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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. Such things are no more elections than those in the late, unlamented Soviet Union.

  2. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  3. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  4. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  5. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

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