CHARLES M. SAGE and RIKI SAGE v. SARVENAZ PAHLAVI, individually and as Trustee of the SARVENAZ PAHLAVI LIVING TRUST U/A/D JUNE 10, 2015

Citation: Not availableDocket: 22-1566

Court: District Court of Appeal of Florida; March 15, 2023; Florida; State Appellate Court

Original Court Document: View Document

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Charles M. Sage and Riki Sage (Buyers) appealed a final summary judgment favoring Sarvenaz Pahlavi (Seller), both individually and as Trustee of the Sarvenaz Pahlavi Living Trust, in a breach of contract and failure to disclose case regarding the sale of a condominium. The court affirmed the judgment, specifically addressing Buyers' claim that Seller inadequately disclosed a foundation settling issue. 

The Buyers entered into an 'AS-IS' Residential Contract and completed a property disclosure form where the Seller affirmed certain conditions regarding the property, including aspects related to settling and structural integrity. Notably, the Seller indicated knowledge of an assessment related to the property but did not disclose specific foundation issues. 

Prior to closing, Buyers conducted their own inspection revealing significant cracks in the exterior wall and other signs of settlement, yet they later claimed that the Seller failed to disclose critical defects affecting the property's value. The Buyers argued that the Seller was legally obligated to disclose such defects under the precedent set in Johnson v. Davis, where the Florida Supreme Court established that sellers must disclose material defects not readily observable to Buyers.

However, during depositions, Buyers admitted they did not read the disclosure form or their inspection report. The court ruled that the Seller fulfilled their disclosure duties as mandated by law, leading to the dismissal of Buyers' claims.

Seller sought summary judgment, asserting that she had adequately disclosed a defect relevant to Buyers’ claim, which was also noted in Buyers’ own inspection report that they disregarded. Buyers opposed this motion and filed a cross-motion, contending that Seller's disclosures were insufficient. After a hearing, the trial court ruled in favor of Seller, concluding that Buyers had sufficient notice of a settling condition at the Condominium Property and did not rely on Seller’s disclosures during their purchase. 

The trial court's judgment was governed by an amended summary judgment standard, which states that summary judgment is appropriate when there is no genuine dispute over material facts and the movant is entitled to judgment as a matter of law. The test for determining a genuine factual dispute is whether a reasonable jury could find for the nonmoving party. 

In analyzing the nondisclosure claim, four elements were established: Seller must have known of a defect, the defect must materially affect property value, it must be non-observable and unknown to Buyers, and Buyers must prove Seller failed to disclose it. The property disclosure form indicated past or present settling issues and additional structural reinforcements, while the inspection report pointed out visible cracks due to settlement. This information sufficiently alerted Buyers to the foundation settling issue, creating a duty for them to investigate further. 

Despite the disclosures, Buyers failed to read the property disclosure form or the inspection report and did not pursue any inquiries about the settling issue. Their lack of due diligence precluded a viable nondisclosure claim, as no actionable claim exists when the buyer neglects to investigate disclosed information. The appellate court affirmed the trial court’s decision, with justices GROSS and KUNTZ concurring, noting the judgment is not final until any timely filed motion for rehearing is resolved.