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IN THE COURT OF APPEALS OF IOWA No. 8-570 / 07-1815 Filed December 17, 2008 KELLY HAMMES and JESSE HAMMES, Plaintiffs-Appellants, vs. JCLB PROPERTIES, LLC, CHRISTOPHER FLESHER and JANE FLESHER, Defendants-Appellees. ________________________________________________________________ Appeal from the Iowa District Court for Scott County, Gary D. McKenrick, Judge.

Home purchasers appeal the district court's dismissal of their case. REVERSED AND REMANDED ON DAMAGES.

Troy A. Howell of Lane & Waterman LLP, Davenport, for appellant. Candy K. Pastrnak and Tara Moffitt of Pastrnak Law Firm, P.C., Davenport, for appellees.

Heard by Sackett, C.J., and Eisenhauer and Doyle, JJ.

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EISENHAUER, J. Plaintiffs, Kelly and Jesse Hammes, bought a single family residence from defendant JCLB Properties, LLC. The members of JCLB are defendants

Christopher and Jane Flesher. The Fleshers had lived in the residence since 1994 and transferred their ownership of the residence to JCLB in April 2004. The residence's northern wall contains two window wells with glass block windows. Christopher stated in 2003, both window wells filled with water like an aquarium. Christopher then contacted his northern neighbor about building a retaining wall between the properties to help divert water coming from the neighbor's property into the Flesher basement. After gaining the neighbor's approval, Christopher built the retaining wall, put drainage tile along the bottom of the wall to divert water to the lot's rear yard, and bought the northern neighbor a downspout extension and asked him to always keep it on. Additionally, Christopher dug a GI trench to drain the water out between the two houses. After water had entered their basement, but before the sale of the property, the Fleshers pulled out the northwest wall cabinets and dried out the area. cabinets, replaced the basement carpet, and painted. In May 2005, during the sale process, Christopher signed a residential property seller disclosure form on behalf of JCLB and claimed no known water or other problems existed regarding the basement or foundation, there was no known settling, flooding, drainage, or grading problems, and there was no known structural damage. They also reinstalled the

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After plaintiffs moved into the house, during rainstorms water entered the basement and soaked the northwest corner. The carpet around the edge of the northwest walls would become saturated about six feet into the room. Additionally, there were times when the drywall on the north basement wall would streak with moisture. The built-in cabinets on the west basement wall were

delaminating and sustained water damage, especially the cabinets closer to the north wall "where it's always wet." Plaintiffs filed suit and their claims relevant to this appeal are: (1) a common law claim for fraudulent misrepresentation/nondisclosure against all defendants; and (2) a statutory claim for damages under Iowa's Real Estate Disclosure Act, Iowa Code chapter 558A (2005), against defendant JCLB. After a bench trial, the district court ruled in favor of defendants. Plaintiffs appeal contending the court erred in: (1) requiring plaintiffs to prove reliance as an element of their statutory claim under Iowa Code chapter 558; (2) finding plaintiffs were not justified in relying on the deceptive disclosure statement; (3) concluding plaintiffs failed to prove proximate cause; and (4) holding plaintiffs failed to prove the amount of their damages. We review this law action for correction of errors of law. Miller v. Rohling, 720 N.W.2d 562, 567 (Iowa 2006). The trial court's findings of fact are binding if supported by substantial evidence. Iowa R. App. P. 6.14(6)(a). I. Iowa Code Chapter 558A -- Reliance. Iowa's Real Estate Disclosure Act requires persons interested in transferring real estate to deliver a written disclosure statement to prospective

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buyers. Iowa Code

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