation, Homequity, Inc., would purchase the home of an employee being transferred. Pursuant to that policy, the Gustafsons and Homequity negotiated, and on July 16, 1975, agreed on a sales price. On August 14, 1975, their transaction was closed by the Gustafsons receiving their money and delivering to Homequity a deed signed in blank. The Gustafsons continued to reside in the home until they moved to Mr. Gustafson's new job site.
A week after the closing, on August 21, 1975, the Schnells were brought to the Gustafsons' home by a real estate agent with whom Homequity had listed the property. While the Schnells viewed the home, the Gustafsons answered various questions asked them. It was the Schnells' understanding that they were buying the home from the Gustafsons. Following another visit to the home, during which additional conversation took place between the parties, the Schnells contracted to buy the home. The portion of the contract listing the name of the seller was left blank. After that time the Schnells contacted the Gustafsons and made arrangements to store furniture in the home until the closing. When the closing took place, on September 9, 1975, the Schnells' names were inserted in the blank deed previously signed by the Gustafsons, and delivery of that deed was made. On one settlement document Homequity was listed as the seller while on another the Gustafsons were listed as sellers.
In the spring of 1976, the Schnells were notified by representatives of the Colorado Department of Health of the uranium tailing condition. They then filed suit against the Gustafsons and Homequity, alleging fraud and deceit. After suit was filed the Schnells sold the home, disclosing the uranium tailing problem, allegedly for $15,000 less than the established market value for similar homes not built on uranium tailings.
The evidence was undisputed that the Gustafsons informed neither the Schnells nor Homequity, Inc., of the existence of the uranium mine tailings. Homequity was dismissed early in the trial for this reason. There was no doubt but that the Gustafsons knew of the uranium mine tailing problem. The trial court instructed the jury as follows:
The Schnells objected to this instruction at trial, and it is the focal point of this appeal. By this instruction the court was telling the jury that unless there was a direct contractual relationship between the Gustafsons and the Schnells, as buyer and seller, the Gustafsons had no duty to disclose this latent defect to the...
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