## Facts

- Buyers purchased a single-family home from the sellers in Waltham, Vermont, for $102,500 after negotiating and signing a purchase and sale agreement.
- During a preclosing visit, the buyers saw a basement “water conditioner” and asked the sellers what kind of water the home had.
- Mrs. Kirby stated the water was “good,” “fine,” and “a little hard,” and that the basement system “takes care of it”; Mr. Kirby was present and said nothing.
- Relying on that response, the buyers made no further inquiry about water quality before closing.
- After closing, the buyers discovered the well water smelled strongly of sulfur (“rotten eggs”).
- When contacted, Mrs. Kirby said she forgot to mention the system required bleach; adding bleach did not remedy the problem and made the water taste of sulfur and chlorine.
- A plumber advised the water was sulfur water, that rehabilitation of the system would cost at least $1,000, and would yield only a “tolerable” drinking result.
- The buyers instead connected to municipal water at a cost of about $5,000 plus ongoing water bills.
- The buyers sued for misrepresentation; a jury awarded $6,600. The trial court denied the sellers’ post-trial motions, and the sellers appealed.

## Issues

1. Whether the evidence permitted a jury finding of actionable fraudulent misrepresentation based on Mrs. Kirby’s statements and omissions, and Mr. Kirby’s silence in her presence.
2. Whether the trial court erred by not requiring the jury to separately assess each seller’s acts or omissions for liability.
3. Whether the damages instruction was legally erroneous in permitting the jury to consider the cost of connecting to municipal water as compensation.

## Decision

- The Vermont Supreme Court affirmed the judgment for the buyers.
- The evidence supported a finding that the sellers, having full adverse information about the sulfur water, made a partial and misleading disclosure in response to a direct question, and the buyers reasonably relied on it.
- The court found no reversible error in the trial court’s handling of the sellers’ individual roles, including the effect of Mr. Kirby’s presence and silence.
- The damages charge correctly allowed the jury to decide what expenditure was reasonably necessary to put the buyers in the position they would have occupied had the property been as represented, including the option of connecting to municipal water.

## Legal Principles

- Fraud may be found where a party with full information responds to an inquiry with a partial disclosure that reasonably appears complete, intends (or reasonably can be found to intend) to prevent further investigation, and induces reliance to the other party’s detriment.
- In a real-estate sale, describing a material condition in reassuring terms while omitting known adverse facts can constitute actionable misrepresentation when the buyer relies and does not investigate further.
- A co-owner’s silence in the face of a misleading statement, when present and aware, may be treated by the factfinder as participation in or adoption of the misrepresentation.
- Compensatory damages for misrepresentation may include the reasonable cost of measures necessary to provide the condition as represented; the factfinder may choose among remedial options supported by the evidence.

## Conclusion

The court upheld a fraud verdict arising from sellers’ misleadingly partial response about well-water quality and confirmed that damages may include the reasonable cost of obtaining potable water when that is necessary to place buyers where they would have been if the representation had been true.


Cushman v. Kirby, 536 A.2d 550 (Vt. 1987)