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Williams v. Nelson

Court of Appeals of Louisiana, Fifth Circuit

December 19, 2018

NANCY WILLIAMS, WIFE OF/AND FRANCO VALOBRA
v.
ROBERT ALLAN NELSON AND JEROME GARFIELD SMITH, III AS CO-TRUSTEES OF THE ALLAN R. & LOUISE S. NELSON REVOCABLE TRUST & THE ALLAN R. NELSON MARITAL TRUST (TRUSTS)

          ON APPLICATION FOR SUPERVISORY REVIEW FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 720-048, DIVISION "G" HONORABLE E. ADRIAN ADAMS, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/RESPONDENT, NANCY WILLIAMS, WIFE OF/AND FRANCO VALOBRA Joseph R. Ward, Jr.

          COUNSEL FOR DEFENDANT/RELATOR, ROBERT ALLAN NELSON AND JEROME GARFIELD SMITH, III AS CO-TR USTEES OF THE ALLAN R. & LOUISE S. NELSON REVOCABLE TRUST & THE ALLAN R. NELSON MARITAL TRUST (TRUSTS) David F. Waguespack

          AMICUS CURIAE, LOUISIANA REALTORS Patricia B. McMurray Alexander M. McIntyre

          Panel composed of Judges Jude G. Gravois, Robert A. Chaisson, and Hans J. Liljeberg.

          HANS J. LILJEBERG JUDGE.

         Relators/Defendants, Robert Allan Nelson and Jerome Garfield Smith, III, as co-trustees of the Allan R. & Louise S. Nelson Revocable Trust and The Allan R. Nelson Marital Trust ("Trustees") filed an application for supervisory writs seeking reversal of the trial court's denial of their motion for summary judgment. After reviewing the writ application, this Court allowed the parties the opportunity to present oral argument and to submit additional briefing to this Court in accordance with La. C.C.P. art. 966(H).[1] For the following reasons, we reverse the trial court's judgment denying the summary judgment motion, grant the Trustees' motion and dismiss all claims alleged against the Trustees by respondents/plaintiffs, Nancy Williams and Franco Valobra, with prejudice.

         FACTUAL AND PROCEDURAL BACKGROUND

         This matter involves plaintiffs' purchase of a residence located at 415 Vincent Avenue in Metairie, Louisiana from the Trustees for $1, 400, 000.00 (the "Property"). When they initially listed the Property for sale in February 2012, the Trustees each executed a document entitled "Property Disclosure Document for Residential Real Estate" ("Property Disclosure") attesting to the condition of the Property. The form required them to indicate "yes," "no" or "no knowledge" for each question regarding whether defects existed in specific parts of the Property listed on the form. The Trustees checked the "no" boxes for most inquiries relating to existing defects. They answered "yes" to Questions 5 and 12 regarding whether the property experienced flooding, water intrusion, accumulation or drainage problems. The Trustees disclosed that the Property experienced flooding during Hurricane Katrina and also during the May 8, 1995 flood due to a blocked drain. They answered "yes" in response to Questions 7, 8 and 9 regarding termite damage and disclosed that the Property previously experienced termite damage, which was repaired. The Trustees attested that the statements and explanations provided were true and correct to the best of their knowledge.

         On February 27, 2012, plaintiffs signed an Agreement to Buy offering to purchase the Property, subject to inspections. The Agreement to Buy warned of the consequences of the failure to obtain inspections and notify the sellers of deficiencies and desired remedies:

FAILURE TO MAKE INSPECTIONS OR TO GIVE WRITTEN NOTICE OF DEFICIENCIES AND DESIRED REMEDIES TO SELLER (OR SELLER'S DESIGNATED AGENT) AS SET FORTH IN LINES 141 THROUGH 155 WITHIN THE INSPECTION PERIOD SHALL BE DEEMED AS ACCEPTANCE BY BUYER OF THE PROPERTY'S CURRENT CONDITION.

         Plaintiffs also signed an addendum to the Agreement to Buy explaining the Property would be sold without any warranties and acknowledging that they did not rely on any statements or representations made by the Trustees:

It is expressly agreed that immovable property herein conveyed and all improvements and compound parts, plumbing, electrical systems, mechanical equipment, heating and air conditioning systems, built-in-appliances, and all other items located hereon are conveyed by Seller and accepted by Purchaser "As Is, Where Is," without any warranties of any kind whatsoever, even as to the metes and bounds, zoning, operation, suitability of such properties for the use intended by the Purchaser, without regard to the presence of apparent or hidden defects and with the Purchaser's full and complete waiver of any and all rights for the return of all or any part of the purchase price by reason of any such defects.
Purchaser acknowledges and declares that neither the Seller nor any party, whomsoever, acting or purporting to act in any capacity whatsoever on behalf of the Seller has made any direct, indirect, explicit or implicit statement, representation or declaration, whether by written or oral statement or otherwise, and upon which Purchaser has relied, concerning the existence or non-existence of any quality, characteristic or condition of the property herein conveyed. Purchaser has had full, complete and unlimited access to the property herein conveyed for all tests and inspections which Purchaser, in Purchaser's sole discretion deems sufficiently diligent for the protection of Purchaser's interests.
Purchaser expressly waives the warranty of fitness and the warranty against redhibitory vices and defects, whether apparent or latent, imposed by Louisiana Civil Code Articles 2520 through 2548, inclusive, and any other applicable state or federal law and the jurisprudence thereunder.

         After the parties reached an agreement on the purchase price, plaintiffs obtained a home inspection, a swimming pool inspection and a termite inspection. On March 9, 2012, plaintiffs submitted a "Property Inspection Response," which included written reports regarding the home, swimming pool and termite inspections. The reports noted the following issues with the Property:

1) Air Conditioning System: The report noted organic growth at vents and pan holding water "which may indicate an AC problem." The inspector recommended an evaluation by a qualified licensed contractor.
2) Roof: The report noted a damaged or missing shingle and staining in the attic and stains/damage on the front wall in the rear addition. The report noted the inspector was unable to access the front roof and was unable to determine if active leaks existed. The inspector suggested that the plaintiffs inquire with the seller about "the history of leaks" and recommended evaluation by a qualified licensed contractor.
3) Moisture: The report noted moisture stains/damage at the right rear french door and door trim and a courtyard french door trim. The inspector recommended an evaluation by a qualified licensed contractor. The report also noted moisture stains/damage at the right side of the laundry and noted with respect to the patio, "surface raised/settled."
4) Termites: The report noted unusual spots in the upstairs hall linen closet and further stated they were unable to determine if they were caused by wood destroying insects.
5) Pool: The report noted the pool was cloudy and had signs of aging. It also noted certain equipment needed to be repaired or replaced.
6) Second Floor: The report noted that a door was difficult to close and that may be indicative of structural movement. The report also noted significant cracking at the moldings in the rear addition and front left bedroom.

         The home inspection report also stated that the subsurface drains were not tested and were not part of the home inspection report. In the Property Inspection Response, plaintiffs noted a defect with the exterior foundation and requested that the Trustees repair and correct moisture damage, including moisture-damaged doors. Plaintiffs requested that the Trustees make recommended repairs to the roofing and flashing system. Plaintiffs also made requests that the Trustees service and repair the air conditioning system and make recommended repairs for electrical, kitchen, appliance, laundry and pool issues. The parties engaged in further negotiations and the Trustees agreed that, in lieu of any other repairs, the Trustees would repair a leaking gas line in the pool area and replace missing roof shingles. They also agreed to include a dining room chandelier in the sale and to pay $5, 000 of plaintiffs' closing costs.

         On April 25, 2012, the Trustees conveyed the Property to plaintiffs by a Cash Sale of Property with a waiver of redhibition provision:

Without limiting the generality of the foregoing, the property is being sold "AS-IS, WHERE-IS," without any warranties or representations whatsoever, express or implied, including, without limitation, any warranty or representation with respect to the condition of the property of any of its components, parts or contents or with respect to fitness or suitability of the property or any of its components, parts or contents for Purchasers' intended use or any other particular use, purpose or condition. Purchasers' specifically waive all claims and all causes or rights of action which Purchasers have or may have against Vendors with respect to the property including any and all claims that it may have to rescind or resolve the sale effected thereby or to demand a reduction, set off or diminution of the purchase price or any part thereof based upon the existence of any redhibitory or other vices or defects. Purchasers further waive any claims that Purchasers have or may have in "quanti minoris" or for reduction of the purchase price paid therein, or any other rights provided in Louisiana Civil Code Articles 2520 through 2548, inclusive.
****
This property is being sold in "as is" condition with waiver of redhibition in accordance with Louisiana Civil Code Articles 2520, et seq.[2]

         Plaintiffs allege that after the sale, they began renovations to the Property and discovered it contained numerous hidden defects. Plaintiffs' counsel allegedly sent correspondence to the Trustees outlining the alleged defects and asking the Trustees to pay to repair the defects. On September 4, 2012, the Trustees' counsel responded by noting that plaintiffs acknowledged in their letter that they only discovered the alleged defects after they began renovations and were not able to detect the alleged defects through inspections. Defense counsel stated that Ms. Louise Nelson, who previously resided in the Property, was not in a position to know of the alleged defects in the attic and roof, and further stated the Trustees had no knowledge of alleged defects that were not listed on the Property Disclosure.

         On October 12, 2012, plaintiffs filed a petition for damages against the Trustees. Plaintiffs claimed that based on the statements in defense counsel's September 4, 2012 correspondence, the Trustees defrauded them by providing inaccurate disclosures on the Property Disclosure. Specifically, plaintiffs alleged the Trustees committed fraud by checking the "no" box rather than the "no knowledge" box on the Property Disclosure when responding as to whether certain features of the Property contained defects. Plaintiffs contend these responses were fraudulent because the Trustees admitted in the September 4, 2012 correspondence that they possessed no knowledge as to whether the property contained defects. Plaintiffs alleged that if the Trustees disclosed they did not have knowledge regarding the condition of the Property, they would have obtained more comprehensive ...


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