July 17, 2008
MARIAMA GUEYE, PLAINTIFF-APPELLANT,
SALVATORE AND ROSARIA AMATO, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Mercer County, DC-901-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted July 1, 2008
Before Judges Skillman and Winkelstein.
Plaintiff appeals from a judgment entered on September 11, 2007, in the Special Civil Part, dismissing her complaint against defendants for water damage to her basement. We affirm. On January 23, 2005, the parties entered into a contract in which plaintiff agreed to purchase a Hamilton Township property from defendants. The following provisions of the contract are pertinent to plaintiff's lawsuit:
17. MAINTENANCE AND CONDITION OF PROPERTY: The Seller agrees to maintain the grounds, buildings and improvements, in good condition, subject to ordinary wear and tear. The premises shall be in "broom clean" condition and free of debris on the date of Closing. Seller represents that all electrical, plumbing, heating and air conditioning systems (if applicable), together with all fixtures included within the terms of the Agreement now work and shall be in proper working order at the time of Closing. Seller further states, that to the best of Seller's knowledge, there are currently no leaks or seepage in the roof, walls or basement. UNLESS OTHERWISE INDICATED IN THE ADDITIONAL CONTRACTUAL PROVISIONS SECTION (Section 30) OF THIS AGREEMENT[,] ALL REPRESENTATIONS AND/OR STATEMENTS MADE BY THE SELLER, IN THIS SECTION, SHALL NOT SURVIVE CLOSING OF TITLE. This means that the Seller DOES NOT GUARANTEE the condition of the premises AFTER the deed and affidavit of title have been delivered to the Buyer at the "Closing."
20. INSPECTION CONTINGENCY CLAUSE:
B. Buyer's Rights to Inspections
The Buyer acknowledges that the Property is being sold in an "AS IS" condition and that this Agreement is entered into based upon the knowledge of the Buyer as to the value of the land and whatever buildings are upon the Property, and not on any representation made by the Seller, the named Broker(s) or their agents as to character or quality. . . .
C. Responsibilities to Cure
If any physical defects, or environmental conditions are reported by the inspectors to the Seller within the Inspection Time Period, the Seller shall then have seven (7) calendar days after the receipt of such reports to notify the Buyer in writing that the Seller shall correct or cure any of the defects set forth in such reports. If Seller shall fail to notify Buyer of Seller's agreement to so cure and correct, such failure to so notify shall be deemed to be a refusal by Seller to cure or correct such defects. If Seller shall fail to agree to cure or correct such defects within said seven (7) day period, . . . the Buyer shall then have the right to void this Contract by notifying the Seller in writing within seven (7) calendar days thereafter. If Buyer shall fail to void this Contract within the seven (7) day period, the Buyer shall have waived his right to cancel this Contract and this Contract shall remain in full force, and Seller shall be under no obligation to correct or cure any of the defects set forth in the inspections. If Seller shall agree to correct or cure such defects, all such repair work shall be completed by Seller prior to the closing of title.
23. ENTIRE AGREEMENT; PARTIES LIABLE:
This Agreement contains the entire agreement of the parties. No representations have been made by any of the parties, the Broker(s) or his/her/their agents except as set forth in this Agreement. . . .
Evidence at the bench trial disclosed that plaintiff ordered a home inspection for the premises, which came back "satisfactory," except for, as plaintiff's counsel wrote to defense counsel on February 22, 2005, "evidence of water problems as to the basement." Plaintiff's counsel asked defense counsel to "follow up with sellers as to the nature of the 'water problem' in the basement, and advise as to same." The day after receiving the February 22 letter, defense counsel wrote back to plaintiff's counsel, indicating that he had discussed the letter with his clients, who advised him "that the water stains in the basement had occurred because of unclean gutters which had washed out dirt around the foundation of the house. They have since had a landscaper add dirt and regrade the area and they have extended the downspouts away from the house." Defense counsel asked plaintiff's counsel to "please contact [him] if [he] desire[d] to discuss [the] matter further." After receiving defense counsel's letter, plaintiff did not order an additional inspection of the property or request defendants to take any additional action. Settlement was held on March 24, 2005, when title was transferred to plaintiff. The following month, during heavy rains, the basement walls became wet and at times, over the next two years, water infiltrated into the basement. Plaintiff testified that sometime after she discovered the water problem, she hired someone, whose name she could not remember, to place cement around the perimeter of the house to try to keep the water out. The cement did not cure the problem.
Plaintiff also secured an estimate to waterproof the basement from Vulcan Basement Waterproofing Service at a cost of $6900 to $7000. At trial, Larry Miller, a salesman for Vulcan, testified that it was his opinion that water was seeping through the concrete block and was not the result of the grading around the outside of the house. Miller testified primarily from the report of another employee, who had inspected the house in 2005. Miller did not visit the property until June 2007.
Miller was not an engineer, but a salesperson for the company, working on a commission basis. He had completed two to three weeks of training, dealing with "different situations in basements," conducted by the company's national sales manager. The qualifications of the sales manager were not disclosed. All of Miller's training was "from people on the job . . . from the same company."
Defendants did not testify at the trial, nor did they offer any witnesses. Upon completion of the trial, the court dismissed plaintiff's complaint. The court concluded that defendants had fulfilled their obligations under the contract by notifying plaintiff of what they believed was a drainage problem that caused the water stains. The court reasoned that following that notification, it was plaintiff's obligation under the contract to require defendants to take additional corrective action, but plaintiff did not do so. The judge stated:
Apparently there was no request to reinspect the property. There was no contact again after that to ask the sellers to do anything more than clean out the gutters, do some work around the foundation, add some dirt, re-grade the area, which is a standard way of maybe raising the dirt around the foundation so that the water runs away from the foundation, et cetera.
When a deal is closed, . . . the funds are paid, the money disbursed, and the deed delivered. That closes the obligations of the buyer to the seller to pay anymore or the seller to the buyer to do anything more. There's nothing that I've seen that carries over the seller's obligation in this case months later because they get . . . Mr. Rosenberg's report of October 25th, which was five and a half months after the closing which was . . . essentially it was a sales pitch. That's Mr. Miller's testimony. It was a sales pitch to try and sell their product.
The court rejected the opinion testimony of Larry Miller, essentially concluding that he was not qualified as an expert.
The judge observed:
Mr. Miller was a nice man and he's an expert in his own way in selling the Vulcan Waterproofing systems. I don't know that that would take care of anybody's water problem in the basement.
[W]e don't have an expert here, how do we know that what the plaintiff did on an interim basis, cement around the outside of the building, we don't even know what that involved. . . . Mr. Miller even admitted, with his limited engineering expertise, that that alone could have disturbed the water and made it worse in other parts. I don't even know.
The bottom line in my decision is that the expert testimony that we heard today, . . . is irrelevant to the issue. I look at the obligation contract-wise in this case. And I don't think the sellers, the Amatos, had any additional obligations to do anything more six months after the closing to correct a water issue.
When a buyer buys a property and has an inspection, the buyer gets the inspection and gives it to the seller. The seller decides what it wants to do in response to those things in the inspection report that the buyer brings to the seller's attention. . . .
It's pretty clear . . . that the plaintiffs, buyers, didn't ask the sellers to do anything more than what was represented was done; that is, clean out the gutters real good, re-grade, and . . . add some dirt to the foundation. It . . . wasn't called on for them to put in a waterproofing system or to dig around outside and waterproof the outside of the foundation.
[Defense counsel's] letter . . . actually invites additional discussion if anything more was to be requested in this particular area other than what they said the sellers had done. There was no representation that that was going to cure the problem.
Following the court's decision, in response to plaintiff's counsel's argument that paragraph seventeen of the contract contains an affirmative representation that there were no leaks or seepage with regard to the basement, the court replied:
It's still up to the buyer at the time of the inspection to bring it to the attention of the seller, see what the seller is going to do in response, and then if they're satisfied or not satisfied, decide whether to buy it or not buy it, or buy it only if the seller does certain things.
[The sellers] responded to those issues which you raised in the fashion they did, and invited further discussion of the matter. There was no further discussion of the matter. And there hasn't been any proof that there was water seepage or water leakage, specifically, there was just a water problem.
Our scope of review of a trial court's findings are limited. We decide if the findings reasonably could have been reached on substantial, credible evidence in the record, giving due regard to the judge, as factfinder, to assess credibility. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). A trial court's interpretation of the law, however, is not entitled to our deference. Manalapan Realty LP v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). Here, we find no error in either the trial court's findings of fact or the legal consequences that flow from those findings.
Although plaintiff has not included a copy of her complaint in the appendix, as required by Rule 2:6-1(a)(1)(A), we presume from the arguments counsel made and the proofs submitted at trial that plaintiff's cause of action was grounded in either breach of contract or fraud. Taking the contract claim first, we agree with the trial judge that defendants complied with their contractual obligations.
After being notified by the home inspector that the basement walls showed water stains, defendants informed plaintiff that it was their understanding that the water stains were caused by unclean gutters and inadequate grading. Upon receiving that information, plaintiff did not demand that defendants take additional action to remedy the situation. Plaintiff's failure to do so relieved defendants of any additional obligation with regard to the cause of the water stains. Indeed, had plaintiff demanded that defendants waterproof the basement, and defendants refused, plaintiff's remedy was to cancel the contract, not to close and sue defendants for damages. Once title passed, all warranties and representations made in the contract were extinguished under the doctrine of merger. Caparrelli v. Rolling Greens, Inc., 39 N.J. 585, 590-91 (1963). The contract specifically states, in paragraph seventeen, that defendants did not guarantee the condition of the premises "AFTER the deed and affidavit of title have been delivered to the Buyer at the Closing." Thus, unless plaintiff took action to have the problem cured prior to closing, she was barred from raising that claim after obtaining title.
In his summation before the trial court, plaintiff's counsel appeared to argue that defendants committed fraud in not disclosing an accurate source of the water problem. To establish legal fraud, a plaintiff must show "a material misrepresentation of a presently existing or past fact, made with knowledge of its falsity and with the intention that the other party relied thereon, resulting in reliance by that party to his detriment." Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619, 624 (1981). Equitable fraud requires "(1) a material misrepresentation of a presently existing or past fact; (2) the maker's intent that the other party rely on it; and (3) detrimental reliance by the other party." First Am. Title Ins. Co. v. Lawson, 177 N.J. 125, 136-37 (2003). Here, plaintiff failed to prove that defendants' representation that the water problems were caused by unclean gutters and inadequate grading were not true.
The court rejected Miller's testimony, finding that Vulcan's inspection report, upon which Miller relied, was simply a "sales pitch." The court found that Miller was not qualified to render an opinion as to the cause of the water problems. That finding was supported by the record. Miller was not an engineer; he did not perform the waterproofing work himself; and his only training came from a company sales manager whose qualifications to provide expert training were not disclosed during the trial. Plaintiff did not establish that Miller had the requisite skill, knowledge or training to render an opinion as to the cause of the water infiltration into the basement. Simply put, plaintiff failed to prove that defendants materially misrepresented a presently existing or past fact when they stated that they had been told that the water stains on the basement walls were the result of dirty gutters that washed away the dirt around the house's foundation. Without evidence of a material misrepresentation, plaintiff did not prove fraud. We affirm substantially for the reasons expressed by the trial court.
© 1992-2008 VersusLaw Inc.