Wednesday, March 20, 2013

Alires v. McGehee case brief

Alires v. McGehee case brief summary
277 Kan. 398, 85 P.3d 1191

SYNOPSIS: Plaintiff buyers filed suit against defendant sellers on the basis that the sellers had fraudulently misrepresented the condition of the house. The trial court entered judgment for the buyers. The Kansas Court of Appeals reversed. The buyers appealed.

OVERVIEW: The buyers argued, inter alia, that the court of appeals erred in concluding that the sellers had no intent to deceive in their representation about basement leakage and that the buyers were justified in relying upon the statements regarding the basement.

The supreme court disagreed.

-The buyers could not reasonably have relied upon representations of the sellers when the truth or falsity of the representation would have been revealed by an inspection of the subject property and the misrepresentations were made prior to or as part of the contract in which the buyers contracted for the right to inspect, agreed that the statements of the sellers were not warranties, did not replace the right of inspection, declined inspection, and waived any claims arising from defects which would have been revealed by an inspection.
-There was no showing that the subsequent contract addendum which contained the waiver of the right to inspect was induced by any additional misrepresentations of the sellers.

-To prove fraudulent concealment in a real estate contract, a plaintiff must establish that the party concealing facts was under a legal or equitable duty to communicate those facts to the plaintiff.
-Where a real estate contract is induced by a false representation of fact, it is not a defense that the buyer could have discovered the falsity of the representation if due diligence had been exercised. -However, the fact that there is an undertaking to investigate relates to both the issues of whether the representation was material and of whether the recipient of the information reasonably relied upon the representation.

OUTCOME: The judgment of the court of appeals reversing the trial court was affirmed. The judgment of the trial court was reversed.

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