Lexplug logoLexplug

Royal v. Cook

Louisiana Court of Appeal
984 So. 2d 156 (2008)
ELI5:

Rule of Law:

A seller who knows of a non-apparent redhibitory defect, such as a severe rodent infestation, and fails to disclose it to the buyer commits fraud, which vitiates an otherwise valid waiver of redhibition (or "as is" clause) in the act of sale.


Facts:

  • On May 9, 2003, Joel and Debra Royal entered into an agreement to purchase a home in Belle Chasse, Louisiana, from Patsy Cook.
  • The agreement allowed the Royals to have the property inspected and request repairs for any identified deficiencies.
  • The Royals hired Greater New Orleans Home Service, Inc. (GNOHS), which identified several deficiencies, and the parties subsequently signed a contract on June 13, 2003, specifying which repairs Cook would make.
  • Cook represented that all agreed-upon repairs had been completed.
  • On July 21, 2003, the Royals purchased the home for $180,000, and the cash sale document included a waiver of the warranty against redhibitory defects.
  • During pre-sale viewings of the home, Cook had candles burning.
  • After moving in, the Royals discovered that the agreed-upon repairs were not properly completed and also found evidence of a severe, long-standing rodent infestation, including numerous rat carcasses, extensive feces under the attic insulation and within the walls, and multiple types of rat poison.
  • Cook admitted to a one-time rodent problem in the 1980s but did not disclose any history of rodent issues to the Royals before the sale.

Procedural Posture:

  • Joel and Debra Royal filed suit against Patsy Cook and Greater New Orleans Home Service, Inc. (GNOHS) in a Louisiana state trial court, alleging redhibition, breach of contract, and fraud.
  • The trial court granted summary judgment in favor of GNOHS, dismissing it from the lawsuit.
  • After a two-day bench trial, the trial court rendered judgment in favor of the Royals and against Cook, awarding damages for the redhibition and breach of contract claims.
  • Cook (appellant) appealed the trial court's judgment to the Court of Appeal of Louisiana, Fourth Circuit, with the Royals being the appellees.

Locked

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 seller's failure to disclose a known, non-apparent rodent infestation constitute fraud that vitiates a waiver of redhibition and entitles the buyer to damages for repair and remediation costs?


Opinions:

Majority - Tobias, Jr., J.

Yes. A seller's failure to disclose a known, non-apparent defect constitutes fraud that invalidates a waiver of redhibition, entitling the buyer to damages. The court determined that the rodent infestation was a redhibitory defect under La. C.C. art. 2520 because it diminished the home's value. This defect was not apparent, as a 'reasonably prudent buyer' would not discover it through a simple inspection, which does not include removing insulation, baseboards, or drywall. Although the Royals signed an effective waiver of redhibition, it was vitiated by Cook's bad faith. The court found that Cook knew about the rodent problem—based on her incredible testimony, the presence of various poisons, and her use of candles to mask odors—and her failure to disclose it constituted fraud under La. C.C. art. 1953. This fraudulent concealment negated the waiver of redhibition and obviated the Royals' need to give Cook notice and an opportunity to repair. Therefore, the Royals were entitled to damages equal to the cost of remediation and attorney's fees under La. C.C. art. 2545 for a bad-faith seller.



Analysis:

This decision reaffirms a crucial limitation on 'as is' clauses and waivers of redhibition in Louisiana real estate transactions. It clarifies that a seller cannot use such a waiver as a shield against liability when they have actual knowledge of a significant, non-apparent defect and fraudulently conceal it. The case underscores that a defect need not be structural to be redhibitory; any condition that substantially diminishes the property's value or usefulness, like a severe pest infestation, can qualify. This precedent strongly incentivizes sellers to make full disclosure of known latent defects, as failure to do so can result in liability for repair costs, damages, and attorney's fees, regardless of contractual waivers.

G

Gunnerbot

AI-powered case assistant

Loaded: Royal v. Cook (2008)

Try: "What was the holding?" or "Explain the dissent"