Is Lying OK? Apparently it is when you sell real estate in Wisconsin
From the moment we begin to learn, one common theme is drummed into our minds—it is wrong to lie. Many of us vividly remember what happened when we lied to our parents!
We especially don’t like it when someone lies to us to sell a product. This is especially true when buying a home. For most Wisconsinites, it is the single most valuable possession they will ever buy. This is why the state Supreme Court decision last month in Below v. Norton was so shocking. In a 4-to-3 decision, the court limited the punishment for homeowners who lie about the condition of their home.
For over a century, this state has allowed injured homeowners to pursue fraudulent misrepresentation claims in tort against homeowners who lied about the condition of their homes. Now the high court says that claim no longer exists.
Chief Justice Shirley Abrahamson, and Justices Louis Butler and Ann Walsh Bradley did not agree with the decision and for good reason. Writing for the dissent, Bradley put it very clearly:
“According to the majority, a person selling a home can look the buyer in the eye, lie about the condition of the home and escape legal consequences in tort for the lie because of the economic loss doctrine.”
The economic loss doctrine was created by judges to prevent parties to a contract from pursuing a recovery in tort when the damages suffered were economic or commercial losses. It was thought to be a private matter between the buyer and the seller and the contract should control how the dispute is resolved. With the court’s decision, this very narrow doctrine has now been expanded to prevent a private homebuyer from seeking remedies against a seller who lies to him.
The basic underlying purpose of tort law is to require each of us to act as a reasonable person to prevent harm to another. When a person lies, he violates this basic duty each of us owes one another. That is why the tort of fraudulent misrepresentation was created, to find a remedy for a serious wrong against community values.
This split decision of the Wisconsin Supreme Court is important for a number of reasons. For the first time, many victims of real estate fraud will go without remedies against the seller.
The decision also signals a dangerous turn for the court.
As Justice Bradley wrote in her dissent, good public policy that recognizes the need for truth in human relationships is no longer recognized by the Wisconsin Supreme Court.
This decision is bad for the welfare of Wisconsin consumers and bad for the real estate market, which must operate in an environment of trust and honesty.
We must ask, is this the direction some members of Wisconsin Supreme Court will take in the future? Much is at stake. We all need to be much more vigilant, not only as purchasers of homes but as voters in the next Wisconsin Supreme Court election.
Christine Bremer Muggli is president of the Wisconsin Association for Justice (formerly the Wisconsin Academy of Trial Lawyers), Wisconsin’s largest statewide voluntary attorney organization defending the civil justice system. She can be reached at 2100 Stewart Ave., #140, Wausau, WI 54401; phone (715) 849-3200.
Aug 31, 2008 at 8:40 p.m.
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On a personal note: I paid for a home inspection by an individual that was recommended by the realtor I used to buy my money-pit. I may as well have wiped something with that check. I have structural damage that wasn't found, among tons of other stuff wrong with this house. The inspector didn't find it but my friend did when he went down stairs.
It's been over two years so there isn't a blessed thing I can do about squat. Contractors want $30,000 to fix it. Yeah that's not happening either.
Did the previous owners know about it? I have no doubt in my mind that they did and they sold it to me anyway. And now, because I KNOW I can never sell the place because once people see yes to structural damage they don't want it either. Unless of course I LIE which I'm not likely to do.
Anyone up for doing some free construction work?
Aug 15, 2008 at 3:29 p.m.
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I think you've got that backwards Kleej.
People are born with a propensity to do evil and have to be taught to do good.
That’s why children who are poorly trained and undisciplined behave so badly. No one has to teach them how to be brats.
The same is true of adults. Those with weak character behave badly when they are around people whose opinions they don’t care about or when they think they won’t get caught.
Maintaining strength of character is a life long struggle while those with weak character simply do as their nature guides them.
Aug 15, 2008 at 2:26 p.m.
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unidentifiable,
I agree. A political system that's put in place by the citizens of this country. People are born with good souls and trained to be evil. It starts at home. Sorry to get off track here, but, it needed saying. Oh, yeah, the real estate thing........................
Aug 15, 2008 at 10:24 a.m.
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Is this being done so banks can unload foreclosed homes easer without lawsuits? Hmmm...
Aug 15, 2008 at 9:59 a.m.
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Of course lying is not O.K. The Supreme Court did not overturn the laws against fraud. They simply disallowed the suit to go forward on the grounds the plaintiff and her lawyer choose to take, grounds meant for damage recovery when an item is sold for the purpose of making money and the item is unsuitable for that purpose and therefore the plaintiff “lost” money he could not earn, called the Economic Loss Doctrine. RetiredAirForce seems to be right, the plaintiff and lawyer in this case appear to have tried for a much bigger award than the loss they really incurred. You can read it for yourself here- http://www.wisbar.org/res/sup/2008/2005a...
Of course, when you sell a home with known problems you can hire a lawyer to help you find a legal way to conceal the truth. I’m sure Ms. Muggli would have no problem with that whatsoever.
Aug 15, 2008 at 8:23 a.m.
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Wow this topic veered off course a bit. Here's a news flash people, politicians lie. Not just Clinton, Bush, or McCain, but yes even the media loved Obama. It's built into our political system.
Aug 15, 2008 at 1:14 a.m.
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"Integrity" cannot be bought. The American People are the one's who are being bought. We're trading our freedom for security. We're selling out to these corporate driven thugs in the govt. and doing nothing about it.
Aug 14, 2008 at 10:43 p.m.
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Don't stop at Bill Clinton. John McCain's outright lies in his campaign ads are living proof that "integrity" can be bought.
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Buckle up your seatbelts shriner's, we're in for a rough ride.
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P.S....I'm John McCain, and I approve this ad.
Aug 14, 2008 at 10:33 p.m.
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It all boils down to "accountability". We need a court to decide if a lack of integrity is tolerable? It never stops does it? Right and Wrong aren't negotiable! Bill Clinton put that to the test in true politician form a few years back didn't he??!! There are absolute truths whether people like to hear it or not. The more they're ignored and compromised, the closer our society gets to collapse. It's been documented through history.
Aug 14, 2008 at 8:25 p.m.
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I agree on the inspection. We once were going to buy a 10 year old ranch home and were glad to pay for an inspection. There were things there so bad the structure would of fallen down on us (wood rot and broken trusses). Wow, the money was worth it. I think they finally sold it at auction and the owner probubly re- built the whole house...
Aug 14, 2008 at 8:24 p.m.
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If an inspection cost a couple of hundred bucks, it is plenty well worth the money if something is found to be wrong. I would never buy a previously owned home without an inspection.
Aug 14, 2008 at 5:47 p.m.
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RetiredAirForce: Thanks for taking time to look further into this.
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In my opinion, it is wise to get a home inspection regardless of what the homeowner does or does not say or regardless of what is written in contract. It would be tough to prove, in some cases, that the problems didn’t occur once the new owners took possession. In addition, Any obvious existing problems would be identified by a licensed inspector. Many of the good inspectors have guarantees and insurance to cover anything they may have missed during inspection for a designated amount of time after inspection. This would cause the inspector to be liable should something go wrong once the new owners took possession.
Aug 13, 2008 at 4:49 p.m.
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so dont worry about what the owner says and get an inspection!!!!! then they arent any problems
Aug 7, 2008 at 12:40 a.m.
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Not being a lawyer I decided to read the opinion provided by the court and then look at the person who wrote this article. At first glance the article tries to convince readers the Supreme Court is in favor of people lying to sell real estate. After just 10 minutes of reading (the court decision and this article) the opinion piece offered here glares of bias. I could go on and on about the points I read but I will enclose the most prominent from the court “If, as PLAINTIFF alleges, the DEFENDANTS knew of the defective sewer line and failed to disclose that information as required by statute, then they have breached the terms of the property condition contract and PLAINTIFF has a breach of contract action against them for which contractual remedies would be available.” In non-legalese terms if they lied on the contract their accountable; wonder why this was not mentioned in the opinion piece. So the whole hubbub of this article is over ADDITIONAL tort above and beyond what is available for breach of contract (yep, that means get money by legal means via a lawyer). So who wrote the above opinion piece? An injury attorney, imagine that. Even though the court stated there is legal means available in the contract breach (if proven) for restitution this is not enough in the eyes of an injury lawyer. No wonder insurance on everything is so costly! Just my humble opinion.
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