## Facts

- Terry and Diane Visser bought a Blaine, Washington house needing substantial work and performed renovations, during which they encountered significant rot and structural problems.
- A contractor recommended removing plywood to inspect joists, but Visser declined further structural investigation and directed superficial fixes rather than repairing underlying rot.
- The Vissers later chose to sell the property. Terry Visser, a licensed real estate agent, listed the property himself.
- The Vissers completed the statutory seller disclosure form but used “don’t know” or left blanks for multiple items; they did not provide the inspection report they had obtained when they purchased the property.
- Nigel and Kathleen Douglas (buyers) hired a home inspector, Dennis Flaherty, before closing.
- Flaherty identified (1) rot/decay near the roof line with indications of a prior leak and (2) a rotted sill plate under the home associated with water-damaged siding; his report recommended monitoring and repair but did not characterize the condition as a structural threat.
- The Douglases did not seek follow-up from Flaherty, request additional inspections, or reopen inquiries with the Vissers based on the inspection findings, and they closed the purchase.
- After closing, the Douglases noticed odor and pest activity; subsequent inspections revealed extensive mold, rot, pest activity, and structural damage, and inspectors concluded some pre-sale work concealed rather than corrected damage.
- The Douglases defaulted on the purchase money obligation and sued, alleging nondisclosure and concealment of material defects.

## Issues

1. Whether buyers who have actual notice of a defect from a preclosing inspection can recover for fraudulent concealment or negligent misrepresentation/concealment when they fail to investigate further and there is no finding that further inquiry would have been fruitless.

## Decision

- The Court of Appeals reversed the judgment for the Douglases.
- The court held that the preclosing inspection findings of rot and decay put the Douglases on notice of a defect, triggering a duty to make further inquiries before purchasing.
- Because the Douglases did not pursue additional inquiry or investigation and the trial court made no finding that further inquiry would have been futile, they could not establish the reliance and diligence necessary to recover on concealment-based theories.
- The sellers’ alleged superficial repairs and incomplete disclosures did not restore the buyers’ claims once the buyers independently learned of rot before closing.

## Legal Principles

- When prospective homebuyers discover evidence of a defect, they are on notice and must investigate further before closing.
- A buyer’s failure to conduct reasonable follow-up inquiry after learning of a defect defeats claims premised on nondisclosure or concealment when the buyer cannot show that additional inquiry would have been fruitless.
- Justifiable reliance is not established where the buyer had actual notice of the problem and proceeded to purchase without reasonable diligence.

## Conclusion

The appellate court held that preclosing notice of rot imposed a duty on the buyers to investigate further; absent a finding that further inquiry would have been fruitless, the buyers’ failure to act barred recovery for fraudulent concealment and negligent misrepresentation/concealment, requiring reversal of the trial court’s judgment.


Douglas v. Visser, 295 P.3d 800 (Wash. Ct. App. 2013)