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Stone v. Ford

Court of Appeals of Iowa

May 2, 2018

JADE C. STONE and DARCIE J. STONE, Plaintiffs-Appellants,
v.
CHARLES K. FORD and JOYCE A. FORD, Defendants-Appellees.

          Appeal from the Iowa District Court for Johnson County, Lars G. Anderson, Judge.

         Buyers appeal from the district court's ruling finding sellers did not breach their duty to disclose under Iowa Code chapter 558A (2016) and did not commit fraudulent misrepresentation. AFFIRMED.

          Kevin J. Kennedy of Kennedy & Kennedy, New Hampton, for appellants.

          Michael W. Kennedy of Kennedy, Cruise, Frey & Gelner, LLP, Iowa City, for appellees.

          Heard by Danilson, C.J., and Mullins and McDonald, JJ.

          MCDONALD, Judge.

         This case arises out of a residential real estate transaction. In 2012, Jade and Darcie Stone purchased a home from Charles Ford and his now-deceased wife Joyce. In 2016, the Stones sued the Fords for a violation of the real estate disclosure law set forth in Iowa Code chapter 558A (2016) and for fraudulent misrepresentation. Following a bench trial, the district court dismissed the claims, finding the Stones failed to prove a violation of the disclosure law and failed to prove their claim for fraudulent misrepresentation. The Stones timely filed this appeal.

         I.

         The Fords purchased a newly-constructed home in 2007. The basement was finished and included a dry sauna, a "man cave, " and a guest room. The Fords, in particular Charles, used the basement on a daily basis. The Fords regularly entertained friends and family in the basement.

         During the time the Fords owned the home, there was a single incident in which water infiltrated the basement. After a heavy rain in March 2009, Charles went down to the basement to take care of the family's cat. He discovered the carpet was wet. He checked the sump pump and found the float was stuck. In two seconds, Charles dislodged the float, and the sump pump began to operate. Charles contacted his insurance agent to provide notice of a claim. The claims adjuster came to the house that day and determined the Fords had coverage under an insurance policy that covered water damage caused by sump pump malfunction. The insurance company paid $10, 499 on the claim, which was primarily for the replacement of the basement carpet. After this incident, Charles checked the sump pump each time it rained, and it always worked. This was the only water event the Fords experienced during the time they owned the home.

         In 2011 or 2012, the Fords decided to the sell the home due to Joyce's declining health. With the aid of a realtor, they sold the home to the Stones. As part of the sales transaction, the Fords completed a disclosure form pursuant to Iowa Code chapter 558A. The form required the disclosure of "all known conditions materially affecting this property." More specifically, question one provided, "1) Basement/Foundation: Any known water or other problems?" Question eighteen provided, "18) Physical Problems: Any known settling, flooding, drainage, or grading problems?" The Fords checked "No" in response to each question.

         In May 2013, during a period of heavy rain, Jade Stone went into the basement and found the carpet was soaked. Jade testified the carpet was ruined and had to be removed. The Stones submitted an insurance claim for the loss. At that time, the Stones learned from their insurance agent of the Fords' prior claim. The Stones' insurance company covered the loss.

         In 2014, the Stones decided they were going to sell the home and move closer to family. In June 2014, the Stones were in the process of selling the home to the Goddards when the basement flooded during a heavy rain storm. The Stones did not have insurance coverage for the loss. To finalize the sale to the Goddards, the Stones agreed they would repair the basement and remediate any potential conditions causing water to infiltrate the basement. A contractor's proposal identified the following:

The grade is too low next to the home, the egress window area wells are too low and inadequate construction, the wells are too close to the sides of the windows, the window trim appears to have never been sealed properly, there are no visible vertical tile drains in the bottom of the area wells, if they were there they ...

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