Case Title: Epple v. Clark

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1991-01-15T00:00:00Z

Document:
Epple v. Clark1991 WY 6804 P.2d 678Case Number: 89-228Decided: 01/15/1991Supreme Court of Wyoming
 
 
Gary D. 
EPPLE and Peggy E. Epple, husband and wife,

Appellants 
(Plaintiffs),

 

v.

 

Michael L. 
CLARK and H. Bernadette Clark, husband and wife,

Appellees 
(Defendants).

 

 
 

Appeal from 
the District 
Court 
of 
Sheridan 
County, James N. 
Wolfe, J.

 

H.W. 
Rasmussen of Badley & Rasmussen, P.C., Sheridan, for appellants.

 

Richard M. 
Davis, Jr. and Anthony T. Wendtland of Burgess & Davis, Sheridan, for appellees.

 

Before 
URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.

 

GOLDEN, 
Justice.

 

[¶1]  This appeal raises a question concerning 
the liability of a former homeowner to a subsequent homeowner for alleged 
misrepresentations and fraud relating to the condition of the basement of the 
house. The subsequent homeowners state the sole issue as:

 

The trial 
court erred by ignoring the uncontroverted evidence and applying the standard 
[Restatement (Second) of Torts § 353] when it should have applied [Restatement 
(Second) of Torts § 552C].

 

[¶2]  We affirm.

 

FACTS

 

[¶3]  In October, 1981, Mr. and Mrs. Michael 
L. Clark (Clarks) moved 
into their newly constructed home located in Sheridan, 
Wyoming. Having 
selected house plans from a catalog, they purchased a lot and hired a contractor 
to build the house based on the mail order plans. 

 

[¶4]  On September 
13, 1982, the 
Clarks found 
surface water in the basement of the house during a rain and snow storm. The 
storm caused a power outage; consequently, the Clarks' portable 
submersible sump pump failed to operate. This, in turn, permitted water to enter 
the basement through the sump pump hole. When power was restored, the pump 
operated and the Clarks swept the 
excess water into the sump pump hole, allowing the pump to remove the water from 
the basement. The Clarks' home 
insurance carrier denied their claim for wet carpet and water stained paneling 
due to the water.

 

[¶5]  On July 21, 
1983, the 
Clarks found 
water in the basement and the pump running. They discovered their neighbor had 
irrigated all night in a field adjacent to the Clarks' property. 
The flooding irrigation water saturated the ground and migrated to the 
Clarks' property 
and into their basement. The Clarks notified 
their home insurance carrier of this event. The 1982 and 1983 incidents of water 
in the basement were the only ones that occurred while the 
Clarks lived 
there.

 

[¶6]  In early 1984, Mr. Clark's employer 
notified him that he was being transferred to Alaska. The 
Clarks listed the 
home with Carroll Realty; one of the provisions of the listing contract recited 
that there were no known defects except those which were readily visible upon 
inspection. When this listing expired, the home had not been sold. The 
Clarks, through 
arrangements made by Mr. Clark's employer, entered into a contract with Merrill 
Lynch Relocation Management, Inc. (ML). As purchaser, ML was to pay the 
Clarks an agreed 
upon price for the house and hold it for resale. One of the provisions of the 
contract was that any knowledge of the physical condition of the house be 
disclosed to ML (as purchasers) by the Clarks (as 
sellers). Another provision recited that ML as purchaser relied on the 
representations of and information supplied by the Clarks as 
sellers.

 

[¶7]  After selling the home to ML, the 
Clarks moved. 
Later, ML sent them a warranty deed; all of the blanks on the deed were filled 
out except for the name of grantee. At the request of ML the 
Clarks executed 
the deed as grantors, knowing the blank for the name of the grantee was not 
filled out.

 

[¶8]  In the meantime, Mr. and Mrs. Gary D. 
Epple (Epples) were in the process of moving to 
Sheridan and 
contacted Carroll Realty there in their search for a home. The Epples decided on 
the home formerly owned by the Clarks. The 
evidence is undisputed that the Clarks and Epples never met and never had any 
conversations before the Epples bought the house. It is also undisputed that the 
Epples had no meeting or conversation with any representative of ML before they 
bought the house. In their deposition testimony the Epples said they understood 
the Clarks had sold 
the house to ML and were gone.

 

[¶9]  The Epples dealt solely with Steve 
Carroll of Carroll Realty in the purchase of this house, and Carroll sent them a 
proposed contract covering the transaction. Upon advice of their lawyer, the 
Epples added a provision to the contract that the purchase was to be contingent 
upon the results of an inspection and evaluation of the house by a construction 
expert selected by them. They had earlier told Carroll they were not interested 
in any house with a history of water problems. Carroll told them he knew of no 
such problems with the house in question.

 

[¶10]  The Epples hired John Carroll, Steve's 
brother, as their construction expert to inspect the house. He reported there 
were "no evident structural problems that would in any way compromise the 
durability and livability of the home." He noted that the terrain east of the 
house sloped toward the foundation; however, he found no evidence of leakage. He 
opined that "should it become a problem in the future, it can be easily 
rectified * * *." He concluded "it is my opinion that there are no significant 
problems with the house. There are no defects in the house that would influence 
my purchase of the home."

 

[¶11]  After receiving John Carroll's report, 
the Epples bought the home from ML, with ML apparently inserting the Epples' 
name in the grantee blank in the deed. The Epples moved into the house in 
November, 1984.

 

[¶12]  In the spring of 1985, the Epples found 
water on the basement floor, and each year since water has seeped into the 
basement. After investigating the matter, locating the Clarks, and 
attempting unsuccessfully to resolve the matter, the Epples sued the 
Clarks.

 

[¶13]  In their complaint the Epples sought to 
impose liability on theories of intentional failure to disclose a known latent 
defect, fraud, and negligent failure to disclose a known latent defect. In their 
answer, the Clarks denied 
liability; they also filed third party claims against ML and Carroll Realty. 
After discovery, those third party defendants moved for and were granted summary 
judgment. The Clarks also moved 
for summary judgment against the Epples. After reading the parties' memoranda 
and submissions, and hearing argument, the trial court granted the 
Clarks' summary 
judgment on the Epples' theories of fraud and intentional failure to disclose a 
known latent defect. The parties tried the case on the remaining theory of 
negligent failure to disclose a known latent defect. The trial court found 
generally in favor of the Clarks and 
against the Epples. This appeal followed.

 

[¶14]  The Epples ask that the summary judgment 
entered against them be reversed on their theories of intentional failure to 
disclose a known latent defect and fraud. Unfortunately, in both their written 
brief and oral argument, they failed to provide a statement of facts relevant to 
those issues with appropriate page references to the record. W.R.A.P. 5.01(3). 
See also Jung-Leonczynska v. Steup, 782 P.2d 578, 581 
(Wyo. 1989); and 
V-1 Oil Company v. The Honorable Robert B. Ranck, 767 P.2d 612, 613 
(Wyo. 1989). 
Moreover, in oral argument Epples' counsel conceded that his written brief did 
not contain any statement of law regarding the theories of liability that fell 
when summary judgment was entered. This court found no cogent argument or 
authority cited that would be convincing for a reversal of the summary judgment. 
Under these circumstances, we shall not address the propriety of the summary 
judgment disposition. Prazma v. Kaehne, 768 P.2d 586, 588 
(Wyo. 1989); 
Johnston v. Conoco, 
Inc., 758 P.2d 566, 570 (Wyo. 1988); 
Smith v. Ensley, 752 P.2d 1374, 1377 (Wyo. 
1988).

 

[¶15]  Epples' sole thrust in their brief is a 
challenge to the court's judgment at trial against them on their theory of 
negligent failure to disclose a known latent defect. We have reviewed their 
challenge under our usual standard. "[W]e accept the evidence of the prevailing 
party as true, leaving out entirely the evidence presented in conflict 
therewith, giving every favorable inference which may fairly and reasonably be 
drawn from the prevailing party's evidence." Pancratz Company, Inc. v. 
Kloefkorn-Ballard Construction Development, Inc., 720 P.2d 906, 908-09 
(Wyo. 
1986).

 

[¶16]  The Epples claim the trial court erred 
in not applying the theory of liability of innocent misrepresentation as found 
in Restatement (Second) of Torts § 552C (1977). Their claim in this regard 
strikes us as rather curious since they presented the case to the trial court 
both in pleading and at trial on a negligence theory. As we understand § 552C of 
the Restatement, it is "a rule of strict liability for innocent 
misrepresentation of a material fact * * *." Id., comment 
a, at 142. This court has taken a dim view of a litigant trying a case on one 
theory and appealing it on another. Further, we will not consider for the first 
time on appeal an issue neither raised nor argued to the trial court. Thatcher 
& Sons v. Norwest Bank Casper, 750 P.2d 1324, 1328 (Wyo. 1988). 
Parties are bound by the theories which they advanced below. We find nothing in 
the record to indicate that the Epples raised or argued innocent 
misrepresentation to the trial court; the Epples asked the trial court to look 
at only the negligent misrepresentation issue. They cannot now complain that the 
court erred in not considering innocent misrepresentation. 
Id.

 

[¶17]  We note in passing that § 552C, which 
Epples would have the trial court apply, explains that the section is limited to 
the immediate parties to the sale. Restatement, supra comment d at 144. The 
Clarks were not a 
party to the sale of the house to the Epples. Rather, the Epples bought the 
house from ML. Moreover, the Epples failed to prove that 1) the 
Clarks 
represented to them that the basement did not leak, 2) the 
Clarks made that 
representation to them for the purpose of inducing the Epples to rely upon it in 
acting as a part of the sale transaction, and 3) the Epples did in fact so rely 
on that representation. Restatement, supra comment c at 144-45. Thus, even had 
the trial court considered § 552C, it would have found the Epples' proof 
deficient.

 

[¶18]  Affirmed.

 

THOMAS, J., files 
a concurring opinion.

 

URBIGKIT, C.J., 
files a dissenting opinion in which MACY, J., joins.

 

THOMAS, Justice, 
concurring.

 

[¶19]  I agree with the result found in the 
majority opinion pursuant to which the judgment in favor of the 
Clarks is 
affirmed. For myself, I would be willing to affirm that judgment on the ground 
that the theory of negligent misrepresentation and the theory of innocent 
misrepresentation should have been disposed of by summary judgment. I say that 
because recovery under both theories is limited to those to whom the maker of 
the statement intends that it be communicated. Further, both theories require 
reliance upon the information communicated by the party seeking recovery. 
Finally, both theories depend upon inaccurate information being communicated, 
and none was in this instance.

 

[¶20]  After trial, the information found in 
this record is not substantially different from that presented to the district 
court in support of, and opposition to, the Clarks' motion 
for summary judgment. I am persuaded that there was no genuine issue as to any 
material fact. In granting a trial by denying the Clarks' motion 
for summary judgment on the issue of negligent misrepresentation, I believe the 
district judge was being generous, perhaps to the point of indulgence, to the 
Epples.

 

[¶21]  While the theory ultimately asserted in 
this court is that of innocent misrepresentation, as encompassed in the 
Restatement (Second) of Torts § 552C (1977), the theory apparently presented to 
the district court, because it was the one preserved for trial, was negligent 
misrepresentation as found in Restatement (Second) of Torts § 552. That theory, 
like all misrepresentation theories, assumes that false information was supplied 
to another who incurred loss because of his justifiable reliance upon the 
information. Duffy v. Brown, 708 P.2d 433 (Wyo. 1985). See 
Rocky Mt. Helicopters, Inc. v. Air Freight, Inc., 773 P.2d 911 
(Wyo. 
1989).

 

[¶22]  The possibilities for supplying false 
information are limited by this record to only two events. The first of those 
was the listing by the Clarks of the 
property with Carroll Realty. The second was in the contract with Merrill Lynch 
Relocation Management, Inc. (ML). As to the listing with Carroll Realty, no 
liability could flow because of the limitation set forth in the Restatement 
(Second) of Torts § 552(2), which reads as follows:

 

"(2) Except 
as stated in Subsection (3), the liability stated in Subsection (1) is limited 
to loss suffered

"(a) by the 
person or one of a limited group of persons for whose benefit and guidance he 
intends to supply the information or knows that the recipient intends to supply 
it; and

"(b) 
through reliance upon it in a transaction that he intends the information to 
influence or knows that the recipient so intends or in a substantially similar 
transaction."

 

The listing 
with Carroll Realty expired substantially prior to any involvement of the Epples 
with the property, and logic teaches that the Epples could not have been 
contemplated as members of any limited group of persons for whose benefit and 
guidance Clarks may have 
furnished the information in the listing. If that limitation in the Restatement 
(Second) of Torts has any significance, then that group, as a matter of law, 
would be limited to those to whom Carroll Realty might offer the property 
pursuant to the listing.

 

[¶23]  The statement in the contract with ML 
might survive the limitation found in Restatement (Second) of Torts § 522(2) 
because one could infer from the record that the Clarks understood 
that ML would resell the property to someone. With respect to negligent 
representation, however, the definition of the tort assumes reliance upon the 
information, and the record is clear that, prior to the purchase, the Epples had 
no information relating to the contract between the Clarks and ML. They could 
not rely upon it. Furthermore, the record is equally clear that, in offering to 
purchase the property, the Epples reserved the right to have the property 
examined by their own engineering representative and that right, in fact, was 
exercised. The Epples' engineer reported no defects in the property, and the 
Epples, if they relied on anything, must have relied upon their engineer's 
report and not on the Clarks' 
statements.

 

[¶24]  Turning then to the theory of innocent 
misrepresentation, to which the Epples have shifted in this appeal, the 
Restatement (Second) of Torts § 552C also requires justifiable reliance upon a 
misrepresentation. As the majority opinion correctly notes, the application of 
that provision is limited to the immediate parties to the sale. Of more 
significance to me, however, is the fact that the Epples, as noted above, did 
not rely upon any representation by the Clarks. They 
relied upon the report of their engineer, and that report has an interesting 
significance in this case.

 

[¶25]  The Epples' engineer was never a party 
to this litigation. This omission is puzzling because the engineer, in effect, 
made the same representation that the Epples claim the Clarks made. That 
singular circumstance causes me to inquire, "what defect?" There was water in 
the basement twice while Clarks owned the 
property. On one occasion, a power failure caused by a storm prevented a sump 
pump from operating that otherwise would have kept the water from rising into 
the basement. That circumstance hardly seems to encompass a defect in the 
property. On another occasion, a neighboring landowner created what was an 
underground flood by over-irrigation of his property. The fact that water came 
into the basement as a result of a flood does not demonstrate a defect in the 
property. Instead, the record shows that normal and prudent measures were taken 
with respect to the construction of a dwelling in an area in which there was, on 
occasion, a high water table. The installation of a sump and the utilization of 
a sump pump to address that problem does not constitute a defect, patent or 
latent. Instead, it manifests a prudent construction design with the goal of 
avoiding damage to the property because of water rising into the basement. My 
analysis of these circumstances leads to the conclusion that the Epples' 
engineer correctly advised them that there was no defect in the property, and 
that is why he was not a party to the litigation.

 

[¶26]  The result then, as the progression 
clearly manifests, is that the only possibility for recovery from the 
Clarks was to 
turn to a remedy that is described in this way:

 

"* * * It 
is a rule of strict liability for innocent misrepresentation of a material fact, 
made to another in a sale, rental or exchange transaction." Restatement (Second) 
of Torts § 552C comment a. at 142.

 

The Epples 
mistakenly conclude that the theory of innocent misrepresentation makes the 
Clarks an insurer 
with respect to the property. The thrust of the Epples' ultimate position is 
that the Clarks are liable 
because they owned the house at an earlier time. I do not believe that 
Wyoming is 
prepared to adopt that rule. It goes so far beyond our cases describing an 
implied warranty of habitability that those cases would have no future 
application. In recognizing the implied warranty of habitability, this court has 
gone as far as may be necessary to justify relief to subsequent purchasers of 
dwellings. It is important to remember that the Epples presented a warranty 
theory to the trial court; a summary judgment was entered against them with 
respect to it; and, in this appeal, they have failed to prosecute any claim of 
error relating to that theory.

 

[¶27]  I agree that the decision of the trial 
court should be affirmed, but I would affirm it on these additional grounds as 
well as that set forth in the majority opinion.

 

URBIGKIT, Justice, 
dissenting, with whom MACY, Justice, 
joins.

 

[¶28]  In 1984, Gary D. Epple and Peggy E. 
Epple moved from Sterling, 
Colorado to 
Sheridan, 
Wyoming and 
purchased a new home in Sheridan. They 
contacted ERA Carroll Realty Co., Inc. which had unsuccessfully attempted to 
sell the house of Michael L. Clark and H. Bernadette Clark for a number of 
months but remained involved as a sales agency when the relocation arrangement 
process resulted in equity acquisition of the house by Merrill Lynch Relocation 
Management, Inc. from the Clarks. In 
result, the Clark house was 
presented to the Epples for sale by Carroll Realty.

 

[¶29]  The Epples had suffered through a 
basement water problem in a Westminster, 
Colorado house and 
placed highest priority on being saved the frustration of a recurrent 
experience. Dealing through Carroll Realty, undoubtedly knowledgeable about the 
house and the area where the house was situated, the Epples unfortunately asked 
the advice of Carroll Realty about an expert who could assure them that they 
would not be exposed to recurrent basement water problems if they purchased the 
Clark residence. 
Steve Carroll of Carroll Realty recommended his brother John Carroll as a 
construction expert from whom such assurance could be secured. Not so 
surprising, John Carroll found no water problems, Steve Carroll completed the 
sale, the Epples purchased the house and have suffered basement water problems 
each year since the purchase.

 

[¶30]  The fact of the matter, as undisputed in 
the record, was that the Clarks were 
knowledgeable about a general water problem in the area before they had the 
house built and then had repeated water problems in the basement. An explanation 
at trial of unusual occurrence cause was provided, but the unquestioned facts 
reveal annual water problems and at least one resulting insurance damage claim. 
Not only had the water intrusion occurred, but the house contained a basement 
sump pump. When the Clarks moved away 
to relocate in Alaska, they 
disconnected the sump pump and its connections and took it with them to 
Alaska.1

 
[¶31]  No one advised the purchasers that a 
sump pump had previously been used and then disconnected and taken away. No one 
advised the purchasers that sump pumps in the area were customary.2 The record provides a denial by 
Mrs. Clark that she ever told her counsel that they did not have a sump pump or 
that they did file insurance claims. The house was built in 1981; water problems 
occurred in the basement in September 1982 and July 1983; and the first owner 
moved out in 1984. The Epples had water problems regularly after their occupancy 
of the house commencing in the fall of 1984. The house purchase price was 
$134,000. The initial listing price in February 1984 was $175,000. The appraisal 
which was obtained to complete the sale indicated drainage unknown and sump pump 
- none. The home was located on 1.83 acres in a rural subdivision with 2,822 
gross living area square footage and was a split level basement 
structure.

 

[¶32]  However, in conjunction with the 
relocation agency sale, the Clarks signed a 
condition of the premises statement for Merrill Lynch (accompanied by a deed in 
blank). The statement, in part, certified:

 

19 
WARRANTIES

* * * * * 
*

(b) Sellers 
covenant, represent and warrant that to the best of their knowledge, information 
and belief the Sellers have disclosed to the Purchaser all information regarding 
the physical condition of the premises of which they have knowledge, and Sellers 
have not misstated or omitted any material fact with regard to any condition 
affecting the premises that if known would have an effect on the value of the 
premises.[3]

 

[¶33]  I dissent not alone because the Epples, 
as completely innocent actors, were put upon by a combination of actors and are 
now without remedy, but also because the district court and now this court 
unduly compress the theories of recovery to justify nonrecovery. I do not 
segment the transaction in order to insulate the Clarks from 
vendor responsibility under any of the customary theories of liability afforded 
by Restatement (Second) of Torts § 552C (1977).

 

[¶34]  
The Clarks knew there was a basement water problem; Steve Carroll probably knew 
there was a basement water problem; his brother John Carroll, the home basement 
condition expert, should have known there was a basement water problem; but 
Merrill Lynch, the amorphous property relocation agency, had no knowledge or 
reason to know that the certification no problem assurance supplied by the 
Clarks as the builder-owners was inaccurate.

 

[¶35]  In insulating a theory of habitability 
responsibility from a predecessor in ownership, the present decision is contrary 
to our recent decision in Deisch v. Jay, 790 P.2d 1273 
(Wyo. 1990). 
Conversely, I would not insulate the wrongful action from liability 
responsibility by the intervention of the relocation agency which essentially 
acted as a conduit for the finite result.4

 
[¶36]  On the record as presently presented, I 
would hold the summary judgment on fraud and breach of warranty to have been 
erroneous with significant issue of fact presented and the decision on the 
merits on the failure to disclose a known defect to be unsupportable as a matter 
of law. Theory development, pleading and appellate briefing is not, in my 
opinion, appropriate justification here for denial of justice to the innocent 
buyer from the misconduct caused by affirmative misrepresentation and negative 
failure to warn or advise resulting from conduct of the initial party 
responsible.

 

[¶37]  The Clarks knew they had a house with a 
basement water problem; they did not make that information available for the 
protection of the successors in house usage and ownership; and the Clarks also 
knew that the house they were selling would be resold by Merrill Lynch with both 
the ultimate buyer as well as Merrill Lynch relying on the condition of the 
premise certification which they signed to accomplish their sale. I am 
unconvinced that the buyer should bear the burden of resulting loss and/or 
diminished value for the damaged merchandise residence which they unwillingly 
purchased.

 

[¶38]  I would find the philosophy of 
Restatement (Second) of Torts as identified in philosophy with Anderson v. 
Bauer, 681 P.2d 1316 (Wyo. 1984); ABC Builders, Inc. v. Phillips, 632 P.2d 925 
(Wyo. 1981); Moxley v. Laramie Builders, Inc., 600 P.2d 733 (Wyo. 1979); Tavares 
v. Horstman, 542 P.2d 1275 (Wyo. 1975) as well as the more current case of 
Deisch, 790 P.2d 1273 and reverse both the granted summary judgment on 
intentional failure to disclose and the trial judgment of negligent failure to 
disclose and remand for a new trial.

 

Footnotes

 

1 Perhaps to fend off the frozen tundra up north.

 

2 The date 
of occupancy of the house by the Clarks is not 
completely clear, but in September 1982, they filed a notice of claim with their 
homeowner's insurance carrier and stated that "[w]ater came up into basement 
because sump pump failed, because electricity was going off and on. Carpet, * * 
* storage got soaked. Damage to the paneling."

About ten months later, July 1983, another claim was filed with the 
homeowner's insurance carrier stating that they "[w]oke up this morning & 
found water in basement. We believe water came from irrigation being done by 
neighbors in subdv."

Prior to 
litigation, an exhibit reveals that counsel for the Clarks wrote to 
counsel for the Epples which included the following 
statements:

In 
addition, Mr. and Mrs. Clark strongly dispute your characterization of a latent 
defect in the house. There never has been a sump pump installed on the premises. 
At the time the house was constructed, an opening was made for a sump pump to be 
installed if necessary. The Clarks did not 
have a recurrent seepage problem which would have necessitated the purchase and 
installation of the sump pump. On two separate occasions, a portable, 
submersible pump was utilized to remove water in the basement. The first time 
water appeared in the basement was in the spring of 1982, and the second in 
1983. No problem with seepage was experienced in 1981 or 
1984.

* * * * * *

My clients are unaware of any insurance claims they filed for water 
damage.

In further communication, a letter was written asserting that only one 
insurance claim had been made and then further 
stated:

As I stated 
to you in my earlier letter, the Clarks never 
owned a sump pump, they did own a portable, submersible pump. If Mrs. Clark 
described it as a sump pump, she was in error.

The Epples 
employed a highly reputable Sheridan 
professional engineer, Larry D. Baccari, who concluded that a problem existed of 
"water entering the basement during periods where there is a high amount of 
surface moisture around the residence." He further 
noted:

Mr. Epple noted that the water infiltration problem only occurs when 
there is surface moisture available. This information discounts the possibility 
that the water problem is the result of a rising groundwater table. Further, the 
water is entering around the perimeter of the basement walls, without 
necessarily filling the sump in the basement. This reinforces the expectation 
that the water source is surface water which is following the foundation walls 
down to the footings, then flowing under the footing or through the footing 
foundation wall joint, to enter around the perimeter of the basement 
slab.

The surface drainage around the home is towards the home on what I 
believe to be the north and east sides (I am not sure of the true orientation of 
the home). This situation will continuously subject the home to surface water 
running up to the foundation walls on at least two sides of the home. It also 
appears that this condition will tend to saturate the area beneath the parking 
slab in front of the garage. It is my opinion that this continual introduction 
of excess moisture around and under the home, can be expected to lead to ongoing 
problems. At the very best I would expect the water infiltration to the basement 
to continue, and at the worst there could easily be displacement of footings and 
continual movement in the floor slabs which are poured on grade for the living 
room, dining room, atrium, kitchen, and garage.

Appellee Michael L. Clark, with a bachelor of science degree in mining 
and engineering and ten years experience, could rationally be expected to know 
that a sump pump is a pump that is put in the sump in the basement to remove 
water before the basement floods. The testimony of H. Bernadette Clark revealed 
that the sump pump was installed when the basement floor was put 
in.

Q. Did you ask him [building contractor] to put it 
in?

A. No. I don't recall asking him to put it in. I would think maybe that 
was part of his job and that's probably his 
suggestion.

Q. Did he just do it on his own?

A. I'm not sure. I think we probably discussed it. We talked a lot as we 
built the home.

Q. Isn't it true that you had discussed with your neighbors, Deurloos, 
that they had sump pumps and Mr. Larson having built their home recommended a 
sump pump for you?

A. Yes, I think so.

 

3 There are a lot of actors in this wet basement house problem as a fraud 
perpetrated upon the Epples. Why more if not all were not included in this 
litigation is undisclosed, although Merrill Lynch was once included and then 
dismissed by summary judgment on the basis of no knowledge of the water problem. 
We have here the original builders who, as occupants, knew that some problem 
existed and then willingly signed the resale form with its false certification 
of property condition.

The house 
was constructed on the alluvial plane topography in the 
Sheridan area, 
adjacent to irrigated farm land in an area of existent basement sump pump usage, 
built with a perimeter drain system and accommodated with a submersible sump 
pump. Anyone with fair knowledge of the Sheridan area would 
have known that an operational sump pump would be indispensable in the spring 
and that the house was "high risk" for basement water with overload power usage 
or flooding condition during that spring season with the raised subsurface water 
cycle inevitably to occur. Unfortunately, no one told the Epples any of this 
when the house was shown and the sale completed.

 

4 Merrill 
Lynch never took title. The deed was signed in blank by the 
Clarks and was 
completed by insertion of the Epples' names who consequently took title by 
warranty deed from the original builder-owners, the 
Clarks.