Silverstein v. Fisher ( 2016 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
KENNETH L. SILVERSTEIN;
ARLENE K. HARRINGTON; DR.
CHRISTOPHER KOPROWSKI;
and DR. MARY KOPROWSKI,
Plaintiffs,
'V»
A. FISCHER; DONNA
DELAURENTIS; WAYNE MEGILL, JR.
MEGILL HOMES, INC., MEGILL
HOMES, LLC, MEGILL
CONSTRUCTION CO., INC.;
WYNLEIGH DEVELOPMENT CORP.;
WYNLEIGH BUILDERS, INC.;
W VENTURES, INC., dba RE/MAX
ASSOCIATES; and PATTERSON-
SCHWARTZ & ASSOCIATES, INC.,
Defendants.
RIC_HARD A. FISCHER; and DONNA
DELAURENTIS,
Third-Party Plaintiffs,
V.
A-1 INSPECTIONS, LLC, A LIMITED
LIABILITY CORPORATION,
§€é€\./é&/%\J&/é&€%/€é€\»/SS\/退€§%é%/%/€S€\»/§
Third-Party Defendant.
C.A. No. N13C-05-160 FWW
Submitted: February 11, 2016
Decided: May 18, 2016
Upon Defendants’ Joint Motion for Summary Judgment
GRANTED.
_OPINION AND Q_RD,ER
Wi11iam J. Rhodunda, Jr., Esquire and Nicholas G. Kondraschow, Esquire,
Rhodunda & Williams, 1220 N. Market Street, Suite 700, Wilmington, Delaware
19801, Attorneys for Plaintiffs.
Christo'j;;;her H. Lee, Esquire, T§;§*l€¥`i:‘._._ P.r_z.‘+‘a_., B='z%a*x'u;'§;j,?z?erine
1000 "§¥?'=e'$tf St., 10"‘ Floor, Wi'lz_ni;rii'_rg_i;§on, f?fréjia‘i;w`af'_;z'é __~‘I_9`S{31,~_ i'-’-l‘~'.?fo.£iz¢:z;‘_§-‘°=~ for `_Déifé*rzda;nt,
W Ventures, Inc. d/b/a Re/Max Associates.
Seth A. Niederman, Esquire, FoX Rothschi1d, LLP, Citizens Bank Center, 919
Market St., Suite 300, Wilrnington, Delaware 19801, Attorney for Defendants,
Wayne Megill, Jr., Megill Homes, Inc., and Megill Homes, LLC.
Robert K. Beste, Jr., Esquire, Cohen Seglias Pa1las Greenhall & Furrnan, PC, 1007
Orange Street, Suite 1130, Nemours Building, Wilrnington, Delaware 19801,
Attorney for Defendants, Richard A. Fisher and Donna DeLaurentis.
R. Karl Hill, Esquire, Seitz Vanogtrop & Green, PA, 222 Delaware Avenue, Suite
1500, Wilrnington, Delaware 19801, Attorney for Defendant, Patterson-Schwartz
and Associates, lnc.
ON, J.
of the alleged injuries until December l5, 2012 when they received the Cogent
Letter.29 Specifically, the Silversteins argue that the doctrines of "inherently
unknowable injury," fraudulent concealment and equitable tolling toll the statute of
limitations.
IV. STANDARD OF REVIEW
Super. Ct. Civ. R. 56(c) provides that summary judgment is appropriate
where there is "no genuine issue as to any material fact" and "the moving party is
entitled to a judgment as a matter of law." When considering a motion for
summary judgment, the Court’s function is to examine the record to determine
whether genuine issues of material fact exist "but not to decide such issues."30 The
moving party bears the initial burden of demonstrating that the undisputed facts
support its claims or defenses.m If the moving party meets its initial burden, then
the burden shifts to the non-moving party to demonstrate that there are material
issues of fact to be resolved by the ultimate fact-finder.” "It is not enough for the
opposing party merely to assert the existence of such a disputed issue of fact. The
opponent to a motion for summary judgment ‘must do more than simply show that
there is some metaphysical doubt as to material facts."’33 Summary judgment will
29 _;Sil:,=¢s= ls<.»,~,v;@. 1364 6:1,.21.
3° ;§,zaz-z-z;f~':t_&; a:;z'w.zzwlz-Am., Inc., 606 A.zd 96, 99-100 (r)el. 1992).
31 Moore v. Sizemore, 405 A.2d 679, 681 (Del. 1979).
32 Brzoska v. olson, 668 A.zd 1355, 1364 (Del. 1995).
33 Id. (quoting Matsushz`ta Elec. Ina'us. Co. v. Zenz'th Radio Corp., 475 U.S. 574, 586, 106 S. Ct.
1343, 1356, 89 L.Ed.zd 538 (1986)).
11
be granted if, after viewing the record in the light most favorable to the non-
moving party, no genuine issues of material fact exist and the moving party is
entitled to judgment as a matter of law.34 If the record reveals that material facts
are in dispute, or if the factual record has not been developed thoroughly enough to
allow the Court to apply the law to the factual record, then summary judgment is
inappropriate.”
V. DISCUSSION
The Silversteins’ counts in the Third Amended Complaint allege actions for
breach of contract, negligence or fraud.36 Pursuant to 10 Del. C. § 8106, the statute
of limitations for each of the Silversteins’ claims is three years.37 However, the
Court recognizes limited exceptions that toll the statute of limitations. To
34 Merrill, 606 A.zd ar 99-100.
35 see cook v. Czzy ofHarrzngron, 1990 WL 35244, ar *3 (Del. super. Feb. 22, 1990) (“sunmary
judgment will not be granted under any circumstances when the record indicates . . . that it is
desirable to inquire more thoroughly into the facts in order to clarify the application of law to the
circumstances.").
36 Se¢=: slate 22.
”10 nat 1:;:; §_-s~:;06 provides that
[n]o action to recover damages for trespass, no action to regain
possession of personal chattels, no action to recover damages for
the detention of personal chattels, no action to recover a debt not
evidenced by a record or by an instrument under seal, no action
based on a detailed statement of the mutual demands in the nature
of debit and credit between parties arising out of contractual or
fiduciary relations, no action based on a prornise, no action based
on a statute, and no action to recover damages caused by an injury
unaccompanied with force or resulting indirectly from the act of
the defendant shall be brought after the expiration of 3 years from
the accruing of the cause of such action; subject, however, to the
provisions of §§ 8108-8110, 81 19 and 8l27 ofthis title.
12
determine if the statute of limitations is tolled, the Court conducts a three-part test:
first, the Court decides when the cause of action accrued; second, the Court must
assess whether the statute of limitations has been tolled; and third, assuming the
statute has been tolled, the Court must determine when the plaintiff was on inquiry
notice of the cause of action.38
A. The Causes of Action Accrued On or Before July 1, 2008.
"The statute of limitations begins to run when a plaintiff’ s claim accrues
which occurs at the moment of the wrongful act and not when the effects of the act
are felt"39 "
even if the plaintiff is ignorant of the cause of action.""o "The
‘wrongfi,ll act’ is a general concept that varies depending on the nature of the claim
at issue."‘" A claim for breach of contract accrues when the breach occurs.42 The
cause of action for fraud accrues when the fraud is successfully perpetrated.43 The
cause of action for negligence accrues at "the time of the injury."44
38 Wal-Man smres, ma v. A1G Lzfe Ins. Co., 860 A.2d 312 (Del. 2004).
39 Azrporr Bus. cm VLLLP v. sun Nar’l Bank, 2012 wL 1413690, ar *7 (Del. super. Mar. 6,
2012) (citing Sunrise Ventures, LLC v. Rehoboth Canal Ventures, LLC, 2010 WL 363 845, at *6
('Ij§af_trg_;;=. Ji'.¢;;rr 27, z~;.zc)'i§:`:`}»;
4`9' §?iz-'»i;i.‘fci'ffiiz"a°Beeé:?§§£a'£%z_.§"harm. Co. v. Merck & Co., 766 A.2d 442, 450 (Del. 2000).
41 Certainteed Corp. v. Celotex Corp., 2005 WL 217032, at *7 (Del.Ch. Jan. 24, 2005).
42 Nard@ v. Guzdo D€Ascanzs & sons, lnc., 254 A.2d 254, 256 (Del. super. 1969).
43 Van rake v. sam CRM UsA, lnc., 2013 wL 1087583, ar *6 (Del. super. Feb. 15, 2013); see
Puig v. Semz`nole Night Club, LLC, 2011 WL 3275948, at *4 (Del.Ch. Jul. 29, 201 l)(For claims
of fraudulent inducement, the claim accrues at the time the plaintiff entered into the agreement.).
44 Nara'o, 254 A.Zd at 256; see Krahmer v. Christie ’s Inc., 903 A.2d 773, 778 (Del.Ch. 2006)(For
negligent misrepresentation, the claim accrues at the time the misrepresentations were made to
the plaintiff.).
13
Viewing the record in the light most favorable to the Silversteins, the Court
finds that the latest date that the alleged wrongful act could have accrued for each
of the Silversteins’ claims is July l, 2008, when the Silversteins made settlement
on the home. Therefore, to be timely, the Silversteins had to file their Complaint
on or before July l, 201 l, three years after the alleged wrongful act. Because the
Silversteins filed the initial Complaint on May l6, 2013, almost five years after the
alleged wrongful act, the Silversteins’ claims are time-barred unless the
Silversteins can show that a tolling doctrine applies and they were not on inquiry
notice of the claims.
B. Applicability of the Tolling Doctrines.
l. Discovery Rule
"Under the ‘discovery rule’ the statute is tolled where the injury is
‘inherently unknowable and the claimant is blamelessly ignorant of the wrongful
act and the injury complained of."’45 The Silversteins assert that the injury is
"inherently unl854 A.2d
838, 842 (Del. 2004).
46 Pl.’s Resp. Br. at 20.
14
they would have undertaken steps that would have led to the discovery of the
‘injury."’47
Construing the record in the light most favorable to the Silversteins, the
Court finds that nothing in the record indicates that the Silversteins possess any
special knowledge regarding home construction and maintenance. However,
whether that renders the injury "inherently unknowable" to the Silversteins is an
unresolved question of fact for the jury. Similarly, if the injury is "inherently
unl2008 WL 5352063, at * 15 (Del.Ch.
Dec. 23, 2008)(citing In re Dean Witter P ’ship Litig., 1998 WL 442456, at *5(Del.Ch. Jul. l7,
1998)).
15
.49 Pl.’s Resp. Br. at 22-24.
misrepresentations intended to put the plaintiff ‘off the trail of inquiry. . . "’49
Defendants assert that there can be no fraud because the Silversteins had actual
knowledge of the injury prior to executing the settlement documents.s° The record
before the Court is not well-developed regarding whether or not Defendants
engaged in acts of fraud with the intent to "put a plaintiff off the trail of inquiry."
Therefore, the Court cannot fmd, as a matter of law, that the fraudulent
concealment exception does not toll the statute.
3. Equz`table Tollz`ng
The doctrine of equitable tolling "applies when a plaintiff reasonably relies
on the competence and good faith of a fiduciary."sl Plaintiffs argue specifically
that the Silversteins’ real estate agent and the Silversteins’ home inspector were
fiduciaries to the Silversteins and that it was reasonable for the Silversteins to rely
upon their competence and good faith.sz Defendants argue that the equitable
tolling doctrine cannot apply because the Silversteins have made no allegations of
any fiduciary relationships in this matter.”
50 Defs.’ _€’Iip¢.ri'ixz_§g-_Br. at 29.
51 sunrise 'zfezzzzzzas, 2010 WL 363845, ar *6.
52 Pl.’s _izi;e.zp., £1£!2:"_£`.
53 Defs;" fi¥._.péfsi.-¥`-.“r_;gff§r, ?éi$: n. 2.
16
The Court has determined that realtors are fiduciaries to their clients based
upon an agency theory.54 Delaware courts have not addressed whether home
inspectors are fiduciaries to the buyers by whom they are hired to perform a home
inspection. Other courts have considered the question and note that home
inspectors possess a special degree of expertise and are charged with exercising
due care relative to their expertise but hold that home inspectors are not fiduciaries
to the buyer for whom they perform the inspection.ss Therefore, the Court finds
that, as to claims related to the realtors, the doctrine of equitable tolling tolls the
statute of limitations. However, consistent with other courts’ holding and the
general principle that Delaware courts "ha[ve] traditionally been hesitant to expand
the definition of fiduciary relationship, requiring that a ‘special trust in another’ or
a ‘special duty’ exists between parties rising to the level that ‘ [t]he relationship
"’56 the Court declines to impute home inspectors with
connotes a dependence
fiduciary duties to their clients. Therefore, the doctrine does not apply to the
Silversteins’ counts pertaining to the home inspector.
54 See Petenbrink v. Superz'or H0me Builders, Inc., 1999 WL 1223786, at *3 (Del. Super. Nov. 1,
l999)("‘Real estate brokers and salesman are fiduciaries, who are charged with full disclosure of
all material facts to those who repose confidence in them."’(internal citations omitted)); see also
Heller v. Kiernan, 2002 WL 385545, at *3(Del.Ch. Feb. 27, 2002) ("The relationship between a
realtor and customer is not one that ordinarily qualifies as a fiduciary relationship until an
§§ SR£§‘.'§;ri"iz§ci-pal .l‘e;zia_‘_§ijs;€cz.;~;`b§p arises." .
ii’~‘~z-,-S”e'i§ v. -I}&z?i".£`.'?z"£*§;i-Bzzuer Const., Inc., 939 N.E.2d 1067, 1073 (I1l.App. Ct. 2010)(". . .we
refuse to find that the relationship between a home inspector and a home purchaser reaches the
level of a ‘_‘special social relationship". . ."); see also Moreno v. Sanchez, 141 Cal. Rptr. 2d 684,
_,ifz§f¥.l-§?@;_j{il§aI`,Ct.App. 20()`3.;;_1_:£1:§;re:;kno\;s_`fle¢:§r;;iir;z»:~: i_xispe,ctor is not a t`iduciz?\.'r‘-B?i§¥
§§ .'Z_=F:S"£:_‘S'S;:.YF`,__HYJ'OZ WL 3855¢§§;_?§`11;.'*3'§(§Eii§i:iilgf-_§E’i?ee;i‘e'S§z'ng;i-_{rri{"’§.. Inc. v. Steele, 303 _&-.;?§689, 690
(Del.Ch. 1973)).
17
C. The Silversteins were on Inquiry Notice of the Alleged Injury On or
Before July 1, 2008.
Even where a tolling doctrine applies, the statute of limitations is tolled only
until the plaintiff is on inquiry notice of the injury.57 If the Court finds that the
Silversteins were on inquiry notice of the injury prior to three years before the
Complaint was filed, the fact that there are questions of fact regarding which, if
any, tolling doctrines apply is not dispositive. If plaintiffs are on inquiry notice of
the alleged injuries more than three years prior to filing the complaint, Defendants
are entitled to summary judgment as a matter of law.
When a plaintiff "discovers the facts constituting a basis for the cause of
action, or knows facts sufficient ‘to put a person of ordinary intelligence. . .on
inquiry, which, if pursued, would lead to the discovery of such facts,"’ the plaintiff
has inquiry notice of the cause of action.$s "Inquiry notice does not require a
plaintiff to have actual knowledge of a wrong, but simply an objective awareness
57 See Coleman, 854 A.Zd at 842 (citing Becker v. Hamada, Inc,, 455 A.2d 353, 356 (Del.
l982))(Regarding inherently unknowable injuries, "the statute of limitations begins to rtm upon
the discovery of facts "constituting the basis of the cause of action or the existence of facts
sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued,
would lead to the discovery" of such facts.); Winner, 2008 WL 53 52063, at *l5 (citing Dean
Wz`tter, 1998 WL 442456, at *S)(Fraud is concealed "until such time as the plaintiff is put on
inquiry notice."); In re American Intern. Group, Inc., 965 A.2d 763, 812 (Del.Ch. 2009)(For
equitable tolling, the statute of limitations is tolled only until plaintiff "was objectively aware of
the givin`;,g_'_:ri-`S¢+`Yé) the wrong, i.e. , on iz;z€j§zx‘i~r-:'§+°-";'i<'ie°‘£ii‘:';e';?’t`§.
58 ,;§§-°za,~z,iz;m v. _zzz.¢,.<»~,,¢z,<~,»_,=;_@, §3_;:1_11 WL 473 1 120, ._':§I§e.l. sept 28, 201 i)(ciring Waz-Marr
Stores, 860 A.2d at 319).
18
of the facts giving rise to the wrong."59 The Court considers a plaintiff’s objective
awareness by examining whether there were "‘red flag[s]’ that clearly and
unmistakably would have led a prudent person of ordinary intelligence to inquire"
furtheré° and by determining if the plaintiff gained "possession of facts sufficient to
,ei
make him suspicious, or that ought to make him suspicious.’
l. The Silversteins Were Objectz'vely Aware ofFacts Gz'vz`ng Rise to the
Causes ofAction.
In Sunrz'se Ventures, LLC v. Rehoboth Canal Ventures, LLC,62 the plaintiff
argued that the statute of limitations should have been tolled because he was
unaware of environmental issues with the property he had purchased.63 In granting
defendant’s motion for summary judgment, the Court of Chancery determined that
the plaintiff had received a email that referenced a specific environmental study
performed on the property and held that plaintiff was on inquiry notice of potential
environmental issues.64 The Court held that the plaintiff cannot "claim the
protection of the tolling doctrines" because the plaintiff did not request the
5.9 E.I. duPont de Nemours and C0. v. Medtronic Vascular, Inc., 2013 WL 261415, at *ll (Del.
_i§t_zpez_j, Jan. 29, 2013).
§§ ~r`fraz*r».».man, 854 A.2d ar 842
61 sunrise Vaaruras, 2010 WL 363845, ar *6.
62 2010 WL 363845 (Del. ch. Jaa. 27, 2010).
63 sunrise Vanrrrras, 2010 WL 363845, ar *6.
64 lar ar *7.
19
environmental study or perform his own inspection despite having the right to do
both.“
Like in Sunrise Ventures, the Silversteins had documents that referenced
potential stucco issues and that a more intrusive report, the Cogent Letter, had been
prepared on the home. Lil1998 WL 442456(De1.ch. Ju1. 17, 1998).
66 penn Wz¢¢er, 1998 wL 442456, ar *7-8.
69 Ia'. at *8.
20
I. INTRODUCTION
Before the Court is Defendants’ Joint Motion for Summary Judgment to
dismiss claims alleged by Plaintiffs Arlene Harrington and Kenneth SilVerstein
("Silversteins") for the sale of a stucco home that needed extensive repairs after the
close of the transaction.l Defendants assert that the statute of limitations on the
Silversteins’ claims had run before the Silversteins f1led their Complaint. The
Silversteins claim that tolling doctrines preclude dismissal of their counts.
Applying Super. Ct. Civ. R. 56 to the Defendants’ Joint Motion for
Summary Judgment, the Court finds that the undisputed facts show that the statute
of limitations for the Silversteins’ claims began to run on July l, 2008 because the
Silversteins were on inquiry notice of their claims on or before that date. The
Court further finds that the Silversteins’ Complaint, filed on May l6, 2013, is time-
barred. Therefore, Defendants’ Joint Motion for Summary Judgment as to CountI
through and including Count XX in the Third Amended Complaint is GRANTED.
II. FACTUAL AND PROCEDURAL CONTEXT
Richard A. Fischer and Donna DeLaurentis ("Fischers"), the original owners
of the home located at l23 East Wynleigh Drive Centerville, Delaware l9807,
entered into a contract for sale of the home to William A. Ward and Suzanne Ward
1 The claims alleged by Plaintiffs Christopher Koprowski and Dr. Mary Koprowski are not subject to Defendants’
Joi11t Motion for Summary Judgment.
3
actually look at the cold, hard figures provided to them" when the information is
readily available and dismissed the investors’ claims as time-barred.m
Although the Silversteins assert that they reasonably relied on the
competence and skill of professionals to act on their behalf, like in Dean Witter,
the information regarding the condition of the home was readily available to the
Silversteins. Therefore, like in Dean Witter, it is unreasonable for the Silversteins
to blindly rely on others. There were several "red flags" that should have raised
the Silversteins’ suspicions regarding the condition of the home. lt is unmistakably
clear that information contained in the amended Seller’s Disclosure, information
contained in the Preferred Report and email communication between the
Silversteins and their realtor should have made a prudent person of ordinary
intelligence inquire further into the condition of the home.
The amended Seller’s Disclosure indicates that the there is past or present
water leakage in the house;" and that the sellers are aware of problems affecting
the exterior and interior walls.n The amended Seller’s Disclosure also contains a
handwritten note that states that "possible problems with stucco are being
evaluated for leaking and will be repaired if necessary."73 Mrs. Harrington
’° ld. ar *s-9.
71 Seller’s Disclosure at 2.
72 Id. at 4.
73 Id. at 5.
21
acknowledged that she received and read the Sellers’ Disclosure prior to
purchasing the home."
Additionally, the Preferred Report indicates, in part, that there were several
"maj or deficiencies." The summary section of the Report states that
In addition to the home inspection, an additional more
intrusive evaluation was being preformed (sic) by Cogent
Building Diagnostics to determine the presence of
potential moisture build up behind the stucco or stone.
The home inspection evaluation revealed details which
would indicate moisture intrusion onto the sheathing or
into the basement on the band board. These observations
were continued by Cogent. The boundary between the
stucco and the stone does not appear to have been
installed correctly and is wicking moisture back into the
sheathing area. The front right corner where the garage
meets the house is leaking into the basement and causing
mold build up on the band board. The front unfinished
sections of the basement show moisture penetration along
this wall. lt is recommended that Cogent do an intrusive
evaluation to determine the extent and repair needed for
these issues.75
The same notation appears on page six of the Report.76 The Preferred Report
indicates, with regard to the roof covering, "[t]he front right bedroom. . .shows
signs of flashing or roof leaks in the dormer area. . .The right rear family room
shows signs of a past leak. . .The stucco and gutter in this area show moisture leaks
and minor damage. Have a licensed contractor evaluate and repair all issues. . ."77
74 See supra note 14.
75 Preferred Report at Sumrnary 1.
76 Preferred Report at 6.
77 Preferred Report at Sumrnary 2.
22
Mrs. Harrington acknowledged she received and read the Preferred Report prior to
settlement.78 Dr. Silverstein also acknowledged that he received the Preferred
Report and initialed each page prior to settlement.79
Additionally, in an email from the Silversteins’ realtor to Mrs. Harrington
and Dr. Silverstein dated May 9, 2008, the realtor writes, in part:
...The sellers are meeting with [the original builder]
today to loook (sic) over the stucco issues that were
brought up by the previous home inspection. I told [the
Fischers’ realtor] we would like to be involved and kept
in the look with anything that goes on with this issue. . .I
expressed our concerns that we don’t want anything
sealed up and repaired without us having a chance to
have our inspections done and also we would like those
areas to be accessable (sic) to our inspector. . .80
Dr. Silverstein also admitted that he was aware of stucco issues with the home
before making settlement on the home.gl Although both Mrs. Harrington and Dr.
Silverstein assert they had not received the Cogent Report that details the extent of
the stucco issues until early 2013, a reasonably prudent person would have
recognized "red flags" prior to that date. The Court draws all reasonable
inferences in favor of the Silversteins and finds that the Silversteins were on
inquiry notice, if not actual notice, of the stucco problems at or before July l, 2008,
the date they made settlement on the home.
78 See supra note 15 .
79 See ia'.
8° May 9, 2003 Emaii, D.1. 192, EX. M at 1.
81 See supra note 16.
23
2. The Silversteins Would Have Dz'scovered the Stucco Issues by the
Exercz'se of Reasonable Dz`lz'gence.
In addition to finding that the Silversteins were on inquiry notice of the
stucco issues, to grant summary judgment the Court must also find that the
Silversteins would have discovered the stucco issues had they exercised reasonable
diligence.sz In Sunrise Ventures, the Court of Chancery held that the plaintiff who
was on inquiry notice of his claims for an environmental injury because an email
he received referenced an environmental study, "by the exercise of reasonable
diligence," could have discovered the alleged environmental injury.83 The Court
reasoned that had the plaintiff requested the environmental study or performed his
own environmental study, the plaintif “could have easily discovered the problems
[the environmental study] identifies about which [plaintiff] now complains."M
Similarly, the Silversteins were on inquiry notice of the stucco problems
because of the information contained in the Seller’s Disclosure and Preferred
Report that the Silversteins acknowledged they had received prior to settlement.
The Preferred Report specifically references the Cogent Letter and states, in part,
...an additional more intrusive evaluation was being
preformed (sic) by Cogent Building Diagnostics to
determine the presence of potential moisture build up
behind the stucco or stone. The home inspection
evaluation revealed details which would indicate
82 sunrise Venwres, 2010 wL 363345, at *7.
83
84
24
moisture intrusion onto the sheathing or into the
basement on the band board. These observations were
confirmed by Cogent. . .It is recommended that Cogent do
an intrusive evaluation to determine the extent and repair
needed for these issues.g§
In the exercise of reasonable judgment, the Silversteins should have inquired
further into the stucco issues and requested the Cogent Report. Furthermore, in the
exercise of reasonable judgment, the Silversteins should have investigated the
issues identified in the A-l inspection including reports of various areas of water
damage in the home a recommendation that "an obtrusive inspection may be
required" to identify the underlying problem.86
The Court finds, faced with all of these "red flags," it was unreasonable for
the Silversteins to rely on the assurances of the Fischers that repairs had been
completed.87 Drawing all reasonable inferences in favor of the Silversteins, at the
lastest, the statute of limitations began to run on July l, 2008 and the action as it
relates to the Silversteins is time-barred. Therefore, summary judgment in favor of
Defendants is appropriate for Count I through and including Count XX of the
Third Amended Complaint.
85 Preferred Report at summary l.
86 A-i Report ar 3.
87 See mfg-rita note 19.
25
VI. CONCLUSION
The Court finds that the undisputed facts show that the statute of limitations
for the Silversteins’ claims began to run on July 1, 2008 because the Silversteins
were on inquiry notice of their claims on or before that date. The Court further
finds that the Silversteins’ Complaint, filed on May l6, 2013, is time-barred.
Therefore, Defendants’ Joint Motion for Summary Judgment as to Count I through
and including Count XX in the Third Amended Complaint is GRANT]A£D.
IT IS SO ORBERED.
26
("Wards") in April 2008.2 The Wards hired Preferred Inspections, Inc.
("Preferred") to complete a home inspection. A Preferred representative inspected
the home and issued a report on April 14, 2008 ("Preferred Report").3
A. The Preferred Report
The Preferred Report shows that the inspector found several "maj or
deficiencies" with the home. The first page of the summary of the Preferred
Report contains the following:
In addition to the home inspection, an additional more
intrusive evaluation was being preformed [sic] by Cogent
Building Diagnostics [("Cogent")] to determine the presence
of potential moisture build up behind the stucco or stone.
The home inspection evaluation revealed details which
would indicate moisture intrusion onto the sheathing or into
the basement on the band board. These observations were
confirmed by Cogent. The boundary between the stucco and
the stone does not appear to have been installed correctly
and is wicking moisture back into the sheathing area. The
front right comer where the garage meets the house is
leaking into the basement and causing mold build up on the
band board. The front unfinished sections of the basement
show moisture penetration along this wall. It is
rec§`;é_»ij:i_f‘zfi"?e»-,_ifided {_Tfijz§ent do an j;i‘ii“t`*i"`t_isfive ef;éfalliz..*“=i~_i;_i.on to
detemii;ri_;e' the e'§te_»i:r.`t. repair needed fur these °i?;<.;_sri~es."
The same notation appears on the sixth page of the Preferred Report.s The
Preferred Report indicates, with regard to the roof covering, "[t]he front right
2 Ward Sale Contract, D.I. 192, Ex. A at 8.
3 Preferred Reporc, D.i. 192,13><. c.
4 Id. at Preferred Report Surnmary 1.
5 Id. at Preferred Report 6.
bedroom. . .shows signs of flashing or roof leaks in the dormer area. . .The right rear
family room shows signs of a past leak. . .The stucco and gutter in this area show
moisture leaks and minor damage. Have a licensed contractor evaluate and repair
all issues. . ."6
B. The Cogent Letter
A representative from Cogent also inspected the home. The letter addressed
to the Wards from Cogent ("Cogent Letter") shows that on April 23, 2008, the
Cogent representative conducted a "[p]hase I screening review of the [house] for
indications of possible water damage. . ."7 The Cogent Letter indicated that there
were a "limited number of areas that have likely become water damaged associated
with the stucco and stone veneer."s Additionally, the Cogent Letter concluded that
"[a] limited number of localized areas have likely experienced water damage under
the stucco and stone veneers based on the non-invasive evaluation performed at the
house."g In the Letter, the representative recommended that the Wards hire a
professional to "[c]onduct [an] invasive evaluation of suspected water damaged
areas to establish the construction features that allowed water damage to occur, the
extent of damage and support the preparation of a repair plan. These evaluation
6 Id. at Preferred Report Summary 2.
7 cogent Lercer, D.I. 192, Ex. D ar 1.
3 1¢1. at 4.
91¢1. ar 5.
areas should include stucco areas with dark staining, areas beneath the stone
veneer.. ._."10
C. Fischers Amend the Seller’s Disclosure
F or reasons immaterial to this Motion, the Wards did not purchase the home
and the Fischers relisted the home for sale. The Fischers received the Preferred
Report and Cogent Letter prior to relisting the home for sale.u The Fischers then
amended the Seller’s Disclosure.lz The Seller’s Disclosure indicates that the
Fischers checked the box labeled "yes" to the questions "[i]s there any past or
present water leakage in the house?" and "[a]re [sellers] aware of any problems
affecting ... Exterior and interior Walls?"B A handwritten note discloses that
"possible problems with stucco are being evaluated for leaking and will be repaired
if necessary."l"
_w m __ _.
“ see D@Laurenris Dep., D.I. 175,13><. D ar 30; 34 - 31; 9;
Q: But you do recall reading [the Cogent and Preferred] reports?
A: Exactly, yes.
Q: And you read them at the time that you received them?
A: I believe so.
Q: A:z<§. yauiirr§_ii.z.:a_t'ed ea#:i§i~?_r@ fil; -iizi;nk, fiz;;a_i; gear tv_~::_-:e?i-.=,»rr, D.I. 192, Ex. R. ar 3.
the Fischers’ assurances that the Fischers would fix all stucco problems.zo The
Silversteins made settlement on the home on July 1, 2008.21
E. The Silversteins’ Complaint
The Silversteins and other plaintiffs, Christopher Koprowski and Dr. Mary
Koprowski, filed the initial Complaint on May 16, 2013.22 Of the twenty-two
counts in the Third Amended Complaint, the first twenty pertain to the
Silversteins’ claims.” On September 30, 2015, Defendants filed their Joint Motion
20 See Harrington Dep., at l01:8 - l2:
Q: Did you discuss [major deficiencies identified in the Preferred
Report] with the Realtor?
A: I believe that all of these major deficiencies that are listed here
were going to be looked into, and, like l said, addressed by the
sel1ers, and everything would be resolved.;
Silverstein Dep., at 47:21 - 48:3:
Q: Why weren’t you concerned [about water issues with the
home]?
A: Because I was assured they were being addressed and would be
resolved by the time of closing.
Q: Who assured you of that?
A: The seller through their signature on the addendum on the
contract.
21 Pl.’s Resp. Br., D.I. 192, at 14.
22
D.I. 1.
23 See Third Am. Compl., D.I. l66: Count I: Breach of Contract (Silversteins against Fischers);
Count II: Breach of` the implied Covenant of Good Faith and Fair Dealing (Silversteins against
Fischers); Count III: Negligence (Silversteins against Fischers); Count IV: Negligent Provision
of Information/§SZZ of the Restatement (Second) of Torts (Silversteins against Fischers); Count
V: Fraudulent Misrepresentation (Silversteins against Fischers); Count VI: Negligent Inspection
(Silversteins against Wayne Megill, Jr. and/or Megill Homes); Count VII: Negligence
(Silversteins against Wayne Megill, Jr. and/or Megill Homes); Count VII: Negligent Provision of
Information/§SZZ of the Restatement (Second) of Torts (Silversteins against Wayne Megill, Jr.
and/or Megill Homes); Count IX: Fraudulent Misrepresentation (Silversteins against Wayne
Megill, Jr. and/or Megill Homes); Count X: Consumer Fraud (Silversteins against Wayne
9
for Summary Judgment regarding only the Silversteins’ Counts.24 On October 30,
2015, Plaintiffs filed their response in opposition to Defendants’ Joint Motion.”
Defendants filed a reply brief on November 20, 2015.26 The parties appeared
before the Court for oral argument on the Motion on February ll, 20l6.
III. THE PARTIES’ CONTENTIONS
Defendants argue that the Silversteins’ claims are barred by the statute of
limitations. Defendants assert that all of the Silversteins’ claims are subject to a
three year statute of limitations that expired on July l, 2011.27 Defendants assert
that the statute of limitations was not tolled because the Silversteins were on
inquiry notice of the alleged injuries before they made settlement on the home.z$
The Silversteins argue that there are genuine issues of material fact that
preclude granting summary judgment. The Silversteins assert that tolling doctrines
extend the statute of limitations because the Silversteins were not on inquiry notice
Megill, Jr. and/or Megill Homes); Count XI: Negligent Misrepresentation - Consumer Fraud Act
(Silversteins against Wayne Megi1l, Jr. and/or Megill Homes); Count XII: Negligent
Construction (Silversteins against the Builder Defendants); Count XIII: Breach of Implied
Warranty of Good Quality and Workmanship (Silversteins against the Builder Defendants);
Count XIV: Consumer Fraud (Silversteins against the Builder Defendants); Count XV:
Negligence (Silversteins against RE/MAX); Count XVI: Negligent Pr0vision of
Information/§SZZ of the Restatement (Second) of Torts (Silversteins against RE/MAX); Count
XVII: Fraudulent Misrepresentation (Silversteins against RE/MAX); Count XVII: Consumer
Fraud (Silversteins against RE/MAX); Count XIX: Negligent Misrepresentation - Consumer
Fraud Act (Silversteins against RE/MAX); Count XX: Negligence (Silversteins against
Patterson-Schwartz).
24 D.I. 175.
25 D.I. 192.
26 D.I. 196.
22 Defs.’ opening Br., D.I. 175, ar 22.
2a Id_
10