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. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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