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Jehly v. Brown

Court of Appeals of Colorado, Second Division

March 27, 2014

David Jehly and Peggy Jehly, Plaintiffs-Appellants,
v.
Allen Brown, Defendant-Appellee

Teller County District Court No. 10CV359. Honorable Edward S. Colt, Judge.

LeHouillier & Associates, P.C., Patric J. LeHouillier, Colorado Springs, Colorado; The Green Law Firm, P.C., Gregory T. Green, Colorado Springs, Colorado, for Plaintiffs-Appellants.

Opinion by JUDGE CASEBOLT. Richman and Ashby, JJ., concur.

OPINION

Page 352

CASEBOLT, JUDGE.

[¶1] Plaintiffs, David and Peggy Jehly, appeal the judgment entered following a bench trial in favor of defendant, Allen Brown, in which the court found for defendant on plaintiffs' claim of fraudulent concealment. Plaintiffs assert that the court erred by applying the wrong legal standard and failing to impute the knowledge of defendant's agent to defendant. We disagree and affirm.

I. Background

[¶2] Defendant owned real property and hired a general contractor to build a house upon it. Before or during construction, the general contractor discovered that part of the property was located in a floodplain. However, the contractor did not inform defendant of that fact.

[¶3] Plaintiffs and defendant entered into a contract to purchase the house. Defendant filled out a Seller's Property Disclosure form that asked numerous questions regarding the condition of the house and the land. As it relates to this appeal, the section entitled " Environmental Conditions" asked whether, " To Seller's current actual knowledge . . . any of the following conditions now exist or have . . . ever existed: . . . (14) Within governmentally designated Flood Plain area." Each item included boxes entitled " Yes," " No," " Do Not Know," and " Comments" for the seller to respond to the questions.

[¶4] Defendant filled out every page of the disclosures, including the pages asking about environmental conditions, by writing " New Construction" diagonally across the page. He did not check any boxes. Before buying the house, plaintiffs were never informed that part of the property was located in a floodplain.

[¶5] Approximately five years after purchasing the home, heavy rains caused severe flooding and damage to the basement of the house. Plaintiffs sued defendant, alleging that he fraudulently concealed knowledge of the floodplain to induce plaintiffs to buy the

Page 353

house. During a bench trial, defendant denied having any personal knowledge of the floodplain at the time of the sale. Defendant also denied that his general contractor or any subcontractors had informed him of the existence of the floodplain.

[¶6] The trial court found in favor of defendant, concluding that plaintiffs had not proved that defendant knew that part of the property was in a floodplain, and this appeal followed.

II. Imputed Knowledge and Fraudulent Concealment

[¶7] Plaintiffs assert that the trial court erred in failing to impute to defendant the general contractor's knowledge that part of the property was in a floodplain. They contend that the trial court thus employed an improper legal standard requiring them to prove ...


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