Cushman v. Kirby
536 A.2d 550, 148 Vt. 571, 1987 Vt. LEXIS 546 (1987)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A home seller's partial disclosure about a property's condition that intentionally creates a false impression constitutes actionable misrepresentation. Silence regarding a known material defect can also constitute misrepresentation when the seller has superior knowledge and a duty to speak.
Facts:
- Lynn and Julie Cushman entered negotiations to purchase a single-family home from Gregory and Elizabeth Kirby.
- During a tour of the house, the Cushmans noticed a water treatment system and asked the Kirbys about the water quality.
- Elizabeth Kirby responded, 'It’s good. It’s fine. It’s a little hard, but the system downstairs takes care of it.'
- Gregory Kirby, who was present for the exchange, remained silent.
- Both Kirbys were aware at the time of the sale that the well water contained sulfur, which required treatment to be of tolerable quality.
- Relying on the representation that the water was only 'hard,' the Cushmans purchased the home.
- After moving in, the Cushmans discovered the water had a strong sulfur smell and was not merely hard water, which is a different and less severe condition.
Procedural Posture:
- Lynn and Julie Cushman (plaintiffs) sued Gregory and Elizabeth Kirby (defendants) in a Vermont trial court for misrepresentation.
- A jury returned a verdict in favor of the Cushmans, awarding them $6,600 in damages.
- The Kirbys filed motions for directed verdicts, to set aside the verdict, and for a new trial, all of which were denied by the trial court.
- The Kirbys, as appellants, appealed the judgment to the Supreme Court of Vermont.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a home seller's representation that water is merely 'hard' when they know it has a significant sulfur problem, coupled with the other seller's silence, constitute actionable misrepresentation?
Opinions:
Majority - Dooley, J.
Yes. A seller's partial disclosure of facts that creates a misleading impression and is intended to deceive constitutes actionable fraud. Mrs. Kirby's statement that the water was 'a little hard' was a misleading half-truth because she failed to disclose the known, material fact of the sulfur problem. This partial disclosure, intended to prevent further investigation, amounts to misrepresentation under the standard set in Crompton v. Beedle. Mr. Kirby is also liable because silence can constitute fraud when there is a duty to speak. This duty arises when a seller has superior knowledge of a material defect not discoverable by the purchaser. Knowing his wife's statement was misleading, Mr. Kirby had a duty as a seller with full knowledge of the water's condition to correct the misimpression, and his silence was a breach of that duty.
Analysis:
This decision reinforces the modern trend away from the traditional doctrine of caveat emptor ('let the buyer beware') in real estate transactions. It establishes that sellers in Vermont have an affirmative duty to avoid misleading partial disclosures and may have a duty to speak up about known material defects. The case holds that both an affirmative half-truth and a knowing silence in the face of such a statement can create liability for fraud, placing a higher burden of honesty and disclosure on sellers. This precedent makes it easier for buyers to sue sellers for failing to be forthcoming about significant problems with a property.
