Fraud; Innocent misrepresentation; “As is”; Knowingly misrepresenting any material facts; Adverse possession; Multiple listing service (MLS)
The court concluded that plaintiffs’ innocent misrepresentation claim was “precluded as a matter of law by the ‘as is’ provisions of the fully-integrated purchase agreement, so summary disposition” was proper under MCR 2.116(C)(8) as to that claim. It also held that the trial court “correctly found no question of fact whether defendant knowingly misrepresented any material facts, so summary disposition was proper under MCR 2.116(C)(10) as to fraud." The case arose ‘“out of the sale by defendant of a parcel of real property to plaintiffs. After the purchase, plaintiffs discovered that fourteen feet of their apparent property, upon which was a fence and a garage, legally belonged to their neighbors.’ Defendant did not disclose the encroachment, plaintiffs did not obtain a survey prior to completing the purchase, and the purchase agreement contained an ‘as is’ clause and an integration clause.” Plaintiffs alleged “fraudulent misrepresentation and innocent misrepresentation, largely premised on representations in the MLS property listing and in defendant’s seller’s disclosure statement.” The court held that defendant “clearly made a variety of material representations for the purpose of selling the property; i.e., reliance by plaintiffs. Defendant never disclosed the encroachment or represented that fourteen feet of the apparent property was not part of the sale. Therefore, if defendant was aware of the encroachment, he seemingly committed fraud in the MLS listing, which clearly represented that the property included everything up to the fence line. Defendant would also have seemingly committed fraud in his seller’s disclosure statement, because it would be untrue to say that it was ‘unknown’ whether there was an encroachment. Defendant profited from the sale on the basis of the encroachment remaining undiscovered, and plaintiffs were harmed by the encroachment.” Thus, he seemingly committed innocent misrepresentation. However, the trial court properly held “as a factual matter that defendant did not commit any knowing misrepresentations, and the purchase agreement precludes plaintiffs’ innocent misrepresentation claim as a matter of law.” Affirmed.
Full Text Opinion
State Bar of Michigan
306 Townsend St
Lansing, MI 48933-2012