Shimmons v. Mortgage Corp. of America

520 N.W.2d 670, 206 Mich. App. 27

• Court: Michigan Court of Appeals
• Decided: June 21, 1994
• Docket: Docket No. 151398
• Status: Published

Opinion

Per Curiam.

In this case alleging fraudulent omission, plaintiff appeals as of right from the trial court’s order granting summary disposition in favor of defendant. We reverse and remand.

Plaintiff, Steven B. Shimmons, purchased a house "as is” from defendant, Mortgage Corporation of America. Before the sale, the Grand Blanc Township Building Department had inspected the house, declared it uninhabitable, and issued to defendant a repair notice and order. Defendant did not advise plaintiff of the existence of the repair notice and order.

Plaintiff alleged that the cost of rehabilitating the house to comply with the repair notice and order was considerably greater than it otherwise would have been.

The trial court granted summary disposition to defendant, finding it had no duty to disclose that the house had been deemed uninhabitable. This appeal followed.

A plaintiff may allege fraudulent concealment even where the purchase agreement includes an "as is” clause. Clemens v Lesnek, 200 Mich App 456, 460; 505 NW2d 283 (1993). Fraudulent concealment is established by showing that the hidden defect (which need not be unreasonably dangerous) was known to the vendor and that the purchaser had no knowledge of it. Id. at 459-461.

Plaintiff does not dispute that he was aware of the physical condition of the house. However, because plaintiff allegedly was required to carry out more extensive and expensive repairs because the house had been declared uninhabitable, we conclude that issuance of the repair notice and order was a latent defect that must be disclosed. Cf. Mulheron v Henry S Koppin Co, 221 Mich 187, 189, 191; 190 NW 674 (1922), overruled on other grounds Witte v Hobolth, 224 Mich 286; 195 NW 82 (1923).

Defendant asserts that plaintiff should be charged with constructive knowledge of the repair notice and order because it was a matter of public record. We disagree. It is not reasonable to assume, as a matter of law, that every prospective purchaser should examine the local building inspector’s records before purchasing a residential home. Whether such an assumption should be made in this case is a question of fact for the jury.¹

There remains a further issue of material fact whether plaintiff had actual knowledge of the building department’s determination. The trial court could not weigh the credibility of the afffdavits to decide this issue. Accordingly, summary disposition pursuant to MCR 2.116(0(10) was inappropriate. Arbelius v Poletti, 188 Mich App 14, 18; 469 NW2d 436 (1991).

Reversed and remanded for further proceedings. We do not retain jurisdiction.

1 McMullen v Joldersma, 174 Mich App 207; 435 NW2d 428 (1988), cited by defendant, is distinguishable because (1) that case concerned a proposed highway bypass plan that had been a matter of public record for years, and (2) the plaintiffs were represented by an attorney and a certified public accountant.