ILNews

Court upholds home developer's liability

Jennifer Nelson
January 1, 2007
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The Court of Appeals upheld the trial court judgment in favor of homeowners against the developer of their neighborhood, affirming the developer is liable for misleading the homeowners as to what type of homes would be built in the new neighborhood.

In Robert K. Yeager, et al. v. David A. McManama, et al., 49A02-0607-CV-614, the Yeagers, sole members and owners of Yeager Realty, the developer, planned to build Emerald Highlands in the residential neighborhood Murphy's Landing. The developer executed and recorded the Declaration of Covenants and Restrictions of the Murphy's Landing Ownership, and included specific language applying to Emerald Highlands and a site plan for the area.

The McManamas and Cotteys agreed to purchase lots and build homes in the new neighborhood, relying on information from the developer and its exclusive builder, Steven Morse, that the neighborhood would be a high-quality, exclusive, upscale neighborhood. Once the plaintiffs built their more than 5,000-square-foot homes in the neighborhood, they noticed that the other homes being built were less than half the size of their homes, causing their home values to decrease.

The plaintiffs filed a complaint alleging fraud, constructive fraud, or fraudulent concealment, and breach of fiduciary duty. The developers were sole members of the Architectural Review Board, which was to regulate the design, appearance, use and location of homes in the neighborhood to maintain and enhance values and appearance.

The Yeagers filed a motion for summary judgment, arguing that because the doctrines of fraud and constructive fraud do not apply, there is no fiduciary duty between the parties; and fraudulent concealment is not procedurally applicable in this case.

The trial court ruled the defendants owed the plaintiffs "a duty of fair dealing and honesty" and "a duty of good faith and fair dealing, as well as 'contractual obligations,' pursuant to the Declaration" and concluded the evidence showed the fraud and a failure to meet contractual and fiduciary duties.

The Court of Appeals upheld the trial court's decision. The Yeagers were the sole owners and developers of the project and had drafted, executed, and recorded the neighborhood's declaration. The Yeagers were also sole members of the Architectural Review Board and were responsible for enforcing the standards of the homes constructed in Emerald Highlands.
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  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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