Supreme Court of Iowa, 2002SUMMARY:American Escrow and Closing Company, an employee relocation company, hired Radon Analytical Labs to do a home inspection in Dubuque, Iowa. Daniel Burbach then purchased the home.Mr. Burbach subsequently sued Radon Analytical Labs for failing to disclose the defects within the home that he felt should have been discovered during a routine home inspection. The home inspector failed to recognize that the home was covered in Louisiana-Pacific (L-P) Innerseal siding, which was widely known to have been both defective and at the center of a class-action lawsuit. The Radon Analytical Labs inspector instead identified the siding as “wood siding.” When questioned about not accurately identifying the siding, Radon Analytical Labs stated that the home inspector was untrained, and they confirmed that he should have been able to identify the L-P siding, which was widely known to be hazardous.Due of the inspector’s lack of training and negligence, a judgment was entered on behalf of Mr. Burbach.Burbach v. Radon Analytical Labs, 652 N.W.2d 135
Superior Court of Connecticut, 1994
SUMMARY:William Campbell was the Director of Health of the city of Danbury, Connecticut. Sydney Groves owned two rental properties in the area. Mr. Groves hired an inspection company, Enviro Science Consultants, Inc., to perform a routine inspection of both of his properties. Following the inspection, Enviro Science Consultants informed Mr. Groves that they found toxic levels of lead paint in both property locations. The company offered to perform the corrective work on the property for approximately $90,000. Mr. Campell wanted to have the corrective work done, but he thought that the cost was outrageous.Mr. Campbell issued an abatement order to Mr. Groves for not having the corrective work done on his property. The abatement order was prepared by the lead inspector for Enviro Science Consultants. Mr. Campbell then asked the court for an injunction against Mr. Groves for non-compliance with the city’s lead-based paint regulations. The court did not grant the injunction because it directed that the corrective work should be performed by the inspection company, which constituted a conflict of interest.The court found in favor of Mr. Groves, pointing out that as long as there were no children under the age of 6 living at the property, lead-based paint could be managed in alternative ways that do not cost as much as the original quote of $90,000.1994 Conn. Super.
Supreme Court of New York, 2006
Joshua and Ellen Dicker hired the Charles Hennessy to do an inspection of a home that they were considering purchasing in Roslyn, New York. The fee for Mr. Hennessy’s inspection was $520.00 and was specifically stated to a limited time/scope visual inspection. This means that things any defects not easily seen, such as mold or wood rot, would not be covered under the inspection.After inspecting the home, Mr. Hennessy advised the Dickers that the home was in fair condition. A fair rating has the probability of requiring monitoring, maintenance, repair, replacement, and/or other work either immediately or in the very near future on the home. The Dickers proceeded to purchasing the home and said that they were given oral assurances by the inspector that the home was in good condition.Upon moving in the home, the Dickers discovered there was a very large leak in one of the bathrooms. Further inspection showed water rot and mold that caused extensive damage to the bathroom. The Dickers incurred a significant amount of costs in repairing and renovating the bathroom, and then chose to sue Mr. Hennessy’s company for negligence and breech of contract.Mr. Hennessy did not show any negligence in his written report of the home, because all of the damage that occurred was not readily visible on a simple walk through inspection. The court found in favor of Mr. Hennessy’s company after reviewing the contract between the two parties carefully.Dicker v. Housemaster, 2006 NY Slip Op 50174U
Supreme Court of New York, 2006
SUMMARY:Pamela Drullinsky hired Tauscher Croancher Engineers to perform an inspection on a home that she was interested in purchasing. For a fee of $750, Tauscher Croancher Engineers sent inspector Richard Haber to the home, and he did a solo walk-through inspection of the house. Afterward, Mr. Haber informed Ms. Drullinsky that it was a “good house,” and that there were no major issues associated with the home.
Four months later, Ms. Drullinsky hired Insight Environmental Consultants and Scientists to inspect her home after she became concerned about a black substance near the basement. After they investigated the home, Insight Environmental Consultants and Scientists concluded that there was water damage on the foundation and mold in the basement, which Ms. Drullinsky had removed immediately. She then decided to replace the carpet in her living room. When she pulled up the carpet, she noticed a large crack in the living room floor. She then hired John Cusumano to repair the crack. Upon his examination of the floor and the beams that connect the floor to the ceiling, Mr. Cusumano discovered that the left side of the house was collapsing. This damage was attributed to water damage on the roof, foundation, and in the shower area of the house. Upon a second, more thorough inspection, termite damage was noted in the living room, as were rot damage and mold. Ms. Drullinsky was advised from two different inspection companies that the only way to correct her termite, wood rot and mold problems would be to demolish the house.A few months later, Ms. Drullinsky walked through the house and noticed a very “sweet” smell and a large puddle of water in the basement. She also noticed that there was paint peeling on the ceiling, which was attributed to a leak in the air-conditioning system. The purchase price was reduced $6,300 to reflect some of the damage that Ms. Drullinsky encountered.After careful consideration, Ms. Drullinsky had her home demolished. She then sued the original inspection company, Tauscher Croancher Engineers, and won on the allegation of negligence.Drullinsky v. Tauscher Cronacher Engrs., 2006 NY Slip Op 52440U
Louis D. Freeman and Uaildeen E. Freeman v. Paul D. Duhamel and Home Inspection Services of Deleware, Inc.
Superior Court of Delaware, 1997
In 1989, Louis and Uaildeen Freeman became interested in purchasing a home owned by the Yetter family in Delaware. In early 1990, the Freemans made an offer on the home that was contingent upon a satisfactory home inspection, followed by five days for the prospective buyers to decide whether the condition of the home was acceptable.
On January 8, 1990, the Freemans hired Paul Duhamel to conduct an inspection of the home. He testified that, during the course of the home inspection, he entered the crawlspace beneath the kitchen floor, and noticed makeshift floor supports, which consisted of four columns made of concrete blocks piled together without mortar, with 2x4 framing lumber wedged on top of the columns. After inspecting the home, Mr. Duhamel gave the Freemans a written report, but did not make any note of the makeshift supports he observed, or of sagging in the kitchen floor. Instead, his report stated that there were no major issues with the home, except for a few minor repairs that needed to be made. The Freemans proceeded with the purchase of the home.
After moving in, the Freemans began noticing problems, such as the sagging kitchen floor. They then realized that the makeshift supports in the crawlspace were probably intended to hold it up. After having several contractors visit their home to give them quotes on the repair of the kitchen floor, and replacement of the cabinetry, the Freemans estimated that the costs would be around $18,000. They subsequently filed suit against the home inspector and his company for a negligent inspection.
The court ruled in favor of the Freemans, finding that Mr. Duhamel was negligent for not reporting on the makeshift supports in his home inspection report.Freeman v. Duhamel 1997 WL 524119 (Del Super.)
Lisa Goldstein v. Carnell Associates, Inc.
Supreme Court of New York, 2010
Lisa Goldstein contracted with Carnell Associates, Inc., to conduct an inspection of a home that she wanted to purchase. The contract stated that Carnell Associates would be performing a visual inspection of the home, and that any concealed defects would not be covered or accounted for. The contract also stated that the liability of Carnell Associates would be limited to the cost of the inspection. Carnell Associates performed the inspection and gave Ms. Goldstein a satisfactory report, after which she purchased the home.
Soon after, Ms. Goldstein discovered that there were several structural defects with the home. She filed suit against Carnell Associates for gross negligence. She tried to recover the full amount of damages for the home, plus the cost of the inspection.
The court held in favor of Carnell Associates because their inspection was visual only, and specifically disclaimed any hidden defects, which covered the structural problems discovered by the plaintiff. Additionally, the contract stated that the defendant’s liability was limited to the cost of the inspection.Goldstein v. Carnell 2010 N.Y. Slip Op. 04741
Superior Court of Connecticut, 2010
SUMMARY:In June of 2004, David Gray contracted with Sullivan Real Estate to assist him in finding a suitable home to purchase. The contract between the company and their client stated that Mr. Gray was to be notified of all material facts involving the property. Sullivan Real Estate located a condominium in Burlington, Connecticut, which they presented to Mr. Gray, and he was very pleased with it. After inspecting the condominium, Sullivan Real Estate stated that it was in good condition, and Mr. Gray purchased it.After closing on the property, Mr. Gray discovered that it was contaminated by mold. He then brought suit against Sullivan Real Estate, alleging that the company was aware of the mold problem and purposely did not tell him about it so that they could sell the property.The court found in favor of Mr. Gray, holding that Sullivan Real Estate, Inc., was liable for non-disclosure of pertinent information, misrepresentation, and a negligent inspection.2010 Conn. Super.
Charles Grogan v. Daniel Uggla, et al.
Tennessee Supreme Court, 2017
In this case, the plaintiff Charles Grogan was injured when he fell from a second-story deck that had not been properly constructed but had recently been inspected by the defendant Jerry Black, a home inspector hired by homeowner Daniel Uggla. Defendant Black was a franchisee of defendant Pillar to Post, Inc. The trial court granted summary judgment in favor of the defendants, and the Court of Appeals affirmed the trial court.
The appeal was granted to consider as a matter of first impression in this state whether a home inspector is subject to liability for the physical harm suffered by a social guest of the home inspector’s client.
It was concluded that the defendants successfully negated essential elements of the claims of negligent misrepresentation and negligent inspection such that summary judgment was appropriate in this case. Accordingly, the Court of Appeals and the trial court judgments were affirmed that the home inspector's liability does not extend to third parties.
Authoring Judge: Justice Roger A. Page
Originating Judge: Judge James G. Martin, III
Date Filed: Tuesday, November 21, 2017
2017 Tennessee Supreme Court
Ronald Grzymala and Kathryn A. Grzymala v. Donald A. McKeon, Sr., Mary Jo McKeon and Yale Enterprises, LLC, d/b/a Re-Max Suburban, Harriet’s Oil Service and Pease Engineering, Inc.
Superior Court of New Jersey, 2007SUMMARY:On April 22, 2001, Ronald and Kathryn Grzymala executed a contract for the purchase of a home from Donald and Mary McKeon in Southampton, New Jersey. The contract contained a provision that allowed for a “satisfactory” home inspection to be performed before the sale became final. It specifically stated that tests on the soil and the underground storage tank, or UST, could be performed to ensure that there were no contaminants in the soil. Mr. and Ms. Grzymala hired Pease Engineering, Inc., to perform the inspection. On May 14, 2001 Pease Engineering sent an inspector to the property, who issued a “satisfactory” report. He tested the radon levels of the home, but he did not test the UST or its surrounding soil. The Grzymalas proceeded with closing on the home and moved in soon after.In the summer of 2001, shortly after moving into the new home, Mr. Grzymala began experiencing severe swelling of his trachea. He ended up requiring a tracheotomy. Mr. Grzymala’s medical history included a diagnosis in 1995 of esophageal cancer, which was subsequently treated with chemotherapy and radiation. A couple of months after his tracheotomy, Mr. Grzymala detected an odor of oil coming from the basement. In November of 2001, the Grzymalas received a fuel shipment from Harriet’s Oil Service (which also provided the fuel for the McKeons when they occupied the home), and during the transfer of a delivery, some oil was spilled onto the ground. The Grzymalas called Median Environmental Services to clean up the mess, saying that the spill was the result of Harriet’s Oil Service overfilling the UST. The cleanup and repairs for the spill were extensive because the oil had seeped down as far as 14 feet into the ground. The entire deck had to be removed as a result.The Grzymalas brought suit against the McKeons, the oil providers, and the home inspector, citing negligence, intentional misconduct, misrepresentation, and a personal injury claim that alleged that the oil spill and previous oil spills on the property were the cause of Mr. Gryzmala’s trachea problems.The court found in favor of the sellers and the home inspector because the inspector was not required to test the UST or its surrounding soil, and since the Grzymalas did not specifically request those tests, it was unreasonable to expect that they should be done. It was found that Pease Engineering gave a full, competent and complete report of the home and abided by all the standards that are expected of home inspectors. However, Harriet’s Oil Service was held liable for personal injury against Mr. Grzymala.2007 N.J. Super.
Hall et al. v. Harris et al.
Court of Appeals Minnesota, 2001
Joe Harris owned Harris Builders and Multi-Pest Services, and acted as building developer on a home to be built in Carrollton, Georgia. Mr. Harris chose the design, subcontractors, and materials for the home, and also had his pest control company do a barrier treatment while the home was still under construction. Mr. Harris also chose to have the exterior covered in synthetic stucco, which is commonly known as EIFS.
Although the house was scheduled for an inspection in order to receive a Certificate of Occupancy from the Carroll County Building Inspector’s Office, upon inspection, the office refused to issue the certificate. The renters who had been residing in the home between 1990 and 1992 made numerous complaints to the inspector’s office about construction and water problems. Mr. Harris himself admitted that he could not obtain a Certificate of Occupancy for the house.
In early 1993, Mr. Harris began advertising the home for sale, stating that it was luxurious and of high quality. Joseph and Creaestia Hall read the advertisements and inquired about the home. Mr. Harris gave the Halls many oral assurances that the home was “incredibly well-built,” and even went so far as to say that it was “code-approved,” although there was still no Certificate of Occupancy issued for it. The Halls purchased the home, and Mr. Harris’ companies performed both the home inspection and the pest-control inspection.
Shortly after moving in, the Halls discovered that the home was infested with termites, and that the stucco had been adhered to the exterior in a faulty manner, trapping moisture and causing extensive wood rot. The Halls sued Mr. Harris for fraud, negligence, breach of contract, and misrepresentation. The court held in favor of the Halls, and Mr. Harris was held liable for damages based on all four allegations.Hall v. Harris, 239 Ga. App. 812
John and Judy Healy v. Peter Telege et al.
Supreme Court of New Hampshire, 1995
John and Judy Healy purchased a home from Peter Telge shortly after he installed a new septic system. The Healys’ real estate agent was given a certificate by Raymond Laliberte, a septic inspector, that stated that the new septic system was in good working condition. After receiving the certificate, the Healys continued the process of closing on the house without any further inspection of the septic system.
Three months later, the septic system completely collapsed. The Healys brought a suit against Mr. Telge and Mr. Laliberte for breaching both the express and implied warranty of “workmanlike quality.”
The court found that there was a due standard of care to be used by home inspectors when issuing satisfactory certificates of inspection, and that Mr. Laliberte did not uphold that standard of care. Mr. Telge, the seller, was not held liable for breaching any type of contract or warranty.139 N.H. 407; 653 A.2d 1118
Supreme Court of New York, 2006
The Herners were first-time home buyers who purchased a home for $102,000 in Bellmawr, New Jersey. After their real estate agent gave them several brochures of home inspection companies, the Herners contacted Housemaster of America to conduct an inspection of their home. For a fee of $335, Housemaster sent out inspector Joseph Tangradi to perform a limited-time, guaranteed inspection of the home. This meant that if any major defects were discovered in the home within 90 days of the inspection, the cost of repairing or replacing the defects would be covered by the inspection company. Out of the 54 items that were inspected in the home, 51 were marked “satisfactory,” which was the inspector’s highest rating. None of the items was marked “poor.”
Soon after, there was a major leak in the Herners’ roof so extreme that the water dripped onto the floor below. The Herners’ home also began having electrical issues. The Herners sued Housemaster of America for a negligent inspection.
The court awarded the Herners a settlement of $37,000 for compensatory damages.Dicker v. Housemaster, 349 NJ Super. 89; 2006 NY Slip Op 50174U
Court of Appeals of Missouri, 2003SUMMARY:Robert and Paula Herod, the plaintiff buyers, purchased a home in Bridgeton, Missouri. As a condition of buying the home, Mr. And Ms. Herod requested a soil percalator test to ensure that the septic system was in proper working order. The seller’s (Branman Corporation) president, Robert Hindman, provided an inspection report (via the buyer’s agent) to the buyers that stated, “All work was performed per the Inspector’s letter.” The seller hired Sutter Plumbing to clean the septic tank system and correct any problems that were noted in the inspector’s report. Within six months after closing on the property, the buyers began to experience problems with the septic and plumbing systems. The buyers discovered that not all of their plumbing lines were connected to the septic system. Specifically, the appliances and fixtures at the rear of the home, the dishwasher, washing machine and kitchen and basement sinks simply discharged onto open ground at the rear of the property. Also, the septic tank was too small and allowed discharge directly into the ground instead of processing waste through the septic lines and leach bed. The buyers sued the defendants( the real estate company, a septic tank inspector, and the buyers’ agent), for fraud, misrepresentation, and breach of contract. The court held the buyers’ agent liable and dismissed the suit against the other defendants, stating that the buyers were not entitled to multiple judgments.Herod v. Hindman, 96 S.W.3d 915
Circuit Court of Norfolk, Virginia 2003SUMMARY:Jeff E. Howie, III, a prospective home buyer, hired Atlantic Home Inspection, Inc., to send an inspector to a house in Norfolk, Virginia that he had decided to purchase. Mr. Howie paid Atlantic Home Inspection a fee of $195 for their services. After receiving a satisfactory report on the home’s condition, he went forward with the purchase of the home and moved in.Mr. Howie began to notice problems with the so-called “Florida Room,” including cracks in the foundation and in the interior walls of that room. He consulted a contractor who stated that the foundation of that particular room was inadequate. Mr. Howie filed a suit against Atlantic Home Inspection, stating that a competent and knowledgeable home inspector should have noticed the cracks in the foundation of the room. He felt that the inspector was negligent and did not use the proper standard of care while inspecting his home.The court agreed that the inspector should have noted the cracks in the foundation, but did not believe that the damage had increased in such a manner that Mr. Howie was not able to adequately repair it upon discovery. The court ruled that Mr. Howie was owed the $195 fee that he originally paid for the inspection, but he recovered no additional damages.Howie v. Atl. Home Inspection, Inc., 62 Va. Cir. 164
Jeff Hurrell and Lisa Hurrell v. James L. Barker and Jeanne A. Barker
United States Bankruptcy Court for the Central District of California, 2008
James and Jeanne Barker sold their home in Canyon County, California, to Jeff and Lisa Hurrell for $825,000. After the closing, the Hurrells scheduled their new home for replacement of its plumbing system, and had a home inspector inspect the property. The Hurrells also hired an environmental specialist to inspect the home for mold, which he found. The couple then spent the next year renovating, demolishing and re-building large areas of their home.
The Hurrells brought suit against the Barkers for fraud and intentional misrepresentation. The Barkers then filed for bankruptcy, so the Hurrells sought a non-dischargeable judgment of over $1 million.
While the Hurrells are still awaiting a decision on the claims of fraud and intentional misrepresentation, the United States Bankruptcy Court has ruled that they would not be able to receive a non-dischargeable judgment against the Barkers.393 B.R. 864; 2008 Bankr.
Court of Appeals of Minnesota, 2006SUMMARY:Mr. Woods decided to sell his lake house due to a lack of use. Upon closing of the sale, he hired an inspector from Mariway Land Consultants to perform an inspection of the home’s septic system. The inspector gave a satisfactory report, and the home was subsequently sold to Mr. Kellogg.Shortly after moving into the home, Mr. Kellogg discovered that there were cracks in the home’s septic system that allowed groundwater to seep in. He then decided to sue both Mr. Woods and Mariway Land Consultants for a negligent inspection and for damages incurred as a result of the groundwater contamination.Mr. Woods filed a cross-complaint against Mariway Land Consultants for their negligent home inspection, and won. The court held in favor of Mr. Kellogg, and awarded him compensatory damages from both Mr. Woods and Mariway Land Consultants.Kellogg v. Woods 720 N.W.2d 845; 2006 Minn. App.
Timothy Lapoint et al. v. Steve Houghtaling et al.
Superior Court of Connecticut, 2009
In January 2005, Mr. and Mrs. Timothy Lapoint negotiated with Steve Houghtaling to purchase the property that they owned in Southington, Connecticut. The Houghtalings provided the Lapoints with a Residential Property Condition Disclosure Report that stated that the sellers must inform the buyers of any known defects, or defects that should be reasonably known, before closing on the property. The Houghtalings specifically stated that there was no structural damage to the property.
The Lapoints hired a home inspector, Mr. Balkum, to perform a visual inspection of the property. Afterward, Mr. Balkum stated that there were no problems with the structure or the foundation of the property. He stated that his visual inspection of the basement was limited because there was a great deal of clutter, and his contract specifically stated that he would not move the homeowners’ personal belongings.
The Lapoints moved into the home, and a few weeks later, they hired an engineer to inspect the property. The engineer found five major cracks in the foundation wall, vertical movement of the foundation system, and horizontal displacement of the wall assemblage. The costs of fixing these issues were so high that the Lapoints never made them. They then filed suit against the Houghtalings and against Mr. Balkum, citing misrepresentation and negligence.
The court found in favor of the defendants.Lapoint v. Houghtaling 2009 WL 3738136 (Conn. Super)
Court of Appeals of Ohio, 2002
In 1997, Mr. and Mrs. Yanien Lee purchased a house located in Arlington, Ohio. The contract for purchase contained a home inspection clause. On the recommendation of their real estate agent, the Lees arranged to have the home inspected by CDE Home Inspection. Mr. Maibaum was the sole inspector of CDE, and he and his wife, Barbara, were the company’s owners.
Before inspecting the home, Mr. Maibaum did not speak directly with the Lees, and there was no agreement, either written or oral, that defined the scope of the home inspection.
Mr. Maibaum inspected the property on August 27, 1997. He noted some dampness in the air-conditioning ducts, but no standing water.
The Lees moved into the home, and soon afterward found that water had been seeping into the structure of the home. They sued Mr. Maibaum’s company for negligent misrepresentation.
The court found in favor of CDE because Mr. Maibaum had conducted a full visual inspection, and since there was no contract that stated otherwise, it was not reasonable to expect him to have inspected concealed areas, which included the air-conditioning ducts.Lee v. CDE Home Inspection 2002 WL 1938248 (Ohio App. 10 Dist)
California Court of Appeals, 2001SUMMARY:In 1997, Jeffrey and Joan Lee purchased a home in Agoura Hill, California, from Jae Tae, Sun Min, Lauren, Kyung and Samuel Lim. The Lees’ real estate agent was Joe Pallat and the sellers' agent was Sherry Oyler. Both Pallat and Oyler were affiliated with the same broker, Blago Leko, operating a business under the name Century 21 Adobe Realty.In 1998, the Lees filed a complaint against the sellers and agents, alleging that they had failed to disclose defects in the property, and had actively concealed major structural damage caused by the Northridge earthquake of 1994. The complaint alleged fraud, breach of statutory duties, breach of fiduciary duties, negligence, and negligent and intentional infliction of emotional distress.In turn, the agents filed a cross-complaint against several home inspection companies, including co-defendants Cornerstone Building Inspection Service, Crystal Home Inspection, and Dale Feb, doing business as D-Way Fire Inspection Service. Cornerstone had been retained by the Lees to perform a general inspection of the property, and had prepared a report before the sale was consummated. Approximately one month before the Lees made their offer on the property, Crystal and D-Way had inspected the same property and prepared reports for a different prospective buyer.While inspecting the home, the inspectors neglected to discover major problems with the fireplace that cost the Lees a substantial amount of money to fix. The court found in favor of the agents, stating that the trained inspectors should have found the problems with the fireplace.86 Cal. App. 4th 1109
Superior Court of Connecticut, 2006SUMMARY:The Linet family hired Pro-Tech Home Inspection to do a complete home inspection, which specifically included a thorough inspection of their septic system. Pro-Tech Home Inspection wrote a report for the Linets stating that their home was in great shape, and that there should be no foreseeable problems with the home for the next five years. They then referred the septic system inspection to Country Septic Service, who reported that the septic system was in excellent condition, despite the fact that the system was around 30 years old.The Linets began having problems with their septic system, and, after another inspection, they discovered that their septic system was at the end of its service life. They sued Pro-Tech Home Inspection for their carelessness and negligence in both their own home inspection and their referral to Country Septic Service. The Linets also alleged a violation of the Connecticut Unfair Trade Practices. The court found in favor of the Linets.Linet v. Pro-Tech Home Inspection, LLC, 2006 Conn. Super.
Superior Court of New Jersey, 2007
SUMMARY:In December of 1998, Michael and Laura Mazza purchased a home from Margaret and John O’Connell. The purchase was financed by the Federal Home Loan Mortgage Corporation. The original contract listed the property for $127,000, but the price was reduced to $116,500 in order to compensate the Mazzas for a septic system that the O’Connells said needed repair. The Mazzas then hired Peter Juzwin to come perform a home inspection, specifically on the septic system. Mr. Juzwin concluded that the septic system was in good working order for the time being, but stated that he could make no determinations as to its future condition because the house had been unoccupied for several months. He did state that there were signs of corrosion in the system, and recommended that a future inspection be performed. Mr. Mazza stated that he read the inspection report, understood it, and discussed it with his real estate attorney, Daniel McCarthy. The Mazzas did not provide the inspection report to their mortgage company or to Remax, which had listed the property for the O’Connells. The Mazzas proceeded with the purchase of the property.Within a month, the Mazzas began to experience severe problems with the septic system’s leech field. Upon further inspection, they were told that the system was “virtually inoperable,” and that the replacement cost would be around $30,000. The Mazzas brought suit against their mortgage company, their real estate attorney, the sellers, the real estate company, and the inspector, contending that they all knew of the problems with the septic system and purposely concealed the problems from them. They alleged various degrees of misrepresentation, concealment, negligence, and breach of contract.The Mazzas ended up settling with the O’Connells, Mr. Juzwin, and Lausch Realty, but they lost their case against the remaining defendants.2007 N.J. Super.
Armando V. Moreno et al. v. Deric Sanchez
2nd District California Court of Appeals, 2003
In 1998, Armando Moreno and Gloria Contreras found a property in Whittier, California, that they were considering buying. They visited it at least six times before putting an offer on it. After some negotiation, a purchase agreement was drawn up that stipulated that the prospective buyers had seven days to have the property inspected.
The sellers noted in their signed offer that there significant defects with the walls and ceilings in the form of cracks. They also noted that water had seeped into the basement on several occasions. Mr. Moreno and Ms. Contreras hired Deric Sanchez to inspect the home before the final closing. The home inspection contract stated that the inspection was a visual inspection of the general systems in the home, and that anything concealed or inaccessible was outside of the scope of the inspection. Mr. Moreno accompanied Mr. Sanchez on his inspection. After receiving a satisfactory inspection report, Mr. Moreno and Ms. Contreras moved into the home.
Shortly afterward, Mr. Moreno and Ms. Contreras started getting very sick. In September 1999, they hired a licensed engineer to test the air quality of the home. It was then that they discovered that the basement heating and air-conditioning ducts were insulated with asbestos. Mr. Moreno and Ms. Contreras then filed suit against both Mr. Sanchez and the sellers for negligence.
The court found in favor of the defendants because the inspection contract specifically stated that the property would not be checked for hidden defects, including asbestos.Moreno v. Sanchez 106 Cal App. 4th 1415
United States District Court, New York, 1980SUMMARY:Mutual Marine Office, Inc., an insurance company, hired the defendant, Atwell, Vogel & Sterling, Inc., to do an inspection of their client’s insured property for approval for flood insurance. Upon inspection, Atwell, Vogel & Sterling’s inspector told Mutual Marine Office that there would be no danger of flooding.However, in actuality, the property was located within 400 feet of the Susquehanna River, which should have been noted in the inspector’s report. Less than two months later, the river flooded and caused over $300,000 worth of damage to the property.The insurance company paid the claim, and then filed a lawsuit against Atwell, Vogel & Sterling for negligence. The inspection company claimed that there was a clause in their agreement that indemnified them against misinformation, and that the insurance company would have assumed the risk regardless of their findings. Because of the contract’s disclaimer, the court found in favor of the inspector and the defendant inspection company because the contract specifically stated, "[W]e do not assume any legal liability due to misinformation given our inspector, nor for inaccuracies, human error, etc." The insurance company lost their case and was held completely liable for the damages.Mutual Marine Office, Inc. v. Atwell, Vogel & Sterling, Inc., 485 F. Supp. 351
Franklin County, Ohio Court of Appeals, 2006
In 1996, Peter and Patricia Howitt purchased a residence in Columbus, Ohio, from David and Ellen Brown. Jeanne Favret, a real estate agent employed by Sorrell Realty, represented both the Howitts and the Browns in the transaction. Before closing on the property, the issue of termites arose, and Cook’s Termite and Pest Control, Inc., was hired to treat the home for the infestation. After the home had been treated, the Howitts hired a home inspector to inspect the property. The inspector stated that there was still a termite infestation in the home, but that he could also tell it had been treated.
In February 2000, the Howitts decided to sell their property. When asked on the property disclosure form if there were wood-boring insects or termites at their property, the Howitts stated that there were not. They further stated that the property had been inspected twice by Cook’s Termite and Pest Control, and nothing was found. They re-hired Ms. Favret, and put their house up for sale.
In April 2000, Ms. Favret, Kurt Niermeyer and the Howitts entered into a contract that allowed Mr. Niermeyer to purchase the home from the Howitts for $580,000. Following a home inspection, the issue of termites arose, and because the parties could not agree on a resolution, the contract was terminated.
A few months later, Mr. Niermeyer and the Howitts renewed their negotiations and agreed on a reduced purchase price of $575,000 for the home in “as-is” condition.
About two weeks later, the Niermeyers discovered that there was a live termite colony living in the second floor of the home. They sued the home inspector, the pest control company, the real estate agent, and the Howitts for negligence, breach of contract, and intentional misrepresentation.
The court found in favor of the defendants because the Niermeyers were aware of the termite problems and still agreed to purchase the home in “as-is” condition.Niermeyer v. Cook’s Termite and Pest Control, 2006 WL 330099 (Ohio Appl. 10 Dist.)
Superior Court of Connecticut, 1997SUMMARY:John Peterson and his wife, Wendy Peterson, entered into a contract on October 25, 1995, with Pine Hill Development to purchase a newly constructed home in Newtown, Connecticut. The contract stated that the Petersons would have 14 days to have the house inspected to their satisfaction before closing. It also stated that, during this time, the contract would be null and void unless it was agreed upon by both the buyer and the seller.A few days after signing the contract, the Petersons hired a home inspector to inspect the property. Upon inspection, the inspector informed the Petersons that their new home had very high levels of radon. After receiving an unsatisfactory inspection report, the Petersons declined to purchase the home. A couple of months later, Pine Hill Development sold the home to different buyers, and then proceeded to bring suit against the Petersons for breach of contract.After reviewing the arguments of both sides, the court found in favor of the Petersons, finding that an unsatisfactory home inspection was reason enough reason for them not to proceed with the purchase, given that there was a stipulation in their contract to this effect.Pine Hill Development, Inc. v. Peterson, Conn. Super. 1997
Redding et al. v. Tanner et al.
Georgia Court of Appeals, 1998
Mr. and Mrs. Redding entered into an agreement for the purchase of a house owned by Marguerite Thurmond. As a condition of the closing, the Reddings contacted home inspector Mr. Tanner and hired him to perform a visual, structural and mechanical inspection of the house.
The inspection was scheduled for August 26, 1995. Both the Reddings and Ms. Thurmond were at the home when Mr. Tanner arrived. However, he had no ladder with him, and Mr. Redding asked him how he planned to inspect the roof. Mr. Tanner had binoculars and replied to Mr. Redding that he would use those for the roof and eaves inspection. Mr. Tanner described some minor flaws with the home, including some rotted wood. He spent approximately three hours inspecting the house. Afterward, the Reddings proceeded with the purchase of the home.
On October 21, 1995, Mr. Redding got on the roof of the home to clean his gutters, and noticed very large cracks in the brick covering the gables. The cost of repairs for the roof was approximately $27,000.
The Reddings then brought suit against Mr. Tanner, citing negligence. The court ruled in favor of the Reddings, finding that Mr. Tanner breached his duty as a home inspector.Redding v. Tanner 231 Ga. App. 250
Circuit Court of Fairfax County, Virginia, 1990SUMMARY:Robert and Mary Smolinski purchased a home from Dorsey. As a condition of the home’s financing, the Smolinskis’ lender required a written termite inspection report from a qualified pest inspection company. Mr. Dorsey hired Paramount Termite Control Company to inspect the house and provide a written statement before closing on the home. The written statement that the inspector provided said that there was no termite infestation or damage.However, shortly after moving in, the Smolinskis discovered both water damage and termite damage in the den of the house that was so bad, it was considered uninhabitable. The Smolinskis sued Mr. Dorsey for selling them a home in a defective condition. They also sued Paramount Termite Control Company.The court used a number of factors to determine whether the Smolinskis could sue Paramount Termite Control Company based on its contract with Mr. Dorsey. The court considered the following questions:
After considering these factors, the court found that the termite company did, indeed, owe the home buyer a duty of care, and found it negligent in its inspection. The court ruled in favor of the Smolinkis.
- Did the inspection directly affect the buyer?
- Was the harm foreseeable to the inspector?
- Was the inspector negligent?
- Was there was a high degree of certainty of harm?
- Could this lawsuit prevent future negligent inspections?Smolinski v. Dorsey, 20 Va. Cir. 215
Supreme Court of Nassau County, New York, 2007SUMMARY:Barbara Sullivan-Parry hired Pillar to Post, Inc., and Suburban Consultants, Ltd., to conduct a home inspection for a home she intended to purchase in Oyster Bay, New York. She paid Suburban Consultants a fee of $475 to perform a visual inspection of the premises. This inspection was to include the electrical system and wiring of the home. When the inspection was concluded, the inspector provided a written report that stated that there was copper wiring in the home, and that the electrical components had been updated, professionally installed, and in functional condition.After moving into the home, Ms. Sullivan-Parry discovered that there was aluminum wiring in the home, with faulty copper splicing, which violate both state and federal laws, and are considered to constitute a serious fire hazard. She then brought suit against the inspectors for breach of contract, negligence, negligent misrepresentation, gross negligence, professional malpractice, and deceptive trade practices.The court dismissed the claim specifically naming William Murphy, the president of Suburban Consultants, so he was released from personal liability in this action. The court did allow the claims against Pillar to Post and Suburban Consultants to go forward on the issues of breach of contract, negligence, and negligent misrepresentation. However, in a motion for summary judgment for the remaining claims, the defendant prevailed and the entire complaint was dismissed.18 Misc. 3d. 1104(A)
United States District Court for the District of Colorado, 2009
In early 2005, Martha and Walter Taylor contacted Carol Dopkin for assistance in finding a residence to buy in Aspen, Colorado. The Taylors wanted to purchase a home quickly, and advised Ms. Dopkin that, because of some existing health issues, it was very important that their home be completely free of mold.In February of that year, the Taylors entered into a contractual agreement with Ms. Dopkin, directing her to place an offer on a property listed for purchase by David and Janice Panico. The contract between the Taylors and Ms. Dopkin stipulated that she would be acting only as the “middleman” between the buyers and sellers, but would not be acting as an agent for either party. The Panicos accepted an offer from the Taylors, and, upon closing, they provided a written property disclosure report. This report stated that the home had had a water leak many years ago, as well as some electrical wire damage from rodents, but other than those conditions, there were no structural or water-related issues with the home.The Taylors asked Ms. Dopkin if she would arrange for a home inspector to do an inspection of the home. In March, AmeriSpec performed a routine home inspection, which did not include a mold inspection. The inspector’s report deemed the property acceptable, citing some rodent infestation that could be handled by a pest control agency, but no other issues. After receiving this report, Ms. Taylor visited the property herself and thought that it was actually unacceptable. She had an allergic reaction upon entering the property, and was not happy about the overall condition of the home. She decided to cancel the sale, but Ms. Dopkin coaxed her back into purchasing the home, and the Taylors closed on the property in May.Several months later, a complete and comprehensive home inspection was performed and it was discovered that there was severe mold contamination, water damage, and rodent infestation. The cost of repairing these problems was estimated to be around $100,000.The Taylors brought suit against Ms. Dopkin and the Panicos for fraud, misrepresentation, and negligence. The court found in favor of Ms. Dopkin, but against the Panicos.Civil Action No. 07-cv-00985-MSK-CBS, 2009 U.S. District
Nattalee Vickers v. Michael Young and Becci Young
Court of Appeals of Kansas, 2007
In late 2002, Michael and Becci Young filed for divorce and decided to sell their home in Wichita, Kansas. Mr. Young was in charge of handling the sale of the home. He met with a real estate agent and filled out a “Seller’s Property Disclosure Statement,” in which he was to itemize any defects in the house. Mr. Young carefully described any defects he knew of, and the real estate agent told him that if he wasn’t sure about any items, he was to mark them as “okay.”
While Mr. Young was filling out the forms, he neglected to note that there was a previous problem with a water leak in the basement. The Youngs pulled up the carpet, dried the area with fans, and wiped up the excess moisture with towels. They later hired Architectural Waterproofing to investigate and possibly fix the problem. An inspector suggested caulking the window area. Mr. Young made the caulking repair.
The following year, after looking at the property several times, Nattalee Vickers and her husband decided to purchase it for $445,000. They had an inspection done, and, at that time, the basement was dry. An inspector issued a satisfactory report of the home, and the Vickers proceeded to move in.
Within a month of moving into the home, the Vickers noticed a dark, wet spot in the basement bedroom. Originally, they simply dried the area with fans, but they soon realized that there was a moisture problem. Mr. Vickers called Mr. Young and asked him whether there had ever been a problem with water leakage, and Mr. Young denied that there had. He did tell Mr. Vickers about the caulking done to the exterior of the home.Shortly thereafter, the Vickers separated, and Ms. Vickers stayed in the home. After receiving estimates for repairs that were upwards of $23,000, Ms. Vickers filed suit against the Youngs for fraud and negligent misrepresentation. The court held Michael Young liable for damages in the amount of $77,500, but released Becci Young from any culpability.172 P.3d 1221; 2007 Kan. App.