## Facts

- James and Shannon Ponder agreed to purchase a residential home from Daniel and Kristen Culp under a written purchase agreement that included an inspection contingency and provided that, if the buyers did not timely object, they would accept the property in its present “AS IS” condition.
- As part of the transaction, the Culps completed an Ohio Residential Property Disclosure Form under R.C. 5302.30.
- On the disclosure form, the Culps indicated they were unaware of any prior or current water leakage, water accumulation, or excess moisture affecting the property, including areas below grade such as the basement.
- The Culps also disclosed that, before they owned the home, a basement wall had been reinforced and a water system had been installed, and they reported that they had experienced no issues with either during their ownership.
- The Ponders hired a home inspector, Tony Tilenni, who advised them that the slope of the driveway might cause water to leak into the basement.
- The sale proceeded to closing, and the Ponders took title to the property.
- After taking ownership, the Ponders experienced leaking in the basement.
- The Ponders hired Ron Jackson to waterproof the basement; Jackson stated that the water problems did not arise overnight but had been developing for a number of years.
- The Ponders asserted they later discovered plastic sheets glued to the basement walls that were not visible during earlier inspections and that, in their view, had been used to conceal moisture conditions.
- The Ponders sued the Culps alleging fraud based on alleged misrepresentations and concealment about basement water problems.
- The Culps moved for summary judgment; the trial court granted the motion, and the Ponders appealed.

## Issues

1. Whether the Ponders produced evidence creating a genuine issue of material fact that the Culps knowingly made a false statement or concealed a material fact about basement water leakage on the residential disclosure form or otherwise.
2. Whether, given the inspection contingency, the inspector’s warning about potential water intrusion, and the “as is” terms, the Ponders could show the justifiable reliance required for fraud.
3. Whether the evidence about long-developing water conditions and the later-discovered plastic sheeting was enough, without more, to infer the Culps’ knowledge and intent to mislead.

## Decision

- The Ninth District Court of Appeals affirmed the trial court’s grant of summary judgment to the Culps.
- The court concluded that the Ponders failed to present evidence from which a reasonable factfinder could find that the Culps knowingly misrepresented or intentionally concealed basement water leakage.
- The court held that the record, including the inspector’s warning and the contract’s inspection and “as is” provisions, supported judgment as a matter of law for the Culps on the fraud claim.

## Legal Principles

- Fraud requires proof of: (1) a representation (or concealment where there is a duty to disclose) of a material fact, (2) made falsely with knowledge of falsity or with reckless disregard for the truth, (3) intent to mislead another into relying on it, (4) justifiable reliance, and (5) resulting injury.
- On summary judgment, the nonmoving party must point to evidence that would allow reasonable minds to find in its favor on each element for which it bears the burden of proof.
- Ohio’s Residential Property Disclosure Form statute (R.C. 5302.30) requires sellers to disclose conditions within their actual knowledge; it does not impose liability for conditions not shown to have been known by the seller at the time of the disclosure.
- An “as is” clause does not automatically bar a fraud claim, but it is significant when the buyer had the chance to inspect and the record does not show a knowing misrepresentation or intentional concealment that prevented discovery.
- When a buyer receives information from an inspection that identifies a risk or possible defect, proceeding with the purchase can defeat the reliance element if the buyer cannot show that the seller’s conduct reasonably overcame that warning.

## Conclusion

The court affirmed summary judgment for the sellers because the Ponders did not produce evidence that the Culps actually knew their disclosure statements about basement water conditions were false or that they acted with intent to mislead, and the buyers’ inspection warning and acceptance of the contract’s “as is” framework left no triable showing of justifiable reliance needed to prove fraud.


Ponder v. Culp, 2017 WL 192609 (2017)