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Sale to trust creates first impression

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A sale of a home to a trust that included disputed errors in a sales disclosure form presented an issue of first impression for the Indiana Court of Appeals Monday.

Indiana Code Section 32-21-5 spells out when an owner isn’t liable for any errors, inaccuracies, or omissions of information in the disclosure form. It also states when Chapter 1 of the statute doesn’t apply, and that includes transfers to a living trust.

Rebecca Hoffmeister-Repp sold her lake-front home to Rex Breeden, who bought the home through his revocable trust. When she was preparing the home for sale, she signed a seller’s residential real-estate sales disclosure form saying that there weren’t any moisture or water problems in the basement, crawl space area, or any other area.

More than 10 years before she sold the home, Hoffmeister-Repp saw water in a floor vent and heating duct. She and her husband had a sump pump installed and after that, she never noticed water in the ducts and assumed the issue was fixed.

Breeden saw the sales disclosure form, saw issues with the roof and siding, and got the home at a reduced priced to cover the costs of repairs. Breeden also hired an inspector, who advised Breeden to hire someone else to determine if there was actual water penetration in some decayed wood trim in the house. Breeden didn’t follow through with that recommendation and purchased the home.

He later discovered damage to some structural walls and defective conditions of the duct work. On behalf the trust, he sued Hoffmeister-Repp alleging her statements on the form constituted fraud to allow for damages or rescission, and there was a mutual mistake in the contract which entitled the trust to rescission of the purchase agreement.

The trial court granted summary judgment for Hoffmeister-Repp, which the Indiana Court of Appeals affirmed. The suit brought up for the first time what liability a seller to a trust would have for errors contained in the form.

Both sides argued the statute was not ambiguous, but both interpreted it differently. The trust claimed it wasn’t required to establish that any error was within actual knowledge of Hoffmeister-Repp because of the exception involving trusts. She claimed application of the exception to include selling to trusts would allow buyers to avoid the terms of the statute by creating a living trust and having the trust act as the purchaser of record for residential real estate.

In Rex E. Breeden Revocable Trust v. Rebecca Jane Hoffmeister-Repp, No. 03A04-1003-CT-185, the judges found the statute to be ambiguous and ruled in favor of Hoffmeister-Repp. They noted that exceptions to the requirement of a disclosure form are based on a special relationship between the buyer and seller, and some exceptions take into account that the seller is unlikely to have actually lived in the home such that knowledge of the home’s components can’t be assumed.

“Because I.C. § 32-21-5-10 requires this Disclosure Form to be completed and signed prior to an offer for the sale of the residence is accepted, the ninth exception—transfer to a living trust—can necessarily only come into play if the residence is purchased by the seller’s own living trust,” wrote Judge Patricia Riley. “If the sale is occasioned between a seller and a non-related living trust, the seller will always include a Disclosure Form as he is unaware as to the identity of the prospective buyer.”

The judges also held the trust failed to show Hoffmeister-Repp had actual knowledge of the moisture problems in the duct work at the moment she completed the disclosure form, and that there was insufficient designated evidence to support a finding of mutual mistake.

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  1. Call it unauthorized law if you must, a regulatory wrong, but it was fraud and theft well beyond that, a seeming crime! "In three specific cases, the hearing officer found that Westerfield did little to no work for her clients but only issued a partial refund or no refund at all." That is theft by deception, folks. "In its decision to suspend Westerfield, the Supreme Court noted that she already had a long disciplinary history dating back to 1996 and had previously been suspended in 2004 and indefinitely suspended in 2005. She was reinstated in 2009 after finally giving the commission a response to the grievance for which she was suspended in 2004." WOW -- was the Indiana Supreme Court complicit in her fraud? Talk about being on notice of a real bad actor .... "Further, the justices noted that during her testimony, Westerfield was “disingenuous and evasive” about her relationship with Tope and attempted to distance herself from him. They also wrote that other aggravating factors existed in Westerfield’s case, such as her lack of remorse." WOW, and yet she only got 18 months on the bench, and if she shows up and cries for them in a year and a half, and pays money to JLAP for group therapy ... back in to ride roughshod over hapless clients (or are they "marks") once again! Aint Hoosier lawyering a great money making adventure!!! Just live for the bucks, even if filthy lucre, and come out a-ok. ME on the other hand??? Lifetime banishment for blowing the whistle on unconstitutional governance. Yes, had I ripped off clients or had ANY disciplinary history for doing that I would have fared better, most likely, as that it would have revealed me motivated by Mammon and not Faith. Check it out if you doubt my reading of this, compare and contrast the above 18 months with my lifetime banishment from court, see appendix for Bar Examiners report which the ISC adopted without substantive review: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS

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  3. So if I am reading it right, only if and when African American college students agree to receive checks labeling them as "Negroes" do they receive aid from the UNCF or the Quaker's Educational Fund? In other words, to borrow from the Indiana Appellate Court, "the [nonprofit] supposed to be [their] advocate, refers to [students] in a racially offensive manner. While there is no evidence that [the nonprofits] intended harm to [African American students], the harm was nonetheless inflicted. [Black students are] presented to [academia and future employers] in a racially offensive manner. For these reasons, [such] performance [is] deficient and also prejudice[ial]." Maybe even DEPLORABLE???

  4. I'm the poor soul who spent over 10 years in prison with many many other prisoners trying to kill me for being charged with a sex offense THAT I DID NOT COMMIT i was in jail for a battery charge for helping a friend leave a boyfriend who beat her I've been saying for over 28 years that i did not and would never hurt a child like that mine or anybody's child but NOBODY wants to believe that i might not be guilty of this horrible crime or think that when i say that ALL the paperwork concerning my conviction has strangely DISAPPEARED or even when the long beach judge re-sentenced me over 14 months on a already filed plea bargain out of another districts court then had it filed under a fake name so i could not find while trying to fight my conviction on appeal in a nut shell people are ALWAYS quick to believe the worst about some one well I DID NOT HURT ANY CHILD EVER IN MY LIFE AND HAVE SAID THIS FOR ALMOST 30 YEARS please if anybody can me get some kind of justice it would be greatly appreciated respectfully written wrongly accused Brian Valenti

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