In Ringstreet Northcrest, Inc., v. Bisanz, the Missouri Court of Appeals addressed a buyer's claim of fraud against a seller for allegedly failing to disclose problems with pipes freezing at the property. The court affirmed summary judgment for the seller as it found that, under the sales contract, the seller had no duty to disclose the problem, of which the buyer had knowledge before signing the contract.

In March 1988, Ringstreet purchased a 153-unit apartment complex (Northcrest) from the Real Estate Equities partnership, of which Bisanz was a general partner. In the Winter of 1989, the pipes at Northcrest froze and burst causing extensive damage throughout the complex. Ringstreet then sued Bisanz and other defendants alleging, among other claims, fraud through nondisclosure of the problem with the pipes. Evidence from a deposition indicated that, prior to purchase, Ringstreet was told that there had been a previous incidence of pipes freezing. After the trial court sustained defendants' Motion for Summary Judgment, Ringstreet appealed.

The Missouri Court of Appeals stated that the elements of fraud are: (1) a false material representation; (2) the speaker's knowledge of its falsity or his ignorance of its truth; (3) the speaker's intent that it should be acted upon by the hearer in the manner reasonably contemplated; (4) the hearer's ignorance of the falsity of the statement; (5) the hearer's reliance on its truth, and the right to rely thereon; and (6) proximate injury. Also, silence can add up to misrepresentation if the silent party has a duty to speak. The duty to disclose information exists where a classical fiduciary relationship exists or where one party has superior knowledge which is not within the fair and reasonable reach of the other party.

The Missouri Court of Appeals the addressed the sales contract. It noted that Section 6 provided for "inspection and cancellation rights for the buyer." Section 6 also stated that by execution of the contract, "buyer acknowledges that it has performed all such inspections and that the results thereof are satisfactory . . . ." Section 9 set forth the limited representations and warranties actually made by the seller. These included statements that the records held by the defendants were true and accurate, and that seller was in compliance with its insurance coverage, applicable building codes, and fire regulations. Section 10 contained statements on the condition of the property. It stated that by execution of the contract, Buyer "acknowledges that Seller has made no warranties, representations, or statements other than those" in Section 9. Section 10 also stated that seller acted in reliance of buyer’s acknowledgment to enter into the contract, and that buyer took the property "as is."

The Missouri Court of Appeals found that the real estate contract clearly stated that Ringstreet agreed that it "relie[d] upon no warranties, representations or statements" by the sellers in purchasing the property. Also, Ringstreet was allowed to conduct a thorough inspection of the property and examine documents relating to it. The court held that given the particular provisions of the real estate contract, and especially if, as the record indicated, Ringstreet was told prior to purchase that there had been an instance of pipes freezing, it should have investigated the problem further. The court held that the sellers did not have a duty to disclose the problem and affirmed summary judgment on the fraud claim.

Ringstreet Northcrest, Inc., v. Bisanz, 890 S.W.2d 713 (Mo. Ct. App. 1995).