DAVID W. WADDELL APPELLANT
FERGUSON HOME BUILDERS, LLC, AND G. BART FERGUSON APPELLEES
FROM THE SALINE COUNTY CIRCUIT COURT [NO. 63CV-13-93-3]
HONORABLE DAVID N. LASER, JUDGE
William G. Almand, P.A., by: William G. Almand, for
Anderson, Murphy & Hopkins, L.L.P., by: Michael P.
Vanderford, for appellee.
D. VAUGHT, Judge
Waddell brought an action for rescission of a real-estate
contract against Ferguson Home Builders, LLC, and Bart
Ferguson (collectively, Ferguson) based on constructive fraud
for failing to disclose that the house was built in a
floodplain. Waddell appeals from the judgment of the Saline
County Circuit Court ruling that he failed to meet his burden
of proving that Ferguson had made a fraudulent
misrepresentation. Waddell argues four points on appeal. We
Facts and Procedural History
October 2005, Waddell purchased a home in the Timberlake
subdivision of Haskell, Arkansas, that was constructed and
sold by Ferguson. As part of the sale, Waddell was given a
"Seller Disclosure Statement"
("Disclosure") in which Ferguson made numerous
representations about the property. The representations at
issue in this case are numbers 8, 19, 33, and
April 4, 2008, a heavy rain caused flooding, and Waddell and
his family had to be evacuated. They refused to return to the
house after the flood, and Waddell asked Ferguson to
repurchase the house. Ferguson refused.
originally filing suit in October 2008 and taking a nonsuit
in February 2012, Waddell filed the present suit against
Ferguson on February 1, 2013, seeking to rescind the
purchase. He contended that the
Disclosure did not disclose that the property was in a
floodplain area or designated wetlands when Ferguson knew
that it was. Waddell further contended that, because the
construction of the home was not completed until the day of
closing, he was unable to inspect the home. He asserted that
he was entitled to his purchase price, consequential damages
such as closing costs, and property damage, together with
interest, costs, and attorney's fees. Ferguson answered,
denying the complaint's material allegations.
1985, Haskell adopted a flood-control ordinance that applies
to subdivisions of fifty lots or five acres. The ordinance
requires a builder to have hydraulic or hydrological studies
prepared and to obtain floodplain permits before construction
can start. Among the calculations required before development
is the establishment of a "Base Flood Elevation"
("BFE") for the property. The Federal Emergency Management Agency
("FEMA") has created maps, known as "Flood
Insurance Rate Maps" ("FIRMs"), which
delineate the boundaries within a community of flood-hazard
areas. Sarah Fox, This is Adaption: The Elimination of
Subsidies Under the National Flood Insurance Program, 39
Colum. J. Envtl. L. 205, 215 (2014). The FIRMs are divided
into insurance-risk zones according to the likelihood of a
flood occurring within a particular region. Id. The
FIRM for Haskell was prepared in 1987 and does not contain
BFEs. The Haskell FIRM shows two zones: Zone "C, "
an area of minimal flooding, and Zone "A, " an area
of special flood hazard.
filed a motion in limine seeking to prevent the ordinance
from being entered into evidence because, according to
Ferguson, it did not apply to the construction of
Waddell's subdivision. Ferguson also sought to preclude
Waddell from using as evidence a study conducted by Thomas
Black, an engineer hired by Haskell in 2010 to conduct a
study to determine the BFEs and to have the 1987 FIRM redrawn
with the established BFEs. The study was still ongoing at the
time of trial. Ferguson argued that, because the BFEs
determined by Black in 2010 were not available in either 1999
when the subdivision plat was approved or in 2005 when the
sale to Waddell occurred, the study should not be allowed.
Ferguson argued that the 1987 FIRM showed Waddell's Lot
56 to be in a minimal flood Zone "C" and that
Ferguson relied on that map as the basis for his
representations concerning floodplains.
court denied Ferguson's motion to preclude use of the
1985 ordinance but granted the motion to preclude
consideration of Black's study and any proposed revisions
of the 1987 FIRM.
a bench trial, the court issued a letter opinion in which it
found that, based on the information available to Ferguson at
the time of the transaction, Ferguson committed no fraud in
his representations and dismissed Waddell's suit with
prejudice. The court also adopted Ferguson's proposed