Metsker et al v. Cahoon et al
ORDER granting Cahoon Defendants' Motion for Summary Judgment in part as related to plaintiffs claims regarding representations as to the permits, back deck, basement slab, and chimney, and denying in part 52 motion for summary judgment in all other relevant aspects; denying 54 Graebel's motion for summary judgment. Signed on 03/27/2017 by District Judge Fernando J. Gaitan, Jr. (Powers, Jo)
THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
M. SCOTT METSKER, et al.,
) No. 15-0286-CV-W-FJG
DANIEL R. CAHOON, et al.,
Pending before the Court are (1) Defendant Graebel Relocation Services
Worldwide, Inc.’s Motion for Summary Judgment (Doc. No. 54); and (2) Defendants
Daniel and Nicole Cahoon’s Motion for Summary Judgment (Doc. No. 52). The Court
notes that the defendants’ requests for oral argument have been withdrawn (Doc. Nos. 76
Plaintiffs filed the pending action on March 10, 2015, in the Circuit Court of
Jackson County at Independence. On April 17, 2015, defendants timely removed the
action, asserting diversity jurisdiction. Plaintiffs are homeowners of a single family home
located at 8821 Boten, Lee’s Summit, Missouri, legally described as: Lot 16, LOCHKIRK
ESTATES, a subdivision in Jackson County, Missouri (the “Property”).
Daniel and Nichole Cahoon presently reside in Salt Lake City, Utah, but formerly owned
the Property at issue in this dispute. Defendant Graebel Relocation Services Worldwide,
Inc., is a relocation services company, and the Cahoons conveyed the property to
Graebel prior to the sale of the Property to plaintiffs. Plaintiffs generally allege that
defendants’ real estate disclosures minimized or omitted known conditions regarding the
property, improperly inducing plaintiffs to purchase the property.
Plaintiffs’ petition contains three counts:
Count I – Fraud and Misrepresentation
against the Cahoons; Count II – Negligent Misrepresentation against the Cahoons; and
Count III – Negligent Misrepresentation against Graebel.
In its motion for summary judgment, Defendant Graebel argues that it has
established its affirmative defenses of waiver, release, and estoppel. See Doc. No. 54.
In their motion for summary judgment, the Cahoons argue that (1) plaintiffs released all
their claims against them; (2) plaintiffs’ detrimental reliance argument is negated by the
fact that plaintiffs had an inspection of the home done prior to purchase; and (3) plaintiffs
are unable to prove the required elements of negligent and fraudulent misrepresentation
under Missouri law. See Doc. No. 52.
This lawsuit arises out of the purchase of a home by the Plaintiffs, located at 8821
Boten, Lee's Summit, MO 64064 (the “Metsker home”). The Plaintiffs allege that certain
material defects in the home were misrepresented by the Sellers, Defendants Daniel and
Nicole Cahoon, in the “Sellers Disclosure and Condition of Property Addendum.” At all
relevant times, Daniel Cahoon was an employee of H&R Block. Defendant Graebel
Relocation Services Worldwide, Inc. (“Graebel”) handles the relocation benefit provided
to H&R Block employees. The Cahoons deeded their Boten residence to Graebel, who
then deeded it to plaintiffs after closing.
Defendant Daniel Cahoon completed and both Cahoon defendants signed the
Disclosure attached as Exhibit B to Doc. No. 53. They also completed a “Graebel
Relocation Services Worldwide, Inc. Homeowners Disclosure Statement.” Doc. No. 53,
Ex. C. Defendant Daniel Cahoon testified he never met plaintiff Scott Metsker until after
the filing of this suit, and Mr. Cahoon further testified that the plaintiffs never asked him
any questions about the fire which occurred in the house. Defendant Cahoon testified
that had the plaintiffs contacted him, he would have answered any of their questions.1
Graebel is a relocation services company, which entered into a Rider to Buyer
Offer ("Rider") with Plaintiffs dated June 18, 2013, consisting of the Rider itself (attached
as Exhibit 1 to Doc. No. 55),2 and three exhibits titled Exhibit A to Rider to Buyer Offer
(Exhibit 2 to Doc. No. 55),3 Exhibit B to Rider to Buyer Offer (Exhibit 3 to Doc. No. 55), and
Exhibit C to Rider to Buyer Offer — Graebel Relocation Services Worldwide, Inc. Release
of All Claims by Buyer (Exhibit 4 to Doc. No. 55).
On or about June 19, 2013, Plaintiff Scott Metsker signed and initialed Exhibit 1,
and initialed every page of Exhibits 2 and 3. Plaintiff Scott Metsker initialed every page of
Exhibit 4, and on August 2, 2013, signed Exhibit 4 before Notary Public Sheila D. Havard.
Plaintiffs do not dispute the authenticity of Mr. Metsker's signature and initials on these
As a relocation company, GRSW purchases properties solely for the purpose of
resale, and does not reside in the homes it sells. Neither GRSW nor its agents,
Both plaintiffs and the Cahoon defendants were represented by agents in this
transaction, so it is unclear how plaintiffs would have contacted the Cahoon defendants
The Rider (Exhibit 1) states:
Agreement to Terms of Rider. Graebel and Buyer hereby agree to
amend the Buyer Offer in the manner set forth in this Rider. The terms and
conditions contained in this Rider are in addition, take precedence over, and
replace and supersede any contrary provisions of the Buyer Offer.
Exhibits. Exhibits A, B, and C are attached hereto and Incorporated
herein by reference.
3 Exhibit A to Rider to Buyer Offer allows the buyer to waive certain inspections in
purchasing the Home. See Exhibit 2. Plaintiffs did not waive any of the inspections, and
Scott Metsker acknowledged that he had received tests, inspections, and disclosure
documents. Exhibit A to the Rider states closing shall occur on August 2, 2013. Id. Scott
Metsker had fifteen days to inspect the home. Doc. No. 65, Ex. E.
employees, or other representatives has ever resided in the Metsker home. See Doc. No.
55, Exhibit 3, at ¶¶ 3, 10.
Exhibit B to the Rider (Ex. 3 to Doc. No. 55) includes the following statements:
Relocation Transaction Acknowledgement.
acknowledges all of the following:
Graebel is not a natural person and therefore it has never
resided in the Property;
None of Graebel's agents, employees, or other
representatives have ever resided in the property; and
Graebel is a relocation services provider, which purchased
the Property solely for the purpose of resale;
Graebel has no actual knowledge of the condition of the
Property except those matters, if any, which arose after the
date of acquisition of the Property by Graebel.
General Disclaimer of Representations and Warranties. BUYER
HEREBY ACKNOWLEDGES AND AGREES THAT GRAEBEL
HAS-NOT MADE AND HEREBY SPECIFICALLY DISCLAIMS ANY
WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR
WRITTEN, PAST, PRESENT, OR FUTURE, OF, AS TO, OR
THE NATURE, SQUARE FOOTAGE, CONDITION, VALUE,
OR QUALITY OF THE PROPERTY, INCLUDING BUT NOT
LIMITED TO, THE WATER, THE SOIL, AND GEOLOGY
AND THE SUITABILITY THEREOF AND OF THE
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES
WHICH BUYER MAY ELECT TO CONDUCT THEREON;
THE MANNER, CONSTRUCTION, CONDITION, QUALITY,
STATE OF REPAIR, OR LACK OF REPAIR OF ANY OF THE
EXCEPT FOR ANY WARRANTIES CONTAINED IN THE
DEED, IF ANY, THE NATURE AND EXTENT OF ANY
ENCUMBRANCE, LICENSE, RESERVATION, CONDITION
OR OTHERWISE; AND
THE COMPLIANCE OF THE PROPERTY OR ITS
OPERATION WITH ANY LAWS, RULES, ORDINANCES, OR
REGULATIONS OF ANY GOVERNMENT OR OTHER
No Express of Implied Representations or Warranties. BUYER
EXPRESSLY ACKNOWLEDGES AND AGREES THAT, IN
CONSIDERATION OF THE AGREEMENTS OF GRAEBEL
HEREIN, GRAEBEL MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE EXCEPT AS OTHERWISE SPECIFIED HEREIN
RELATING TO THE PROPERTY.
No Warranty of Compliance with Laws. BUYER ACKNOWLEDGES
AND AGREES THAT GRAEBEL HAS NOT WARRANTED, AND
DOES NOT HEREBY WARRANT, THAT THE PROPERTY OR ANY
IMPROVEMENTS LOCATED THEREON NOW OR IN THE
FUTURE WILL MEET OR COMPLY WITH THE REQUIREMENTS
OF ANY SAFETY CODE OR REGULATION OF THE STATE,
COUNTY, OR MUNICIPALITY WHERE THE PROPERTY IS
LOCATED, OR ANY OTHER AUTHORITY OR JURISDICTION.
Buyer's Inspection and Reliance Thereon. BUYER HEREBY
EXPRESSLY ACKNOWLEDGES AND AGREES THAT BUYER
HAS THOROUGHLY INSPECTED AND EXAMINED THE
PROPERTY TO THE EXTENT DEEMED NECESSARY BY BUYER
IN ORDER TO ENABLE BUYER TO EVALUATE THE PURCHASE
ACKNOWLEDGES AND AGREES THAT BUYER IS RELYING
SOLELY UPON THE INSPECTION, EXAMINATION, AND
EVALUATION OF THE PROPERTY BY BUYER AND THAT BUYER
IS PURCHASING THE PROPERTY, ON AN "AS IS, WHERE IS"
AND "WITH ALL FAULTS" BASIS AND NOT ON ANY
INFORMATION PROVIDED, OR TO BE PROVIDED BY GRAEBEL.
Purchase from Relocation Company. BUYER ACKNOWLEDGES
AND AGREES THAT GRAEBEL HAS OWNED THE PROPERTY
ONLY SINCE THE DATE OF ACQUISITION OF THE PROPERTY
BY GRAEBEL, HAS NOT RESIDED ON THE PROPERTY, AND IS
NOT IN A POSITION TO MAKE ANY REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED, AS TO THE
PROPERTY OR THE CONDITION THEREOF.
Graebel Not Bound by Statements or Other Information Provided by
Others. GRAEBEL IS NOT LIABLE OR BOUND IN ANY MANNER
BY ANY VERBAL OR WRITTEN STATEMENTS, OR
REPRESENTATIONS OF INFORMATION, PERTAINING TO THE
PROPERTY FURNISHED BY ANY REAL ESTATE BROKER,
AGENT, EMPLOYEE, OR ANY OTHER PERSON.
Tests. Inspections, and Disclosure Documents.
Tests and Inspections. The tests and inspections described in
Exhibit A have been conducted in, on or with respect to the
Property. Buyer acknowledges receipt of the test(s) and/or
inspection(s) documentation specified in Exhibit A. In the
event Graebel test(s) and/or inspection(s) documentation is
not available at the time of the execution of the Buyer Offer
and this Rider, Graebel agrees to provide Buyer with such
reports within five (5) days of Graebel's receipt of such
reports, and to provide Buyer five (5) days to review the
reports and provide Graebel with written notice of defects in
the manner described in Section 15 of this Rider.
RECEIPT OF THE DISCLOSURE DOCUMENTATION
SPECIFIED IN EXHIBIT A. BUYER ACKNOWLEDGES AND
AGREES THAT THE ABOVE-LISTED DISCLOSURE
DOCUMENTATION IS BEING PROVIDED TO BUYER FOR
COMPLIANCE WITH GRAEBEL'S LEGAL DISCLOSURE
DUTY, IF ANY, AND FOR NO OTHER PURPOSE.
WARRANTIES, OR GUARANTEES RELATING TO THE
DISCLOSURE DOCUMENTATION. BUYER FURTHER
ACKNOWLEDGES AND AGREES THAT IT IS NOT
ENTITLED TO RELY ON THE ABOVE-LISTED
DISCLOSURE DOCUMENTATION AND THAT BUYER IS
MAKING ITS PURCHASE DECISION BASED SOLELY ON
THE BUYER'S OWN EXAMINATIONS, INSPECTIONS, AND
TESTS OF THE PROPERTY.
Buyer's Inspection and Tests. Buyer has the right to inspect or to
have the Property inspected and tested by others on Buyer's behalf
to determine the existence of defects, if any. All inspections and tests
shall be conducted at Buyer's sole cost and expense. Graebel
recommends, but does not require, that Buyer secure such surveys,
title inspections, professional building inspection reports, and other
inspections and tests as Buyer, in its sole and exclusive discretion,
deems necessary or appropriate to determine the condition of the
Property, including but not limited to, any inspections or tests
necessary to determine the presence of radon gas, asbestos, lead
based paint, underground storage tanks, or toxic or hazardous
substances in or about the Property. Buyer acknowledges and
agrees that all inspections and tests conducted on Buyer's behalf,
and any defects discovered as a result of those inspections or tests,
must be reported to Graebel or Graebel's agent in writing,
accompanied by a complete copy of Buyer's inspection and test
reports, no later than 5:00 p.m. (in the jurisdiction where the Property
is located) on the last day of the Buyer's Inspection Period as set
forth on Exhibit A. Buyer further acknowledges and agrees that, to
the fullest extent permitted by law, buyer's failure to provide Graebel
with a copy of the inspection and test reports and reported defects on
or prior to the last day of the Buyer's Inspection Period shall
constitute (a) Buyer's constructive acceptance of the condition of the
Property, (b) Buyer's waiver of all inspection contingencies under the
Buyer Offer of this Rider, and (c) Buyer's agreement to proceed to
closing of the transaction for the sale and purchase of the Property
as contemplated by the Buyer Offer and this Rider (the "Closing").
Pre-Closing Inspection of Condition of Property. Buyer shall have the
right to make a final inspection of the Property within forty-eight (48)
hours before Closing, not as a contingency of the sale, but solely to
confirm that the Property's condition has not deteriorated from the
date of the Buyer Offer and the Rider (ordinary wear and tear
Buyer's Release. Buyer expressly acknowledges that all of the
obligations of Graebel pursuant to the Buyer Offer, as amended by
this Rider, are subject to and conditional upon Buyer executing and
delivering to Graebel at the Closing the Release of All Claims by
Buyer which is attached hereto as Exhibit C and incorporated herein
Binding Effect/Entire Agreement. The Buyer Offer of this
Rider shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors,
executors, legal representatives, administrators, and
permitted assigns. All prior understandings and agreements
between the parties are merged in the Buyer Offer and this
Rider, which constitutes the entire agreement between the
parties. The Buyer Offer and this Rider are entered into after
full investigation made by Buyer, and neither party relies upon
any statement or representation made by anyone unless
contained herein. No provision of the Buyer Offer or this Rider
may be modified or waived unless in writing and signed by the
party against whom the enforcement of such modification or
waiver is sought.
Scott Metsker retained Crown Inspection to inspect the home, and the company
did the inspection on June 24, 2013, after Exhibit B had been signed. Daniel Cahoon
testified that Crown Inspection did not ask him any questions about the Missouri
Disclosure, and if Crown Inspection had asked him questions, he would have answered.
The report provided by Crown Inspections to the Plaintiffs notified them that “portions of
the wood deck are in contact with the earth. This can be source of rapid deterioration
and/or help to promote pest infestation. Part of the wood deck ledger board nailed to
house. We recommend installation of lag screws to positively anchor the deck to the
house framing.” Report, Doc. No. 53, Ex. F, p. 3. The report further advised that the
fireplace was full of insulation at the time of inspection and was not inspected. Id. p. 4.
The report further advised plaintiffs “Drainage on the north side of the house should be
improved to prevent erosion and pooling water.” Id. p. 9. Regarding the joists, Crown
Inspection noted that “The ceiling structure consist of standard wood joists” and noted no
defects. Id. p. 14.
Exhibit C to the Rider (Exhibit 4 to Doc. No. 55) begins as follows:
GRAEBEL RELOCATION SERVICES WORLDWIDE, INC.
RELEASE OF ALL CLAIMS BY BUYER
CAUTION: READ BEFORE SIGNING.
Immediately thereafter, at the top and center of the document, in all capital letters,
bold type, Exhibit C to the Rider states:
THIS DOCUMENT SHOULD BE INITIALED BY THE
BUYER(S) WHEN THE RIDER TO BUYER OFFER IS
THIS DOCUMENT SHOULD NOT BE SIGNED BY THE
BUYER(S) WHEN THE RIDER TO BUYER OFFER IS
THIS DOCUMENT IS TO BE COMPLETED AND SIGNED BY
THE BUYER(S) AT THE CLOSING.
Exhibit C to the Rider contains the following language releasing Graebel from any
and all claims:
Buyer, for itself and on behalf of Buyer's heirs, agents,
representatives, successors, and permitted assigns
(collectively, the "Releasing Parties"), FULLY AND FINALLY
WAIVES AND RELEASES ANY AND ALL CLAIMS AND
CAUSES OF ACTION (known and unknown, foreseen or
unforeseen, developed or undeveloped) which Buyer may
now have or may hereafter acquire against Graebel and
Graebel's principal (i.e., the employer of Graebel's immediate
predecessor in title to the Property (the "Former Owner")),
and all of their respective predecessors, successors, parents,
subsidiaries, and other affiliates, and all those entities'
shareholders, directors, officers, employees, and agents
(collectively, the "Released Parties") that arise from, or relate
in any way to, or result in any manner from:
The transactions contemplated by the Buyer Offer and
All of the disclosures which were made to Graebel by
the Former Owner of the Property; and
The presence of radon gas, asbestos, or any other
toxic, hazardous, or other environmentally dangerous
substance in, on, or about the Property;
including, without limitation, all such claims and causes of
action of any sort or type whatsoever, including claims based
on any contract, tort, common law or other law, claims based
on any federal, state, or local statute, rule, or ordinance, and
any claims for punitive or other enhanced damages and
whether any such claim or cause of action is made by Buyer
or by any person which Buyer allows to reside in or about the
Property or to come in contact with the Property.
The Releasing Parties state and acknowledge that they are
not entering into this Release in reliance upon any
representations, promises, or assurances other than those
expressly stated in the Buyer Offer, the Rider, and this
Release. The Releasing Parties agree that there shall be no
presumption against the drafter of this Release and that this
Release shall be governed by and interpreted according to
the laws of the state where the Property is located.
Exhibit C to the Rider also contains the following covenant prohibiting the buyer
from asserting claims against GRSW:
The Releasing Parties hereby irrevocably covenant to refrain
from, directly or indirectly, asserting any claim or demand, or
commencing, instituting, or causing to be commenced, any
proceeding of any kind against any Released Party based
upon any matter purported to be released hereby.
Plaintiff Scott Metsker signed Exhibit C to the rider at closing. Plaintiff Scott
Metsker testified he understood what the Release of All Claims by Buyer in the rider
Six months after plaintiffs closed on the subject property, Plaintiff Victoria Metsker
purchased another home, in January or February of 2014, because plaintiffs felt the home
they purchased on Boten was unsafe due to issues with the joists, mold, water intrusion,
and deck. At the time plaintiffs determined the Boten residence was unsafe and Mrs.
Metsker purchased another home, no professional engineer had told plaintiffs the home
The Alleged Defects
In November 2008, a house fire occurred at the Boten house. Daniel Cahoon
testified the fire started in an electrical outlet in the bedroom of his daughter. The fire was
confined to the room where it originated (Fire Report, Incident Number 08-0000349,
attached to Doc. No. 53 as Exhibit G, page 5). Daniel Cahoon testified the fire caused no
structural damage to the house. Daniel Cahoon and Mike Pottinger (the contractor who
repaired the home after the fire) testified the water damage from the fire was primarily
confined to the room where the fire occurred and the hallway outside of that bedroom.
Daniel Cahoon further testified there was not extensive water damage throughout the
house. The Cahoons relocated to a house at Lake Lotawana for ten months while the fire
restoration was being completed.
The Cahoon Defendants disclosed the fire on the Missouri Disclosure under
paragraph 8, where they checked “Yes” to the question “are you aware of any additions,
structural changes, or other material alterations to the Property?” (Exhibit B, Missouri
Disclosure, at page 3, paragraph 8(a)). Defendants further disclosed on the Missouri
Disclosure that there had been a “small electrical fire in exterior wall, contained with no
structural damage” (Exhibit B, Missouri Disclosure at page 3, paragraph 8(a)).
Defendants further disclosed the fact that there had been an insurance claim made
relating to the fire (Exhibit B, Missouri Disclosure at page 6, paragraph 15(q); Nicole
Cahoon Deposition, February 15, 2016, attached hereto as Exhibit I, at 76:10-77:12).
Defendants disclosed the occurrence of the 2008 fire on the Graebel Disclosure at
paragraph 9(g), by stating “Small electrical fire in 2008. No structural damage. Smoke and
Water.” (Exhibit C, Graebel Disclosure at GRSW000083; Exhibit A, Daniel Cahoon
Deposition, at 109:17-110:8). Defendants additionally disclosed that the fire occurred at
paragraph 9(V)(7) of the Graebel Disclosure when they checked “yes” to “Fire damage at
any time?” (Exhibit C, Graebel Disclosure at GRSW000084; Exhibit A, Daniel Cahoon
Deposition, at 111:3-8). Defendants additionally disclosed the fire at paragraph 4(D) of
the Graebel Disclosure when they checked “yes” to “Has the roof…been damaged by
fire…or other events?” and commented “portion of roof replaced during 2009 renovation
after house fire.” (Exhibit C, Graebel Disclosure at GRSW000078). However, plaintiffs
argue that defendants did not disclose the magnitude and significance of that insurance
claim, which in full came to over $200,000 for repairs to the house and $90,000 for
Daniel Cahoon testified that neither Plaintiffs nor their agent ever asked him for
more information regarding the fire than what was disclosed in the Graebel Disclosure;
however, plaintiffs indicate that their real estate agent, Cathy Counti, specifically asked
the sellers’ agent, Chris Hall, for additional information. After closing on the home and
moving in Plaintiffs obtained a copy of the fire report and asked neighbors about the fire.
When asked what rooms in the home are still damaged from the fire, Plaintiff Scott
Metsker testified that the damage is currently unknown, but that he has the feeling that
there may be some damage in the house that he cannot see yet (Scott Metsker Depo.,
128:16-25). Plaintiffs are worried that when they attempt to sell the house, having to
disclose the fire to potential buyers may make the house unappealing, although they have
not had a professional appraiser confirm this fear (Scott Metsker Depo., 129:1-13).
Christine Hall, the agent hired by Graebel to sell the home, completed a “Broker’s
Market Analysis and Strategy Report” (BMA) and submitted it to Cheri Woodard
(“Woodard”), the relocation specialist for Graebel handling the transaction. Hall indicates
on the BMA as follows: “THE HOUSE HAD AN ELECTRIAL [sic] FIRE SEVERAL YEARS
BACK, IN AN OUTSIDE WALL. IT WAS QUICKLY CONTAINED SO THERE WAS NO
STRUCUAL [sic] DAMAGE. THERE WAS EXTENSIVE SMOKE DAMAGE WHICH IS
WHY THE WHOLE HOUSE WAS TORN OUT AND REBUILT.” Plaintiff’s Ex. F, p. 1. The
BMA also asks the agent “What are the three-five challenges to getting this property
sold?” Hall indicates in relevant part: “4. DISCLOSING PREVIOUS FIRE.” Id., p. 6.
Woodward did not request any documentation regarding the work done due to the fire,
nor did she ask Hall what the cost of the repairs were as a result of the fire. Woodward
was not aware that there was a fire report from the fire department or that the fire
department was even involved in putting out the fire. Woodard testified that there was
nothing in either of the disclosure forms that indicates that the whole house was torn out
Christine Hall, Graebel’s real estate agent, testified that if she was aware of a
material defect, she “absolutely would have to make sure they [sellers] put it on the
seller’s disclosure.” Hall depo., 35:15-22. Hall further testified that “fire” is one of the two
most inflammatory words, which would “put you in Defcon5.” Id. 42:12-20. Hall testified
that there is a “potential future stigma that a property will always carry if there’s . . . a fire in
it.” Id., 137:5-8. Hall, however, testified that the Cahoon’s disclosure did not require
further explanation because, “I don’t care as a buyer’s agent because I am not
necessarily going to believe anything the seller tells me anyway.” Id., 45:13-19. Hall
could not remember if she asked the Cahoons how much it cost to restore the house as a
result of the 2008 fire. Hall testified that, “If I think they’ve overdisclosed or underdisclosed
or if they’re incorrect, I can tell them that in my opinion, that does not seem to really cover
the details the way it should.” Hall depo., 196:6-10.4 Hall acknowledged that she was
aware of the fact that the house sustained extensive smoke damage which is why the
house had to be torn out and rebuilt. Hall testified that she cannot imagine that she did not
have discussions with Woodard about the fire given the information contained in the
Cathy Counti, the real estate agent for the plaintiffs, testified she was told by Hall
that there was a small fire in a bedroom and that the Cahoons loved the house so much
they decided to upgrade other areas of the house.5 Counti testified that she did not ask
Plaintiffs cite to Hall’s testimony about her beliefs as to realtors’ duties under the law.
The Court agrees with Cahoon Defendants that such testimony amounts to a legal
conclusion, not a statement of fact, and does not consider those beliefs or opinions.
Plaintiffs cite in their statement of facts to Counti’s testimony about her opinions as to
what buyers have a right to know, whether defendants’ agents violated ethical
obligations, and realtors’ duties under the law. The Court agrees with the Cahoon
for a scope of work because Hall represented that the fire was small and not a big deal.
Counti was told by Hall that the fire was small and “it was put out quickly’ which is the
information she transmitted to the Metskers. When Counti first saw the BMA, she
“gasped” because she then knew at that time that both Hall and Graebel knew about the
magnitude of the fire and “chose to either not tell us or to minimize it.” Counti depo., 54:18
– 55:1; 56:10-14; 90:21-91:15. Counti testified she relies on the disclosures to be true
and on the agent to verify from her knowledge that the information is true. Counti depo.,
Defendant Daniel Cahoon testified that nobody from Graebel ever asked any
questions about the fire, requested any documentation regarding the fire, or asked for any
information regarding the fire claim. Cahoon depo., 40:12-25. Daniel Cahoon testified he
told Hall all about the fire, including their needing to redo everything. Id. 128:9-20.
Mike Pottinger (hereafter referred to as “Pottinger”) is the contractor the Cahoons
hired following the 2008 fire. He identified the scope of work and estimate prepared by
Cahoons’ insurance company to repair the damage that resulted from the 2008 fire
reflecting a cost to repair the damage of $208,339.13. Pottinger had to replace some
charred studs. According to Pottinger, everything permeable had to be removed from the
house including carpeting, sheetrock, wood, doors, door frames, cabinetry, and
insulation; and then he had to place Kilz on everything to encapsulate the smell and then
put the house back together, in order to make it habitable. Pottinger had to tear out and
replace an acoustic ceiling. Pottinger testified that all of the drywall on the first and second
floors had to be replaced and was replaced by his company. The insurance company paid
for, and Pottinger replaced four exterior doors. According to Pottinger, when he walked
through the house after the fire, “you just got knocked over by the smell of smoke.” “And
Defendants that such testimony amounts to legal conclusions and/or undisclosed expert
opinion, and the Court will not consider those beliefs or opinions in its analysis.
then we gutted the house down to the studs so what’s left is the exterior siding of the
house and the studs.” Pottinger depo., 109:19-110:2; 117:7-14.
On the Missouri Disclosure when asked if all necessary permits were obtained,
Defendants checked the box “Yes.” (Doc. No. 53, Exhibit B, Missouri Disclosure, page 3,
paragraph 8(b)). According to the Pottinger, there were no structural changes involved in
the renovation done to the home, and therefore the renovation did not require a permit.
(Pottinger depo., 120:8-17). Making changes to the electricity would require a permit (Id.,
120:17-21). Defendant Daniel Cahoon testified he pulled a permit for the electrical repair
and upgrade in the house after the fire occurred (Daniel Cahoon Depo., 42:3-25). An
inspector from Jackson County came to the residence after the permit was obtained to
inspect the electrical repairs and upgrade (Affidavit of Daniel Cahoon, attached as Exhibit
K to Doc. No. 53). Since an electrical permit was obtained, and an inspection completed
by the county on the electrical repairs and upgrade, Defendant Daniel Cahoon believed
that his statement on the Missouri Disclosure that all necessary permits were obtained
was correct (Exhibit K, Affidavit of Daniel Cahoon).
Water Issues and Mold
When they purchased the home, the Plaintiffs were aware that the basement had
evidence of water penetration (Scott Metsker Depo., 65:17-20; Victoria Metsker Depo.,
42:25-43:8). Defendants noted on the Missouri Disclosure that there was no water
leakage or dampness in the house, crawl space, or basement as of the date the
disclosure was signed (Exhibit B, Missouri Disclosure, at page 2, paragraph 2, 7(d)).
Defendants noted at paragraph 9(B) of the Graebel Disclosure that there was not any
standing water, drainage, or flooding problems on the property (Exhibit C, Graebel
Disclosure, at GRSW000083). Defendant Daniel Cahoon testified he did not indicate on
the Graebel Disclosure that there were any issues with water intrusion because water
intrusion was not an issue for the home at the time the disclosure was completed. (Daniel
Cahoon Depo., 63:23-64:5). Real estate agent Hall has no memory of the Daniel Cahoon
telling her there had been a single issue of water intrusion from the outside, because if he
had, she would have insisted that he put it on the disclosure, and she acknowledged it
was not on the disclosure.
After purchasing the house, Defendants experienced water pooling outside of the
basement sliding door about six times in the first five years and on a few of those
occasions, water got a few feet into the basement (Daniel Cahoon Depo., 48:13-25). To
alleviate these conditions, Defendant Daniel Cahoon testified he daylighted downspouts
into the yard and kept the gravel in the courtyard refreshed (Id., 53:16- 25). Additionally, to
alleviate the water pooling Defendants worked to keep the gutters cleaned (Id., 54:10-20).
According to Daniel Cahoon, those remedial actions alleviated the problem of water
pooling outside the basement sliding glass door. (Id., 54:17-24). Besides one occasion in
May, 2013, when a contractor working on the home accidentally disconnected the
downspout off of the gutter, Defendants had no further issues with water intrusion
between the time Defendants moved back into the house in 2009 after the fire renovation
and the time Plaintiffs purchased the house (Daniel Cahoon Depo., 54:25-55:19;
94:24-95:8). Defendant Daniel Cahoon testified if water intrusion had required any
additional repairs beyond those done by Defendants, Defendants would have made the
necessary repairs to correct the water intrusion (Id., 125:3-7).
While there was water staining noted in an inspection report, Daniel Cahoon
testified that was due to a broken valve on the water heater in the basement, which
Defendants replaced prior to selling the house, solving the problem (Daniel Cahoon
Depo., 125:8-126:12). Plaintiff Scott Metsker testified that he believed water was being
forced from underneath the concrete slab directly outside the basement door laterally into
the basement (Metsker Depo., 281:16-282:3). However, the parties dispute whether the
concrete slab was present when Plaintiffs purchased the home from the Cahoon
Defendants, or whether Plaintiffs had the offending concrete slab installed after they
purchased the home.
While the Plaintiffs were aware there had been water intrusion previously in the
basement, Plaintiffs did not retain anyone to check for mold in the home prior to closing on
the house. Defendants noted on the Graebel Disclosure that they had not had a mold
problem or mold remediation, abatement, clean up, or removal at the property. The
Cahoon Defendants testified they never had any problems with mold in the house.
Plaintiffs did not see any mold when they walked through the house; instead Plaintiffs first
saw mold in the house when removing carpet in the basement, and Plaintiffs do not
believe that mold existed in the home at the time they moved in, because the carpet was
installed after plaintiffs had moved in (Scott Metsker Depo., at 264:2-9). The only time
Plaintiffs had mold tests conducted in the home was in November, 2014, and Plaintiffs do
not believe that the mold in the home is at a harmful level (Scott Metsker Depo., 90:3-20).
Plaintiffs believe that the mold has been remediated where it no longer reflects a health
concern to anyone (Id., 93:18-94:2).
Plaintiff Scott Metsker testified he first noticed water intrusion problems a few days
after they moved in; there was approximately a six foot wet area by the basement door.
Plaintiff next noticed water in the basement the following week. Scott noticed water in the
basement again the following week. Plaintiff Scott Metsker attempted to determine the
source of the water at that time but was not successful. He next noticed water around the
middle of September (2013) when he noticed that the bottoms of boxes and the carpet
were wet. He next saw water in the basement in early November. Plaintiff Scott Metsker
has found mold in various areas throughout the lower level; he believes it existed at the
time they moved in and he just did not notice it. Metsker depo., 80:15-81:19. He has
removed drywall and trim from Property that he believed contained mold. Id.
Cahoon Defendants noted on the Missouri Disclosure that there were not any
problems with the driveways, patios, decks, fences, or retaining walls on the property
(Doc. No. 53, Exhibit B, Missouri Disclosure, page 2, paragraph 7(f)). The deck was
installed in 2009 as part of the renovation the Defendants undertook following the fire.
The Cahoon Defendants testified they never had any issues in regard to the back deck.
The condition of the deck was completely observable on the date Plaintiffs’ inspector
inspected the property and before Plaintiffs purchased the house (Scott Metsker Depo.,
96:11-22). There was nothing hidden or undisclosed from Plaintiffs about the deck, which
was open and obvious (Id., 97:2-5). While Plaintiffs believe the deck to be dangerous,
they have done nothing to fix it (Id., 98:22-99:1).
Defendants noted on the Missouri Disclosure that they had not had any
movement, shifting, deterioration, or other problems with the walls, foundations, crawl
space, or slab (Doc. No. 53, Exhibit B, Missouri Disclosure, page 2, paragraph 7(a)).
Defendants noted on the Graebel Disclosure that they were unaware of any settling,
expansive soils, or other soil problems (Sliding, earth movement, upheaval, or stability)
on the property (Exhibit C, Graebel Disclosure at GRSW000083). Daniel Cahoon testified
the Cahoon Defendants never had any problems with the foundation of the house,
including cracking of the foundation (Daniel Cahoon Depo., 99:20-24).
According to their contractor, when the Defendants made renovations to the home
after the fire, the renovations structurally did not change anything that would have added
weight or loads more than what the house was originally designed for (Mike Pottinger
Depo., 94:16-95:12). When Plaintiffs had an inspection done on the home prior to
purchasing the property, the inspection company found no problem with any visible joists
supporting the floors (Scott Metsker Depo., 107:12-20). Plaintiffs discovered issues with
floor joists in other areas of the basement after they removed drywall ceilings in 2015 (Id.,
104:21-105:4). Plaintiff Scott Metsker admitted that any issues with the joists he first
discovered after moving into the house were not visible at any time prior to his removal of
the drywall ceiling (Id.,107:4-9; 109:4-11).
The Cahoon Defendants noted on the Missouri Disclosure that they had not had
any problems with the fireplace and/or chimney, and that the date of the last cleaning was
unknown to them (Doc. No. 53, Exhibit B, Missouri Disclosure, page 2, paragraph 7(g)).
There are two fireplaces in the home, one on the lower level, and one on the main level
(Daniel Cahoon Depo., 91:20-23). Cahoon defendants testified they never used the
fireplace on the lower level, and they insulated it because the basement was cold
(Id.,92:2-6; 92:21-93:3). The Plaintiffs did not ask a professional to inspect the chimney,
but rather inspected it themselves, and found that it appeared to be improperly repaired
(Scott Metsker Depo., 125:9-22). Plaintiffs have no confirmation that the chimney was
improperly repaired short of their own visual observations (Id., 125:23-25). Plaintiffs
purchased the home with the understanding that they had no idea about the condition of
the fireplace (Id., 127:2-5).
Testimony of Frank Comer, P.E.
Frank Comer (“Comer”) was hired by the Metskers and prepared a report based on
two inspections of Property. Comer is a professional engineer which he acquired by
college, internship and experience. Comer was provided both the U.S. Inspection report
provided by Graebel and the Crown inspection report which Metskers had procured.
Comer believes that the holes in the joists due to their size and spacing present a
structural hazard at Property. Comer detected many deflection and failure-related cracks
in the joists that indicates a failure in the lumber. Comer testified that he advised the
Metskers that there were excessive levels of mold spores. Comer does not believe the
concrete slabs around the home are causing the water problems plaintiffs are
experiencing; in fact, he believes that the concrete slabs are providing a ready transport
of the water away from the house. However, Mr. Comer’s report at page 5, page 3, says
“the grade at the rear yard area results in water accumulation along the foundation walls.”
Comer believes that water is coming from under the home and not laterally because of
hydrostatic pressure. Comer’s opinion is that the drainage condition, which has existed
for many years, has water accumulation adjacent to and beneath the home, and that
seepage into the basement area has resulted in saturation of the basement area floor
Summary judgment is appropriate if the movant demonstrates that there is no
genuine issue of material fact and that the movant is entitled to judgment as a matter of
law. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). The facts and inferences are
viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 586–90 (1986). The moving party must carry the
burden of establishing both the absence of a genuine issue of material fact and that such
party is entitled to judgment as a matter of law. Matsushita, 475 U.S. at 586–90.
A nonmoving party must establish more than “the mere existence of a scintilla of
evidence” in support of its position. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
The nonmovant must do more than simply show that there is
some metaphysical doubt as to the material facts, and must
come forward with specific facts showing that there is a
genuine issue for trial. Where the record taken as a whole
could not lead a rational trier of fact to find for the nonmoving
party, there is no genuine issue for trial.
Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc) (citations
and quotations omitted).
A. Graebel’s Motion for Summary Judgment (Doc. No. 54)
Plaintiffs have pled a claim against Graebel in Count III of the Petition, asserting
Graebel indicates that the material facts in this case
establish that (1) plaintiffs have waived all claims against it, (2) plaintiffs acknowledged
they did not rely on representations made by Graebel, and (3) Graebel’s affirmative
defense of release has been established. Defendant Graebel, in particular, argues that in
light of the extensive written acknowledgements and releases in this matter, defendant
Graebel is entitled to judgment as a matter of law.
Defendant Graebel argues that the interpretation of the parties’ release agreement
is a question of law for the court to decide, and "[ajbsent fraud, accident, mistake, or
duress, and unless the terms of the agreement are themselves ambiguous," a court will
not "consider extrinsic evidence contradicting the terms of the agreement." Guthrie v.
Hidden Valley Golf & Ski, Inc., 407 S.W.3d 642, 647 (Mo. App. E.D. 2013). Defendant
Graebel argues that the terms of the release in this matter are clear and unambiguous,
and plaintiffs knew they were releasing certain rights when they signed the release.
Defendant Graebel also argues that terms of the Rider to Buyer Offer, which indicates
that Graebel had no actual knowledge of the condition of the property given that it never
resided there, preclude plaintiffs’ claims against it. Additionally, defendant points out
Section 11 of Exhibit B, which states "Graebel is not liable or bound in any manner by any
verbal or written statements, or representations of information, pertaining to the property
furnished by any real estate broker, agent, employee, or any other person." Thus,
defendant Graebel argues that plaintiffs agreed that Graebel could NOT be held
accountable for statements made by the Cahoons or the Cahoons' agents.
In response, plaintiffs note that Graebel (unlike plaintiffs) had full knowledge of the
nature and extent of the November 2008 fire, because the BMA submitted by Hall to
Woodard indicated that the whole house had to be torn out and rebuilt. Furthermore,
Woodard was provided copies of the Cahoons disclosure forms, which plaintiffs argue
minimized the nature and extent of the fire and do not indicate that the whole house had to
be torn out and rebuilt. Woodard testified that her manager said to “Disclose” the fire after
she showed him a copy of the BMA; however, the parties dispute whether his admonition
to “Disclose” applied to the Cahoons only, or to Graebel as well. Although the Rider
indicated that Graebel had no knowledge of the property prior to when it owned it,
plaintiffs argue that this statement is not true given the BMA. Plaintiffs argue that the
disclosures indicated the fire was a “small electrical fire in exterior wall contained w/no
structural damage.” Additionally, when the Metskers’ real estate agent, Counti, inquired
about the fire, Hall said there was a small fire in a bedroom and that the Cahoons loved
the house so much they decided to upgrade other areas of the house.
Plaintiffs cite to White v. Bowman, 304 S.W.3d 141 (Mo. App. S.D. 2009), in which
the Court stated: “[The seller’s] duty to speak arose from its superior knowledge prior to
the execution of this contract. The presence of a clause disclaiming warranties in a
contract does not negate a pre-contractual duty to speak.” White, 304 S.W.3d at 147
(citing Artilla Cover Resort, Inv. v. Hartley,72 S.W.3d 291, 299 (Mo. App. S.D. 2002)).
Furthermore, “Missouri law…holds that a party may not, by disclaimer or otherwise,
contractually exclude liability for fraud in inducing that contract.” Lollar v. A.O. Smith
Harvestore Prods., Inc., 795 S.W.2d 441, 448 (Mo. App. W.D. (1990))(J. Gaitan).
Plaintiffs state that, reviewing the facts in the light most favorable to them,
defendant Graebel knew or should have known that the entire house had to be gutted
after sustaining extensive smoke and water damage, and failed to make sure that
information was disclosed to potential buyers. “A duty to disclose information exists . .
. where one party has superior knowledge which is not within the fair and reasonable
reach of the other party.” Ringstreet Northcrest, Inc. v. Bisanz, 890 S.W.2d 713, 720 (Mo.
Ct. App. 1995) (citing Blaine v. J.E. Jones Constr. Co., 841 S.W.2d 703, 705
Here, there are at least questions of material fact as to whether
defendant Graebel possessed information that was not within the fair and reasonable
reach of plaintiffs, as even though a fire report existed, based on the disclosures and the
representations made by Graebel’s agent, plaintiffs believed there was no need to look
for such a report. Given that these questions remain, the Court will not enforce the
release plaintiffs entered into in this instance. Defendant Graebel’s motion for summary
judgment, therefore, is DENIED.
Defendants Daniel and Nicole Cahoon’s Motion for Summary
Judgment (Doc. No. 52)
The Cahoon defendants argue that summary judgment is proper for three reasons:
(1) plaintiffs contractually released any claims arising from the sale of Defendants’
residence, as they signed the “Release of All Claims by Buyer” Rider; (2) Plaintiffs were
not entitled to rely on Defendants’ disclosures because they conducted their own
investigation of the property; and (3) Plaintiffs are unable to show that any
representations made by Defendants were false. The Claims against the Cahoon
defendants are contained in Counts I and II.
Count I alleges that the Cahoons
fraudulently represented the history of the house including, but not limited to, the nature
and extent of the fire that occurred in November of 2008. Plaintiffs assert that the
Cahoons minimized the size of the fire, which required repairs costing well over $200,000
and required the interior of the house to be ripped out to the studs and completely
replaced. Plaintiffs also assert that the Cahoon defendants represented in their
disclosures they never experienced water issues, whereas defendant Daniel Cahoon
admitted in deposition that they had experienced water intrusion in the past, with the last
occasion being the month before Plaintiffs signed the contract to purchase the property.
Count II sets forth a theory of negligent misrepresentation, based on the same theories
regarding failure to disclose.
The Cahoon Defendants argue that they are covered under Graebel’s “Rider” and
“Release of all Claims” Cahoon Defendants note that the “Rider” purported to release all
of Plaintiffs' claims sounding in tort, contract, or common law, not only against Graebel,
but also against “Graebel’s principal (i.e. the employer of Graebel’s immediate
predecessor in title to the Property (the “Former Owner”)), and all of their respective
predecessors, successors, parents, subsidiaries, and other affiliates, and all those
entities’ shareholders, directors, officers, employees. . .” (Cahoon Defendants’ Exhibit E)
(emphasis added). Cahoon Defendants further argue that these documents demonstrate
that Plaintiffs released all claims against these individuals and entities arising from “(1)
The Property. . . [and] (3) All of the disclosures which were made to Graebel by the
Former Owner of the Property. . .” Id. Because Daniel Cahoon was and remains a H&R
Block employee and Plaintiffs’ claims arise from his Disclosures to Graebel, Cahoon
defendants argue that all claims against them are released for the same reasons as
stated in Graebel’s motion for summary judgment.
As noted by plaintiffs in their response, however, this argument would not preclude
claims against Nicole Cahoon, who signed the disclosures and is not an employee of
H&R Block. Furthermore, as with Defendant Graebel, the Court finds that White v.
Bowman, 304 S.W.3d 141 (Mo. App. S.D. 2009) applies in this matter. In White, the
Court stated: “[The seller’s] duty to speak arose from its superior knowledge prior to the
execution of this contract. The presence of a clause disclaiming warranties in a contract
does not negate a pre-contractual duty to speak.” White, 304 S.W.3d at 147 (citing Artilla
Cover Resort, Inv. v. Hartley,72 S.W.3d 291, 299 (Mo. App. S.D. 2002)). Furthermore,
“Missouri law…holds that a party may not, by disclaimer or otherwise, contractually
exclude liability for fraud in inducing that contract.” Lollar v. A.O. Smith Harvestore Prods.,
Inc., 795 S.W.2d 441, 448 (Mo. App. W.D. (1990))(J. Gaitan).
Here, as noted by
plaintiffs, questions of material fact remain as to whether the Cahoon Defendants made
affirmative misrepresentations about the size of the fire, and/or concealed material facts
about the amount of restoration that had to be done to the house and the presence of
water and/or mold.
Accordingly, summary judgment is denied on this basis.
Cahoon defendants next argue that plaintiffs’ independent inspection of the
property negates their reliance on the Cahoon defendants’ disclosures. Generally, “where
a party makes his own independent investigation, he will be presumed to have been
guided by what he learned and the conclusions he reached and will not be permitted to
say that he relied on misrepresentations of another and that he was deceived thereby.”
Colgan v. Washington Realty Co., 879 S.W.2d 686, 690 (Mo. Ct. App. 1994), citing
Consumers Co-op. Ass'n v. McMahan, 393 S.W.2d 552, 556 (Mo.1965). There are three
exceptions to this general rule: “First, if the party making the independent inspection
makes only a partial inspection and relies on the misrepresentations as well as the
inspection, he may maintain an action for fraud. Second, the buyer is entitled to rely on
the representation when he lacks equal footing for learning the truth where the facts are
peculiarly within the knowledge of the party making the representation and are difficult to
ascertain. Third, even if the parties stand on equal footing, if the seller makes a distinct
and specific representation, the buyer has the right to rely on the representation.”
Brennan v. Molina, 934 S.W.2d 631, 635 (Mo. App. E.D. 1996).
The Cahoon defendants state that none of these three exceptions apply in the
present matter, as (1) plaintiffs made a full inspection; (2) plaintiffs did not lack the ability
to discover any of the house issues allegedly hidden from them; and (3) plaintiffs have not
shown a distinct and specific representation made by defendants that turned out to be
In response, plaintiffs argue that they lacked equal footing for learning the truth
because of facts peculiarly within the knowledge of the party making the representation,
as the Cahoon defendants knew they had a fire that resulted in more damage than what
was disclosed, and knew they had water issues and specifically represented they had
Plaintiffs argue that a thorough inspection could not have determined the
magnitude of the previous fire, and unless it was raining it would be very difficult for an
inspector to ascertain the water problems. Plaintiffs also argue that they meet the third
exception set forth in Brennan, where the seller makes specific and distinct
representations, such as here where the sellers indicated they had a small contained fire,
and no other information was conveyed to inform the plaintiffs that the house had to be
gutted to make the necessary repairs. Plaintiffs further note that, although no specific
representations were made about the joists found inadequate by Comer, Comer found
that the remodel may have contributed to an increased load on the joists, noting that the
master bathroom was “over-spanned” because what used to be the kitchen was now the
master bath with a large Jacuzzi tub and extensive tilework. Plaintiffs argue that the
extent of the remodel was unknown to them and their inspector, but was information
peculiarly in the knowledge of the Cahoon defendants. See Fox v. Ferguson, 765
S.W.2d 689, 691 (Mo. App. E.D. 1989 (noting, “The hearer is entitled to rely on specific
representations even if the parties have equal means of knowledge or the hearer
conducts his own investigation but nevertheless does not stand on equal footing with the
speaker and relies on the speaker's representations.”).
The Court finds that questions of material fact remain as to whether plaintiffs were
entitled to rely on the representations made by the Cahoon defendants due to (a) lack of
equal footing for learning the truth or (b) distinct and specific representations made by the
Cahoon defendants. Brennan v. Molina, 934 S.W.2d 631, 635 (Mo. App. E.D. 1996).
Accordingly, Cahoon defendants’ motion for summary judgment is denied on this basis.
Elements of Fraud and Negligent Misrepresentation
Cahoon defendants argue that plaintiffs cannot meet the elements of fraud or
negligent misrepresentation as to the specific representations alleged in the Petition.
Count I in Plaintiffs’ Petition is for “Fraud and Misrepresentation.” (Plaintiffs’ Petition, page
3). In Missouri, there are nine elements of fraud: (1) a representation; (2) its falsity; (3) its
materiality; (4) the speaker's knowledge of its falsity or his ignorance of the truth; (5) the
speaker's intent that his statement be acted upon; (6) the hearer's ignorance of the falsity
of the statement; (7) his reliance on the truth of the statement; (8) the hearer's right to rely
on the statement; and (9) the hearer's consequent and proximate injuries. Blanke v.
Hendrickson, 944 S.W.2d 943, 944 (Mo. Ct. App. 1997), citing Colgan v. Washington
Realty Co., 879 S.W.2d 686, 689 (Mo.App.1994) “Failure by a plaintiff to establish any
one of the foregoing elements of fraud precludes recovery.” Mobley v. Copeland, 828
S.W.2d 717, 724 (Mo. Ct. App. 1992).
Count II in Plaintiffs’ Petition is for “Negligent Misrepresentation.” (Plaintiffs’
Petition, page 6). In Missouri, the elements of negligent misrepresentation are: (1) that
speaker supplied information in the course of his business or because of some other
pecuniary interest; (2) that, due to speaker's failure to exercise reasonable care or
competence in obtaining or communicating this information, the information was false; (3)
that speaker intentionally provided the information for the guidance of a limited group of
persons in a particular business transaction; (4) that listener justifiably relied on the
information and (5) that as a result of listener's reliance on the statement, he/she suffered
a pecuniary loss. Colgan v. Washington Realty Co., 879 S.W.2d 686, 689 (Mo. Ct. App.
1994) (internal citations omitted) (emphasis added).
Cahoon defendants argue that, for either of the two claims pled against them,
plaintiffs must prove that the defendants made false representations and knew that the
representations were false or were ignorant of the truth. Defendants state that there is
no evidence that they made any false representations as to any of the seven pled
conditions of the house. The Court examines each alleged misrepresentation in turn.
Fire and Resulting Damage
Defendants argue that they adequately disclosed the 2008 fire. While the fire
itself was disclosed on the forms completed by defendants, the Court believes that
questions of material fact remain as to the alleged misrepresentations as to the extent of
the fire and the extent of renovation needed.
Plaintiffs alleged in their Petition that they had been unable to locate permits
obtained by the Cahoon defendants to repair the fire damage. Plaintiff Scott Metsker
testified at deposition that he was aware of the 2009 permit obtained by defendants for an
electrical upgrade, however.
This was the only permit that defendants obtained;
therefore, defendants argue that neither a claim for fraud or negligent misrepresentation
can survive. Plaintiffs do not respond directly to this issue. From the facts of this case, it
appears that no fraud or misrepresentation occurred in relation to defendants’ statements
regarding the permits. Summary judgment is GRANTED as to these claims.
Water Leakage and/or Mold Issues
Defendants noted on both Disclosures that there were no issues with water
leakage or dampness. Although there had been a few instances of water pooling,
defendant Daniel Cahoon testified that he did not indicate that on the disclosures
because it had been alleviated before selling the house. Defendants also testified they
had not experienced any issues with mold. Defendants also argue that no harm can be
shown regarding mold, as plaintiffs have testified that they remediated the mold
conditions. The Court, however, finds that plaintiffs have pointed to sufficient factual
material to show that questions of fact remain as to whether the Cahoon Defendants
misrepresented the presence water leakage and/or mold. Furthermore, just because the
plaintiffs may believe that they have remediated the mold condition does not mean that
they may not be entitled to damages for the costs of remediating that condition.
Defendants’ motion for summary judgment is DENIED on this issue.
With respect to the back deck, defendants never had any problems with the back
deck, which was installed in 2009 as part of the renovation after the fire. Furthermore,
plaintiff Scott Metsker testified that the condition of the deck was completely observable
at the time of the inspection prior to closing. Therefore, Cahoon Defendants argue these
claims fail for two reasons (1) defendants said nothing false; and (2) plaintiffs are not
entitled to rely on the disclosures when they had every opportunity to, and did, inspect the
deck. The Court finds that the inspection of the deck, which was in an open and obvious
condition at the time of the initial inspection, eliminates plaintiffs’ claim here. See Colgan
v. Washington Realty Co., 879 S.W.2d 686, 690 (Mo. Ct. App. 1994). Defendants’
motion for summary judgment is GRANTED as to issues with the back deck.
Defendants argue they never had any problems with the foundation of the house
or slab, including cracking of the foundation or slab, and defendants related the same on
the disclosures. Defendants state that plaintiffs are unable to present any evidence that
the Cahoon Defendants were aware of movement in the basement slab. Plaintiffs have
not presented facts or argument to controvert defendants here; therefore, Cahoon
Defendants’ motion for summary judgment is GRANTED as to the basement slab.
Floor System or Joists
Defendants argue that the joists below the master bath area were visible to
plaintiffs’ inspector prior to purchase, and that no problems with the joists were noted.
However, plaintiffs have pointed to facts regarding the complete gutting and refinishing
the interior of the house that, had they been known to plaintiffs, might have led an
inspector to look more closely at the joists underneath the master bath and which their
expert now states are insufficient to support the weight of the master bath. Defendants
also argue that plaintiffs discovered alleged issues with other joists only after tearing
down a drywall ceiling after purchase, and defendants argue that they could not have
known what was beneath the drywall either. The Court believes, however, that what
defendants knew about what was beneath their drywall (which most likely was replaced
following the fire) is an issue for a jury to determine. Defendants’ motion is denied as
related to floor system and/or joists.
Cahoon defendants argue that they had not had any problems with the chimney,
and plaintiffs’ only evidence that there are problems with the chimney is their own
observations. Plaintiff Scott Metsker testified that they have not asked a professional to
inspect the chimney, but rather inspected it themselves. Plaintiffs do not set forth any
facts or legal argument showing that there are trial-worthy disputes regarding the
condition of the fireplace. Therefore, Cahoon Defendants motion for summary judgment
is GRANTED as it relates to the condition of the fireplace.
Accordingly, for all the reasons stated herein, (1) Defendant Graebel Relocation
Services Worldwide, Inc.’s Motion for Summary Judgment (Doc. No. 54) is DENIED; and
(2) Defendants Daniel and Nicole Cahoon’s Motion for Summary Judgment (Doc. No. 52)
is GRANTED IN PART as related to plaintiffs’ claims regarding representations as to the
permits, back deck, basement slab, and chimney; and is DENIED IN PART in all other
IT IS SO ORDERED.
/S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
United States District Judge
Dated: March 27, 2017
Kansas City, Missouri
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