Title: O'Mara v. Dykema

State: arkansas

Issuer: Arkansas Supreme Court

Document:

Steven O'MARA, et al. v. Dan DYKEMA, et al.

96-1043                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered April 28, 1997


1.   Judgment -- grant of summary judgment -- standard of review. -
     -  Summary judgment should only be granted when it is clear
     that there are no disputed issues of material fact; it is
     appropriate to sustain a grant of summary judgment if the
     evidence brought before the trial court by the moving party
     shows that there is no genuine issue as to any material fact
     and that the moving party is entitled to judgment as a matter
     of law. 

2.   Judgment -- summary judgment -- burden of proof and factors on
     review. -- Appellees, as movants for summary judgment, bear
     the burden of showing that there is no issue of material fact;
     all evidence must be viewed in the light most favorable to
     appellants, as they are the parties resisting the motion; they
     are also entitled to have all doubts and inferences resolved
     in their favor; however, they may not rest upon the mere
     allegation of their pleadings; Ark. R. Civ. P. 56 requires
     their response, by affidavits or other evidence, to show
     specifically that there is a genuinely disputed issue of
     material fact; once a movant makes a prima facie case for
     summary judgment, the respondent must then meet proof with
     proof by showing that there remains a genuine issue of
     material fact.  
3.   Judgment -- when grant of summary judgment proper -- failure
     to present proof of essential element of claim entitles movant
     to summary judgment as matter of law. -- Even if there are
     disputed facts, if reasonable minds would not differ as to the
     conclusion to be reached, then a grant of summary judgment is
     proper; if a respondent to a motion for summary judgment
     cannot present proof on an essential element of the claim, the
     movant is entitled to summary judgment as a matter of law.  

4.   Fraud -- action for misrepresentation -- elements of. -- The
     elements of a cause of action for misrepresentation are: (1)
     a false representation of a material fact; (2) knowledge or
     belief on the part of the person making the representation
     that the representation is false; (3) an intent to induce the
     other party to act or refrain from acting in reliance on the
     misrepresentation; (4) a justifiable reliance by the other
     party; and (5) resulting damages.

5.   Fraud -- appellants failed to present essential elements of
     claim -- summary judgment properly granted on claim of
     misrepresentation. -- Appellees were entitled to summary
     judgment as a matter of law on the claim of misrepresentation
     because appellants failed to produce a genuine issue of
     material fact that appellees knew that a dryvit was defective
     or that they falsely represented to them that it was not
     defective; appellants failed to meet proof with proof because
     they brought forth no specific facts indicating that appellees
     experienced problems with the dryvit itself or knew it was
     defective, much less that they falsely represented these
     facts.

6.   Fraud -- fraudulent representation -- when grant of summary
     judgment on claim of misrepresentation is appropriate. --
     Representations are considered fraudulent when the one making
     them either knows them to be false or, not knowing, asserts
     them to be true; a grant of summary judgment on a claim of
     misrepresentation is appropriate when a plaintiff does not
     produce specific facts that the defendant knew his
     representations were false. 

7.   Negligence -- three-year statute of limitations applicable to
     tort actions -- affirmative acts of concealment will toll
     statute of limitations. -- A three-year statute of limitations
     applies to all tort actions not otherwise limited by law, and
     the statute begins to run when the acts occur; however,
     affirmative actions of concealment of a cause of action will
     toll the statute of limitations.

8.   Negligence -- tolling of statute of limitations -- affirmative
     acts of concealment discussed. -- When there have been
     affirmative acts of concealment, the statute of limitations
     begins to run again at the time the cause is discovered or
     should have been discovered by reasonable diligence; no mere
     ignorance on the part of the plaintiff of his rights nor the
     mere silence of one who is under an obligation to speak will
     prevent the statutory bar; there must be some positive act of
     fraud, something so furtively planned and secretly executed as
     to keep the plaintiff's cause of action concealed, or
     perpetrated in a way that conceals itself; if the plaintiff,
     by the exercise of reasonable diligence, might have detected
     the fraud, he is presumed to have had reasonable knowledge of
     it.

9.   Negligence -- appellant's argument to toll statute of
     limitations without merit -- no evidence of affirmative acts
     of concealment by appellants given -- trial court properly
     granted summary judgment. -- Appellants argument that the
     statute of limitations should have been tolled because the
     defect was latent and the facts stated in their cause of
     action for misrepresentation were sufficient to prove
     fraudulent concealment was without merit where appellants put
     forth no evidence of any affirmative acts of concealment by
     appellees of any defective condition; therefore, there was no
     genuine issue of material fact concerning fraudulent
     concealment; the supreme court held that the trial court
     properly granted summary judgment.  

10.  Products liability -- proof necessary to sustain action --
     trial court's decision affirmed where appellant failed to
     provide proof of essential element of claim. --     To sustain
     a cause of action for strict products liability, it is
     necessary to prove that the product, in this case a house, was
     in a defective, unreasonably dangerous condition; the fact
     that a product does not meet expectations of the user does not
     meet the definition; the product must be "unreasonably
     dangerous" as well as defective; appellants' pleadings and
     affidavits did not reveal any assertion that the degradation
     of exterior wall surfaces made the house unreasonably
     dangerous; because appellants did not plead or provide proof
     of this essential element of the claim, the trial court's
     decision was affirmed. 



11.  Vendor & purchaser -- implied warranty of habitability arises
     by operation of law -- when implied warranties may be
     excluded. -- By operation of law, a builder-vendor gives
     implied warranties of habitability, sound workmanship, and
     proper construction; the implied warranty does not rest upon
     an agreement, but arises by operation of law and is intended
     to hold the builder-vendor to a standard of fairness; however,
     implied warranties may be excluded when the circumstances
     surrounding the transaction are in themselves sufficient to
     call the buyer's attention to the fact that no implied
     warranties are made or that a certain implied warranty is
     excluded. 

12.  Vendor & purchaser -- implied warranties excluded by language
     that calls buyers attention to exclusion of warranties --
     implied warranty of habitability waived when buyer purchases
     property "as is." -- Under the provisions of Ark. Code Ann. 
     4-2-316, all implied warranties are excluded by expressions
     such as "as is," "with all faults," or "other language which
     in common understanding calls the buyer's attention to the
     exclusion of warranties and makes plain that there is no
     implied warranty"; regarding real estate contracts, the
     implied warranty of habitability is waived when the buyer
     purchases the property "as is." 

13.  Vendor & purchaser -- contract drafted by appellants evidenced
     no intent to rely on any implied warranties -- trial court
     correctly found no genuine issue of material fact concerning
     cause of action for breach of implied warranty of
     habitability. -- Where it was clear from the language of the
     contract of sale, which appellants drafted, that there was no
     intent on their part to rely upon any implied warranties;
     where, having drafted the document themselves, appellants
     could make no serious argument that it was not called to their
     attention that they were not relying upon implied warranties;
     and where the offer that they presented stated that they were
     purchasing the property "as is," the trial court was correct
     in finding that there was no genuine issue of material fact
     that they had a cause of action for a breach of the implied
     warranty of habitability.
     

     Appeal from Benton Circuit Court; Tom J. Keith, Judge;
affirmed.
     Everett Law Firm, by:  David D. Stills and Thomas A. Mars, for
appellants.
     Gocio, Dossey & Reeves, by:  Jerry B. Dossey, for appellees.

     Ray Thornton, Justice.
     Appellants Steven and Cynthia O'Mara purchased a home from
appellees Dan and Lisa Dykema on December 11, 1992.  Appellees had
been living in the house, which they built by hiring various
materialmen, for approximately two years.  They were approached by
a realtor who asked them if they would consider an offer from
appellants to buy the house.  Although the house had not been on
the market, they accepted the offer.
     Appellants elected to inspect the house themselves prior to
purchasing it, rather than hire a professional.  The exterior walls
of the house are made of a material called "dryvit," a plastic
material similar to stucco.  Upon inspection, appellants noticed a
hole in an outside wall, which appellees told them was caused by a
rock pitched by a lawn tractor.  Appellants repaired the hole at
their expense.
     In 1995, after living in the house approximately three years,
appellants became aware that the exterior walls were cracking and
crumbling and moisture was entering the house through these cracks. 
They filed a complaint against appellees, alleging
misrepresentation, negligence, strict liability, and breach of
warranties.  Appellees filed a motion for summary judgment on all
four claims, which the trial court granted.  Appellants bring this
appeal from the order granting summary judgment, and we affirm.
     In support of their complaint, appellants alleged that
appellee Dan Dykema was a professional real estate contractor and
that he built the house; that appellees had encountered problems
with the application of the dryvit to the exterior walls, and had
allowed the subcontractor to take shortcuts as a temporary
solution; and that at the time appellants purchased the house,
there was no visible evidence of any defect.  Further, they
asserted that appellees knew the walls were defective and would
eventually crack, bubble, and crumble, and that they failed to
disclose this defect to appellants in order to induce them to buy
the property.
      Appellants claimed that appellees represented the walls to be
in good condition, and that the condition of the walls was material
to their decision to buy the house.  They maintained that appellees
impliedly warranted that the house was habitable, had been properly
constructed, and was in good condition.  Appellants' complaint also
stated that appellees owed a duty to them to exercise reasonable
care in the construction of the home, that they failed to do this,
and that this failure proximately caused them damage. 
     Appellees denied that they had made any misrepresentations to
appellants or that they had any knowledge that the dryvit was
defective.  Pleading affirmatively, appellees' answer stated in
pertinent part that the statute of limitations had run on the
negligence claim, as more than three years had elapsed since the
home was constructed.  Further, they claimed that appellants had
waived any reliance on warranties in their offer to buy the house.
     At the hearing on the motion for summary judgment, the
arguments centered around whether appellees could be considered a
builder-vendor for purposes of the implied warranty of
habitability.  Appellees filed a supplemental brief in which they
urged the court to find that the fact that they had hired multiple
contractors to build a residence according to prepared plans and
specifications and for their own occupancy, and that on a previous
occasion they had built another house in which they resided for a
number of years, did not make them a builder-vendor for the
purposes of the implied warranty of habitability.
     Standard of review.  The standard of review for a grant of
summary judgment is familiar.  Summary judgment should only be
granted when it is clear that there are no disputed issues of
material fact.  Franklin v. Osca, Inc., 308 Ark. 409,