Opinion ID: 345741
Heading Depth: 1
Heading Rank: 2

Heading: Analysis of Arguments on Appeal.

Text: 9 The question raised by both of appellants' misrepresentation claims is whether the appellants were informed that no proper soil tests had been made on the lot and, if so, when the appellants became aware of such information. The record shows that the Maness report, made available to the appellants as indicated above, contained a notation indicating as follows: 10 Due to lack of information from Engr's (engineer's) report . . . no soil test holes found (none made) we cannot approve the low lots until wet weather test (sic) are made which are blocks S10, S8, S7, S6, S5, S4 Lot L-7 and Lot 0-2 (.) All other lots in this second edition seem to be O K (A. 10). 11 Appellant Mann contends that he did not consider the above statement, including the none made notation, to have any bearing on lot L-8 since that lot was not one of the lots that had been disapproved. Moreover, Mann contends that he informed Adams of his intention to construct a house for Dennard on the lot and that Adams represented that the lot was suitable for such construction. In Mann's affidavit in support of his motion to reconsider, he claims to have made the following statement to Adams: Charles, you know if the septic system will not work I would not buy the lot because I could not get permanent financing for my purchase. According to the affidavit, Adams responded, Everything is fine. 3 12 Mann contends that Adams told him work had been done on the lots, that lot L-8 had been approved and that no further work remained to be done on lot L-8 with respect to septic tank usage. Mann contends further that he relied on Adams' representations and agreed to purchase the lot without making inquiry as to the meaning of the none made notation appearing in the Maness report. As a result, Mann took title to lot L-8 under an agreement to construct a home for Dennard with title to be conveyed back to Dennard upon completion of construction. Mann also contends that when he heard of the revocation of the permit by the County, he contacted Maness and was told that the revocation occurred because some builders had begun construction on lots which had not been approved and that Mann, not considering himself one of those guilty parties, assumed that the revocation had to do with lots other than L-8. 4 13 The district court focused on two separate allegations raised by appellants in support of their claim of knowing and intentional misrepresentation: (1) the concealment by appellees that no test boring holes had been made; and (2) the concealment by appellees of Maness' verbal advice that the defendants should secure additional tests. As to the first allegation, the district court held that the statute of limitations had run because the appellants had been informed that no soil test holes were made before they purchased the lot. The court noted that, before Mann took title to lot L-8 on May 24, 1973, Charles Adams showed him a copy of the Maness report indicating that no test holes had been made. Since this occurred well before a year prior to the commencement of this action, the court granted appellees' motion to dismiss under Rule 12(b) (6). 14 The court also dismissed the second allegation of knowing and intentional misrepresentation on the ground that the court believed a mere concealment or nondisclosure of a fact was insufficient to constitute an actionable fraud in Alabama. Furthermore, the court held that even if a valid claim had been stated, it would also be barred by the statute of limitations. The court held that the plaintiffs were forewarned of the fraud shortly after August 10, 1973, on which date the Lee County Health Department revoked its initial approval of lot L-8 for septic tank use. This notice, the district court held, required the appellants to discover any more specific facts which they contended constituted a fraud against them. Since the appellants' complaint failed to allege that they had made any effort to discover such facts, the district court concluded that the claim was barred. Moreover, the court denied appellants' motions to amend the complaint and to reconsider, even though the latter motion was accompanied by an affidavit indicating that appellant Mann had attempted to determine the cause of the revocation. 15 The court also indicated that neither of the claims remained viable under another Alabama statute of limitations pertaining to persons who design, plan, supervise or construct improvements on real property, 5 since the subject matter of this suit is the suitability of the soil for septic tank use and not a claim pertaining to an improvement on the real estate. 16 The appellants take issue with all of the above conclusions of the district court. First, the appellants contend that the none made notation on the Maness report was inadequate to put them on notice that no test holes had been made on lot L-8. The notation, they suggest, might indicate to a reasonable man that only Maness himself had not made any test holes or that the notation did not apply to lot L-8 in any way since that lot was not specifically mentioned. In response to this argument, the appellees contend that the information contained in the report is a sufficient statement of facts to provoke inquiry in the mind of a reasonable, prudent person. The appellees contend further that appellants received notice of their potential claim against appellees no later than the time when Mann, in the latter part of September, 1973, discovered that the County permit had been revoked. The appellees also contend that the notice of revocation would have prompted a reasonable, prudent person to take measures to inquire as to the suitability of the lot for septic tank usage. 17 In response to this latter contention, the appellants argue that Mr. Mann in fact exercised due diligence by inquiring of Maness as to the cause of the revocation. Although Mann discussed this matter with Maness, who told him that the problem pertained to other lots and not to his, Mann did not contact the appellees about this problem. Moreover, the appellees argue that Mann insisted on beginning construction on his lot even after he was advised by Maness that he, Maness, would not change his stance on the matter. The appellees contend further that Mr. Mann was in the business of constructing residential buildings, and, due to his expertise and knowledge in this area, he should be charged with certain knowledge and responsibilities as to the suitability of the land. Finally, the appellees note that Mann completed construction of his septic tank system in September, 1973. He did not, however, have the system tested immediately upon completion to determine if it would in fact perform as it should. Appellees contend that he waited almost a year to have the tests made, even though, under standard business practice, a building contractor would have had the inspection done immediately once the work was completed. The appellees further contend that, although the district court relied upon both the revocation letter of August 10, 1973, and the none made notation in the Maness report as giving notice to the appellants, both or either of these events would have been sufficient to commence the running of the statute of limitations. 18