JADE C. STONE and DARCIE J. STONE, Plaintiffs-Appellants,
CHARLES K. FORD and JOYCE A. FORD, Defendants-Appellees.
from the Iowa District Court for Johnson County, Lars G.
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.
J. Kennedy of Kennedy & Kennedy, New Hampton, for
Michael W. Kennedy of Kennedy, Cruise, Frey & Gelner,
LLP, Iowa City, for appellees.
by Danilson, C.J., and Mullins and McDonald, JJ.
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.
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.
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.
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.
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.
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 ...