Opinion ID: 1696059
Heading Depth: 1
Heading Rank: 2

Heading: fraudulent suppression of material fact

Text: On appeal, Auction & Real Estate does not argue its claims of fraud, misrepresentation and deceit, and intentional or gross and reckless fraud; thus, those issues are waived. Bogle v. Scheer, 512 So.2d 1336 (Ala.1987). Auction & Real Estate does argue its claim of fraudulent suppression of a material fact, and that is the theory we may consider in the context of the original fraud claim. Auction & Real Estate says that it established all of the elements of an action based on fraudulent suppression of a material fact as defined under Ala.Code 1975, § 6-5-102. Section 6-5-102 states that [s]uppression of a material fact which the party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case. Auction & Real Estate argues that ERA and Shinault had a duty to disclose to it, before the sales contract was signed, the fact that there were some potential title defects. We disagree. In support of this argument, Auction & Real Estate relies on this Court's decision in Jim Walter Homes, Inc. v. Waldrop, 448 So.2d 301 (Ala.1983). In Jim Walter Homes we stated that in order for silence to be an actionable fraud, there must first be a duty to speak: The legal duty to communicate depends upon the existence of a fiduciary relationship, or relationship of trust or confidence between the parties, the value of a particular fact, the relative knowledge or inequality of condition of the parties, or other attendant circumstances.... `... [T]he types of relationships wherein a duty to disclose has been found indicate that the Alabama courts give little attention to the designation of the relationship, such as vendor-vendee, etc., but instead look to the relative bargaining positions of the parties.... Where one party has some particular knowledge or expertise not shared by the plaintiff a duty to disclose has been recognized.' Furthermore, `each case must be individually examined to determine whether a duty of disclosure exists; a rigid approach is impossible, and, indeed, the words of the statute itself [Ala.Code 1975, § 6-5-102] counsel flexibility.' 448 So.2d at 306 (quoting Jim Short Ford Sales, Inc. v. Washington, 384 So.2d 83, 87 (Ala.1980)) (citations omitted). In Jim Walter Homes this Court affirmed a verdict in favor of a buyer against the seller based on the fraudulent suppression of a material fact. The seller, Jim Walter Homes, was a corporation in the business of buying real estate, building houses on it, and then selling it. The buyers, husband and wife, had purchased a house that Jim Walter had built. We held that it was a question for the jury whether Jim Walter had had a duty to disclose to the buyers that there was a pending lawsuit regarding ownership of the property. The Court found that the plaintiffs had presented evidence (1) that the branch manager and field representative of Jim Walter knew of pending litigation regarding ownership of the property, (2) that the field representative had told the salesman who dealt with the plaintiffs that there was no problem in selling the property, and (3) that the plaintiffs were possibly in an inferior bargaining position in their dealings with Jim Walter. Consequently, the Court held that the plaintiffs had presented enough evidence to create a jury question on the issue of fraud. In this case, however, the trial court heard the evidence ore tenus and held that there was no fraudulent suppression on the part of ERA and Shinault. Although the trial court gave no reason for its judgment, this Court will assume that it made whatever findings would be necessary to support its judgment. Lakeview Townhomes v. Hunter, 567 So.2d 1287 (Ala.1990). Therefore, we will not disturb the trial court's judgment unless it is clearly erroneous, without supporting evidence, manifestly unjust, or against the great weight of the evidence. Cougar Mining Co., supra. The facts presented at trial show that ERA and Auction & Real Estate are both corporations in the real estate business, and that the incident in question involved an arm's length negotiation between the parties. Auction & Real Estate argued that ERA committed fraudulent suppression because ERA did not disclose that Herman L. Brown was not the sole owner of the property at the time Auction & Real Estate signed the contract to purchase the property. This Court has held that in an arm's length transaction [t]here is no duty to disclose facts when information is not requested, and mere silence does not constitute fraud in the absence of a confidential relationship. Ray v. Montgomery, 399 So.2d 230, 232 (Ala.1980). The transaction at issue in this case was plainly an arm's length negotiation for the sale of real estate involving two corporations in the business of buying and selling real estate. ERA and Shinault were acting in their capacity as real estate agents for the seller, Herman L. Brown. The relationship between Auction & Real Estate and ERA was neither confidential nor of such a nature that disclosure of material information was dictated. There is no evidence of unequal bargaining power. See Trio Broadcasters, Inc. v. Ward, 495 So.2d 621 (Ala.1986). Considering the relative knowledge of the parties, this Court has recognized that an obligation to disclose does not arise where the parties to a transaction are knowledgeable and capable of handling their affairs. See, Bank of Red Bay v. King, 482 So.2d 274 (Ala.1985); Trio Broadcasters, supra; Berkel & Co. Contractors, Inc. v. Providence Hosp., 454 So.2d 496 (Ala.1984); Webb v. Renfrow, 453 So.2d 724 (Ala.1984); Collier v. Brown, 285 Ala. 40, 228 So.2d 800 (1969); Mudd v. Lanier, 247 Ala. 363, 24 So.2d 550 (1945). In addition, the fact that Herman L. Brown was not the sole owner of the property was of public record and could have been easily discovered by Auction & Real Estate, had it sought the information. Based on the facts of this case, we find that there was sufficient evidence to support a finding that there was no fiduciary relationship between ERA and Auction & Real Estate and that there was no unequal bargaining power between the parties. Therefore, we conclude that the trial court could properly have found that there was no duty on the part of ERA to disclose to Auction & Real Estate that Herman L. Brown was not the sole owner of the property at the time the contract was signed. Accordingly, the judgment of the trial court is affirmed insofar as it held in favor of ERA and Shinault on the fraudulent suppression claim. AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. MADDOX, SHORES, HOUSTON and KENNEDY, JJ., concur.