Flakus v. Schug

329 N.W.2d 859, 213 Neb. 491, 1983 Neb. LEXIS 971
CourtNebraska Supreme Court
DecidedFebruary 11, 1983
Docket81-822
StatusPublished
Cited by23 cases

This text of 329 N.W.2d 859 (Flakus v. Schug) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flakus v. Schug, 329 N.W.2d 859, 213 Neb. 491, 1983 Neb. LEXIS 971 (Neb. 1983).

Opinion

Caporale, J.

The sellers of residential real estate, Mr. and Mrs. Steven L. Schug, defendants in the trial court, appeal from the $3,500 judgment entered pursuant to a jury verdict in favor of the purchasers and plaintiffsappellees, Mr. and Mrs. Terry J. Flakus. We affirm.

The sellers contend, in summary, that the trial court erred in (1) failing to sustain their motions for directed verdict after the close of the evidence; (2) admitting certain evidence with respect to cause and damages; and (3) improperly charging the jury with respect to the elements of fraud and the measure of damages.

The purchasers’ amended petition alleges that the sellers ‘‘fraudulantly [sic] represented to Plaintiffs that the lot and house in question was [sic] free from underground water problems and that they [sellers] had not experienced water problems in the basement of the home.” The amended petition alleges the other elements of a cause of action for contractual or promissory fraud, and prays for damages. The sellers deny the operative allegations of *493 the purchasers’ amended petition, and allege that the sale was based upon the purchasers’ own investigation and not upon any representations made by the sellers.

A jury verdict may not be set aside unless it is clearly wrong, and all conflicts in the evidence and questions of the credibility of witnesses are for the jury to resolve. Diesel Service, Inc. v. Accessory Sales, Inc., 210 Neb. 797, 317 N.W.2d 719 (1982); Kniesche v. Thos, 203 Neb. 852, 280 N.W.2d 907 (1979). Moreover, when, upon a jury trial, a defendant at the conclusion of all the evidence moves for a directed verdict in his favor or for dismissal, such motion must be treated as an admission of the truth of all material and relevant evidence admitted favorable to plaintiffs, and plaintiffs are entitled to the benefit of all proper inferences which can reasonably be deduced therefrom. Popken v. Farmers Mutual Home Ins. Co., 180 Neb. 250, 142 N.W.2d 309 (1966). Tested in accordance with these rules, the salient facts are that the purchasers inspected the premises in question prior to executing an offer to purchase on June 10, 1979. During these inspections the purchaser Mr. Flakus observed a sump pump in the basement furnace and laundry room and a sand point well in a basement storage room. A sand point well is used both to lower the water table and as a source of water. However, the basement had been finished into a living area, and a sump hole located in a walk-in closet under the basement stairs and a sump hole in another closet had been concealed prior to the purchasers’ inspections. The offer to purchase was accepted by the sellers on June 19, 1979, following which the purchasers moved into the home. They experienced damaging water in the basement in April of 1980 and again during a tornado in June of 1980. One of the concealed sump holes was discovered by the purchasers after the April occurrence and the other following the June occurrence.

*494 The essential elements required to sustain an action for damages as the result of fraud are that a representation was made as a statement of fact, which was untrue and known to be untrue by the party making it, or else was made recklessly; that the misrepresentation was made with the intent to deceive and for the purpose of inducing the other party to act upon it; and that such party did, in fact, rely upon the misrepresentation and was induced thereby to act to his injury or damage. Gitschel v. Sauer, 212 Neb. 454, 323 N.W.2d 93 (1982); Hauck v. Samus, 212 Neb. 25, 321 N.W.2d 68 (1982); Erftmier v. Eickhoff, 210 Neb. 726, 316 N.W.2d 754 (1982); Luscher v. Empkey, 206 Neb. 572, 293 N.W.2d 866 (1980).

The contract executed by the parties contains a clause which provides: “This offer is based upon my personal inspection or investigation of the premises and not upon any representation or warranties of condition by the Seller or his agent.” Based upon our language in Camfield v. Olsen, 183 Neb. 739, 164 N.W.2d 431 (1969), the sellers argue that in view of the disclaimer described above, the purchasers could not have justifiably relied upon any representation which the sellers may have made. The sellers are in error in this regard. Cam field was a suit to foreclose the buyers’ equity of redemption under an installment sales contract for the purchase of a motel. In a cross-petition for damages the buyers alleged the contract had been induced by false representations. The agreement recited, among other things, the number of times the buyers had stayed at the motel; that the buyers had seen a newspaper article reporting a flooding of the motel; that the sellers had informed the buyers the motel had flooded on two previous occasions; and that the sellers had instructed the buyers on how they thought the motel could be cleaned if another flood should occur. The agreement also stated the buyers had personally and fully inspected the motel. It is *495 true that in discussing the elements of fraud we said a disclaimer clause is relevant in determining whether a claimant relied on a false representation disclaimed in the clause. We also said, however, that the disclaimer is ineffective to preclude the trier of fact from considering whether fraud induced formation of the bargain. We also made the same observations in the later case of Abbott v. Abbott, 188 Neb. 61, 195 N.W.2d 204 (1972).

A more recent case dealing with fraud with respect to the sale of real estate is Hauck v. Samus, supra. We ruled therein that the seller of real property is not guilty of fraud as the result of a failure to disclose material, latent defects which are unknown to him. However, where the evidence shows that he was aware of circumstances from which a reasonable inference could be drawn that he either knew or should have been aware of the fact that latent, defective conditions existed, then he is liable to the purchaser. See, also, Gitschel v. Sauer, supra; Dargue v. Chaput, 166 Neb. 69, 88 N.W.2d 148 (1958). The latter was an action to rescind a contract for the purchase of residential property because of fraud by misrepresentation and concealment of certain facts relating to the condition of the property. Dargue

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Bluebook (online)
329 N.W.2d 859, 213 Neb. 491, 1983 Neb. LEXIS 971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flakus-v-schug-neb-1983.