Rehearing Denied Jan. 9, 2012.
Virginia R. Vetter, Tampa, for Appellants/Cross-Appellees.
Courtney L. Fish and Ronald W. Gregory, II, of Englander & Fischer, LLP, St. Petersburg, for Appellee/Cross-Appellant.
Eric Jensen and Joyce Jensen appeal a final judgment awarding damages against them and in favor of Cynthia Bailey on her claim for the Jensens' failure to disclose material defects in their residence to Mrs. Bailey under Johnson v. Davis, 480 So.2d 625 (Fla.1985). Because the circuit court found that the Jensens had no knowledge of the defects but improperly found the Jensens liable to Mrs. Bailey under a " should have known" standard, we reverse the final judgment.
I. THE FACTS AND THE PROCEDURAL BACKGROUND
In June 2005, the Jensens entered into a contract with Gene Bailey and Cynthia Bailey for the sale and purchase of the Jensens' residence in St. Petersburg. Before the parties signed the contract, the Jensens filled out a property disclosure statement for the Baileys' review. One of the questions on the disclosure statement asked whether the sellers were aware " of any improvements or additions to the property, whether by you or by others, that have been constructed in violation of building codes or without necessary permits?"
In response to this question, the Jensens checked the " NO" box. The parties closed the sale in July 2005, and the Baileys took possession of the property.
Approximately two years later, the Baileys filed an action for damages against the Jensens. In their complaint, the Baileys alleged claims for breach of contract, nondisclosure of material defects in the residence under Johnson, and fraudulent concealment. The Jensens filed an answer denying the material allegations of the complaint and raised affirmative defenses. Mr. Bailey died while the action was pending in the circuit court, and Mrs. Bailey continued the action as the sole plaintiff.
II. THE CIRCUIT COURT'S VERDICT AND THE FINAL JUDGMENT
After a bench trial that lasted two days, the circuit court entered a detailed verdict in favor of Mrs. Bailey on her nondisclosure claim under Johnson. In the verdict, the circuit court ruled, in pertinent part, as follows:
At trial two main categories of problems emerged. One was the alleged defective sanitary sewer which caused reoccurring backups into the home. The other was a trio of unpermitted changes in the home which were discovered to be not in conformity with building codes and would thus require reconstruction.
After careful consideration the court finds the evidence insufficient to support [Mrs. Bailey's] claims regarding the sewer system. On the other hand, the evidence was that ... the [Jensens] had substantial remodeling work done in their master bath, their kitchen[,] and in the bedroom by the installation of [F]rench doors. It was uncontroverted that these three jobs required proper permits. The evidence supports the conclusion that neither the [Jensens] nor those who they hired obtained the permits. Expert testimony indicated that the work was not properly done, did not conform to the codes applicable when done [,] and would require reconstruction in full conformity with newer[,] more stringent codes.
There was no evidence that the [Jensens] actually knew about the failure to obtain permits or the improper work. They[,] like perhaps many trusting people, relied upon the individuals or companies they ...