Opinion
TTDCV166011170S
02-13-2019
Kristin COLE v. Kanishka TANKALA et al.
UNPUBLISHED OPINION
OPINION
Matthew Dallas Gordon, J.
On November 18, 2013, the plaintiff, Kristen Cole, executed a real estate purchase contract with the defendants, Kanisha Tankala and Sudha Swaminathan, pursuant to which she agreed to purchase the defendants’ home located at 30 Andreis Trail in South Windsor, Connecticut for $ 334, 000. The sale was consummated and the plaintiff took possession of the defendants’ property on or about December 17, 2013. On August 24, 2016, the plaintiff initiated this civil action claiming that the defendants negligently misrepresented that there were no problems with their foundation when in reality they knew that there was an iron sulfide material in the foundation called pyrrhotite that was causing the foundation to deteriorate.
The plaintiff also claims that regardless of whether the defendants knew about the pyrrhotite phenomenon, their representation that there were no problems with their foundation was a negligent misrepresentation because they knew but failed to disclose that in 2009 they had hired a company called Dry Works to perform significant structural work on the foundation that included, among other things, excavating the foundation to repair structural cracks. The plaintiff claims that she relied on the defendants’ representation that there were no problems with their foundation in deciding whether to purchase the defendants’ property, and that had she known about the extensive work performed by Dry Works, she never would have agreed to purchase the property.
The defendants respond that their disclosure was adequate and truthful because they did not know about the pyrrhotite problem when they sold their home, and because they never experienced any problems with their foundation after Dry Works completed its work. The defendants also assert that their disclosure was not a misrepresentation because they indicated on the form that they had sealed some cracks and performed some waterproofing on the foundation. The defendants also assert by way of special defenses that the plaintiff’s negligent misrepresentation claim is barred by language in the disclosure forms indicating that nothing in the disclosure forms could be construed as a warranty, and language requiring the plaintiff to obtain her own inspection of the property. The defendants also claim that the plaintiff’s claim is barred by the applicable statute of limitation, General Statutes § 52-584, which provides, in relevant part that, "[n]o action to recover damages for injury to the person, or to real or personal property, caused by negligence ... shall be brought but within two years from the date when the injury is first sustained or discovered or in the exercise of reasonable care should have been discovered, and except that no such action may be brought more than three years from the date of the act or omission complained of ..."
After carefully considering all of the evidence presented at trial, and after carefully considering the arguments advanced by the parties in their post-trial briefs, and at oral argument, the court concludes that the plaintiff did not sustain her burden of proving that the defendants made a material misrepresentation by failing to disclose the existence of the pyrrhotite phenomenon because she failed to prove that the defendants knew about the pyrrhotite problem prior to the sale. Nevertheless, the court also concludes that the plaintiff has sustained her burden of proving that the defendants made a material negligent misrepresentation when they affirmatively represented that they had never experienced any problems with their foundation, and by failing to disclose the nature and extent of the significant work performed by Dry Works. The court also concludes that the plaintiff has satisfied her burden of proving that she would not have purchased the defendants’ property if she knew about the work performed by Dry Works, and that she suffered damages as a result of the defendants’ negligent misrepresentation. Finally, the court concludes that the defendants’ special defenses are unavailing. The court therefore finds in favor of the plaintiff on her negligent misrepresentation claim and enters judgment accordingly.
FINDINGS OF FACT
The plaintiff and the defendants executed a contract on November 18, 2013, for the plaintiff’s purchase of the defendants’ property located at 30 Andreis Trail in South Windsor, Connecticut, for $ 334, 000. Pursuant to the Uniform Property Condition Disclosure Act, General Statutes § 20-327b, the defendants were required to prepare a residential property condition disclosure report in connection with the sale. The Act requires the seller of a residential property to fully disclose certain information about the property to prospective purchasers prior to the execution of any purchase and sale agreement, and to disclose "any knowledge of any problem" regarding the areas and conditions identified on the disclosure form. The defendants provided the plaintiff with the disclosure report on the same day they executed the contract. Paragraph sixteen of the disclosure report, states: "Foundation/slab problem/settling? If yes, explain": The disclosure report then provides three possible responses: "YES," "NO," and "UNKN." The defendants responded to paragraph sixteen in the negative by checking the box labeled "NO." The defendants then added a handwritten note indicating: "SOME CRACKS SEALED AND WATER PROOFING DONE, PREVENTATIVE MEASURE-NO WATER ISSUES."
Pursuant to her rights under the contract, the plaintiff informed the defendants that she intended to obtain an inspection of the property, and on or about November 22, 2013, the plaintiff retained Great Pro-spects, LLC to perform an inspection. The inspection report provided, in relevant part, that: "[t]he inspection is limited to a visual inspection of the exposed and readily accessible areas of the building ... The inspection to be performed is a visual inspection only and does not contemplate or include the dismantling or moving of any object or portion of the premises. Latent and concealed defects and deficiencies are excluded from the inspection. INSPECTOR shall have no liability for conditions which are concealed from view or inaccessible to the INSPECTOR." The inspection report also stated that one of the conditions that falls outside the scope of the inspection is, "any form of engineering analysis, such as structural, geological, and hydrological stability or soil conditions or wave action evaluations and surveying or architectural examinations." Although the inspection report noted some cracks and effervescence in the foundation, the report did not recommended evaluation by a structural engineer.
After addressing several relatively minor issues concerning the property with the defendants, including confirming that the heat worked properly, inspection of the boiler and treating the home for termites and carpenter bees, the plaintiff purchased and took possession of the defendants’ home on or about December 17, 2013. The plaintiff testified that she never pursued any of the issues noted in the inspection report because she perceived those issues to be relatively minor based on the defendants’ affirmative representation that they had lived in the home for thirteen years without experiencing any problems with the foundation, and the defendants’ representation that the only work they had done on the foundation was the sealing of some cracks and some waterproofing as a "preventative measure."
During the winter of 2015-2016, the plaintiff learned for the first time that many homeowners in her neighborhood were experiencing problems with their foundations, and on or about February 25, 2016, the plaintiff retained Carl Cianci of Cianci Engineering, LLC to inspect her foundation. Cianci informed the plaintiff that the foundation was deteriorating due to the presence of pyrrhotite, a sulfide material that oxidizes and expands in the presence of water and oxygen. According to Cianci, because pyrrhotite cannot be removed from the foundation, the entire foundation needed to be replaced. Cianci also noted that the prior owners of the property had attempted to seal or repair the interior and exterior of the foundation, but that the conditions caused by the pyrrhotite had worsened over time.
On or about February 25, 2016, the plaintiff obtained a report prepared by William F. Neal, a consulting engineer from Residential Engineering Services, LLC, indicating that the foundation would continue to deteriorate and eventually cause the foundation walls to bulge inward and structurally fail. The report indicated that it was not possible to predict how long it would take for the foundation to deteriorate to the point where it would become structurally dangerous, and suggested that the plaintiff therefore develop a corrective plan with a licensed contractor as soon as possible.
Don Childree, a general contractor and owner of Don Childree General Contractors, Inc., testified that it will cost the plaintiff $ 209, 630 to replace the foundation.
After filing suit, the plaintiff learned for the first time through discovery that despite the defendants’ representation that they had never experienced any problems with their foundation, the defendants had retained a company called Dry Works, Inc. in 2009 to perform significant structural work on the foundation. The work performed by Dry Works included, among other things, excavating to six to twelve inches below grade near the foundation to make structural crack repairs to the foundation from the outside, and epoxy-injecting all below exterior grade cracks from the inside. Attached as an appendix are two photographs showing some of the extensive work performed by Dry Works, for which the defendants paid $ 9, 500.24.
APPLICABLE LEGAL STANDARD
"Our Supreme Court has long recognized liability for negligent misrepresentation. We have held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth ... The governing principles are set forth in similar terms in § 552 of the Restatement Second of Torts (1979): One who, in the course of his business, profession or employment ... supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information." (Emphasis omitted; internal quotation marks omitted.) Giametti v. Inspections, Inc., 76 Conn.App. 352, 363, 824 A.2d 1 (2003). "Accordingly, an action for negligent misrepresentation requires a plaintiff to prove that (1) the defendant made a misrepresentation, and (2) the plaintiff reasonably relied upon that misrepresentation." Id., 364. "A vendor of residential property is liable to a purchaser for a negligent misrepresentation of the condition of the property to that purchaser if the purchaser would not otherwise have agreed to the terms of the sale." Id., 363. "Whether evidence supports a claim of ... negligent misrepresentation is a question of fact." Id., 364.
DISCUSSION
1. The Plaintiff’s Allegations
The plaintiff alleges that the defendants made a material negligent misrepresentation when they stated that they had no problems with their foundation when in reality they knew that the foundation was deteriorating due to the presence of pyrrhotite. The plaintiff claims that the pyrrhotite problem was common knowledge to everyone living on Andreis Trail, including the defendants, and that the defendants negligently failed to inform the plaintiff about the pyrrhotite phenomenon when they listed their property for sale. The plaintiff claims that the work performed by Dry Works constitutes circumstantial evidence that the defendants knew about the pyrrhotite problem yet failed to disclose it.
The problem with the plaintiff’s theory is that she failed to introduce sufficient evidence to prove that the defendants knew about the pyrrhotite problem prior to the sale. Tankala testified credibly that he had no knowledge of the pyrrhotite issue, and his testimony was bolstered by the testimony of Cianci, who said that the pyrrhotite phenomenon did not become public knowledge until 2015 when NBC Troubleshooters did a report on crumbing foundations. The plaintiff herself testified that she did not learn about the pyrrhotite problem until the winter of 2015-2016. The plaintiff testified that even after a neighbor alerted her to the phenomenon and took her into her basement to show her what was happening, she did not believe it. It is impossible for the court to conclude that the defendants knew about the pyrrhotite phenomenon when the plaintiff herself acknowledges that she lived in the home and neighborhood for more than two years without realizing what was happening.
Based on the plaintiff’s failure to introduce evidence demonstrating that the defendants knew or should have known about the pyrrhotite problem prior to the sale in 2013, the court finds that the plaintiff has failed to satisfy her burden of proving that the defendants made a negligent misrepresentation by failing to disclose the existence of the pyrrhotite problem to her.
The plaintiff also alleges that regardless of whether the defendants knew about the pyrrhotite phenomenon, they made a negligent misrepresentation by affirmatively representing that there were no problems with their foundation when in reality Dry Works had performed significant structural work on the foundation. It is the plaintiff’s contention that the defendants’ specific and affirmative representation that there were no problems with the foundation, combined with their description of the work they had performed as nothing more than a "preventative measure," was deceptive and misleading given the significant structural repairs performed by Dry Works. The plaintiff contends that had she known about the work performed by Dry Works, she never would have purchased the defendants’ property.
The court finds that the defendants had a responsibility to fully disclose to the plaintiff the nature and extent of the work performed by Dry Works. Although the defendants may not have intentionally mislead the plaintiff by minimizing the nature of the work they had performed, the court finds that the defendants made a negligent misrepresentation when they stated "NO" in response to the question regarding whether there were problems with their foundation. The court rejects as untenable the defendants’ position that they did not make a material misrepresentation because they were not actively experiencing any problems with their foundation when they completed the disclosure form because if that were true, homeowners could always avoid liability by claiming that any past problems, no matter how significant, had been resolved.
The plaintiff also supplied credible evidence that she relied on the defendants’ representation that there were no problems with the foundation in deciding whether to purchase the defendants’ property. The plaintiff testified that she had previously owned other properties, and that during the purchase of her last home, she became aware of a structural issue that alerted her to the need to hire an engineer to investigate and assess the situation for her. Based on the engineer’s assessment, she was then able to make an informed decision on whether to purchase the property. The plaintiff testified credibly that because she had gone through this process once before, she would have investigated further if she had any reason to believe that there were any structural issues with the defendants’ foundation, and that she relied specifically on the defendants’ representation that there were no foundation problems, and that the only work they had performed on the foundation was a "preventative measure," in deciding that hiring an engineer was not necessary. The plaintiff also testified credibly that had the defendants been forthright with her regarding the nature and extent of the work performed by Dry Works, she never would have agreed to purchase the property.
In Lopez v. Advanced Funding, LLC, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV-15-6052778, 2017 WL 5706152 (October 18, 2017, Jennings, J.), the court found that the plaintiff "presented no evidence why, despite their professional inspection, they were justified in relying on the answers the defendant made in the § 20-327b report." Id. Here, unlike Lopez, the plaintiff did provide credible evidence that she relied on the defendants’ representation that there were no problems with the foundation in deciding to hire a home inspector rather than a professional engineer, and that she had no reason to believe that the cracks identified by the defendants and noted in the inspection report were of any significance, or somehow related to structural issues with the foundation. The plaintiff also testified credibly that based on the defendants’ representation that they had never experienced any problems with the foundation, there was no reason for her to suspect that the defendants had in fact performed structural work on the foundation. She further testified that without this information, there was no reason for her to know, understand, or believe that the defendants’ representation that there were no problems with the foundation was untrue, or that the cracks noted by the home inspector required follow-up inspection by a professional engineer.
This case is similar to Hull v. Fonck, 122 Conn.App. 286, 291, 999 A.2d 775 (2010), wherein the Appellate Court affirmed the trial court’s denial of the defendant’s motion for judgment notwithstanding the jury’s verdict that the defendant had made a negligent misrepresentation by answering "Unknown" to the same question on the disclosure form that is at issue here because the defendant knew at the time he signed the disclosure statement that there was a crack that ran across the entire length of his foundation. In refusing to grant the defendant’s motion for judgment notwithstanding the jury’s verdict, the trial court found that because the defendant had covered the crack with new walls and flooring when remodeling his house several years earlier, his misstatement served to conceal his knowledge of a defect that was not readily discoverable by the purchaser. The trial court also determined that "the dispute concerned a risk about which the parties were not equally knowledgeable and therefore not equally competent to bargain." Id., 291. In affirming the trial court’s decision upholding the jury verdict, the Appellate Court noted that because the defendant had covered the crack with wallboard and the flooring, "[t]he defendant’s misstatement served to conceal his actual knowledge of a defect in the condition of the property that he sold to the plaintiff," id., 293 (emphasis in the original), and that "the crack was not discoverable without invasive and destructive testing" Id., 289. The Appellate Court also noted that, "it bears emphasis that the defendant cannot dispute the fact that, in this case, the defect was not discoverable by any reasonable inspection by the plaintiff at the time of the sale." Id., 293. The Appellate Court also rejected the defendant’s argument that his statement regarding the foundation in the disclosure form was not a misrepresentation because he did not realize the extent of the settling and consequent enlargement of the crack that had occurred over time.
Similar to the situation in Hull, the defendants were fully aware when they prepared their disclosure report that they had paid Dry Works $ 9, 500.24 to perform significant structural work on their foundation. As in Hull, the work performed by Dry Works was not visible or readily apparent because the work had been performed below grade and had been backfilled on the outside, and covered on the inside, which meant that there was no way for the plaintiff to discover the nature or extent of the work without intrusive and destructive testing. The court concludes, as did the Appellate Court in Hull, that because the plaintiff and the defendants were not equally knowledgeable, they were not equally competent to bargain, and that the defendants had a duty to fully disclosure the true nature and extent of the work performed by Dry Works.
This case is also similar to Geller v. DeFalco, Superior Court, judicial district of New Haven, Docket No. CV-14-6044500-S, 2018 WL 2292875 (May 1, 2018, Richards, J.) (66 Conn.L.Rptr. 312), wherein the court concluded that the defendants’ failure to make a full disclosure regarding output issues, repairs, and service calls regarding their well "was tantamount to an intentional false representation made to induce the plaintiffs to acquire title to the property." Id. The Geller court rejected as unconvincing the defendant’s narrow view as to what constituted a well, noting that the defendant’s definition of a well did not include seemingly essential items such as "a pump or a conditioning system or any type of mechanism that works in tandem with a well or enhances its performance ..." Id. This court similarly finds untenable the defendants’ contention that their failure to disclose the true nature and extent of the work performed by Dry Works was not a misrepresentation simply because they were not actively experiencing any problems with the foundation when they filled out the disclosure report.
The court concludes that the defendants made a material negligent misrepresentation when they affirmatively represented that they had never experienced any problems with their foundation, and that the work they had performed on the foundation was nothing more than a preventative measure. The court also concludes that the defendant has satisfied her burden of proving that she would not have purchased the property had she known about the work performed by Dry Works.
The plaintiff first raised the issue of the plaintiff’s failure to disclose the work performed by Dry Works during the trial. She did not plead this theory in her original complaint, nor did she ever amend her complaint to include this specific allegation. Nevertheless, this issue was thoroughly litigated at trial, and thoroughly briefed by the parties afterward. The court therefore concludes that this theory of recovery is properly before the court for determination. "Such rigid formality with respect to pleadings is not required when the issue is properly argued before the court." Fountain Pointe, LLC v. Calpitano, 144 Conn.App. 624, 643, 76 A.3d 636, cert. denied, 310 Conn. 928 (2013) (citing Stafford Higgins Industries, Inc. v. Norwalk, 245 Conn. 551, 575, 715 A.2d 46 (1998)).
In Fountain Pointe, LLC, the court found that "it is true that ordinarily a court may not grant relief on the basis of an unpleaded claim ... That does not necessarily mean, however, that the absence of a particular claim from the pleadings automatically precludes a trial court from addressing the claim, because a court may, despite pleading deficiencies, decide a case on the basis on which it was actually litigated and may, in such an instance, permit the amendment of a complaint, even after the trial, to conform to that actuality ... Indeed, we have recognized that, even in the absence of such an amendment, where the trial court had in fact addressed a technically unpleaded claim that was actually litigated by the parties, it was improper for the Appellate Court to reverse the trial court’s judgment for lack of such an amendment." Fountain Pointe, LLC v. Calpitano, supra, 144 Conn.App. 642 (citing Stafford Higgins Industries, Inc. v. Norwalk, supra, 575). Here, although the plaintiff did not amend her complaint to include her theory that the defendants committed a negligent misrepresentation by failing to disclose the work performed by Dry Works, she presented testimony and evidence to support this theory, and the theory was fully litigated, briefed, and argued by the parties.
2. The Defendants’ Special Defenses
The defendants argue by way of special defense that the plaintiff could not have relied on their representation concerning the condition of the foundation because under the terms of the contract, the plaintiff had the right and the obligation to perform an inspection of the property. The defendants’ special defenses also rely on language in the contract and disclosure report releasing the defendants from any liability for any defects about which the defendants had no actual knowledge.
Although the defendants’ arguments might preclude a claim by the plaintiff under the contract and disclosure statements themselves, because the plaintiff’s claim here is based on a theory of common-law negligent misrepresentation under, Giametti v. Inspections, Inc., supra 76 Conn.App. 363, the defendants had a separate and distinct legal obligation to disclose all relevant information regarding the foundation of which they were aware regardless of the language in the contract. See Hull v. Fonck, supra, 122 Conn.App. 291, noting that, "[a] claim that a seller’s intentional, reckless or negligent misrepresentation caused a buyer to enter into a contract for the sale of property is a valid cause of action, even if the contract that the parties entered into constituted the entire agreement between the parties and the contract included a clause disclaiming any representations by the seller as to the conditions of the property."
The court also concludes that defendants’ special defense is unavailing because the plaintiff testified credibly that she relied specifically on the defendants’ affirmative representation that they had lived in the property for thirteen years without experiencing any problems with their foundation in deciding that hiring an engineer was not necessary. Moreover, as discussed previously, it would have been impossible for the defendant to have discovered the extensive work performed by Dry Works without engaging in intrusive and destructive testing. The court also finds that the defendants’ special defense based on the statutes of limitations set forth in General Statutes § 52-584 is in unavailing because the plaintiff filed suit within two years of discovering that she was experiencing a problem with her foundation, and it was not until the plaintiff filed suit and the defendants complied with the plaintiff’s discovery requests that the plaintiff learned for the first time about the work performed by Dry Works.
3. Damages
"The plaintiff has the burden of proving the extent of the damages suffered ... Although the plaintiff need not provide such proof with [m]athematical exactitude ... the plaintiff must nevertheless provide sufficient evidence for the trier to make a fair and reasonable estimate ... As we have stated previously, the determination of damages is a matter for the trier of fact ..." Naples v. Keystone Building & Development Corp., 295 Conn. 214, 224-25, 990 A.2d 326 (2010). "Traditionally, an action for negligent misrepresentation requires the plaintiff to establish (1) that the defendant made a misrepresentation of fact, (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result." New London County Mutual Ins. Co. v. Sielski, 159 Conn.App. 650, 664, 123 A.3d 925 (2015). "[T]he trial court has broad discretion in determining damages ..." Sun Val, LLC v. Commissioner of Transportation, 330 Conn. 316, 337, 193 A.3d 1192 (2018). The court finds that the plaintiff has sustained her burden of proving that it will cost $ 209, 630 to repair her foundation, and the court awards those pecuniary damages as part of the judgment in her favor.
CONCLUSION
The court concludes that the plaintiff provided sufficient credible evidence to prove that the defendants affirmatively and negligently misrepresented to her that there were no problems with their foundation when they knew that they had previously performed significant structural work on the foundation. The plaintiff also provided credible testimony that she would not have purchased the defendants’ property had she known about the work the defendants had performed. The court also finds that regardless of the language in the contract documents and disclosure forms requiring the plaintiff to obtain her own inspection of the property, no inspection would have revealed the nature or extent of the work performed without intrusive and destructive testing. For these reasons, and for the additional reasons stated in this decision, the court finds in favor of the plaintiff on her claim of negligent misrepresentation and enters judgment in her favor in the amount of $ 209, 630.