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COA invites high court to revisit Indiana law

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In a case involving the purchase of a home, Indiana Court of Appeals judges today disagreed as to whether the home sellers should be granted summary judgment in a fraud suit. The judges unanimously did agree to encourage the Indiana Supreme Court to re-evaluate a rule that protects a seller from a lawsuit, even if he lies about a property, as long as the prospective buyer had a reasonable opportunity to inspect the property.

At issue in Drew and Donna Dickerson v. Donna Strand and Gloria German, No. 54A01-0807-CV-334, is whether Donna Strand and Gloria German can be held liable for fraud arising from the sale of their house to the Dickersons.

When Strand and German bought their home, it had termite damage, which the seller paid to treat. When Strand and German went to sell the home five years later, termite damage was found again and disclosed in a home inspection report. They claimed to have fixed the issue and said there were no structural problems with the building. The Dickersons bought the home, relying on disclosures and documents from Strand and German and never had their own inspection done.

After discovering more termite damage than what was revealed to them, the Dickersons filed a complaint against Strand and German alleging they falsely represented the property hadn't suffered structural termite damage. The trial court granted summary judgment in favor of Strand and German.

Under Indiana law, the appellate court didn't need to decide whether Strand and German's representations in the documents were fraudulent because the Dickersons had no right to rely on those representations, wrote Judge Patricia Riley. The majority relied heavily on the Indiana Supreme Court ruling in Cagney v. Cuson, 77 Ind. 494, 1881 WL 6689 (1881), in which the high court held even as to fraudulent representations operating as an inducement to the sale or exchange of property, a purchaser has no right to rely on those representations when he has had reasonable opportunity to examine the property and judge for himself its qualities.

"The fact that the Dickersons did not actually inspect the house is irrelevant; under Cagney, it is the opportunity to inspect that matters," wrote the judge. "We encourage our supreme court to reevaluate the social value of a rule allowing a seller of property to lie with impunity as long as the prospective buyer had a reasonable opportunity to inspect the property. But until then, we are bound by that rule."

In her dissent, Judge Nancy Vaidik agreed that the Supreme Court needs to examine the common law rule that a residential real estate buyer may not rely upon a seller's assertions regarding the property where the buyer has a reasonable chance to inspect the property in light of Indiana's disclosure form statute, Sections 32-21-5-1 to -13.

"From my reading of Indiana Code Sections 32-21-5-1 to -13, I agree with (cases Reum v. Mercer and Verrall v. Machura) that the relevant question now is whether the seller of covered residential real estate actually knew about the property's defects when filling out the disclosure form," wrote Judge Vaidik.

Because the record shows genuine issue of material fact whether the sellers had actual knowledge of the structural damage at the time they completed the disclosure form, she would reverse the grant of summary judgment and remand for further proceedings.

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  1. It is amazing how selectively courts can read cases and how two very similar factpatterns can result in quite different renderings. I cited this very same argument in Brown v. Bowman, lost. I guess it is panel, panel, panel when one is on appeal. Sad thing is, I had Sykes. Same argument, she went the opposite. Her Rooker-Feldman jurisprudence is now decidedly unintelligible.

  2. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  3. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

  4. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  5. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

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