## Facts

- In 1999, Loren and Kathy Taylor sold their house to Patrick and Debra Donnelly.
- The parties’ purchase agreement contained an “as is” provision stating that, absent written notice from the purchasers of any deficiency prior to closing, the purchasers would take the property in an “as is” condition.
- The Donnellys relied on a V.A. appraisal/inspection connected to financing and obtained a termite inspection; they did not obtain an independent general home inspection.
- The Taylors completed a residential property disclosure form and did not disclose any bat problem.
- After the Donnellys moved into the home, they began hearing noises in the walls at night.
- During a warm spell in winter, the Donnellys found a bat on the floor of a shower in the basement.
- After contacting pest-control professionals, the Donnellys learned that bats were living in the walls and that the home was infested.
- The Donnellys noticed foil and boards in and around parts of the home and believed these materials suggested prior attempts to block or deter bats, implying the Taylors knew of the problem before the sale.
- The Taylors submitted affidavits denying that they had any knowledge of bats in the home before the closing.
- The Donnellys sued the Taylors for breach of contract, loss of enjoyment, and misrepresentation/fraud based on the post-closing bat infestation.
- The Taylors moved for summary judgment on all claims.

## Issues

1. Whether the “as is” clause and the buyers’ opportunity to inspect barred the Donnellys’ breach-of-contract and loss-of-enjoyment claims arising from the home’s condition after closing.
2. Whether the Donnellys produced sufficient evidence that the Taylors knowingly misrepresented or concealed the bat infestation to avoid the effect of the “as is” clause and survive summary judgment on misrepresentation/fraud.

## Decision

- The court granted summary judgment to the Taylors on all claims and dismissed the complaint.
- The court held the “as is” clause allocated the risk of property-condition problems to the Donnellys and defeated contract-based claims tied to the home’s condition after closing, particularly where the Donnellys did not provide pre-closing written notice of any deficiency as required by the contract language.
- Applying Ohio caveat emptor principles, the court found the Donnellys had an unimpeded chance to examine the property and that the condition was not shown to be undiscoverable through reasonable inspection.
- The court held the misrepresentation/fraud claim failed because the Donnellys did not present admissible evidence creating a genuine dispute that the Taylors knew about bats and intentionally misrepresented or actively concealed the condition; suspicion based on foil and boards was not enough.

## Legal Principles

- Summary judgment is appropriate when, construing the evidence most strongly for the nonmoving party, reasonable minds can reach only a conclusion adverse to that party.
- Under Ohio’s caveat emptor doctrine (as described in Layman v. Binns), a buyer may be barred from recovery for property defects when: (1) the condition is open to observation or discoverable on reasonable inspection, (2) the buyer has an unimpeded opportunity to examine the premises, and (3) there is no fraud by the seller.
- An unambiguous “as is” clause generally relieves a seller of a duty to disclose defective conditions and bars contract-based claims about the property’s condition after closing.
- An “as is” clause does not bar claims for fraudulent misrepresentation or fraudulent concealment, but the buyer must produce evidence supporting the fraud elements, including the seller’s knowledge and an intent to mislead.
- Speculation about a seller’s knowledge, without supporting evidence, is insufficient to create a triable issue of fraud at summary judgment.

## Conclusion

The court enforced the parties’ “as is” allocation of risk and applied caveat emptor, concluding that the Donnellys’ contract-based claims were barred by the agreement and their inspection choices, and that their fraud theory failed because they could not show, with evidence beyond suspicion, that the Taylors knew of and concealed or misrepresented the bat infestation before the sale.


Donnelly v. Taylor, 786 N.E.2d 119 (2002)