Opinion ID: 1800221
Heading Depth: 1
Heading Rank: 2

Heading: Fraud and Suppression

Text: Kilgore's theory of the case is that it was induced by fraud and/or fraudulent suppression to purchase lots in Southland on the false premise that the soil beneath the lots was suitable for the use of conventional septic-sewage systems. More specifically, Kilgore says it purchased the lots on the basis of a misrepresentation by Buchalter that the residences constructed on the lots would be on conventional septic tanks and on the basis of the health department's representation that the lots were acceptable for conventional [septic] systems. Kilgore also insists that Buchalter deceived the health department as to modifications to the soil Buchalter allegedly made between Buchalter's submission of the preliminary report and the final report in order to acquire the health department's approval of the final report. Kilgore contends that Buchalter's representations to the health department, on which Kilgore also allegedly relied, were based on the allegedly inaccurate soil tests Buchalter provided the health department. In the alternative, Kilgore argues that Buchalter suppressed information known to Buchalter that the soil beneath Southland was unsuitable to the use of conventional septic-sewage systems. According to Kilgore, the trial court erroneously held that the as is nature of the sale of the lots precluded Kilgore's fraud and suppression claims. Buchalter, on the other hand, essentially argues that the `as is' language of the contract, in conjunction with the doctrine of caveat emptor,  bars Kilgore's recovery on the fraud and suppression claims. Buchalter's brief, at 61. The dispositive issue, therefore, involves the interplay between the doctrine of caveat emptor and the as is clause in the contract. Although this Court has abrogated the rule of caveat emptor in the sale of a new house, the doctrine still applies to the sale of a `used' house. Nesbitt v. Frederick, 941 So.2d 950, 956 (Ala.2006); see Moore v. Prudential Residential Servs. Ltd. P'ship, 849 So.2d 914, 923 (Ala. 2002). The rule also still applies to the purchase of unimproved land. DeAravjo v. Walker, 589 So.2d 1292, 1293 (Ala. 1991) (emphasis added); see Morris v. Strickling, 579 So.2d 609 (Ala.1991). DeAravjo involved an action by Frances and Jose DeAravjo against Harold Walker, a real-estate developer, arising out of Walker's sale of a vacant lot on which a house was eventually built and purchased by the DeAravjos. 589 So.2d at 1293. This Court affirmed a summary judgment for Walker on the ground that caveat emptor applied to the purchase of unimproved property. Id. Kilgore attempts to distinguish DeAravjo, apparently on the theory that this case involves utilities installations that were not involved in DeAravjo. The vacant lot in that case had been modified before the sale by the installation of a drainage system and curbs and gutters. Id. In this case, some utilities lines had been brought up to the lots before the sale. Indeed, Kilgore contends that these lots  unlike the lot in DeAravjo  were, in fact, improved. This Court has previously rejected similar arguments. In DeAravjo, for example, we said: We reaffirm our recent holding in Morris v. Strickling, 579 So.2d 609 (Ala. 1991), that the doctrine of caveat emptor applies with regard to the purchase of unimproved land: `The Morrises argue that the exception to the caveat emptor rule as stated in Cochran v. Keeton, 287 Ala. 439, 252 So.2d 313, 314 (1971) (holding that the rule caveat emptor would no longer be applicable to the sale of a newly constructed house, and recognizing an implied warranty of fitness and habitability with regard to such sales), should be extended to situations, such as the one at bar, involving the purchase of an unimproved piece of property. We disagree. `The Court of Civil Appeals has addressed the purchase of real estate as follows: `Furthermore, while Alabama courts recognize the implied warranty of fitness and habitability for the purpose purchased [sic] in newly constructed homes, we know of no such implied warranty extending to the purchase of lands. The physical condition of the premises has fallen under the rule of caveat emptor. See Cochran v. Keeton, 287 Ala. 439, 252 So.2d 313 (1971); 77 Am.Jur.2d Vendor and Purchaser § 329. ` Scott v. Gill, 352 So.2d 1143, 1145 (Ala.Civ.App.1977). While the Morrises argue that the Scott case dealt with raw, vacant and unimproved land as opposed to land improved for the purpose of building houses, we are unwilling to extend the Cochran exception to land with no dwelling, because we are of the opinion that the dispositive question would then become the often difficult question of whether a particular parcel is improved or unimproved and, if improved, then for what purpose.' 589 So.2d at 1293-94 (emphasis added). Under the principle stated in Morris and reiterated in DeAravjo, unimproved property simply means land with no dwelling. It is undisputed that the property Kilgore purchased was land with no dwelling. Consequently, caveat emptor applies to Kilgore's purchase of lots 5 and 26. Under a growing body of Alabama caselaw involving circumstances in which the rule of caveat emptor is applicable, a fraud or fraudulent-suppression claim is foreclosed by a clause in a purchase contract providing that the purchaser of real property accepts the property as is. Moore v. Prudential Residential Servs., 849 So.2d at 923; Leatherwood, Inc. v. Baker, 619 So.2d 1273, 1274 (Ala.1992); Haygood v. Burl Pounders Realty, Inc., 571 So.2d 1086, 1089 (Ala.1990); and Massey v. Weeks Realty Co., 511 So.2d 171 (Ala. 1987). This is so, because an as is clause negates the element of reliance essential to any claim of fraud and/or fraudulent suppression. Haygood, 571 So.2d at 1089; Massey, 511 So.2d at 173; and Gaulden v. Mitchell, 849 So.2d 192, 199 (Ala.Civ.App. 2002). Kilgore does not cite any of those cases, and it does not ask us to overrule that line of authority. Even if we would be amenable to such a request, we are not inclined to abandon precedent without a specific invitation to do so. Stare decisis commands, at a minimum, a degree of respect from this Court that makes it disinclined to overrule controlling precedent when it is not invited to do so. Moore, 849 So.2d at 926. Kilgore purchased the lots in this case as unimproved property, subject to an as is clause in the purchase contract. Under Massey and its progeny, its fraud and suppression claims are precluded. The trial court did not err, therefore, in entering summary judgments on those claims.