Boehringer and the Cleo A. Boehringer Trust v. Weber (IN)

Summary:  In Indiana, actual knowledge is required to show a failure to comply with the sales disclosure statutes; a showing that an owner failed to disclose a defect of which he should have known is not sufficient.


Boehringer and the Cleo A. Boehringer Trust v. Weber, 2 N.E. 3d 807 (Ind. Ct. App. 2014).


Facts:  William and Cleo Boehringer (“the Boehringers”) discovered mold in a home they purchased from Gregory and Susan Weber (“the Webers”). In October 2006, the Webers (who moved into the house in 1999) heard reports of water intrusion in surrounding homes, which led them to order a home inspection. The report following the inspection detailed suspected defects in the construction of the house, most related to water control. The report did not mention mold. The Webers then sent a letter to home builder ("Builder") seeking repair for water damage due to allegedly substandard construction. In December 2006, another inspection was conducted at Builder’s direction. This inspection reported water damage and possible fungal growth resulting primarily from water intrusion due to substandard construction. Again however, the report contained no mention of mold.

Builder began remediation work in March 2007. Shortly thereafter, the Webers put the house up for sale. In June 2007, the Webers executed the “Seller’s Residential Real Estate Disclosure,” and responded “no” to the question of whether there are or have been any hazardous conditions on the property, including mold. The Boehringers closed on the house in August 2007 and in the spring of 2008 they discovered the presence of mold spores. The Boehringers filed a complaint against the Webers on April 17, 2009, claiming fraudulent misrepresentation and mutual mistake. The Webers responded with a counterclaim for costs and attorney’s fees and motioned for summary judgment. Following the trial, a jury rendered verdicts in favor of the Webers in the amount of $425,000. The Boehringers appealed, claiming that the trial court erred in denying them summary judgment on their fraudulent misrepresentation claim and alternatively that the evidence against them could not sustain the jury’s verdict against them. 


Holding:  The Court of Appeals affirmed the decision, concluding that the trial court did not err in denying the Boehringers summary judgment claim and that the evidence sustained the jury’s verdict. The appellate court looked at Indiana’s sales disclosure laws giving rise to a claim for fraudulent misrepresentation. Indiana requires completion of the real estate disclosure form submitted to prospective buyers before an offer for sale is accepted. However, the form is not a warranty by the owner or owner’s agent, nor is it a substitute for any inspections or warranties the prospective buyer may later obtain. Moreover, the owner is not liable for any error, inaccuracy, or omission of information required to be delivered to the prospective buyer if: (1) the error, inaccuracy, or omission was not within the actual knowledge of the owner or based on information provided by a public agency or licensed professional who provided a written or oral report and the owner reasonably believed to be correct; or, (2) the owner was not negligent in obtaining information from a third party and transmitting the information. In order to support the claim for fraudulent misrepresentation, the Boehringers had to show that the following were all true: (1) the Webers made false statements of past or existing material facts; (2) the Webers made such statements knowing them to be false or recklessly without knowledge as to their truth or falsity; (3) the Webers made the statements to induce the Boehringers to act upon them; (4) the Boehringers justifiably relied and acted upon the statements; and (5) the Boehringers suffered injury. The Boehringers failed to establish that the Webers had actual knowledge of the mold in the house before the sale. The undisputed evidence showed that the inspections of the House did not indicate the presence of mold; therefore, the court did not err in denying the Boehringers’ summary judgment motion.

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By: ATG Underwriting Department | Posted on: Mon, 05/12/2014 - 2:06pm