Lyons v. McDonald
Indiana Court of Appeals
501 N.E.2d 1079 (1986)
When asked directly if he knew of any problems with the home, Lyons (defendant) told buyers the McDonalds (plaintiffs) he was unaware of any particular issues, despite having been told by both the prior owner and his own contractor about existing termite damage; after purchasing the home in reliance on that denial, the McDonalds discovered extensive termite damage requiring the house to be gutted and structurally reinforced, and would likely not have bought the home had they known the truth. The trial court found the Lyonses liable for fraudulent misrepresentation, and they appealed.
Whether the seller of a home is liable for fraud if he knowingly makes a false material representation to the buyer as to the condition of the home, and the buyer relies on that representation to his detriment.