Thacker v. Tyree, 15232

• Court: Supreme Court of West Virginia
• Writing for the Court: MILLER
• Citation: 171 W.Va. 110,297 S.E.2d 885
• Parties: Edwin G. THACKER, et al. v. Melvin L. TYREE, et al.
• Docket Number: No. 15232,15232
• Decision Date: 19 November 1982

Page 885

297 S.E.2d 885 171 W.Va. 110 Edwin G. THACKER, et al.
v.
Melvin L. TYREE, et al. No. 15232. Supreme Court of Appeals of West Virginia. Nov. 19, 1982.

Syllabus by the Court

Where a vendor is aware of defects or conditions which substantially affect the value or habitability of the property and the existence of which are unknown to the purchaser and would not be disclosed by a reasonably diligent inspection, then the vendor has a duty to disclose the same to the purchaser. His failure to disclose will give rise to a cause of action in favor of the purchaser.

James Allan Colburn, Helen M. Morris, Baer, Napier & Colburn, Huntington, for appellants.

James M. Robinson, Huntington, for appellees.

MILLER, Chief Justice:

The issue presented in this appeal is whether the vendor of a dwelling house may be held liable in a suit brought by the [171 W.Va. 111] purchaser for damages arising from substantial latent defects in a home. Specifically, the inquiry is whether the vendor, who knows of facts which substantially affect the value of the property and also knows that such facts are not known to or would not be known to the purchaser as a result of diligent attention on the part of the purchaser, has a duty to disclose them to the purchaser. The trial court held, apparently based on the doctrine of caveat emptor, that the vendor was not liable and granted a summary judgment in the vendor's favor. We reverse.

Page 886

In 1978, the appellants, the Thackers, bought a house from the appellees, the Tyrees. In his pretrial deposition, Melvin Tyree stated that he had built the home in 1975 and that he and his wife had lived there until they sold it to the Thackers in 1978. Mr. Tyree was apparently in the business of constructing new homes, living in them for a few years, and then selling them. He estimated that between 1971 and 1978, he had built, lived in, and sold three such homes.

After the Tyrees moved into the house, major problems developed with the foundation of the home. The walls of the house cracked, part of the basement wall collapsed, and window sills came loose. These problems were diagnosed as being caused by water under the footers. In an attempt to correct the problem, Mr. Tyree built a drain and a retaining wall between the drain and the house. According to Mr. Tyree, only a small crack remained in one wall of the house after the repairs, and they experienced no further trouble with the house. He stated that upon the sale of the house to the Thackers they had asked nothing about the condition of the house and consequently he had made no disclosures.

The Thackers claimed that after they bought the house and moved in, various problems developed which ultimately resulted in cracked walls and foundation problems. It is asserted that part of the house's foundation was constructed on filled ground which caused slippage or settlement thus causing considerable cracking in the walls to the point that the house could not be safely occupied. The Thackers filed a complaint charging the Tyrees with fraudulent concealment of a latent defect of which the Tyrees had knowledge.

The Tyrees filed a motion for a summary judgment pointing out that the Thackers had never asked even a general question as to the quality of the house and that no representations were made by them in this regard. The motion was granted. It is important to note that the summary judgment was based on a legal proposition to the effect that even if there was a fraudulent concealment this would not give rise to a cause of action. Because summary judgment was granted, the factual record is meager and we do not pass upon the ultimate factual sufficiency of the case. We address only whether a cause of action exists.

The doctrine of caveat emptor ¹ was never an absolute bar to a lawsuit between a vendor and a purchaser of real property in this jurisdiction. We recently stated in Lengyel v. Lint, 167 W.Va. 272, 280 S.E.2d 66, 69 (1981): "It has long been the law in West Virginia that a vendor of real property may be liable to the vendee in an action for fraud. Averill v. Boyer, 76 W.Va. 642, 87 S.E. 259 (1915); Stout v. Martin, 87 W.Va. 1, 104 S.E. 157 (1920)." In Lengyel, suit had been brought to set aside the sale of a house based on a claim of fraudulent misrepresentation with regard to the quality and type of house and the size of the lot. The plaintiff's complaint had been dismissed by way of a summary judgment. We held that there were sufficient factual issues to militate against the summary judgment. In Penix v. No. 2 Gas Coal Co., 99 W.Va. 310, 129 S.E. 127 (1925), and McBee v. Deusenberry, 99 W.Va. 176, 128 S.E. 378 (1925), we permitted recissions of real estate sales based on the fact that the vendors had falsely [171 W.Va. 112] represented the amounts they had paid for the properties.

In fact, the doctrine of caveat emptor has not received much attention in our case law. We have discussed it in the context of a judicial sale. E.g., Headley v. Hoopengarner, 60 W.Va. 626, 55 S.E. 744 (1906). Whatever its former status in the law of sales, the Uniform Commercial Code, by its implied warranty of merchantability and fitness found in W.Va.Code, 46-2-314 and 315, has virtually abolished the doctrine in the sale of goods. ² See also Nettles v.

Page 887

Imperial Distributor, Inc., 152 W.Va. 9, 159 S.E.2d 206 (1968).

In the area of construction contracts, caveat emptor ordinarily does not apply, as there is general recognition that an implied warranty of fitness and workmanlike quality attaches to such contracts, as stated in 3A Michie's Jurisprudence Building Contracts § 4 (1976):

"In building and construction...