Terry Tindle v. Pulte Home Corp. ( 2010 )


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  •                                 In the
    United States Court of Appeals
    For the Seventh Circuit
    No. 09-2888
    T ERRY T INDLE,
    Plaintiff-Appellant,
    v.
    P ULTE H OME C ORPORATION, a Corporation, and
    P ULTE H OME C ORPORATION, ILLINOIS D IVISION,1
    Defendants-Appellees.
    Appeal from the United States District Court
    for the Northern District of Illinois, Eastern Division.
    No. 06 CV 566—Blanche M. Manning, Judge.
    A RGUED JANUARY 20, 2010—D ECIDED JUNE 9, 2010
    Before F LAUM, K ANNE, and E VANS, Circuit Judges.
    K ANNE, Circuit Judge. Terry Tindle suffered serious
    injuries when his foot and leg sank into a hole concealed
    underneath the sod in the backyard of his new home. That
    1
    Plaintiff sued Pulte Home Corporation, a Corporation, and
    Pulte Home Corporation, Illinois Division. The correct (and
    only) defendant should have been Pulte Home Corporation.
    2                                              No. 09-2888
    new home was built by Pulte Home Corporation. Tindle
    sued, and Pulte moved for summary judgment, arguing
    that Tindle failed to establish a triable issue on each of
    the five required elements for vendor liability under
    Restatement (Second) of Torts § 353 (1965). The district
    court granted Pulte’s motion, and we affirm.
    I. B ACKGROUND
    The facts are relatively undisputed. Pulte Home Corpora-
    tion purchased land in West Dundee, Illinois, and devel-
    oped it into a residential neighborhood known as Car-
    rington Reserves Subdivision. The subdivision was divided
    into three sections: the Enclave, the Timbers, and the
    Valleys. Terry and Diane Tindle’s home is located in the
    Timbers. Pulte hired third parties to perform soil explora-
    tion and testing and to grade and level the land prior to
    construction. All of the land, including the section that
    would eventually include the Tindles’ property, met or
    exceeded the minimum soil compaction and bearing
    capacity standards. However, at some point Pulte received
    complaints from several homeowners in the Valleys about
    flooding, and it was determined that a tract including
    eight homes had been improperly graded.
    Pulte placed sod on the soil in the Tindles’ yard prior
    to them moving into their home in December 2003. Shortly
    after moving in, the Tindles noticed holes developing
    in the front yard near the driveway and in the back near
    a drain. The Tindles’ neighbors told Mrs. Tindle that
    they had also noticed holes on their property. The
    Tindles requested that Pulte fix the holes near the drive-
    No. 09-2888                                               3
    way. A Pulte representative told Mrs. Tindle that the
    holes were “normal,” but Pulte did repair most of the
    holes in and around the driveway in the spring.
    Over the course of the seven months prior to Tindle’s
    accident, the Tindles regularly watered their lawn and
    had it mowed. Tindle walked through his backyard at
    least five times before his accident. Mrs. Tindle also
    walked through the backyard and went there to clean up
    after the family dog. In July 2004, while walking through
    his backyard, Tindle’s foot and leg sank through the sod
    into a concealed hole. He fell, seriously injuring his leg.
    Sometime after the accident Mrs. Tindle marked with
    flags and photographed several areas in her backyard that
    she believed were holes or depressions. However, the
    Tindles were never able to identify the specific hole
    into which Tindle fell.
    Tindle brought this suit, arguing that Pulte was negligent
    in causing his injuries. The district court granted Pulte’s
    motion for summary judgment, and this appeal followed.
    II. A NALYSIS
    We review the district court’s grant of summary judg-
    ment de novo. Budde v. Kane County Forest Preserve, 
    597 F.3d 860
    , 862 (7th Cir. 2010). Because Tindle is the non-
    moving party, we will draw all reasonable inferences
    from the evidence in his favor. 
    Id.
     We are not required,
    however, to draw unreasonable inferences in his favor, St.
    Louis N. Joint Venture v. P & L Enters., Inc., 
    116 F.3d 262
    ,
    265 n.2 (7th Cir. 1997), and Tindle must come forward
    4                                               No. 09-2888
    with admissible evidence that demonstrates there are
    genuine issues of material fact to survive Pulte’s summary
    judgment motion, Gunville v. Walker, 
    583 F.3d 979
    , 985
    (7th Cir. 2009); Winskunas v. Birnbaum, 
    23 F.3d 1264
    , 1267-
    68 (7th Cir. 1994).
    The parties agree that Illinois law governs their dispute.
    In Illinois, “an ordinary vendor of real property is not
    liable for personal injuries which are sustained subse-
    quent to his transfer of possession and control.” Anderson
    v. Cosmopolitan Nat’l Bank of Chicago, 
    301 N.E.2d 296
    , 298
    (Ill. 1973); see also Restatement (Second) of Torts § 352.
    But Illinois has adopted § 353 of the Restatement (Second)
    of Torts, which provides an exception to the general rule
    of non-liability:
    To state a claim under section 353, plaintiff-
    p u rc h as er m u st sufficiently allege that
    (1) defendant-vendor concealed or failed to dis-
    close a condition which, prior to the sale, created
    an unreasonable risk to persons on the land; (2) the
    defendant knew or had reason to know of the
    condition and realized or should have realized
    the risk involved; (3) that defendant had reason
    to believe that plaintiff would not discover the
    condition; (4) that the condition caused physical
    harm, after plaintiff took possession but before
    plaintiff knew or had reason to know of the con-
    dition and the risk involved; and (5) before plain-
    tiff had an opportunity to take precautions to
    prevent the injury.
    Heider v. Leewards Creative Crafts, Inc., 
    613 N.E.2d 805
    , 817
    (Ill. App. Ct. 1993).
    No. 09-2888                                                5
    The district court found that Tindle failed to produce
    evidence to support each of the required elements to
    sustain a claim under § 353. (App. at 4.) The district court
    discussed by way of example Tindle’s shortcomings
    regarding whether Pulte knew or should have known of
    the dangerous condition at the time of the sale and whether
    Pulte had reason to believe Tindle would not discover
    the condition. (Id. at 4-5.) We agree with the district court
    that Pulte is entitled to summary judgment, both because
    of what Tindle knew and what Pulte did not.
    A. What Tindle Knew
    Tindle’s theory of liability seems to be not that Pulte
    knew of the specific hole that caused his injury, or even
    that there were holes in the Tindles’ backyard. Instead,
    Tindle argues that Pulte knew or should have known of “a
    pervasive and systematic problem with the soil that
    manifested itself in holes that Pulte covered with sod.”
    (Appellant’s Br. at 11.) Assuming without deciding that
    Tindle’s soil-problem theory could legally lead to liability,
    Tindle’s theory falls short because he ignores the fact
    that his knowledge of the dangerous condition—here, holes
    in the soil—may defeat liability, just as Pulte’s knowledge
    of the same problem could lead to it.
    In Regas v. Associated Radiologists, Ltd., 
    595 N.E.2d 1223
    (Ill. App. Ct. 1992), the Illinois Appellate Court explained
    that under § 353, “a purchaser of property cannot shut his
    eyes to available information and then charge that he has
    been deceived. Thus, the vendor’s liability may not be
    predicated on a defective condition of which the vendee
    6                                               No. 09-2888
    was aware.” Id. at 1227 (citations and internal quotation
    marks omitted); see also Lake v. United States, 
    522 F. Supp. 166
    , 168 (N.D. Ill. 1981) (“[I]n order for the vendor to
    remain responsible for hazardous conditions not
    revealed to the vendee, the condition must have been one
    that the vendee did not know or have reason to know
    existed.”). The uncontroverted evidence is that the
    Tindles knew, or certainly were placed on notice of the
    possibility, that there could be holes in their yard and
    that those holes might cause an injury.
    The evidence that Tindle suggests demonstrates Pulte’s
    knowledge of the “pervasive and systemic problem with
    the soil” is the same evidence that demonstrates his own
    knowledge of the condition. The Tindles themselves
    noticed sink holes developing near and in their driveway
    within one month of moving into their home. Tindle
    also submitted evidence that there were holes on their
    neighbors’ property and on other lots down the street.
    However, the only evidence that is properly before the
    court is of the holes on the Tindles’ property. The evidence
    of the holes on the neighbors’ property and in other parts
    of the subdivision comes from Mrs. Tindle’s testimony
    about conversations she had with the neighbors and
    others. But what Mrs. Tindle says the neighbors said is
    inadmissible hearsay, and Tindle cannot rely on it to
    overcome summary judgment. Gunville v. Walker, 
    583 F.3d at 985
    .
    Even were we to consider Mrs. Tindle’s testimony about
    the conversations with her neighbors, it only shows
    that the Tindles were further put on notice that there
    No. 09-2888                                                7
    might be a problem with holes on their property. Tindle
    also knew that the sink holes could cause personal
    injury—that is, he understood the risk of the holes—
    because one of the holes had previously caused Mrs. Tindle
    to fall. That the specific hole into which he fell was
    covered by sod does not eliminate his knowledge of the
    risk of holes being found in his backyard. His knowledge
    of the risk is fatal to his claim.
    In Lake, 
    522 F. Supp. at 167
    , the plaintiff’s daughter was
    injured when she fell from a porch of a house that the
    United States, through the Department of Housing and
    Urban Development, had sold to another individual. The
    court granted summary judgment to the government
    because the plaintiff failed to produce evidence that the
    individual purchaser did not know of the dangerous
    condition of the porch. 
    Id. at 169
    . Important to its decision
    was the fact that “the hazardous condition which caused
    the injury should have been fully apparent from a
    simple visual inspection of the property as it was observ-
    able and photographable from the outside of the house,”
    and the purchaser had made multiple inspections of the
    property. 
    Id. at 168
    . Thus, the government, as the vendor,
    could not be held responsible for a condition of which
    the purchaser should have been aware. 
    Id. at 168-69
    .
    Similarly, in Regas, 
    595 N.E.2d at 1223
    , the court granted
    summary judgment to the vendors. There, the plaintiff
    complained that the defendant had failed to disclose
    extensive water damage. The court found that the
    plaintiff had been put on notice of the potential for water
    damage because he had personally observed water-
    8                                                No. 09-2888
    leakage-related problems, albeit not to the full extent of
    the damage. 
    Id. at 1228
    . The court also noted that the
    water leak problem was “visible and obvious.” 
    Id.
    Finally, Swisher v. Janes, 
    606 N.E.2d 798
     (Ill. App. Ct.
    1992), demonstrates how narrow the exception to the
    general rule of non-liability is in Illinois. The plaintiffs
    in Swisher purchased a home that had an uncapped pro-
    pane pipe in the bathroom. Within hours of closing on
    the purchase, plaintiffs were injured in an explosion
    that occurred when they attempted to light the pilot
    light on the water heater. 
    Id. at 799-801
    . There was no
    evidence that the plaintiffs actually knew of the uncapped
    pipe and risk of explosion. 
    Id. at 803
    . However, the court
    found that they had reason to know of the risk because
    they had twice inspected the home, they could have
    but did not hire a professional to inspect the home, and
    they attempted to light the pilot light themselves rather
    than seek professional help. 
    Id.
     Under those circum-
    stances, the court held that the plaintiffs had reason to
    know of the danger. Accordingly, their action under § 353
    failed as a matter of law. Id.
    Like the plaintiffs in Lake, Regas, and Swisher, Tindle
    had reason to know of the dangerous condition that
    eventually caused his injuries. The Tindles had walked
    through their backyard at least five times. Mrs. Tindle
    went into the backyard weekly to clean up after the
    family dog. Even if the Tindles did not know about the
    holes in the backyard (that is, the full extent of the danger-
    ous condition), they were certainly aware that there were
    holes in other parts of the property. The holes in the
    No. 09-2888                                                9
    backyard here were visible, as Mrs. Tindle was able to
    locate and photograph numerous holes after her husband
    was injured. Surely the Tindles had more reason to
    know of the dangerous condition on their property than
    did the plaintiffs in Swisher.
    Tindle argues, however, that the facts of Sparling v.
    Peabody Coal Co., 
    322 N.E.2d 5
     (Ill. 1974), are more analo-
    gous to his case. In Sparling, the plaintiff’s father pur-
    chased land that had previously housed a coal mine. A
    large pile of slack, or coal dust, remained on the property.
    The plaintiff was severely injured more than six years
    after the sale of the property to her father when she
    walked on top of the slack pile and fell into a fire that was
    burning at the bottom of the pile. 
    Id. at 6-7
    . The court
    rejected the defendant’s argument that the passage of
    more than six years was ample time for the father to
    discover and remedy the dangerous condition. 
    Id. at 10
    .
    The court found that the question of whether the father
    should be deemed to have constructive knowledge of
    the risk was a question for the jury because the fire
    did not create smoke or steam, the father rarely went
    near the pile, and he did not use the land near the pile
    or have reason to go near it. 
    Id.
    Tindle’s case is readily distinguishable from the facts
    of Sparling. As discussed above, Tindle knew of sink holes
    on other parts of his property and perhaps on his neigh-
    bors’ lots. He frequented his backyard, or at the very
    least had more occasion to walk through his backyard
    than the plaintiff in Sparling had to go near the slack pile.
    Thus, because Tindle knew or had reason to know the
    10                                              No. 09-2888
    condition and risk involved, summary judgment on his
    § 353 claim must be granted.
    B. What Pulte Knew
    Tindle’s claim also falls short because he has failed to
    produce evidence that Pulte knew or had reason to know
    of the dangerous condition at the time of the sale. Tindle
    argues that he has presented numerous pieces of evidence
    sufficient to raise a jury question about what Pulte knew.
    This evidence includes: (1) the presence of holes on
    Tindle’s, his neighbors’, and others’ property; (2) the
    improperly graded land in another part of the subdivi-
    sion; (3) the development’s location on and near wet-
    lands; (4) Pulte’s acknowledgment that building next to
    a wetland raised erosion issues; (5) differing compaction
    levels in the yard and under the foundation; (6) Pulte’s
    covering the yard with sod; and (7) Pulte’s explanation
    that the holes in the Tindles’ yard were caused by
    normal settling. None of this evidence, however, genuinely
    raises the issue of whether Pulte knew of the allegedly
    dangerous condition at the time of the sale.
    As noted earlier, Tindle cannot rely on the inadmissible
    hearsay evidence of the holes developing in his neighbors’
    property to defeat summary judgment. Tindle points to
    evidence of a sink hole at Holly Anderson’s property, but
    the only evidence regarding that hole is that it was
    caused by a sprinkler leak, not by the alleged soil problem.
    The sink hole at Ms. Anderson’s property, therefore,
    cannot be used to impute knowledge of the risk of sink
    holes on Tindle’s property. Nor can the fact that other
    No. 09-2888                                                11
    parts of the development were once improperly graded.
    Tindle makes no attempt to connect the improper grading
    of eight home sites in a separate part of the subdivision
    to the soil condition that caused the hole in his backyard;
    nor does Tindle appear to argue that it was a grading
    problem that caused the hole that injured him.
    Equally unhelpful to Tindle is the fact that Pulte built
    Tindle’s neighborhood on and near wetlands. Tindle
    himself acknowledges that “Pulte avoided the wetlands
    by building houses only on the high grounds that
    existed, or that they created, around the wetlands.” (Appel-
    lant’s Br. at 5.) And although Tindle likely wishes that
    Pulte had acknowledged erosion issues in the neighbor-
    hood because of the wetlands, (see Appellant’s Br. at 11),
    in reality Pulte merely acknowledged that erosion is a
    concern any time one builds in a wetland area. Further,
    absent some evidence that the yard was not compacted
    enough, the fact that the soil in the yard was compacted
    less than the soil under the foundation does not
    establish that Pulte knew of a dangerous condition when
    it sold the house to Tindle. To the contrary, the evidence
    suggests that the soil compaction on the Tindles’ property
    met or exceeded the applicable standards.
    Because we cannot reasonably infer from the evidence
    that Pulte had any reason to know of the alleged soil
    problem in the Tindles’ yard prior to the their purchase
    of the property, the fact that Pulte laid sod down on top
    of the soil in the yard tells us little. Based on the evidence
    before us, it would be unreasonable to infer some sort
    of nefarious purpose on Pulte’s part in laying the sod.
    12                                                No. 09-2888
    Even if the sod did conceal a dangerous condition, there
    is no evidence properly before the court that Pulte knew
    or had reason to know of that dangerous condition.
    Finally, Tindle argues that because Pulte told him the
    holes in his front yard were the result of normal settling,
    the court should allow a jury to consider his § 353 case. To
    the extent that Tindle argues that Pulte telling him that
    it was normal settling eliminated his knowledge of the
    dangerous condition or his duty to investigate, he is
    mistaken. See, e.g., Regas, 
    595 N.E.2d at 1228
     (“Plaintiff’s
    testimony stating that he did not know the cause of the
    leak does not erase his awareness of the problem.”); Smith
    v. Ethell, 
    494 N.E.2d 864
    , 865-66 (Ill. App. Ct. 1986) (barring
    the plaintiffs, who had noticed some water damage in
    the ceiling, from cancelling the contract even though the
    defendants told the plaintiffs that the roof was in good
    condition and that there was no need to inspect the
    attic). He is also wrong to the extent that he is arguing
    that this evidence shows Pulte knew of a dangerous
    condition before the sale of the property to Tindle.
    That Tindle has failed to produce evidence that Pulte
    knew or should have known of a dangerous condition that
    created an unreasonable risk prior to the transfer of
    property further demonstrates that Pulte is entitled to
    summary judgment.
    III. C ONCLUSION
    Tindle has failed to adequately raise a question for the
    jury on each of the required elements of his claim under
    No. 09-2888                                           13
    Restatement (Second) of Torts § 353. The district court’s
    grant of summary judgment is therefore A FFIRMED.
    6-9-10