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Montgomery v. Vargo

Court of Appeals of Ohio, Eighth District, Cuyahoga

March 1, 2018

SIMON C. MONTGOMERY, ET AL. PLAINTIFFS-APPELLANTS
v.
DONALD VARGO DEFENDANT-APPELLEE

         Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-16-870827

          ATTORNEY FOR APPELLANTS Daniel S. White

          ATTORNEY FOR APPELLEE Jason Wolfe

          BEFORE: Jones, J., Keough, P.J., and Celebrezze, J.

          JOURNAL ENTRY AND OPINION

          LARRY A. JONES, SR, JUDGE

         {¶1} In this appeal, we consider the second case initiated by plaintiffs-appellants, Simon and Bettina Montgomery, relative to their purchase of a home from defendant-appellee, Donald Vargo. Vargo filed a motion for summary judgment on the ground of res judicata, and the trial court granted the motion. In their sole assignment of error, the Montgomerys contend that the trial court committed reversible error in granting Vargo's motion for summary judgment. For the reasons that follow, we affirm.

         {¶2} The record demonstrates that the Montgomerys purchased the home, located on Brookdale Avenue in Brook Park, Ohio, "as is, " in December 2011. Montgomery v. Vargo, 8th Dist. Cuyahoga No. 102830, 2016-Ohio-809, ¶ 2, 5 ("Vargo I "). The first litigation relating to the sale of the property occurred in 2013 in the Berea Municipal Court. Id. at ¶ 1, 2. In that action, the Montgomerys contended that Vargo failed to disclose on the residential property disclosure form the existence of a material defect relating to a renovation Vargo had done to the house that resulted in the removal of a chimney and fireplace. Id. at ¶ 4. Specifically, the Montgomerys claimed that they suffered damages because of a leak in a flat roof that was installed during renovations to the house. Id. at ¶ 2.

         {¶3} The case was tried to a magistrate, who found that even though the house was purchased "as is, " Vargo should have disclosed the removal of the chimney and fireplace; the court awarded the Montgomerys $1, 500 in damages. Id. at ¶ 5. Vargo appealed, contending that the removal of the chimney and fireplace was unrelated to the defect with the roof. Id. This court agreed. Id. at ¶ 9.

         {¶4} In reversing the trial court's judgment, this court found that there had been two renovations done to the house: the first was done before Vargo owned it, and involved adding the flat roof, and the second was done during Vargo's ownership, and involved the removal of the chimney and fireplace. Id. at ¶ 2, 3. This court found that "[t]here was no evidence that the separation of the chimney caused any damage to the building, that the separation was caused by a latent defect in the structure of the building, or that the roof was repaired or in need of repair after the chimney was removed" and that "there was no evidence that the rotted roof was even remotely related to the removal of the fireplace * * * or the chimney attached to the side of the house." (Emphasis sic.) Id. at ¶ 3, 9.

         {¶5} After this court's decision in Vargo I was issued in March 2016, the Montgomerys filed the instant case against Vargo in October 2016. They asserted claims for relief based on fraudulent inducement, fraud and mutual mistake of fact. The gravamen of their complaint was that Vargo had failed to disclose that the basement was prone to flooding. In paragraph 16 of their complaint, the Montgomerys alleged that, "[s]hortly after moving into the property, [they] began experiencing severe problems related to water infiltration in their basement." According to the Montgomerys, the issues with water in their basement caused problems with the foundation, basement, crawl space, floors and interior and exterior walls.

         {¶6} Attached to the complaint was the residential property disclosure form that was completed by Vargo prior to the sale of the home. Section D of the form, "water intrusion, " asked "[d]o you know of any previous or current water leakage, water accumulation, excess moisture or other defects to the property, including but not limited to any area below grade, basement or crawl space?" Vargo answered, "[y]es, " and explained "when home was purchased there was moisture in the basement. Gutters were fixed and drive drain replaced."

         {¶7} Section D further asked, "[d]o you know of any water or moisture related damage to floors, walls or ceilings as a result of flooding; moisture seepage; moisture condensation; ice damming; sewer overflow/backup; or leaking pipes, plumbing fixtures, or appliances?" Again, Vargo answered "[y]es, " and gave the following explanation: "minor moisture in garage during heavy rain."

         {¶8} Section E inquired about knowledge of problems with structural components, that is, the foundation, basement/crawl space, floors, or interior and exterior walls. Vargo indicated that he did not have knowledge of any problems in those areas. Section J inquired about knowledge of any "flooding, drainage, settling or grading or erosion problems affecting the property."[1] Vargo also answered that he did not have knowledge of any problems in those areas.

         {¶9} Vargo filed a motion for summary judgment, contending that the Montgomerys' claims in this action were barred under the doctrine of res judicata. The Montgomerys opposed the motion, contending that this action was "completely different" from Vargo I, which had "nothing whatsoever to do with flooding in the basement" of the house. They further contended, and Simon Montgomery averred in an affidavit, that they were "not aware of [Vargo's] ...


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