Malzewski v. Rapkin

2006 WI App 183, 723 N.W.2d 156, 296 Wis. 2d 98, 2006 Wisc. App. LEXIS 709
CourtCourt of Appeals of Wisconsin
DecidedAugust 8, 2006
Docket2005AP1007
StatusPublished
Cited by38 cases

This text of 2006 WI App 183 (Malzewski v. Rapkin) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Malzewski v. Rapkin, 2006 WI App 183, 723 N.W.2d 156, 296 Wis. 2d 98, 2006 Wisc. App. LEXIS 709 (Wis. Ct. App. 2006).

Opinions

FINE, J.

¶ 1. John and Jennifer Malzewski appeal the trial court's grant of summary judgment dismissing their breach-of-contract, misrepresentation, and false-advertising claims against Sheldon and Mae Louise Rap-kin.1 The trial court granted summary judgment to the Rapkins. We affirm the trial court's dismissal of the Malzewskis' breach-of-contract and misrepresentation claims, but reverse on their fraudulent-advertising claim.

[104]*104I.

¶ 2. In August of 2003, the Malzewskis offered to buy a house from the Rapkins. The Offer to Purchase provided:

PROPERTY CONDITION REPRESENTATIONS: Seller represents to Buyer that as of the date of acceptance Seller has no notice or knowledge of conditions affecting the Property or transaction (see below) other than those identified in Seller's Real Estate Condition Report dated 5/2/03, which was received by Buyer prior to Buyer signing this Offer and which is made a part of this Offer by reference.

See Wis. Stat. ch. 709 (disclosure requirements for residential real estate sales). The Rapkins agreed to be responsible for these representations by signing the Offer to Purchase and checking a box on the Real Estate Condition Report, which they also signed, that indicated that they were "aware of defects in the basement or foundation (including cracks, seepage and bulges)." They explained on the form that "[d]uring very heavy rainstorms, there might be a little seepage in the walls/floors. The seller has regraded to correct this when it has happened." The Real Estate Condition Report tracked the language of Wis. Stat. § 709.03 and defined a "defect" as "a condition that would have a significant adverse effect on the value of the property; that would significantly impair the health or safety of future occupants of the property; or that if not repaired, removed or replaced would significantly shorten or adversely affect the expected normal life of the premises."

¶ 3. The Malzewskis' Offer to Purchase also had an inspection contingency, which made the sale of the house contingent on the home passing inspection:

[105]*105This Offer is contingent upon a Wisconsin registered home inspector performing a home inspection of the Property, and an inspection, by a qualified independent inspector, of Buyer's Choice which discloses no defects as defined below. This contingency shall be deemed satisfied unless Buyer, within 10 days of acceptance, delivers to Seller, and to listing broker if Property is listed, a copy of the inspector's written inspection report(s) and a written notice listing the defect(s) identified in the inspection report(s) to which Buyer objects.

Additionally, the Malzewskis conditioned their purchase of the Rapkins' house on their being allowed to "do a walk-through within 3 working days of acceptance." An Addendum to the Offer to Purchase, referenced the inspection contingency and recommended that the home be formally inspected: "Many factors and conditions affecting the Property, including defects, may not be apparent from a visual inspection of the accessible areas of the Property by either Buyer or Broker. Broker recommends that Buyer obtain professional advice and a professional inspection of the Property by a Wisconsin registered home inspector." (Bolding and capitalization omitted.)

¶ 4. The Malzewskis exercised their right to walk through the house, and, according to their submissions to the trial court, they did not notice any defects. They then waived their right to have the home inspected, and bought the house in September of 2003.

¶ 5. In the early summer of 2004, paint on the basement walls peeled away and some pre-existing cracks in the basement walls opened. The Malzewskis hired an engineer to evaluate the walls' condition. The engineer told them that the basement walls, which he estimated had been cracked for many years, were failing and would have to be fixed. A foundations contractor [106]*106estimated that it would cost $25,600 to repair the basement walls.

¶ 6. The Malzewskis sued the Rapkins for failing to disclose the cracks in the basement walls under the following theories: (1) breach of contract and breach of warranty; (2) intentional misrepresentation; (3) misrepresentation in violation of Wis. Stat. § 895.80 (renumbered as Wis. Stat. § 895.446 effective April 5, 2006), which provides a civil remedy for the violation of Wis. Stat. § 943.20(l)(d) (theft-by-fraud); (4) misrepresentation in violation of Wis. Stat. § 100.18 (false advertising); (5) strict-responsibility misrepresentation; and (6) negligent misrepresentation. The Malzewskis sought money damages, or alternatively, rescission and restitution.

¶ 7. During discovery, the Rapkins admitted in answers to interrogatories that when they owned the house, the basement walls had twelve-foot long, three-eighths-inch wide cracks, which they filled-in ten to twenty times "using masonry cement in a calking tube." According to the Rapkins, they painted the walls approximately five times and also touched them up after they had filled-in the cracks. The Rapkins claimed in their interrogatory answers that they never had anyone look at the house's basement or foundation to get a repair estimate.

¶ 8. The Rapkins moved for summary judgment, claiming that they had fully disclosed the condition of the house on the Real Estate Condition Report, and that there was no evidence that they knew the cracks were a "defect" as defined by the Real Estate Condition Report and Wis. Stat. § 709.03:

In essence, our position is that the Court should not allow this claim to continue where the plaintiffs in [107]*107opting to save $300 for [a] home inspection which is mentioned and recommended twice in the sale documents in the standard real estate purchase forms for something that they opted to originally have and waive that home inspection contingency for a condition, cracks in the basement wall, which there has been no showing that the Rapkins had any knowledge as to the significance.

In an affidavit attached to the motion, Sheldon Rapkin averred that he had lived in the house for thirty years and that during that time there were no signs of any "structural defects." He also claimed that he "never had any verbal [sic oral] conversations with the [Malzews-kis] and did not meet the [Malzewskis] until after the real estate closing." Mae Louise Rapkin admitted that while she met John Malzewski once, she "did not speak to John Malzewski at any time about the condition of the house."

¶ 9. The Malzewskis contended that there were questions of fact both as to whether the Rapkins intended to deceive them when the Rapkins represented that the only problem in the basement was "a little seepage," and, also, as to whether the Malzewskis were justified in relying on that representation.

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Cite This Page — Counsel Stack

Bluebook (online)
2006 WI App 183, 723 N.W.2d 156, 296 Wis. 2d 98, 2006 Wisc. App. LEXIS 709, Counsel Stack Legal Research, https://law.counselstack.com/opinion/malzewski-v-rapkin-wisctapp-2006.