Present: Compton, Lacy, Hassell, Keenan, Koontz, and Kinser,
JJ., and Whiting, Senior Justice
DAVID S. NORRIS, ET AL.
OPINION BY
v. Record No. 970461 SENIOR JUSTICE HENRY H. WHITING
January 9, 1998
CALVIN D. MITCHELL, JR., ET AL.
FROM THE CIRCUIT COURT OF MATHEWS COUNTY
John M. Folkes, Judge
In this appeal, we decide (1) at what point an order that
sustained a demurrer and dismissed an action but gave the
plaintiffs leave to amend within a certain period became final,
and (2) whether the circumstances of this case required sellers
of residential property to disclose to the purchasers the
contents of a public document describing a restriction on the use
of the property being sold.
The trial court decided the case by sustaining the
defendants' demurrer. Therefore, we accept as true the following
material facts expressly alleged in the motion for judgment and
all reasonable inferences which may be fairly drawn from those
facts. Heyward & Lee Constr. Co. v. Sands, Anderson, Marks &
Miller, 249 Va. 54, 55, 453 S.E.2d 270, 271 (1995).
Calvin D. Mitchell, Jr., and Marie D. Mitchell, husband and
wife (the sellers), contracted to sell a house and lot in the
Chesapeake Shores subdivision in Mathews County to David S.
Norris and Agnes A. Norris, husband and wife (the purchasers).
The contract was "contingent upon satisfactory reports from a
qualified . . . septic inspection."
Cindy Fox, the sellers' real estate agent, arranged to have
Allen S. Farmer perform the septic inspection. After doing so,
Farmer wrote Fox that the "septic System is not operating
properly at this time." Upon being notified by Fox of the
results of Farmer's inspection, the purchasers told Fox that the
septic system would have to be repaired before settlement. Fox,
acting for the sellers, employed Farmer to make the necessary
repairs. Farmer obtained a construction permit from the county
containing the following provisions: "Recommendations:
Summertime use, no laundry, aerated faucets, low flush toilets[.]
Conserve water."
After Farmer completed his work and certified that the
"septic system had been installed and completed in accordance
with the construction permit," the system was inspected and
approved by the county. Although they were told that the system
had been repaired, the purchasers were not given a copy of the
permit. Nor were they told of the reservations noted on the
permit prior to closing, even though they had advised Fox that
they planned to have their son occupy the house on a "year-round
basis."
The parties completed the sale on September 13, 1994, and
the purchasers took possession of the property. Thereafter, they
made substantial improvements to the house.
Almost immediately after the purchasers' son began living in
the house in January, 1995, he "experienced difficulty with the
use of the toilet." When the purchasers asked Fox what Farmer
had done to the septic system to repair it, Fox sent them a copy
of the construction permit containing the above-quoted
restrictions. This was the first time the purchasers became
aware of the restrictive language in the permit.
Upon being advised that they would be required to "expend
substantial funds to upgrade the septic system in order that the
property [could] be used on a year-round basis," the purchasers
sued the sellers and the attorney who represented all the parties
at the closing. Among other things, the purchasers claimed
breaches of a duty to give them a copy of the construction permit
and to advise them of the restrictions noted thereon. Concluding
that the purchasers' motion for judgment failed to state a cause
of action, the court sustained demurrers filed by the defendants
and dismissed the action in a written order entered June 20,
1996.
However, the order granted the purchasers leave to file an
amended motion for judgment on or before July 8, 1996. Three
days before the July 8 deadline, the purchasers filed a motion
for a nonsuit which the court granted in a written order entered
on July 15, 1996. That order was entered more than 21 days after
the June 20 order, but less than 21 days after the July 8
deadline.
In August 1996, the purchasers again sued the sellers,
making the allegations described earlier and this time claiming
1
that the sellers had committed an act of fraud. After
sustaining the sellers' plea of res judicata and a demurrer, the
court dismissed the second action. The purchasers appeal.
First, we decide whether the court correctly sustained the
1
Although the purchasers also sued Fox and her employer, the
trial court's dismissal of the action against them has not been
appealed.
sellers' plea of res judicata. The sellers contend that the
court was correct because the dismissal order in the first action
was a final order effective on the date it was entered and, under
Rule 1:1, the court lost jurisdiction to enter the nonsuit order
more than 21 days after that effective date. 2 The purchasers
argue that the sellers cannot now contest the validity of the
nonsuit order since they did not appeal the judgment of the court
in entering the nonsuit order.
If the dismissal order were a final order, the court would
have lost jurisdiction to enter the order of nonsuit more than 21
days after the dismissal order was entered, even though the
purchasers' motion for a nonsuit was filed within 21 days after
the dismissal order was entered. School Bd. v. Caudill Rowlett
Scott, Inc., 237 Va. 550, 556, 379 S.E.2d 319, 323 (1989). We
resolve this issue by a consideration of the effect of an order
sustaining demurrers to the merits of a case and dismissing it.
If the order merely sustains such a demurrer, it is not a final
order; to be final, it must go further and dismiss the case.
Bibber v. McCreary, 194 Va. 394, 395, 73 S.E.2d 382, 383 (1952).
However, if the order also gives the plaintiff leave to amend,
it does not become final "until after the time limited therein
for the plaintiff to amend his bill has expired." London-
Virginia Mining Co. v. Moore, 98 Va. 256, 257, 35 S.E. 722, 723
2
Rule 1:1 provides in pertinent part:
All final judgments, orders, and decrees, irrespective
of terms of court, shall remain under the control of the
trial court and subject to be modified, vacated, or
suspended for twenty-one days after date of entry, and no
longer.
(1900).
Hence, the dismissal order in question could not have become
final until the July 8 deadline. Thus, the court had 21 days
after that time in which to "modif[y], vacate[], or suspend[]"
its order. Rule 1:1. Within that time, the court modified its
order sustaining the sellers' demurrer by entering its order of
nonsuit, which became the final order in the case. Thus, the
order of June 20, sustaining the demurrer and dismissing the
first action, was not a final order, an essential element for the
imposition of the doctrine of res judicata. Arkansas Best
Freight Sys., Inc. v. H.H. Moore, Jr. Trucking Co., 244 Va. 304,
307, 421 S.E.2d 197, 198 (1992); Faison v. Hudson, 243 Va. 413,
419, 417 S.E.2d 302, 304 (1992). Accordingly, we conclude that
the trial court erred in sustaining the sellers' plea of res
judicata.
And since the sellers did not appeal the trial court's
action in granting the nonsuit, the order of nonsuit became the
final order in the first action and the law of this case. Walt
Robbins, Inc. v. Damon Corp., 232 Va. 43, 49, 348 S.E.2d 223,
227-28 (1986); Searles v. Gordon, 156 Va. 289, 294, 157 S.E. 759,
761 (1931). Therefore, we treat the order as correctly entered.
Next, we turn to the merits of the trial court's ruling in
sustaining the sellers' demurrer. Because of the absence of any
allegations by the purchasers that the sellers intentionally
concealed the limitations upon the use of the septic system noted
in the construction permit, the sellers argue that the trial
court was correct in its ruling.
The purchasers respond that their allegation of the failure
of the sellers or Fox, their agent, to show them the construction
permit or advise them of its limitations, was tantamount to an
allegation of false representation, citing Van Deusen v. Snead,
247 Va. 324, 328, 441 S.E.2d 207, 209 (1994), and Spence v.
Griffin, 236 Va. 21, 28, 372 S.E.2d 595, 598-99 (1988), in
support. We find no merit in this contention.
The purchasers recognize that one of the essential elements
of their cause of action for fraud is "a false representation."
Van Deusen, 247 Va. at 327, 441 S.E.2d at 209. The purchasers
alleged that the sellers "committed an act of fraud when they
concealed from [them] the reservations noted on the septic Permit
which information [the purchasers] had a right to expect
disclosure." Thus, the purchasers equate concealment with a
failure to perform a duty to disclose.
However, we have held that
[f]or purposes of an action for fraud,
concealment, whether accomplished by word or conduct,
may be the equivalent of a false representation,
because concealment always involves deliberate
nondisclosure designed to prevent another from learning
the truth. A contracting party's willful nondisclosure
of a material fact that he knows is unknown to the
other party may evince an intent to practice actual
fraud.
Van Deusen, 247 Va. at 328, 441 S.E.2d at 209 (quoting Spence,
236 Va. at 28, 372 S.E.2d at 598-99) (emphasis added).
Therefore, we have required either an allegation or evidence of a
knowing and a deliberate decision not to disclose a material
fact.
The Van Deusen amended bill of complaint alleged
that [the sellers of a residence] had "put new
mortar in cracks around the foundation" and placed
"materials and the like in front" of cracks in the
basement to prevent the prospective purchasers "from
detecting the defects of the house" and "for the
purpose of diverting their attention from the
settlement of the house."
247 Va. at 329, 441 S.E.2d at 210. In Spence, to induce the
donor-grantor of a charitable gift of land not to read the deed
carefully, the donee-grantee and his agent represented to the
grantor that the deed contained a reversionary clause as the
grantor intended when they knew it did not. 236 Va. at 29, 372
S.E.2d at 599.
Here, however, there is no allegation of a deliberate
decision to conceal from the purchasers the limitations of use
noted on the construction permit. Indeed, the construction
permit was an official record, Code § 2.1-341, available for
inspection by the public under the provisions of Code § 2.1-
342(A), and required to be posted on the property before the work
began. Code § 43-4.01(A). And the purchasers do not allege that
the sellers did anything to divert them from inspecting the
permit.
Additionally, the doctrine of caveat emptor required the
purchaser to discover defects in the property which a reasonable
inspection would have disclosed, unless the sellers did or said
anything to "divert [the purchasers] from making the inquiries
and examination which a prudent man ought to make." Horner v.
Ahern, 207 Va. 860, 864, 153 S.E.2d 216, 219 (1967). As we have
noted, there is no claim that the sellers diverted them from
inspecting the permit. The purchasers merely claim that the
sellers had an affirmative duty to call their attention to the
restrictions. We hold that there was no such duty under the
circumstances of this case.
Accordingly, we find no error in the action of the trial
court in holding that the purchasers had not alleged a cause of
action for fraud. For this reason, we will affirm the judgment
of the trial court.
Affirmed.