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Boschen v. Campanelli


May 1, 2007


On appeal from Superior Court of New Jersey, Law Division, Essex County, No. L-5081-04.

Per curiam.


Argued March 14, 2007

Before Judges Wefing, Parker and Yannotti.

Plaintiffs appeal from the trial court's order granting summary judgment to defendants Carmen Campanelli and his wife Marilyn. After reviewing the record in light of the contentions advanced on appeal, we affirm.

Defendants owned a single-family home located at 589 Mount Pleasant Avenue in West Orange, New Jersey. They decided to sell their home and listed it for sale with defendants Re-Max American Dream and Linda Ciardi.*fn1 In September 2002 plaintiffs Scott Boschen and his wife Leigh Ann Zaolino signed a contract to purchase the home for $275,000, and the closing occurred on November 14, 2002. Prior to signing this contract, plaintiff Zaolino visited the property at least three times. Some of those visits were approximately forty-five minutes in length.

The property in question is across the street from the site used by West Orange as its recycling center. Plaintiffs were aware of that fact. Before signing the contract, plaintiff Zaolino checked with both the West Orange municipal clerk and the town's website as to the nature of the operations conducted there. In addition, plaintiffs' mortgagee expressed some reservations about the transaction in light of the location.

With the onset of warmer weather in the following spring and summer months, plaintiffs could smell strong odors emanating from the recycling center. Zaolino in her deposition described the odors as "foul" and "obnoxious." She also agreed in her deposition that she had made several visits to the house in the summer months, both prior to and after signing the contract of sale and had never noticed any odors of any sort.

Plaintiffs investigated and learned that West Orange had contracted with a private vendor to conduct a composting operation within the recycling center. They also learned that the Campanellis had been aware of this composting operation and had themselves experienced strong odors. Plaintiffs commenced this suit for damages, contending that the Campanellis had a duty to advise plaintiffs of the existence of the composting operation and the odors it generated and breached that duty through their silence. Plaintiffs appeal from the trial court's determination that defendants did not have such a duty.

New Jersey has, of course, long since discarded the doctrine of caveat emptor with regard to the sale of real estate. Weintraub v. Krobatsch, 64 N.J. 445 (1974) (holding that seller of real estate had duty to disclose to prospective purchaser that the house was infested with cockroaches and breach of that duty could entitle the purchaser to rescind the contract).

Shortly after Weintraub, Judge King, then sitting in the Law Division, held that a builder-developer could be liable for damages for not disclosing to one purchaser that the owner of the adjoining lot intended to construct a tennis court on his property. Tobin v. Paparone Const. Co., 137 N.J. Super. 518, 526 (Law Div. 1975) ("Paparone's silence created a mistaken impression on the part of the purchaser which operated to induce the purchaser to buy. This silence was a fraudulent representation and a failure of an implicit condition of sale."). Judge King also concluded, however, that the purchaser had no claim against the neighbor who had installed the tennis court. Id. at 527.

In Strawn v. Canuso, 140 N.J. 43, 65 (1995), the Supreme Court extended that duty to encompass an obligation to advise prospective purchasers of "off-site physical conditions known to [the seller] and unknown and not readily observable by the buyer if the existence of those conditions is of sufficient materiality to affect the habitability, use, or enjoyment of property and, therefore, render the property substantially less desirable or valuable to the objectively reasonable buyer." Significantly, however, the Court carefully restricted that duty to a builder-developer and a broker representing that builder-developer. Id. at 59.

[T]he principal factors shaping the duty to disclose have been the difference in bargaining power between the professional seller of residential real estate and the purchaser of such housing, and the difference in access to information between the seller and the buyer. . . .

The first factor causes us to limit our holding to professional sellers of residential housing (persons engaged in the business of building or developing residential housing) and the brokers representing them. [T]he reseller of residential real estate [does not have] that same advantage in the bargaining process. Regarding the second factor, professional sellers of residential housing and their brokers enjoy markedly superior access to information. Hence, we believe that it is reasonable to extend to such professionals a similar duty to disclose off-site conditions that materially affect the value or desirability of the property. [Id. at 59-60.]

Following the Court's decision in Strawn, the Legislature passed the New Residential Construction Off-Site Conditions Disclosure Act, N.J.S.A. 46:3C-1 to -12, further limiting the duty of disclosure. The statute by its terms is limited to newly-constructed residential real estate and real estate brokers, salespersons and builders. N.J.S.A. 46:3C-3. It is further limited to nine specific off-site conditions: properties listed on the National Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"); sites included on New Jersey's master list of known hazardous discharge sites; overhead electric transmission lines of more than 240,000 volts; electrical transformer substations; underground gas transmission lines; certain sewer pump stations and sewer trunk lines; sanitary landfill facilities; public wastewater treatment facilities; and areas defined as airport safety zones.

In our judgment, neither the Court's opinion in Strawn nor this statute provides a basis to conclude that defendants had a duty to advise plaintiffs that odors from the nearby composting operation could be detected on the property during the summer months. The property in question is not newly-constructed, the Campanellis cannot fairly be characterized as professional sellers of real estate and the composting operation does not fit within any of the categories selected by the Legislature as requiring disclosure by professional sellers.

Nor do the other authorities upon which plaintiffs rely lead to the conclusion that defendants breached a duty to plaintiffs. Nobrega v. Edison Glen Associates, 167 N.J. 520 (2001), involved a claim against the sponsor of a condominium project for failure to disclose the existence of nearby hazardous waste sites. In United Jersey Bank v. Kensey, 306 N.J. Super. 540, 544 (App. Div. 1997), we concluded that a mortgagee bank did not have a duty to disclose to prospective purchasers that its own internal appraisal indicated that the properties were worth less than the selling price and outstanding mortgage amounts. Byrne v. Weichert Realtors, 290 N.J. Super. 126, 133 (App. Div. 1996), dealt with the sale of a home with no disclosure that it was "riddled with termites." And in Timm v. Clement, 574 N.W.2d 368 (Iowa Ct. of App 1997), the court concluded that a seller of property had a duty to disclose to the prospective purchaser latent off-site conditions of other property owned by the seller that would materially affect the desirability or market value of the property. Id. at 371-72.

We agree with the trial court that it would be anomalous to impose a greater duty of disclosure upon defendants, non-professional sellers of real estate, than the law has imposed to date upon professional sellers of real estate. The order granting summary judgment to defendants is affirmed.


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