Wise v. Hays

• Decision Date: 15 February 2011
• Docket Number: No. 76A03–1006–PL–323.,76A03–1006–PL–323.
• Citation: 943 N.E.2d 835
• Parties: Deborah J. WISE, Appellant–Petitioner,v.David T. HAYS and Amanda G. Hays, Appellees–Respondents.
• Court: Indiana Appellate Court

943 N.E.2d 835

Deborah J. WISE, Appellant–Petitioner,

v.David T. HAYS and Amanda G. Hays, Appellees–Respondents.

No. 76A03–1006–PL–323.

Court of Appeals of Indiana.

Feb. 15, 2011.

John J. Schwarz, II, Cresslaw Group, PC, Angola, IN, Attorney for Appellant.Joshua A. Burkhardt, Beers Mallers Backs & Salin, LLP, Fort Wayne, IN, Attorney for Appellees.

OPINION

VAIDIK, Judge.

Case Summary

A buyer filed a complaint against the sellers of real estate for fraud and negligence. The sellers filed an Indiana Trial Rule 12(B)(6) motion to dismiss for failure to state a claim. The buyer now appeals the trial court's grant of the motion. Because the trial court relied on matters outside the pleading, we treat the sellers' motion as one for summary judgment. Concluding that genuine issues of material fact exist as to whether the sellers made fraudulent misrepresentations on the sales disclosure form required by statute, we reverse the trial court's dismissal order and remand for proceedings consistent with this opinion.

Facts and Procedural History

In 2007, Deborah J. Wise and her husband Travis were interested in purchasing a Wolcottville residence and surrounding real estate from David T. Hays and Amanda G. Hays. The property consisted of around sixteen and a half acres. After viewing the property, Wise emailed specific inquiries about the residence and surrounding real estate. One of her inquiries involved whether the wetlands would affect development of the property:

Where exactly is the wetlands designation on the property? How many acres of wetlands are there compared to “livable” ground? Are the wetlands registered and/or recognized by city/state/army corps? ... [I]s any of it buildable for a possible driveway access from Cty Line Rd? Are the wetlands not usable at all? Property has a survey on file?

Appellant's App. p. 28. The Hayses allegedly responded that the property could be developed for additional residential housing. Id. at 20.

Wise and Travis decided to purchase the property and entered into a purchase agreement in March 2007. The purchase agreement indicated that Wise and Travis reserved the right to have the property inspected and that they could terminate the agreement if the inspection revealed a major defect that the Hayses were unwilling or unable to remedy.

The purchase agreement also indicated that Wise and Travis had received a Seller's Residential Real Estate Sales Disclosure Form. On the sales disclosure form, to the question, “Are there any structural problems with the building?” the Hayses marked the “No” box. Id. at 54 (Question G6). To the question, “Have you received any notices by any governmental or quasi-governmental agencies affecting this property?” the Hayses marked the “No” box. Id. (Question G7). To the question, “Have any substantial additions or alterations been made without a required building permit?” the Hayses marked the “No” box. Id. (Question G9). To the question, “Is the property in a flood plain?” the Hayses marked the “No” box. Id. (Question G14).

Wise and Travis purchased the property following inspection of the residence by a licensed home inspector. The warranty deed transferring title to the property was recorded in April 2007.

Sometime after the purchase, Wise began to have concerns about the residence and surrounding real estate. She consequently obtained copies of correspondences from the enforcement branch of the Army Corps of Engineers to David Hays. In a June 2003 letter, the Army Corps of Engineers informed David that “the sidecasting of spoil material from an excavated channel into wetlands” on his property was a violation of the Clean Water Act. Id. at 30. The letter also indicated that the wetlands on the property may affect any development of it:

During the site meeting, you also asked about a proposed development. As you were informed, much of the area that you are currently proposing to develop is currently wetlands. As of the site visit, you did not know where the proposed road would be placed or what area the area of impact to waters of the U.S. would be. Before you begin any development, you will need to have a wetland delineation performed and verified by the Corps of Engineers. Once the boundaries of the wetland area [are] identified, you will be able to overlay your proposed development and assess impacts to wetlands and other waters of the U.S. After the impacts are calculated, you can apply for a permit for the proposed impacts. Please be aware, as was discussed on June 5, 2003, that in order for a permit to be granted, it [is] likely that compensatory mitigation will be required for your proposed project.

Id. at 31. In a November 2003 letter, the Army Corps of Engineers acknowledged receipt of David's permit application to leave the spoil material in place until it could be removed during the winter freeze and informed David that it would visit the property in March 2004 to verify that he had removed the spoil material and restored the area to its original grade.

After the purchase, Wise also hired a professional engineer to inspect the residence. The subsequent report revealed numerous code violations and structural problems. For example, the professional engineer noted problems with the walls in the master bedroom:

The drywall joint in the Northeast corner was noticeably cracked. [Travis] commented that on a windy night that you could feel the wall move. I pressed outward against the exterior wall near that wall junction and could definitely feel the wall move and see the drywall joint flex as I pushed against it with less than approximately 50 pounds force. The fact that I could do this means that the wall corners are not structurally tied together as required by code.

Id. at 61–62. Other examples of problems with the residence included “a noticeable bounce to the [upstairs family room] floor” when walking across the room, id. at 59, and a leak in the shower floor that “seems to have been there for a long period of time as evidenced by the black staining of the joists in the crawlspace area of the shower drain,” id. at 62.

Wise filed a complaint against the Hayses for fraud and negligence. The complaint alleged, among other things, that the Hayses knowingly misrepresented certain items on the sales disclosure form. Wise attached the following to the complaint: (1) Wise's email with specific inquiries about the property and handwritten notes of the responses she received; (2) the June and November 2003 letters from the Army Corps of Engineers to David; (3) the purchase agreement; (4) the home inspection report performed by a licensed home inspector before the purchase of the property; (5) the warranty deed transferring title to the property to Wise and Travis; (6) the Seller's Residential Real Estate Sales Disclosure Form; and (7) the home inspection report performed by a professional engineer after the purchase of the property.

The Hayses filed a Trial Rule 12(B)(6) motion to dismiss for failure to state a claim. In the memorandum supporting their motion, they argued in large part that Wise had no right to rely on their representations when she had a reasonable opportunity to inspect the property herself. The Hayses cited the exhibits attached to Wise's complaint.

After a hearing, the trial court granted the Hayses' motion to dismiss. The order also cited the exhibits attached to Wise's complaint.

Wise filed a motion to amend the complaint pursuant to Trial Rule 12(B). She then filed a motion to correct error. The trial court held a hearing on both motions. By passage of time, the motion to correct error was deemed denied.

Wise then filed a motion for a ruling or a status conference, a motion to certify the trial court's order for interlocutory appeal, and a notice of appeal. The trial court set a date for a status conference and a hearing on the motion to certify. Although the chronological case summary provided on appeal ends at this point, see id. at 5–7; Appellees' App. p. 7–8, Wise's brief states:

[A] status conference was held wherea[t] counsel for Wise inquired with the Trial Court as to whether or not the Trial Court had accepted Wise's Second Amended Complaint, so as to gain an understanding as to whether the proper appeal route should be interlocutory or direct appeal. Judge William Fee indicated that since the case had been appealed, he was no longer the judge, and thus no direction could be given by the Trial Court.

Appellant's Br. p. 4. This factual account is not refuted by the Hayses. See Appellees' Br. p. 2.

Wise now appeals the order of dismissal.

Discussion and Decision

Wise contends that the trial court erred by granting the Hayses' motion to dismiss. The Hayses point out that this Court may not have jurisdiction over this appeal. We first address the jurisdictional issue.

I. Jurisdiction

Specifically, the Hayses claim that because Wise's motion to amend the complaint pursuant to Trial Rule 12(B) “was not ruled upon by the trial court and was pending when Wise filed her notice of appeal from the trial court,” she “should have obtained certification from the trial court to proceed with an interlocutory appeal.” Appellees' Br. p. 2 n.2. Wise's notice of appeal, however, states that she appeals from a final judgment. Appellant's App. p. 189.

If Wise does indeed appeal from a final judgment, then this Court has jurisdiction over the appeal. See Ind. Appellate Rule 5(A) (providing that, generally, this Court has jurisdiction in all appeals from final judgments). A judgment that disposes of all claims as to all parties is a final judgment. Ind. Appellate Rule 2(H)(1).

To determine whether the trial court's order was a final judgment, we must first consider whether the trial court treated the Hayses' motion as a motion to dismiss for failure to state a claim under Indiana Trial Rule 12(B)(6) or whether the motion was essentially converted into one for summary judgment under Indiana Trial Rule 56(C). Trial Rule 12(...