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REAL ESTATE 68: Holding that plaintiffs-buyers’ allegations of fraud in this case arising from the sale of a residence did not preclude the trial court from granting defendants’ motion for summary disposition based on a release, the court affirmed.

This cause of action arises from plaintiffs’ purchase of a residence from defendant, who had rights in the house under a land contract from co-defendant, the legal owner of the house. Before the house was for sale, in January 2018, an upstairs waterline froze and cracked, causing water damage to the ceiling and drywall in parts of the house. An insurance claim was made resulting in a third party renovating the residence. The renovations were completed in July 2018. In September 2018, plaintiffs offered to purchase sellers’ house contingent on the sale of plaintiffs’ house. Two months after closing, plaintiffs had a second inspection performed on the residence that allegedly revealed hidden water damage, improper repairs, mold, and evidence of narcotic use or manufacture throughout the residence. Plaintiffs sued defendants, alleging defendants committed fraud and misrepresentation in the sale of the residence.   In response, defendants filed a motion for summary disposition pursuant to MCR 2.116(C)(7), arguing plaintiffs released defendants from liability and further, that defendants indicated prior major damage to the residence, and afforded plaintiffs every opportunity to inspect the residence. Pertinent to this appeal, plaintiffs filed a response to defendants’ motion for summary disposition, arguing that questions of fact existed as to whether defendants obtained the release by fraud. The trial court held a hearing on defendants’ motion for summary disposition and granted summary disposition to defendants under MCR 2.116(C)(7), finding the signed release barred plaintiffs from bringing a claim against defendants regarding any issues related to the residence. This appeal ensued.


This Court reviews de novo a trial court’s decision regarding a motion for summary disposition. Under MCR 2.116(C)(7), “[e]ntry of judgment, dismissal of the action, or other relief is appropriate because of release . . . of the claim before commencement of the action.” On appeal, plaintiffs argue that the trial court erred in finding the release signed by plaintiffs operated as a bar to recovery because defendants procured the release through fraud. It is well-settled that a cause of action may be barred, under MCR 2.116(C)(7), where a valid release of liability exists between the parties. “A release of liability is valid if it is fairly and knowingly made.” “The validity of a release turns on the intent of the parties.” “If the text of the release is unambiguous, the parties’ intentions must be ascertained from the plain, ordinary meaning of the language of the release.” However, we do concur with plaintiffs’ general view of the law that under some circumstances, a release may be invalid if it was procured by fraud or a misrepresentation was made with the intent to mislead or deceive. This Court held that language releasing defendants from liability for “any and all” causes of action was sufficiently broad to bar a claim for fraud. Here, plaintiffs released defendants “from all liability.” Such language is sufficiently broad enough to operate as a complete bar to recovery, including claims for fraud.  In addition, plaintiffs’ arguments are unpersuasive because they fail to produce any evidence of fraud or fraudulent inducement. Our analysis could end there; however, although not directly argued in their brief on appeal, we consider whether the facts presented to the trial court sanction a claim of fraud based on obligations arising under the Seller Disclosure Act, MCL 565.951 et seq., because plaintiffs alleged defendants failed to disclose the severe flood damage, repair work, mold issues, and history of use or manufacture of narcotics in the house, and a fire on the property in 2010. In addition, plaintiffs argue co-defendant advised sellers not to disclose the flooding damage to plaintiffs. Again, though not directly argued on appeal, these accusations could potentially create a cause of action for fraudulent misrepresentation. The Seller Disclosure Act imposes a legal duty on sellers to disclose to buyers the existence of certain known conditions affecting the house. MCL 565.957(1). An “as is” clause in the purchase agreement does not preclude liability on the basis of fraud. Again, the record is devoid of any documentary evidence that supports any claim of fraudulent misrepresentation. While the record reveals that the sellers represented on the SDS that the basement had no “evidence of water” and there were no “[s]ettling, flooding, drainage, structural, or grading problems[,]” it also indicated there had been “[m]ajor damage to the property from fire, wind, floods, or landslides[.]” Hence, we cannot conclude there exists a misrepresentation within the SDS because sellers disclosed the house had incurred major damage from fire, wind, floods, or landslides, and because plaintiffs were allowed an unfettered opportunity to inspect the property to determine the nature and extent of the damage. “[T]here can be no fraud where the means of knowledge regarding the truthfulness of the representation are available to the plaintiff and the degree of their utilization has not been prohibited by the defendant.”


Here, it is uncontroverted that plaintiffs were given an opportunity, and did inspect the residence prior to the closing, indicating their complete satisfaction and desire to move in immediately. Further, it is uncontroverted that plaintiffs released defendants “from all liability” and did so without any evidence of fraud, duress or coercion by defendants or anyone acting on their behalf. Hence, on this record, we conclude that the trial court properly granted summary disposition to defendants.


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