Layman v. Binns

Mr. and Mrs. Bradley O. Binns (defendants) built a house in 1971. During construction, the foundation was damaged, and a wall in the basement became bowed. Steel beams were mounted to support the bowed wall. Because of the bowed wall, water entered the basement, resulting in an abnormally damp basement and high utility bills. In 1977 the Binnses listed their house for sale and did not mention the bowed wall in the real estate listing. Mr. and Mrs. F. Garry Layman (plaintiffs) toured the house and noticed the steel support beams but did not ask further questions about them. When the Laymans asked about the moisture in the basement and the high utility bills, they were told that water entered the basement during the spring because of increased rainfall. The Laymans purchased the house from the Binnses. Later, when attempting to sell the house for $125,000, the Laymans learned about the bowed wall and were told that the repair would cost up to $50,000. The Laymans decreased their asking price to $75,000 but could not sell the house. The Laymans filed a lawsuit against the Binnses in state court, alleging that the Binnses fraudulently concealed the bowed wall. The trial court held that the defect in the property—the bowed wall—was not noticeable upon inspection by inexperienced people such as the Laymans and that the Binnses committed fraud by failing to disclose the defect. The court of appeals affirmed. The Binnses appealed, asserting that, under the doctrine of caveat emptor, they had no duty to disclose the defect.