Thread: Lying Seller Found Liable for Hiding Mold

Sent to me from Rory Hernandez of InspectPros in Camarillo, CA:


After a bench trial, a judge in New Haven, Connecticut ruled that the seller of a house that had obvious, visible mold damage - black mold stains in the utility room and water stained and rotted wood inside - had intentionally concealed the existence of this problem, and was liable to the buyers for the cost to prevent further water intrusion, the cost to repair the damage caused by past water intrusion, and $25,000 for emotional distress. The case is Camerone v. Phillips, 2007 WL 241258, (Conn. Super. Jan. 17, 2007), The award of emotional distress damages was later vacated. Camarone v. Philips, WL 2081330 (Conn. Super. April 17, 2007).

The plaintiffs purchased a home in North Haven, Connecticut from the sellers in 2003. Upon moving in, they immediately noticed severe water seepage in the lower level of the house, and brought suit against the sellers for failing to disclose the problems. Sellers argued that the buyers had hired a home inspector, and relied upon his inspection, and proceeded to closing, despite the fact that the inspection noted several potential trouble spots. The court specifically found that the seller was not truthful, and based its findings largely on discrepancies between the MLS description and the seller’s testimony. For example, the MLS listing described the home as “mint condition” and “like new”. New walls, new carpeting and new paint were highlighted. At trial, however, the seller testified that the items were not all new, in fact some of the items had been installed in 1999. The seller testified that he never saw anything that indicated that the home was subject to water seepage. The court stated in its opinion that it did not believe him.

The court specifically found that the seller could not have been unaware of the serious water problems and resulting mold throughout the house. Carpet which had been installed just before the sale was soaking wet when lifted. There was black mold in the utility closet, obscured by boxes and storage items. Wood support beams were visibly stained and rotted through, in areas where sheet rock was missing from the walls, so the seller could not have missed it. The evidence appears to have been overwhelming that the house was in terrible condition.. The court did not discuss the contents of the home inspector’s report. It appears that the defendant’s deception and untruthfulness was hugely significant and overcame any argument that the home inspector should have noted these deficiencies. The judge specifically found that the seller/defendant’s conduct was “outrageous” and “intentional” and that his actions exceeded “all bounds usually tolerated by decent society.”

The buyer was awarded compensatory damages of $96,282 to compensate for the cost of waterproofing the house, repairing the damage and remediating the mold problem. The court initially awarded $25,000 in damages for emotional distress, but vacated that order four months later when it was pointed out that the Plaintiff had not introduced any evidence of her emotional distress. The court found that it was “unduly swayed” by the photographic evidence, and by the Plaintiffs emotional state when she testified.

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I would imagine the HI sidestepped it by reporting what he saw and disclaiming inaccessible areas. Whether the buyer chose to heed his warnings is another matter.

It is interesting that the judge found the seller completely liable and awarded damages for obvious defects that were not hidden. We don't know if the HI reported the structural damage, wet carpet, mold, etc. but, according to the article:

. . . the inspection noted several potential trouble spots.

The article also stated:

The court specifically found that the seller could not have been unaware of the serious water problems and resulting mold throughout the house. Carpet which had been installed just before the sale was soaking wet when lifted. There was black mold in the utility closet, obscured by boxes and storage items. Wood support beams were visibly stained and rotted through, in areas where sheet rock was missing from the walls, so the seller could not have missed it.

And, likewise, the buyer could not have missed it. The buyer also could not have missed the mold in the utility closet after the closet was emptied. The buyer did a walk-through inspection before closing, didn't they? If they did not they should bear the blame for that.

Something is fishy here. This judge is putting the entire burden on the seller and none on the buyer. The judge even got a little carried away by awarding damages for emotional distress without any evidence. Sounds to me like the judge is not completely unbiased in this case.

In my area 'walk-throughs' with the house vacant are virtually unheard of. I think it's a great idea but in 8 years I've never heard of any reference to one... I'd think if they were being done I'd get a call or two

Is this a regional thing? Are these standard in some areas?

Come on now! A seller lying? Can they do that?