ROBERT W. WHITE and wife,
WENDY E. WHITE,
Plaintiffs
v
.
Perquimans County
No. 97 CVS 186
ALMEDA S. HUETT,
Defendant
The Twiford Law Firm, L.L.P., by Edward A. O'Neal, for
plaintiff-appellants.
Hornthal, Riley, Ellis, & Maland, L.L.P., by John D. Leidy,
for defendant-appellee.
CAMPBELL, Judge.
Robert and Wendy White (“plaintiffs”) appeal the trial court's
order granting defendant's motion for a directed verdict on
plaintiffs' claim seeking damages from defendant for allegedly
failing to disclose latent defects in the log house she sold to
them. We affirm.
In July of 1995, plaintiffs, residents of Virginia, contacted
ERA Sasser Realty Company (“Sasser Realty”), a Virginia realty
firm, seeking to purchase a house. Diane Parsons-Powers (now “Mrs.
Whicker”), a licensed Virginia real estate agent working at Sasser
Realty, informed plaintiffs of defendant's log house located onlots fifty-two and fifty-three on Holiday Island in Perquimans
County, North Carolina. The listing agent for defendant's house,
James Schmidtke, was also a real estate agent working at Sasser
Realty. The log house was listed for sale at $69,500.00.
Plaintiffs were first shown the log house by Mr. and Mrs.
Jump, friends of defendant from Portsmouth, Virginia. During this
visit, plaintiffs noticed a black tarp on part of the floor and
mildew stains on the ceiling and walls. Plaintiffs also noticed a
log broken off from an exterior corner of the house. Mr. Jump
informed plaintiffs that the broken log was due to the roof not
being extended far enough to cover that portion of the log and that
the roof leaked.
After a second visit, Mrs. Whicker (acting as the buyer's
agent) submitted plaintiffs' offer to purchase the log house for
$56,900.00 to defendant. The offer was on a standard purchase
agreement form developed by the Virginia Real Estate Commission.
Defendant's son, Thomas M. Huett, III, acting under his mother's
power of attorney, countered plaintiffs' offer by inserting a
disclaimer clause stating that the “property [was] to be sold 'as
is' with no expressed or implied warranties” and returned the form
to plaintiffs. Mrs. Whicker told plaintiffs that the “as is”
language referred only to those conditions which plaintiffs were
made aware of or saw through visual inspections. Neither defendant
nor her son authorized Mrs. Whicker to make this representation.
With respect to disclosures, the purchase agreement stated:
The Virginia Residential Property Disclosure
Act requires sellers of residential realproperty to either disclose to buyers certain
information known to the sellers regarding the
condition of the property to be purchased or
to provide a disclaimer statement that the
property is being sold “as is,” except as
otherwise provided in the purchase agreement.
Seller and Buyer acknowledge that a
RESIDENTIAL PROPERTY DISCLOSURE / DISCLAIMER
STATEMENT (circle either disclosure or
disclaimer), attached hereto and incorporated
by reference into this Purchase Agreement, has
been provided by Seller to Buyer prior to
acceptance of this Purchase Agreement.
The agreement further provided that the contract was contingent on
plaintiffs' acceptance of a home inspection, which was to be done
within ten working days from the date of the contract. However,
Mrs. Whicker later testified at trial that she was unable to locate
an independent home inspector in North Carolina or Virginia within
this time frame and thus no independent home inspection was done.
The only inspection done on the log house was by the Department of
Veteran Affairs (the “VA”) for a loan guaranty officer.
Thereafter, the VA issued a Certificate of Reasonable Value on 24
August 1995, which estimated the reasonable value of the property
at $63,000.00 “based upon [an] observation of the property in its
'as is' condition.” The certificate did not mention any defects or
anything else about the condition of the log house.
Plaintiffs closed on the log house on 12 September 1995 at a
law office in Portsmouth, Virginia. Plaintiffs attended the
closing, but defendant and her son did not. Prior to the closing,
plaintiffs did not communicate with defendant regarding the log
house. Also, neither defendant nor her son personally made anyrepresentations to plaintiffs or any agents for plaintiffs about
the condition of the property before the closing.
After moving into the log house, plaintiffs began noticing
water damage and leakage inside the house. Plaintiffs subsequently
learned from other individuals in the community that the exterior
logs of their house were installed upside down thus preventing the
logs from properly shedding water. Instead, water collected
between the logs resulting in damage to the interior of the house
as the wood rotted away.
On 6 October 1997, plaintiffs filed a complaint in the
Perquimans County Superior Court alleging:
17. Defendant failed to disclose the [latent]
defective condition of the logs in her home
with an intent to deceive and defraud the
plaintiffs and with an intent to induce
plaintiffs (sic) reliance on the
nondisclosure.
18. Plaintiffs reasonably relied upon the
defendant's silence as an indication that the
property was not defective and in justifiable
reliance thereon, entered into a contract to
purchase the property from the defendant, and
have suffered injury as a proximate result of
defendant's nondisclosure.
Defendant answered, denying any liability and alleging, in part,
that she had “sold the subject property to Plaintiffs 'as is,' and
made no warranties, express or implied, nor other representations
about the condition of the property.” Following the court's denial
of motions by both parties for summary judgment, the matter was
heard on 7 February 2000 before Judge Richard Parker (“Judge
Parker”). At the close of plaintiffs' evidence, defendant moved
for a directed verdict. An order directing a verdict anddismissing plaintiffs' action with prejudice was entered on 10
February 2000. Plaintiffs appealed.
By plaintiffs' sole assignment of error they argue the trial
court erred in granting defendant's motion for a directed verdict.
“A motion for directed verdict tests the sufficiency of the
evidence to take [a] case to the jury.” Abels v. Renfro Corp., 335
N.C. 209, 214, 436 S.E.2d 822, 825 (1993). It is appropriately
granted only when by looking at the evidence in the light most
favorable to the non-movant, and giving the non-movant the benefit
of every reasonable inference arising from the evidence, the
evidence is insufficient for submission to the jury. Streeter v.
Cotton, 133 N.C. App. 80, 514 S.E.2d 539 (1999). The trial court's
decision to grant or deny a motion for a directed verdict will not
be disturbed on appeal absent an abuse of discretion. G.P.
Publications, Inc. v. Quebecor Printing-St. Paul, Inc., 125 N.C.
App. 424, 481 S.E.2d 674 (1997).
Plaintiffs contend that defendant's motion should not have
been granted because, despite the presence of an “as is” disclaimer
clause in their agreement with defendant, the evidence presented
was sufficient to support a jury verdict on the issue of fraudulent
non-disclosure of a latent defect (a tort under North Carolina
law). In support of their argument, plaintiffs focus primarily on
the representation made by Mrs. Whicker regarding the condition of
the log house. We are not persuaded by plaintiffs' argument.
“Where the parties have put their agreement in writing, it is
presumed that the writing embodies their entire agreement.” Dellinger v. Lamb, 79 N.C. App. 404, 408, 339 S.E.2d 480, 482
(1986). As a general rule, the construction and validity of such
an agreement are to be determined by the law of the place where the
agreement was made. Construction Co. v. Bank, 30 N.C. App. 155,
159, 226 S.E.2d 408, 410 (1976) (citing Davis v. Davis, 269 N.C.
120, 152 S.E.2d 306 (1967)). Our Supreme Court has held that the
place where the agreement was made is determined by “the place at
which the last act was done by either of the parties essential to
a meeting of the minds[.]” Construction Co., 30 N.C. App. at 159,
226 S.E.2d at 410-11 (citing Fast v. Gulley, 271 N.C. 208, 155
S.E.2d 507 (1967)).
In the case sub judice, plaintiffs' testimony confirmed that
all acts relevant to the making of the purchase agreement between
the parties occurred in Virginia. Also, the closing, which was the
last act done by the parties essential to a meeting of the minds,
took place at a law office in Portsmouth, Virginia. Thus, the
interpretation of the parties' agreement is governed by the laws of
Virginia.
Additionally, the agreement between plaintiffs and defendant
provided that the Virginia Residential Property Disclosure Act
(“Act”) was incorporated by reference. In part, this Act states:
[T]he owner of the residential real property
shall furnish to a purchaser . . . [a]
residential property disclaimer statement in a
form provided by the Real Estate Board stating
that the owner makes no representations or
warranties as to the condition of the real
property or any improvements thereon, and that
the purchaser will be receiving the real
property 'as is,' that is, with all defects
which may exist, if any, except as otherwiseprovided in the real estate purchase
contract[.]
Va. Code Ann. § 55-519(A)(1) (Michie 1999). However, an owner of
property may not intentionally conceal known material defects and
agree to sell the property knowing that the purchaser is unaware of
the defects. See Van Deusen v. Snead, 247 Va. 324, 441 S.E.2d 207
(1994). The Act specifically preserves all remedies at law or
equity otherwise available against an owner in the event of the
owner's intentional or willful misrepresentation of the property's
condition. See § 55-524.
In the present case, plaintiffs' complaint alleged that
defendant intentionally misrepresented the condition of the log
house. Although Virginia law recognizes such an action, plaintiffs
failed to offer evidence to establish any intentional or willful
misrepresentation on the part of defendant. Pursuant to the Act,
the parties' agreement included a residential disclaimer clause
which provided that the log house was being sold “as is” with no
expressed or implied warranties. See § 55-520(A) (providing that
such a disclaimer can be included in a real estate purchase
agreement). Prior to the signing of the agreement, there was no
effort by either defendant or her son: (1) to conceal the defects
in the log house, (2) to discourage plaintiffs from obtaining an
inspection of the house, or (3) to make any representations at all
relating to the condition of the house that contradicted the “as
is” disclaimer clause. The only representations made to plaintiffs
which might be construed as contradicting this clause were made by
Mrs. Whicker, the plaintiffs' agent who was not acting on behalf ofdefendant nor authorized by defendant or her son to make any
representations on their behalf. Furthermore, plaintiffs signed
the purchase agreement which clearly stated that the “Buyer . . .
acknowledges that he has not received or relied upon any
representations made by the Listing Firm, the Selling Firm or the
Seller with respect to the condition of the Property which are not
contained in [the] Purchase Agreement.” Thus, there was no abuse
of discretion by the trial court in not submitting to the jury the
issue of defendant's alleged failure to disclose a latent defect
because there was no evidence to support plaintiffs' allegations
that defendant made any intentional or willful misrepresentations.
Finally, we note that plaintiffs argue that their claim
against defendant for the fraudulent concealment of a material
defect should be decided under North Carolina law. However, in
order to prevail on this claim in North Carolina, plaintiffs would
have to show that “a material defect is known to the seller, and
[she] knows that the buyer is unaware of the defect and that it is
not discoverable in the exercise of the buyer's diligent attention
or observation . . . .” See Carver v. Roberts, 78 N.C. App. 511,
512-13, 337 S.E.2d 126, 128 (1985). Here, despite seeing mildew,
a leaking roof, and a broken log on the house, plaintiffs signed
the purchase agreement (1) with full knowledge that the agreement
contained an “as is” disclaimer clause, (2) without ever speaking
to defendant or her son about the problems plaintiffs had noticed
with the house, and (3) without obtaining a home inspection. With
respect to the home inspection, there was testimony presented byplaintiffs from a home inspector that it was apparent to him that
the logs were incorrectly installed. There was no evidence that
defendant or her son did anything to prevent plaintiffs from
obtaining an independent home inspection or concealing the
condition of the log house from either plaintiffs or an inspector
had plaintiffs been diligent in obtaining an inspection. Thus,
defendant cannot be held liable under North Carolina law for
fraudulent concealment of a material defect because of plaintiffs'
lack of diligence in discovering the logs were inverted.
Accordingly, we conclude that the trial court did not abuse
its discretion in granting defendant's motion for a directed
verdict.
Affirmed.
Judges GREENE and THOMAS concur.
Report per Rule 30(e).
*** Converted from WordPerfect ***