Shiozawa v. Marci Duke, James Duke, Christopher Duke, Rebecca Duke, & Pine Valley Realty, LLC
| Citation | 780 Utah Adv. Rep. 37 |
| Decision Date | 20 February 2015 |
| Docket Number | No. 20130253–CA.,20130253–CA. |
| Parties | Natalie SHIOZAWA and Ulrike Dannhauer, Plaintiffs and Appellants, v. Marci DUKE, James Duke, Christopher Duke, Rebecca Duke, and Pine Valley Realty, LLC, Defendants and Appellees. |
| Court | Court of Appeals of Utah |
OPINION TEXT STARTS HERE
Affirmed in part, reversed in part, and remanded.
Aaron R. Harris and Stephen Quesenberry, Provo, for Appellants.
Barry N. Johnson and Joshua L. Lee, Salt Lake City, for Appellees.
¶ 1 Natalie Shiozawa and Ulrike Dannhauer (collectively, Plaintiffs) appeal from the district court's order granting summary judgment in favor of Marci Duke, James Duke, Christopher Duke, and Rebecca Duke (collectively, the Dukes),1 and in favor of Pine Valley Realty, LLC, on Plaintiffs' claims of breach of contract and fraud in connection with the sale of real property. We affirm in part, reverse in part, and remand the matter to the district court.
¶ 2 This dispute concerns the sale of a house built in Salt Lake County in 1928.2 The Dukes never lived in the house, which had been previously owned and occupied by James and Christopher's grandparents.3 Before offering it for sale, the Dukes made certain repairs and improvements to the house. The Dukes performed some of this work themselves but contracted to have other aspects of the work done by licensed contractors. Christopher, a licensed plumber, installed plumbing improvements in the house. The Dukes also finished the basement. As part of this project, Christopher and James patched some of the cracks on the interior walls of the foundation. When that task was completed, a contractor installed drywall, which concealed the basement foundation from view. In addition, James and Marci patched and painted the exterior of the foundation above the ground, thereby covering some exterior foundation cracks. The Dukes also installed landscaping along portions of the exterior foundation. After completing the repairs and improvements, the Dukes offered the house for sale through real estate agent and part-owner, Marci. Pine Valley Realty acted as the broker for the house. Neither Marci nor Pine Valley Realty received any commission or compensation from the sale of the house.
¶ 3 On April 10, 2007, Plaintiffs executed a Real Estate Purchase Contract (the REPC), agreeing to purchase the house, subject to their approval of the seller disclosures and after physical inspection of the home. The REPC included the following warranty obligations:
10.2 Condition of Property. Seller warrants that the Property will be in the following condition ON THE DATE SELLER DELIVERS PHYSICAL POSSESSION TO BUYER:
...
(b) the ... plumbing [and other] systems ... will be in working order and fit for their intended purposes;
(c) the ... foundation shall be free of leaks known to Seller....
On April 11, 2007, the Dukes delivered “Seller's Property Condition Disclosure” to Plaintiffs. Pursuant to this document, the Dukes agreed that they were “obligated under law to disclose to Plaintiffs defects in the Property known to Seller that materially and adversely affect the value of the Property that cannot be discovered by a reasonable inspection by an ordinary prudent buyer.” Relevant to this appeal, the Dukes' completed disclosure contained the following questions and answers:
...
...
...
...
¶ 4 In connection with their right to inspect the house as part of the sale, Plaintiffs and their home inspector walked through the house to assess its condition. Before closing, the inspector provided a written inspection report to Plaintiffs. The report noted that “[w]ater will inevitably flow towards the foundation due to the grade; such conditions can promote undermining of the structural foundation and subsequent damage.” In addition, the report contained a section specifically related to the condition of the foundation of the house:
FOUNDATION:
The foundation was constructed of poured concrete. A single inspection cannot determine whether movement of a foundation has ceased. Any cracks should be monitored regularly. There were no major visual defects observed on the visible portions of the foundation. There were several minor, vertical cracks observed on the foundation. The cracks were 1/16–inch or less in width. These cracks did not appear to have any structural significance at the time of the inspection. Vertical cracks can be found in most foundation materials, which would include poured concrete, hollow masonry block, brick and stone. We have seen such crack patterns in all of the above noted materials. It is not uncommon to find such cracks in poured concrete foundation walls. These vertical cracks in concrete are typically very narrow, hairline to 1/16 of an inch, and usually pose no significant structural problem for a building. This type of crack is generally the result of curing and moisture shrinkage of newly poured concrete and it will commonly develop between the first several months after construction right up to two years. Parging, the stucco-sand mixture applied to foundation walls, may be added (it exists but is deteriorating in some sections) to help assuage moisture intrusion [into] such cracks.
¶ 5 In the section devoted to the condition of the basement, the inspection report stated, “Most of the interior walls of the basement were finished; therefore, a complete inspection
of the foundation was not possible.” The report continued;
The full slab [of the basement floor] was not visible at the time of inspection because of carpet or other floor coverings. There were no indications of moisture present. There were no major visual defects observed on the visual portions of the slab.... MONITOR: Several curing cracks were visible on/in the slab; the cracks were less than 1/8? and do not appear to represent a serious structural concern; patching or caulking such cracks may help assuage potential movement and should be considered.
¶ 6 Plaintiffs completed the purchase of the house on May 10, 2007, and moved in shortly thereafter. In August 2007, the sewer line to the house backed up in the basement. Plaintiffs contacted a plumber who resolved the immediate problem. When the sewer line backed up again in August 2008, Plaintiffs hired a contractor to perform a video inspection of the sewer line. The video revealed that tree roots and dirt had infiltrated the line. Based on this information, Plaintiffs replaced the sewer line. In the summer of 2008, Plaintiffs also experienced a leak in the house's exterior hose bib faucet. During the resulting repair efforts, Plaintiffs learned that Christopher had installed the hose bib faucet's water line without a required “J-hook.” Plaintiffs also discovered that Christopher had not installed a water pressure gauge in the house's plumbing system.
¶ 7 Between May 2007 and August 2008, Plaintiffs also noticed that some of the vertical cracks in the exterior foundation wall were beginning to widen. They contacted a foundation-repair contractor, who provided them a bid for the installation of helical piers.4 Plaintiffs authorized the installation of one helical pier, which the contractor installed in October 2008 under the northeast corner of the house's foundation. Rather than resolving the problem, the helical pier actually caused the cracks in the northeast corner of the exterior wall of the foundation to widen further. While addressing this issue, Plaintiffs dug around the northeast corner foundation and exposed the exterior foundation cracks that had been patched and painted over during The Dukes' remodeling efforts. Once they were exposed, Plaintiffs became concerned about the width of these below-ground, exterior foundation cracks.
¶ 8 At this same time, Plaintiffs noticed that mold was developing in both the northeast and southwest corners of the basement. In order to mitigate the mold, Plaintiffs removed the drywall that had been installed when the Dukes finished the basement of the house, thereby revealing the interior foundation wall. Plaintiffs discovered cracks in the...
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