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08/25/95 GARY W. CRUSE AND VENITA R. CRUSE v.

August 25, 1995

GARY W. CRUSE AND VENITA R. CRUSE
v.
COLDWELL BANKER/GRABEN REAL ESTATE, INC.



Appeal from DeKalb Circuit Court. (CV-94-005). David A. Rains, TRIAL JUDGE.

Butts, Justice. Hornsby, C. J., and Maddox, Shores, Ingram, and Cook, JJ., concur. Houston and Kennedy, JJ., Dissent.

The opinion of the court was delivered by: Butts

BUTTS, JUSTICE.

Gary Cruse and his wife Venita Cruse sued Randy Harris and his wife Brenda Harris, Coldwell Banker, and Graben Real Estate, Inc. (Coldwell Banker and Graben Real Estate hereinafter referred to collectively as "Graben Real Estate"), alleging defective workmanship in the construction of a house that they had bought from the Harrises and alleging that the defendants had fraudulently misrepresented and/or suppressed material facts concerning the condition of the house. Graben Real Estate moved for a summary judgment; the trial court granted the motion and then certified the judgment as final, pursuant to Rule 54(b), Ala.R.Civ.P. The Cruses appeal.

A summary judgment is proper and must be affirmed where there exists no genuine issue of material fact and the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala.R.Civ.P. Viewed in a light most favorable to the Cruses, the evidence shows that the Cruses were in the market for a home in early November 1992. They contacted Graben Real Estate to find out what was available, and Graben Real Estate agent Mischa Kelley took the Cruses to see the Harrises' house. Randy Harris, a building contractor, had built the house for sale, and he and his wife were occupying it at that time. Graben Real Estate listed that house as "new" in its real estate advertisements, and Mischa Kelley told the Cruses that it was new. She also told the Cruses that the house was comparable to, or even better than, the other houses in the neighborhood; that it was a good buy; and that if they purchased the house they could look forward to years of convenient, trouble-free living.

The Cruses signed a contract on November 11, 1992, to purchase the house from the Harrises. The Cruses visited the property on two to four occasions before the closing date and partially inspected the house. When they told Kelley that they wanted to hire an independent contractor to assess its condition, she told them that it was not really necessary to do so because Randy Harris was a contractor and because the house was well-built. The Cruses did not have the house professionally inspected, nor did they closely inspect it themselves, before they purchased it on November 30, 1992.

On that day, the Cruses signed an "Acceptance Inspection Contract," which stated, in relevant part:

"As of this date we, the undersigned Purchasers, have inspected the above property or have waived our right to do so and accept it in 'as is' condition.

"We expressly agree that the decision to purchase the property was based on our own inspection and evaluation and that neither the Seller nor any Brokers or Salespersons involved in any part of this transaction made any representations, statement or claims as to the age, square footage, or condition of the property ... upon which we based our decision to purchase.

"We also agree that the Brokers and Salespersons have no responsibility or liability for repair or replacement of any of the property or its equipment items."

The Cruses took possession of the residence in mid-December 1992 and, soon thereafter, they began noticing many defects in the structure and in its electrical wiring. They contacted Graben Real Estate, who sent an agent to remedy the problems. The defects continued and multiplied, and this lawsuit resulted.

To establish fraudulent misrepresentations, the Cruses are required to show that Graben Real Estate made a false representation concerning a material fact and that they relied upon that representation, to their detriment. Fennell Realty Co. v. Martin, 529 So. 2d 1003 (Ala. 1988). The Cruses contend that Graben Real Estate represented to them that the house was new; that, in reliance on that representation, they decided not to hire a contractor to inspect the house and discover its defects; and that that reliance resulted in damage to them.

Graben Real Estate argues that, because the Cruses, before buying the house, saw that the Harrises were living in the house, they were not justified in relying on the representation that the house was new. Graben Real Estate also emphasizes that the Harrises signed an "as is" statement, indicating that they had inspected the house and were satisfied with its condition, and concludes that the Cruses have therefore waived any claims arising from defects in the house.

In its order, the trial court apparently found that Graben Real Estate's listing of the house as new and Kelley's statements about the condition of the house were "mere puffery," upon which the Cruses could not have justifiably relied. The trial court cited Cooper & Co. v. Bryant, 440 So. 2d 1016 (Ala. 1983), wherein the buyers of a used residence sued their realtor, alleging a fraudulent misrepresentation arising from a real estate listing that had described the condition of the house as "excellent." This Court held that the listing merely reflected the opinion of the ...


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