Hills v. Jones Arizona Court of Appeals 1986 1) Facts a) Plaintiffs purchased Defendants home for $72,000. Plaintiffs had, on several occasions, inspected the home and twice noticed potential termite damage to the home. Although Plaintiffs, who were both familiar with termite damage, noticed holes in the wood on the patio and a ripple in the floor in the living room they never followed up to determine the cause of such damages. On one such occasion, Plaintiffs asked Defendants about a ripple on the floor in the living, Defendants responded that the ripple was caused by water damage. The house eventually passed termite inspection, and Plaintiffs closed relying on the inspection. Defendant sellers never disclosed to Plaintiff, or to the termite inspector, the fact that in the past the house had been infested by termites and that the house received treatment for such infestations. Upon moving into the house, the wood in the living room began to crumble, it was determined that such damage was caused by termites. 2) History a) Plaintiffs brought suit against defendants for misrepresentations b) The trial court dismissed the claim for misrepresentation c) Sellers then sought summary judgment on the concealment claim d) The trial court granted it 3) Issue a) Was the contract a complete integration i) A merger clause does not excuse one from his own fraud. Parol evidence is always admissible to show fraud, assuming there was fraud committed, then the merger clause cannot shield him. (Lufty v. Roper & Sons Motor Co.) b) Was there a duty to disclose i) Restatements 161 ii) The disclosing of the damage could have altered the buyer’s decision on whether or not to purchase the house. Since there information was pertain to the transaction and materially altered the value of the house, there was a duty to disclose. iii) Even if the buyer hadn’t seen the damage then there was a duty to disclose the damage based on the fact it materially damaged the value of the house 4) Judgment: Reversed and Remanded