Shimmons v. Mortgage Corp. of America

• Court: Court of Appeal of Michigan
• Writing for the Court: PER CURIAM
• Citation: Shimmons v. Mortgage Corp. of America, 520 N.W.2d 670, 206 Mich.App. 27 (Mich. App. 1994)
• Decision Date: 21 June 1994
• Docket Number: Docket No. 151398
• Parties: Steven B. SHIMMONS, Plaintiff-Appellant, v. MORTGAGE CORPORATION OF AMERICA, Defendant-Appellee.

Page 670

520 N.W.2d 670

206 Mich.App. 27

Steven B. SHIMMONS, Plaintiff-Appellant, v. MORTGAGE CORPORATION OF AMERICA, Defendant-Appellee.

Docket No. 151398 Court of Appeals of Michigan.

Submitted May 4, 1994, at Lansing.

Decided June 21, 1994, at 9:00 a.m.

Released for Publication Sept. 8, 1994.

Cline, Cline & Griffin by Timothy H. Knecht, Flint, for plaintiff.

Sotiroff Abramczyk & Rauss, P.C. by Lawrence A. Tower and Edward S. Toth, Bingham Farms, for defendant.

Before HOOD, P.J., and MARK J. CAVANAGH and TEEPLE, ^* JJ.

PER CURIAM.

In this case alleging fraudulent omission, plaintiff appeals as of right from the trial court's order granting summary disposition in favor of defendant. We reverse and remand.

Plaintiff, Steven B. Shimmons, purchased a house "as is" from defendant, Mortgage Corporation of America. Before the sale, the Grand Blanc Township Building Department had inspected the house, declared it uninhabitable, and issued to defendant a repair notice and order. Defendant did not advise plaintiff of the existence of the repair notice and order.

Plaintiff alleged that the cost of rehabilitating the house to comply with the repair notice and order was considerably greater than it otherwise would have been.

The trial court granted summary disposition to defendant, finding it had no duty to disclose that the house had been deemed uninhabitable. This appeal followed.

A plaintiff may allege fraudulent concealment even where the purchase agreement includes an "as is" clause. Clemens v. Lesnek, 200 Mich.App. 456, 460, 505 N.W.2d 283 (1993). Fraudulent concealment is established by showing that the hidden defect (which need not be unreasonably dangerous) was known to the vendor and that the purchaser had no knowledge of it. Id. at 459-461, 505 N.W.2d 283.

Plaintiff does not dispute that he was aware of the physical condition of the house. However, because plaintiff was allegedly required to carry out more extensive and expensive repairs when the house was declared uninhabitable, we conclude that issuance of the repair notice and order was a latent defect that must be disclosed. Cf. Mulheron v. Henry S. Koppin Co., 221 Mich. 187, 189, 191, 190 N.W. 674 (1922), overruled on other grounds Witte v. Hobolth, 224 Mich. 286, 195 N.W. 82 (1923).

Defendant asserts that plaintiff should be charged with constructive knowledge of the repair notice and order because it was a matter of public record. We disagree. It is not reasonable to assume, as a matter of law, that every prospective purchaser should examine the local building inspector's records before purchasing a residential home. Whether such an assumption should be made in this case is a question of fact for the jury. ¹

There remains a further issue of material fact whether plaintiff had actual knowledge of the building department's determination. The trial court could not weigh the credibility of the...