COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 59985 JAMES E. SAXTON, ET AL. : : : Plaintiff-Appellants : JOURNAL ENTRY : vs. : AND : DAVID H. MATEJKA, ET AL. : OPINION : : : Defendant-Appellees : : DATE OF ANNOUNCEMENT OF DECISION: MAY 28, 1992 CHARACTER OF PROCEEDING: Civil appeal from Rocky River Municipal Court No. 89-CVF-349 JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: RICHARD W. PORTMANN 20220 Center Ridge Road #180 Rocky River, Ohio 44116 For Defendant-Appellee: JOHN J. DUFFY 23823 Lorain Road - #210 North Olmsted, Ohio 44070 - 2 - KRUPANSKY, J.: Plaintiffs appeal from the order of the Rocky River Municipal Court granting judgment for defendants on the complaint which stated a cause of action in fraud and misrepresentation. The relevant facts follow. In early October, 1988, plaintiffs James and Phyllis Saxton sought to purchase a new home. Accordingly, they obtained the help of their friend, Pete Kessel, a real estate agent, and viewed numerous properties in their search. Mr. Kessel eventually brought to plaintiffs' attention a property for sale, listed by Realty One, at 24258 Gessner Road, North Olmsted, Ohio. This property was owned by defendants Matejka. Information on the property was obtained through the multiple listing service. Plaintiffs attended an "open house" of the property on October 2, 1988. Defendants David K. and Arlene Matejka were not at home at 1 the time of this initial visit by plaintiffs. Plaintiffs viewed the property for over an hour, including walking through the home and making observations therein. One observation they made was that the east wall in the basement of the home was "discolored" and the paint had peeled in places. Phyllis Saxton also noticed loose linoleum tiles on the basement floor. Plaintiffs inquired of the listing agent if there were 1 In their complaint plaintiffs also named as defendants David H. and Carol Matejka, parents of David K. Matejka and co- owners of the property. However, the senior Matejkas, who did not live at the home on Gessner Road, were later dismissed as parties to the action prior to trial. - 3 - "any disclosures" concerning the property and the agent replied there were none. Three days thereafter plaintiffs made an offer to purchase defendant's property. The contract stated in pertinent part the following: A. BUYER James E. & Phyllis S. Saxton (Husband & Wife), the undersigned (hereinafter called "BUYER"), having examined the premises and being willing to accept same in their PRESENT CONDITION except for normal wear and tear before transfer of Title, does hereby agree to buy the following property, situated in the City of North Olmsted County of Cuyahoga and State of Ohio and located at 24258 Gessner Road.... (Emphasis added.) The contract was made subject to an addendum which stated in pertinent part as follows: INSPECTION ADDENDUM THE FOLLOWING PROVISIONS ARE PART OF THE OFFER TO PURCHASE REAL ESTATE AND ACCEPTANCE BETWEEN James E. & Phyllis S. Saxton (Husband & Wife) (BUYER) AND David K. & Arlene Matejka (Husband & Wife) (SELLER) FOR PROPERTY LOCATED AT 24258 Gessner Road, OHIO WITH OFFER DATED 5 October, 1988. INSPECTIONS: 1. INSPECTION CONTINGENCIES: BUYER shall have (2) days after acceptance of this Agreement to have qualified professionals perform, at BUYER's expense, the inspections indicated below. If BUYER is not satisfied with the results of any such inspection, then BUYER shall so notify SELLER in writing within one (1) day after such inspection is conducted, specifying the unsatis- factory condition(s). If SELLER agrees to correct the condition(s), then this Agreement shall remain in full force and effect. If SELLER does not so elect, then BUYER, at BUYER's option, may either waive such condition(s) and accept the Property in its "AS IS" condition or terminate this Agreement in accordance with the provisions of Paragraph B(2) below. (Emphasis added.) - 4 - Plaintiffs made the offer to purchase the property subject to a "general home inspection" pursuant to this addendum. After plaintiffs' offer to purchase the property, defendants accepted. Plaintiff James Saxton then viewed the property a second time with a certified home inspector, a Mr. Ackerman; Mr. Kessel, and plaintiff's father, Edward Saxton, also accompanied plaintiff on this inspection tour. The inspector had been recommended by plaintiffs' real estate agent and friend, Mr. Kessel. Defendant Arlene Matejka was present in the home when plain- tiff came to inspect the property. During the inspection plaintiff James Saxton asked Mrs. Matejka some specific questions concerning the property. With regard to the condition of the basement, plaintiff was informed the Matejkas had had a problem with water in the basement some years previously, but some "drain work" had been done and the Matejkas had experienced no further problems. Plaintiff and the home inspector thereafter completed the general home inspection of the property. Plaintiffs never notified defendants, pursuant to the purchase contract's addendum, of any dissatisfaction with the results of the general home inspection. After the plaintiffs obtained financing and all other conditions were met, title to the property was duly transferred to plaintiffs. Plaintiffs took possession of the property on December 15, 1988. Early in January, 1989, plaintiffs began experiencing problems with water in the basement of their new home. - 5 - Subsequently, on March 2, 1989, plaintiffs filed a complaint in the Rocky River Municipal Court against defendants David H. and Carol Matejka, David K. and Arlene Matejka, Realty One, and Leda Semon, the seller's listing agent for the property. Plaintiffs attached a copy of the purchase agreement to the complaint. In the complaint plaintiffs made the following allegations: 1. Plaintiffs and Defendants David H. Matejka, Carol K. Matejka, David K. Matejka and Arlene Matejka entered into a contract for the purchase by the plaintiffs of the house and property owned by the aforementioned defendants located at 24258 Gessner Road, North Olmsted, Ohio 44070. * * * 3. Plaintiffs state that they and their agents Smythe Cramer Co. (represented by Peter D. Kessel) did inquire directly of the defendants and the defendants' agents Realty One (represented by Leda Semon) made specific inquiry regarding the condition of the property including the condition of the basement, furnace, humidifier, a 220 volt connection for the kitchen oven, an intercom system, hardware for draperies, and whether the plumbing, toilets, garage door, and dishwasher were in good working condition. 4. Plaintiffs further state that all defendants both individually and collectively herein represented to the plaintiffs that no problems existed regarding the items set forth in the preceding paragraph and that the humidifer [sic] and intercom were on the premises and in good working order. 5. Plaintiffs further state that all defendants knew or should have known that such repre- sentations were false. 6. Plaintiffs further state that they reasonably relied upon the statements and - 6 - representations of defendants herein all to their damage. 7. Plaintiffs further state that as a direct and proximate result of the misrepresentations of defendants herein that they sustained damages. Plaintiffs therefore demanded judgment against defendants in 2 the amount of $10,000. Defendants answered, denied the allegations of misrepresentation stated in the complaint and attached a copy of the inspection addendum of the purchase agreement for the property. Discovery proceeded in the case and plaintiffs' depositions were filed in the trial court. Defendants Realty One and Leda Semon were thereafter dismissed as parties from the action. Subsequently, defendants David H. and Carol Matejka were also dismissed as parties. Trial therefore proceeded on April 26, 1990 with David K. and Arlene Matejka as sole defendants. Testimony was heard by the trial court until April 28, 1990. Thereafter, on May 11, 1990, the trial court rendered judgment for defendants on plaintiffs' complaint. On May 18, 1990, plaintiffs filed a request for findings of fact and conclusions of law pursuant to Civ. R. 52. Plaintiffs also filed on June 5, 1990, a notice of appeal to this court. The trial court issued its findings of 2 Plaintiffs were later permitted by the trial court to amend their complaint. The complaint's prayer for damages was therein restated more precisely; however, the amount of damages prayed for remained the same. - 7 - fact and conclusions of law on June 7, 1990; therein it stated in pertinent part the following: FINDINGS OF FACT * * * 10. At the time of the inspection, Mr. Saxton asked Mrs. Matejka if the humidifier and air conditioner worked and if there was a 220 volt line for an electric range. She responded yes to both questions. 11. During the inspection of the basement [with professional inspector Robert Ackerman], Mr. Saxton noticed moisture along the northeast and southeast corners of the walls and missing floor tiles. 12. James Saxton asked Arlene Matejka, who was in the basement, if they had ever experienced any water problems. She responded that the only time was when the power went out and the sump pump was out, and in 1985 when they had dampness in the corners of the basement. She indicated that her husband had done some work, and also that the City of North Olmsted broke up the patio and fixed a broken sanitary sewer pipe. Mr. Saxton asked if the problem was corrected, and she stated yes. 3 14. Mrs. Matejka's representations were limited to the basement, 220 line, humidifier, air conditioner and intercom which by stipulation at trial is not in issue. 15. The Saxtons took possession of the property on December 15, 1988 and subsequently experienced problems with regard to the condition of the basement, furnace, humidifier, 220 line, hardware for draperies, garage door, dishwasher, air conditioner and two trees on the lot. 16. Plaintiffs' expert, Ivan Huffman [sic], stated that he had no idea when water first came into the basement of 24258 Gessner Road. CONCLUSIONS OF LAW 3 The findings of fact contain no number 13. - 8 - 1. Plaintiffs have not met their burden of proof in establishing fraud in this case. 2. With regard to all problems experienced with the home save those regarding the basement, 220 line, humidifier and air conditioner, the court finds that there was [sic] no actual representations made, and further no duty to disclose, as all was open to an inspection provided for in the Inspection Addendum (Jt. Exhibit B). 3. With regard to the 220 line, humidifier and air conditioner, the court finds that although representations were made that turned out to be false, such statements of Arlene Matejka regarding same were not made with utter regard [sic] and recklessness about their falsity. These representations were not material to the transaction involved; nor were they made with the intent of misleading plaintiffs into relying on them. Further, the court finds that plaintiffs were not justified in relying on these representations as they had a professional inspector with them for the purpose of discerning problems with the home. 4. With regard to Mrs. Matejaka's [sic] representation as to whether or not they had experienced water problems in the basement, the court finds that no false representations were made by plaintiffs [sic]. The court finds Mrs. Matejka was truthful in responding to Mr. Saxton's inquiries regarding water in the basement. 5. Moreover, the court finds no evidence, direct or circumstantial, establishing that there was a water problem other than as stated by Mrs. Matejka during the Matejkas' ownership of the home. 6. The court does not agree that "common sense" would establish that the water problems plaintiff experienced on or about December 26, 1988, and thereafter, must have occurred prior to October 13, 1988 the date of the inspection and representation. There must be proof, and plain- tiffs have failed to establish the fact of a known - 9 - water problem other than stated by Mrs. Matejka on or before October 13, 1988. 7. The representations regarding the existence of a water problem in the basement were not made by Mrs. Matejka with the intent of misleading the Saxtons into relying on them. 8. The Saxtons were not justified in relying on the representations regarding the condition of the basement, as they had hired a professional inspector pursuant to the Inspection Addendum (Jt. Exhibit B), and in fact, relied on his opinion. 9. The court finds that the "benefit of the bargain" standard as to the measure of damages was not met, as plaintiff is not qualified to give an opinion as to the fair market value of his home without alleged defects. (Emphasis added.) Plaintiffs, in their appeal from the trial court's judgment, cite one assignment of error for this court's review which follows: THE ROCKY RIVER MUNICIPAL COURT ERRED IN RENDERING JUDGMENT IN FAVOR OF THE DEFENDANTS-APPELLEES. This assignment of error lacks merit. Plaintiffs make several arguments in their assignment of error. The first contention is that the trial court misinterpreted the testimony of plaintiffs' expert witness, "master plumber, Ivan T. Hofmann." Plaintiffs seem to assert in their argument Mr. Hofmann's testimony supported their allegations of fraud regarding the condition of the basement. Thus, Mr. Hofmann's testimony is the only trial testimony that plaintiffs deemed important enough to have transcribed and submitted to this court pursuant to App. R. 9(B). - 10 - The five elements necessary to allege fraud as the basis for their action were asserted in plaintiffs' complaint, viz., (1) a false representation; (2) knowledge by the person making the representation that it is false; (3) the intent by the person making the representation to induce the other to rely on that representation; (4) rightful reliance by the other to his detriment; (5) an injury as a result of the reliance. (Citations omitted.) Korodi v. Minot (1987), 40 Ohio App. 3d 1; F. & J. Roofing Co. v. McGinley & Sons, Inc. (1987), 35 Ohio App. 3d 16. Furthermore, In an action for fraudulent misrepresentation, the complaining party must affirmatively show that there were made to him actual or implied representations of a matter of fact which related to the present or past and which were material to the transaction; that the representations were false; that the representations were made with knowledge of their falsity, or with such utter disregard and recklessness as to whether they were true or false that knowledge might be inferred; that such representations were made with the intent of misleading such other party into relying upon them; that such party was ignorant of the fact covered by the representations and relied upon them with a right to so rely; and that injury resulted as a consequence of such reliance. Block v. Block (1956), 165 Ohio St. 365. Eckfield v. Bury (Sept. 11, 1980), Cuyahoga App. No. 41564, unreported. Plaintiffs, therefore, had the burden of proving by a preponderance of the evidence the following: (1) defendants had no water problem in the basement; (2) defendants told plaintiffs the home was adequately equipped with the items listed in plaintiffs' complaint, viz., a 220 line, humidifier, air - 11 - 4 conditioner and intercom; (3) defendants had knowledge that such statements were false; (4) defendants intended to induce plaintiffs to rely on these representations; (5) plaintiffs rightfully relied on these representations in purchasing the property; and (6) plaintiffs suffered damage as a result of their reliance. Moreover, with regard to the alleged basement water problem in particular, in Layman v. Binns (1983), 35 Ohio St. 3d 176, the Ohio Supreme Court stated that the doctrine of caveat emptor "remains a viable rule of law in real estate sales." See also, Traverse v. Long (1956), 165 Ohio St. 249. Although the court in Layman discussed the rule as it relates to a structural defect, the rule, however, would also apply to the facts of the case sub judice. In addition, plaintiffs also had to establish (1) the basement water problem was not open to observation or discoverable upon reasonable inspection, (2) they did not have the unimpeded opportunity to inspect the premises, and (3) there was evidence of fraud on defendants' part. Unfortunately, Mr. Hofmann's testimony, standing alone, fails to support plaintiffs' burden of proof with regard to all these requirements for a successful cause of action for fraudulent misrepresentation in their real estate transaction with defendants. 4 Findings of Fact number 14 stated that these items were stipulated not in issue at trial. - 12 - Mr. Hofmann testified in pertinent part as follows: Q. Now, when were you first contacted by the Plaintiffs regarding the house on Gessner Road? * * * A. Well, it would have been prior to April 13, 1989. * * * Q. What did you observe while you were there the first inspection? A. While I was there I observed the base where the concrete and the walls meet, I observed moisture. I observed where water had been getting in. I saw cracks in the wall on the inside. And I saw evidence of water damage. * * * Q. You were there. What did you do? What did you and your men do, put it that way? A. Yes. We dug down the east side of the house, down to the footer tile. And, of course, when we were digging down we located the sump pump line that was broken. And we observed that and I said, "Well, here is the problem." Q. When you say that was the problem, what do you mean? A. Well, this was, in my opinion, was the reason that the wall was leaking. In my experience, I found that when there is a broken line like that, the water comes out, goes down into the drain tile. Finally, the drain tile can't carry the water so it fills up. When the drain tile fills up, the water can't go anywhere so it has to come in the walls, or wherever the water can find it will go, in the wall or usually follows along the wall and comes out the base. This is sort of typical. - 13 - Q. You have seen this condition before? A. Many times. Q. The broken pipe was where? This was coming out of the sump pump? A. It was the sump pump line, coming out of the east wall, yes. Q. Was it completely broken? A. Not severed completely, it was broken in such a way that the water was -- you could see where the water had been going down for quite some time. Q. Then you dug on down to the footer tile? A. We dug down to the footer tile. Q. What did you observe there? What was the condition? A. The footer tiles were completely full, no water could pass through. Q. What was in the footer tile? A. The dirt that had washed down from the side of the house, the backfill from the side of the house. Q. How big a cavity was there around the broken pipe? A. Well, down a ways, I don't recall. I wasn't exactly there when the pipe -- for the complete excavation. We dug it open with the backhoe. But my men told me that they found a large cavity down there beneath the spot where the dirt had washed down. Of course, they dug it right out. Q. Is it your opinion that the dirt that had washed down from the broken area was the dirt that went into the footer tile? - 14 - A. Oh, certainly. * * * Q. Did you have an opinion as to how long that sort of condition existed there at that house? Do you have an opinion? A. Well, it is pretty hard to pinpoint and say something is X number. But it wasn't a new break, it wasn't a new connection. It looked to me like it had been that way for several years. Q. Can you pinpoint down a little more for us than that? Give us your best opinion. A. I would say at the very least three years, but it could have been as long as eight or nine years. I really couldn't say. (Emphasis added.) On cross-examination, Mr. Hofmann's testimony was the following: Q. When did the sump pump line break? A. Well, I would say that must have been several years. Q. But you don't know for sure, do you? A. I don't know for sure. Q. Now, when you came to the house there was actual moisture inside, was there not, back in April when you first took a look at it? A. Inside the wall? Q. Yes. There was moisture there? A. Yes. Q. Do you know when the moisture first appeared inside the house? A. I have no idea. - 15 - Q. Isn't it true that there is always a first time when the water actually gets into the house? * * * A. Yes. Q. Do you have any idea when that first time was? A. No. Q. In the course of examining this problem and digging, did you find a sewer line in the back of the house that had been repaired at some time? A. Yes. Q. Was that in serviceable condition? A. No. Q. What was the problem? A. Well, I don't know who put it in, but it was very, very bad, very poor installation. We replaced it. The trial court stated the following in its findings of fact: "Plaintiffs' expert, Ivan Huffman [sic] stated that he had no idea when water first came into the basement of 24258 Gessner Road." (Emphasis added.) This court cannot agree with plaintiffs that the above- quoted finding was a "misinterpretation" of Mr. Hofmann's testimony since the finding was consistent with the evidence presented. Freeman v. Westland Builders, Inc. (1981), 2 Ohio App. 3d 212. - 16 - Plaintiffs' next argument is that the trial court "ignored the laws of the State of Ohio dealing with fraud and misrepresen- 5 tation arising out of the sale of real estate." In the case sub judice, the trial court specifically concluded that plaintiffs had not met their burden of proof in establishing fraud. Without a complete transcript of the proceedings in the trial court, this court must affirm that decision since it is well settled that there is a presumption that the findings of the trier of fact are correct. Seasons Coal Co. v. Cleveland (1984), 10 Ohio St. 3d 77. A presumption of validity attends the trial court's action. In the absence of an adequate record, which is the appellant's responsibility, see App. R. 9, we are unable to evaluate the merits of the assignments of error and must affirm the trial court's decision. (Citations omitted; emphasis added.) Volodkevich v. Volodkevich (1989), 48 Ohio App. 3d 313; see, also, Columbus v. Hodge (1987), 37 Ohio App. 3d 68. It is within the prerogative of the trier of fact, in this case the trial court, to determine whether plaintiffs proved their case by a preponderance of the evidence based upon the sufficiency of the evidence, the credibility of the witnesses, and the weight of the evidence. Furthermore, a review of the evidence herein supports the trial court's findings since 5 Plaintiffs point to several statements the trial court made in its conclusions of law; however, it is obvious that plaintiffs have misread the relevant portions of the trial court's conclusions of law they cite. Therefore, this court does not find it necessary to refute each one of these contentions. - 17 - plaintiffs did not meet their burden to prove by a preponderance of the evidence their claims of fraud and misrepresentation. The trial court found that the representations made by defendants to plaintiffs regarding the 220 volt line, the humidi- fier and the air conditioner were (1) not material to the transaction; (2) neither made with knowledge of the falsity nor with such reckless disregard that such knowledge could be inferred; and (3) not made with the intent to mislead plaintiffs into relying on them. The trial court further found plaintiffs did not rightfully rely on the statements since at the time the statements were made they had the services of a professional inspector and could have discerned any problems. The trial court's conclusions accurately state the law pertaining to fraud and misrepresentation. Korodi v. Minot, supra; Eckfield v. Bury, supra. Therefore, this court cannot agree with plaintiffs' arguments on that issue. Regarding the basement water problem, the law as stated in Layman v. Binns, supra, controls. The trial court found that Mrs. Matejka "was truthful in responding to Mr. Saxton's inquiries regarding water in the basement", viz., Mrs. Matejka told Mr. Saxton they had moisture in the basement in 1985 when "the power went out and the sump pump was out." This statement of Mrs. Matejka along with what was apparently obvious on the inspections of the basement, i.e., the discoloration and some peeled paint of the east wall, the - 18 - loose tiles, coupled with the moisture which was evident and "along the northeast and southeast corners of the walls and 6 missing floor tiles" should have put plaintiffs on notice that a potential problem might be festering and had not yet exacerbated to the point of culmination as it had in 1985 when the problem was addressed. Defendants are not expected to be prophetic. The weight of the evidence and the credibility of the witnesses are within the trial court's prerogative. State v. DeHass (1967), 10 Ohio St. 2d 230. The trial court also found no evidence of water problems prior to the date of the inspection except in 1985 as stated by Mrs. Matejka. This was consistent with Mr. Hofmann's testimony, and without a complete record on appeal this court cannot determine this finding was erroneous. Seasons Coal Co. v. Cleveland, supra. The trial court also found plaintiffs were not justified in relying on Mrs. Matejka's representations regarding the basement since they had hired a professional inspector and relied on his opinion. Thus, the trial court found the doctrine of caveat emptor applied in the case sub judice. Traverse v. Long, supra. Furthermore, regarding plaintiffs' argument the trial court misstated the law pertaining to testimony of plaintiffs' damages, it is axiomatic that if plaintiffs failed to prove defendants' fraud and misrepresentation with regard to the property by a 6 Finding of Fact number 11. - 19 - preponderance of the evidence, there is no issue of damages for this court to determine. The trial court's findings of fact and conclusions of law are supported by the record before this court. Therefore, this court cannot say the trial court erred in rendering judgment for defendants on plaintiffs' complaint for fraud and misrepresenta- tion. Accordingly, plaintiffs' sole assignment of error is over- ruled. Judgment affirmed. - 20 - It is ordered that appellee(s) recover of appellant(s) costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Rocky River Municipal Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. SPELLACY, P.J., CONCURS; HARPER, J., CONCURS IN JUDGMENT ONLY JUDGE BLANCHE KRUPANSKY N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journaliza- tion, at which time it will become the judgment and order of the court and time period for review will begin to run. .