Home / Fulltext Opinions / Supreme Court of Virginia / NORRIS, ET AL. v. MITCHELL, ET AL. (59955)



January 9, 1998
Record No. 970461





John M. Folkes, Judge
Present: Compton, Lacy, Hassell, Keenan, Koontz, and Kinser, JJ.,
and Whiting, Senior Justice

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 &
, 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 that the
sellers had committed an act of fraud.[1] 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
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

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

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.
, 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.







[1] Although the purchasers also
sued Fox and her employer, the trial court’s dismissal of the
action against them has not been appealed.

[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.