Court Opinion

ID: 9595800
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:43:27.340271+00
Date Added: 2024-06-11T18:01:31.290501
License: Public Domain

URBIGKIT, Justice,
dissenting, with whom MACY, Justice, joins.
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.
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.
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
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 pro*685vides 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.
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
⅜ ⅜ ⅝ # ⅜ ¡jc
(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]
*686I 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).
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.
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
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.
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.
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.

. Perhaps to fend off the frozen tundra up north.

. 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.
*685The 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.

. 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 sub*686surface water cycle inevitably to occur. Unfortunately, no one told the Epples any of this when the house was shown and the sale completed.

. 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.