Rayner v. Wise Realty Co.

Citations: 504 So. 2d 1361; 12 Fla. L. Weekly 938Docket: BL-111, BK-433

Court: District Court of Appeal of Florida; April 6, 1987; Florida; State Appellate Court

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Peter R. Rayner appeals the dismissal of his third amended complaint against Wise Realty Company of Tallahassee and others, as well as a final summary judgment favoring Charles T. Noegel, d/b/a Seminole Gator Exterminator. The District Court of Appeal of Florida, First District, reverses both rulings. The court finds that Rayner's complaint adequately alleges that the defendants fraudulently failed to disclose a termite inspection report from Florida Pest Control, which indicated wet rot and visible termite damage in a house Rayner intended to purchase. Rayner bought the property after receiving a termite clearance letter from Noegel stating no active infestation was present. 

The court identifies genuine material fact issues regarding Noegel's negligence in providing the clearance letter instead of the required inspection report per Florida regulations, and in failing to report evidence of termite infestation. The background of the case reveals that Wise Realty obtained a listing agreement to sell a property for $49,500. Rayner, seeking a home, worked with realtors James and Maggie Lassetter of Tallahassee Realty, who showed him the property. Rayner offered $38,500 for the "as is" property, with the contract stipulating a termite inspection and report be provided prior to closing. The contract stated that if visible damage was found, it had to be reported, allowing the seller to repair or the buyer to void the contract. A typewritten clause confirmed Rayner's acceptance of the property in "as is" condition at inspection. Wise Realty's broker, Charles W. Walter, requested the termite inspection from Florida Pest Control before closing.

Florida Pest Control provided a Wood-Destroying Organism Inspection Report to Wise Realty and Walter in June 1979, indicating no active termite infestation but noting wet rot, visible termite damage, and evidence of past infestation. The report recommended termite treatment to ensure termite absence. Mr. and Mrs. Williams, aware of this report, insisted on an "as is" sale, referencing a brief termite report from Noegel from 1978 that claimed no termites were present. They requested Walter to obtain a second opinion, leading to Noegel issuing a one-sentence termite clearance letter stating no current evidence of infestation. Noegel clarified that this letter differed from a full inspection report, as it did not address past structural damage but indicated he had verbally informed Wise Realty of existing damage. Noegel's clearance letter, delivered in October 1980, did not comply with statutory requirements for formal inspection reports, which necessitate specific disclosures about infestation and damage.

After taking possession of the property, Rayner discovered significant undisclosed termite infestation and damage, prompting him to sue Noegel, Wise Realty, Walter, Tallahassee Realty, and the Lassetters for fraudulent and negligent misrepresentation and nondisclosure. Noegel sought summary judgment, claiming his actions were irrelevant due to the "as is" sale agreement and that he fulfilled his contractual obligations. The trial court granted Noegel’s motion for summary judgment. Subsequently, Wise Realty and other defendants moved to dismiss Rayner's complaint, arguing they had no duty to disclose the termite damage due to the "as is" clause. The court dismissed Rayner's third amended complaint with prejudice.

Rayner's appeal against Wise Realty and other defendants focuses on a claim for fraudulent nondisclosure, citing Johnson v. Davis, where the Florida Supreme Court established a seller's duty to disclose known facts affecting property value that are not easily observable by the buyer. While this case did not explicitly address broker liability, the Third District Court of Appeal suggested that the duty extends to real estate brokers. Appellees argue that Rayner's claim fails because the sale was "as is," implying he waived any disclosure duty through the contract. However, legal precedent indicates that an "as is" clause does not preclude fraud claims. The contract and Florida law required disclosure of visible damage from termite infestations, and the report provided to Rayner at closing failed to comply by not reporting previous infestations or damage. Appellees reference a contract provision stating that typed clauses override printed ones, arguing that the "as is" language controls. While the contract does state that typed provisions govern conflicting printed provisions, the "as is" clause does not conflict with the termite inspection requirements. The real conflict arises between the seller's obligation to pay for termite treatment and the seller's choice to make repairs for previous infestations.

The "as is" agreement in the real estate contract conflicts with paragraph eleven, which may require the seller to cover repair costs for termite damage. However, the contract cannot ignore paragraph E, as written provisions take precedence over printed ones only when they cannot be reconciled. The parties acknowledged paragraph eleven by marking it on the contract form and acted on the termite inspection requirement by obtaining a report. The "as is" clause does not exclude but rather supplements the termite inspection procedure, allowing buyers to proceed with the purchase or withdraw if termite damage is found. Consequently, the "as is" provision does not preclude Rayner's claim of fraudulent nondisclosure, nor does it shield Noegel from negligence claims. The court referenced McNease v. Bone, affirming that plaintiffs were protected under relevant statutes and rules regarding termite inspections, as the prior case cited by Noegel involved a buyer who was informed of previous infestations. Since the current sale occurred before new inspection report requirements were effective, the court found sufficient evidence for a jury to determine Noegel's negligence, reversing the summary judgment and remanding for further proceedings.