## Facts

- A partnership owned a 48,000-square-foot flat-roof warehouse in Charlottesville, Virginia and listed it for sale through a broker.
- John B. Hull investigated the property, negotiated a price reduction, formed Avon Street Business Center, Inc., and purchased the warehouse in 1976.
- The roof had prior damage: a 1974 fire affecting the southern portion (repaired) and 1975 wind damage at the northwest corner.
- After the 1975 wind damage, the sellers obtained $8,121 in insurance proceeds and performed approximately $1,400 in temporary repairs.
- Hull had substantial opportunity to inspect the premises; witnesses stated an observer on the roof could obtain a general view of the entire roof.
- Hull also had access to the sellers’ business records, which disclosed the insurance settlement related to the wind damage.
- The broker made general favorable statements about the roof (e.g., “good roof,” “25-year roof”), did not provide a written roof warranty, and did not guarantee future performance.
- Avon sued the sellers in tort for deceit, alleging concealment and misrepresentation about the roof’s condition and repairs.

## Issues

1. Whether the buyer’s evidence was sufficient to submit a fraud-in-the-inducement (deceit) claim to the jury based on alleged concealment and alleged misrepresentations about the roof.
2. Whether general favorable descriptions of the roof constituted actionable misrepresentations of present fact or nonactionable opinion (“puffing”).
3. Whether the buyer could prove justifiable reliance where it had ample opportunity to inspect and access to records showing prior damage and insurance payments.

## Decision

- The Supreme Court of Virginia reversed the judgment for the buyer.
- The Court held the sellers’ motion to strike should have been granted because the evidence was insufficient as a matter of law to prove fraud.
- The jury’s compensatory and punitive damages awards were set aside, and judgment was entered for the sellers.

## Legal Principles

- Fraud in the inducement requires proof (by clear and convincing evidence) of a material misrepresentation or concealment of a present fact, intent to mislead, justifiable reliance, and resulting damage.
- General promotional statements about property condition (e.g., “good roof,” “25-year roof”) are ordinarily nonactionable opinion or “puffing,” absent a specific false assertion of fact.
- When the means of knowledge are equally available and the buyer has full access to inspection and relevant records, reliance on generalized assurances or alleged nondisclosure is not reasonable absent active concealment or an independent duty to disclose.

## Conclusion

Because the buyer could inspect the roof and review records disclosing prior damage and insurance proceeds, and because the broker’s statements were nonactionable opinion rather than specific false statements of present fact, the evidence did not support fraud in the inducement; the verdict for compensatory and punitive damages was reversed and judgment entered for the sellers.


Watson v. Avon St. Bus. Ctr., Inc., 311 S.E.2d 795 (Va. 1984)