Norris v. Mitchell

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.