DAVID T. HAYS and AMANDA G. HAYS, Appellants-Defendants,
DEBORAH J. WISE, Appellee-Plaintiff
APPEAL FROM THE STEUBEN SUPERIOR COURT. The Honorable Allen N. Wheat, Special Judge. Cause No. 76D01-0902-PL-98.
ATTORNEY FOR APPELLANTS: JONATHAN H. NUSBAUM, Beers Mallers Backs & Salin, LLP, Fort Wayne, Indiana.
ATTORNEYS FOR APPELLEE: JAMES A. McENTARFER, WILLIAM B. BRYAN, Angola, Indiana.
KIRSCH, Judge. BAKER, J., and ROBB, J., concur.
Homeowners David T. Hays and Amanda G. Hays (collectively " the Hayses" ) sold their home after completing Indiana's statutory disclosure forms. Purchaser Deborah J. Wise (" Wise" ) sued the Hayses, alleging that the Hayses failed to disclose defective conditions in the home. Following a bench trial that occurred on remand from this court, the Hayses now appeal the trial court's findings of fact, conclusions thereon, and judgment, which found in favor of Wise on her complaint and determined that the Hayses made misrepresentations in their responses to several question on the residential real estate sales disclosure form. The Hayses raise two issues that we restate as:
I. Whether the findings, conclusions, and judgment are unsupported by the evidence and are clearly erroneous due to a lack of evidence that the Hayses had actual knowledge of the various defects as alleged by Wise; and
II. Whether the judgment ordered damages in excess of the amount that would have been required to repair known structural defects and is therefore clearly erroneous.
FACTS AND PROCEDURAL HISTORY
This is our second meeting with the parties. This current appeal comes to us following a prior appeal by Wise, after her complaint alleging negligence and rescission of the real estate purchase due to fraud, misrepresentation, and failure to disclose was dismissed pursuant to the Hayses' Indiana Trial Rule 12(B)(6) motion to dismiss for failure to state a claim.
In their Rule 12(B)(6) motion, the Hayses had argued that Wise had no right to rely on their representations because Wise had a reasonable opportunity to inspect the property herself. Upon review of that dismissal, we determined that the Hayses' motion was properly considered as one for summary judgment, and we reversed and remanded in a published opinion, finding that remand for trial was appropriate because genuine issues of material fact existed as to whether the Hayses made fraudulent misrepresentation on the sales disclosure form. Wise v. Hays, 943 N.E.2d 835, 843-44 (Ind.Ct.App. 2011). We will borrow some of the facts outlined in our prior Wise opinion to provide relevant background/framework to our decision today:
In 2007, Deborah J. Wise and her husband Travis were interested in purchasing a Wolcottville residence and surrounding real estate from David T. Hays and Amanda G. Hays. The property consisted of around sixteen and a half acres.
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Wise and Travis decided to purchase the property and entered into a purchase agreement in March 2007. The purchase agreement indicated that Wise and Travis reserved the right to have the property inspected and that they could terminate the agreement if the inspection revealed a major defect that the Hayses were unwilling or unable to remedy.
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The purchase agreement also indicated that Wise and Travis had received a Seller's Residential Real Estate Sales Disclosure Form. On the sales disclosure form, to the question, " Are there any structural problems with the building?" the Hayses marked the " No" box. (Question G6). To the question, " Have you received any notices by any governmental or quasi-governmental agencies affecting this property?" the Hayses marked the " No" box. (Question G7). To the question, " Have any substantial additions or alterations been made without a required building permit?" the Hayses marked the " No" box. (Question G9). To the question, " Is the property in a flood plain?" the Hayses marked the " No" box. (Question G14).
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Wise and Travis purchased the property following inspection of the residence by a licensed home inspector. The warranty deed transferring title to the property was recorded in April 2007.
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Sometime after the purchase, Wise began to have concerns about the residence and surrounding real estate.
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After the purchase, Wise also hired a professional engineer to inspect the residence. The subsequent report revealed numerous code violations and structural problems. For example, the professional engineer noted problems with the walls in the master bedroom:
The drywall joint in the Northeast corner was noticeably cracked. [Travis] commented that on a windy night that you could feel the wall move. I pressed outward against the exterior wall near that wall junction and could definitely feel the wall move and see the drywall joint flex as I pushed against it with less than approximately 50 pounds force. The fact that I ...