2001 SD 83 - Parmely v. Hildebrand

SABERS, Justice

¶1(dissenting)

¶2[¶ 19.] The majority opinion concludes that Hildebrands completed the addendum both “truthfully and in good faith.” It is difficult to accept this conclusion as a serious statement.

¶3[¶ 20.] I believe our decision in Engelhart v. Kramer, 1997 SD 124, 570 N.W.2d 550, commands a contrary result. In Engelhart, we emphasized the legislative definition of good faith:

An honest intention to abstain from taking any unconscientious advantage of another, even through the forms or technicalities of the law, together with an absence of all information or belief of facts which would render the transaction unconscientious.

¶4 SDCL 2-14-2(13) (emphasis added). I am convinced that Hildebrands forfeited the good faith protection by creating a document that was designed to mislead. What more of a demonstration is needed than the one provided by the majority opinion: a legally drafted document with the proper tense of the word “existing” absolves the seller from liability. Close examination of the cleverly drafted document reveals the “intentional or negligent violation” of the disclosure requirements contained in SDCL chapter 43-4.

¶5[¶ 21.] The addendum at issue attempts to minimize, distract and reassure the would be buyer that all problems had been taken care of properly.9 The document *516begins by convincing the prospective purchaser that any problems were due to the weather and the sellers’ inability to have the house properly completed. Then the document reassures its reader that after the rain gutter and drain tile had been installed, only minimal problems were present. After that, the document switches to the soil condition, characterizing the very significant damage to this house as occurring from settling, making the prospective buyer believe it was a one time ordeal by prefacing the severe damage by “when the house settled.” Then they relay that they had an engineer tell them “what to do about it.” This consisted of waiting two years and fixing the problem. The disclosure statement picks up with the fact that exactly two years later they “removed all interior walls and replaced them” and they “had some sheet rock cracking” but “it has all been repaired.”

¶6[¶ 22.] No wonder the buyers were deceived. I see no reason for this disclosure except to reassure and convince the prospective buyer that all problems were fixed. That is not all. The document then continues to reassure the prospective buyer that the floor had a crack that damaged 14 tiles in the kitchen, but that was normal. After all the problems with this home, I suspect that definition of “normal” is in the eyes of the seller only.

¶7[¶ 23.] Then there is the use of the magic word “existing” to attempt to absolve Hildebrands of liability. The word existing when used to describe the expansive soil was proper, this is only because the soil was still present. However, that does not end the inquiry. The disclosure addendum attempted to negate the existing and continual damage to the home by leading the prospective buyer to believe it had been repaired and remedied. I do not believe this type of word game or hide the ball tactic is what this Court envisioned when it stated: “We hold that with the adoption of South Dakota’s detailed disclosure statutes[,] the doctrine of caveat emptor has been abandoned in favor of full and complete disclosure of defects of which the seller is aware.” Engelhart, 1997 SD 124, ¶ 20, 570 N.W.2d at 554. It certainly is not what I envisioned. This majority opinion instead serves as a warning that buyer be aware more than ever before.

¶8[¶ 24.] Obviously, the legislature never intended that buyers would have to hire lawyers to help them read deceptively disguised disclosure statements or be at their peril. The buyer must now heighten his awareness because disclosure statements designed to deceive are written by lawyers and approved by this Court. As a matter of law, the trial court’s conclusion was in error and we must reverse for a determination of damages. The buyers’ attorney stated in oral argument that buyers purchased the home on forty acres for $175,000, that the present value of the home is a salvage value of between $15,000 and $25,000, thrusting a possible $150,000 loss on the backs of the deceived buyers and the windfall goes to a contractor who has been building foundations in the Black Hills soil for twenty years. This may be the most outrageous result and whitewash opinion by this Court ever.

¶9[¶ 25.] Therefore, I dissent.

¶10[¶ 26.] AMUNDSON, Justice, joins this dissent.

¶11. Sellers continually blame buyers for failing to discover the defects in the home. In fact, counsel for sellers stated at trial: "To any reasonable person who sees that there’s an existing hazardous condition, without regard to their knowledge of what expansive soil means, that would indicate to any reasonable person that there is a substantially severe problem with the home.”

¶12The obvious point is if a reasonable person would have known something is wrong, then why do sellers adamantly maintain that they did not know enough to trigger full disclosure. Even if we were to accept sellers’ argument they knew nothing, but that buyers should have, why were they clever enough to employ cosmetic repairs and a cleverly crafted disclosure statement? This is not the type of good faith envisioned by the legislature or this Court in Engelhart.

¶13In fact, all of the repairs and remedies taken by the sellers were internal and cosmetic. None of them went to the heart or cause *516of the problem, the expansive soil. They just tried to make them look that way.