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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. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  2. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  3. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

  4. I am the mother of the child in this case. My silence on the matter was due to the fact that I filed, both in Illinois and Indiana, child support cases. I even filed supporting documentation with the Indiana family law court. Not sure whether this information was provided to the court of appeals or not. Wish the case was done before moving to Indiana, because no matter what, there is NO WAY the state of Illinois would have allowed an appeal on a child support case!

  5. "No one is safe when the Legislature is in session."

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