Paul L. Blanton and Cynthia D. Blue-Blanton - Page 4

                                         -4-                                          
               The purchase agreement stated that Hagan had never lived in            
          the house and that he made no warranties as to the condition of             
          the house or whether it was habitable, or in compliance with code           
          or laws.                                                                    
               2.   Petitioners' Move to Spokane                                      
               Petitioners rented moving equipment from U-Haul several                
          times in July 1989 to move some of their furniture and personal             
          belongings to the W. 22d property.  Petitioners sold their home             
          in Moscow on August 4, 1989, for $150,000.  Around that time,               
          petitioners and their son moved from Moscow to the W. 22d                   
          property.  Petitioners took possession of the W. 22d property by            
          early August 1989.  Petitioners did not have a residence in                 
          Moscow after August 4, 1989.                                                
               The W. 22d property needed a lot of work when petitioners              
          moved into it.  Petitioners were responsible for maintaining the            
          W. 22d property after they moved in.  They made various repairs             
          to the property in July and August 1989.                                    
               3.   Title Dispute Over the Spokane Property                           
               Shortly after signing the purchase agreement, petitioners              
          learned that Hagan could not deliver clear title by the closing             
          date (June 19, 1989) because a third party, Riner E. Deglow                 
          (Deglow), claimed that his chapter 7 bankruptcy estate possessed            
          an interest in the W. 22d property.                                         
               On November 30, 1989, petitioners, Hagan, and Deglow's                 
          chapter 7 trustee in the bankruptcy proceeding, Joseph A.                   




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