Opinion
08060578.
Decided August 22, 2008.
Ann Marie Spinney, Plaintiff, Pro Se.
Amy Mirabella, Defendant, Pro Se.
The parties entered into a Purchase and Sale Contract for Residential Real Estate, dated October 29, 2007. The plaintiff/buyer contracted to purchase property owned by the defendant/seller at 3 Ellison Street in the City of Rochester. The closing took place on November 30, 2007. Subsequent to the closing the defendant relocated to the Town of Webster. The plaintiff claims that she contracted for a 150 ampere electric system.
Subsequent to the execution of the contract the defendant made modifications to the electric system, wherein the 150 ampere existing main circuit panel box was replaced with a 100 ampere main circuit panel box, so that it matched the 100 ampere main service line. At closing the parties agreed that buyer's attorney would withhold Five Hundred Dollars ($500.00) in escrow to cover the upgrade of the main electric service line. Subsequent to the closing the plaintiff discovered that the electric system in the residence in question, consisted of a 100 ampere circuit panel box and a 100 ampere service line from the utility pole to the home. The plaintiff maintains in her action that she contracted for a 150 ampere system and is suing for the cost to upgrade said system. The defendant filed a counterclaim alleging that she is entitled to the Five Hundred Dollars ($500.00) held in escrow, since she made modifications to the system, so that the capacity of the main circuit panel box and the main electric line would be the same, namely 100 amperes.
Findings of Fact
The Court makes the following findings of fact:
1. The parties entered into a standard Real Estate Purchase and Sale Agreement commonly used in the County of Monroe, dated October 29, 2007;
2. The defendant provided a Property Condition Disclosure Statement executed by the defendant on September 12, 2007 and which was signed by the plaintiff on October 28, 2007;
3. Item 29 of the Property Condition Disclosure Statement, relative to the issue of the amperage of the electrical service, indicated that same was 150 amps;
4. The parties executed a Buyer's Notice of Conditional Removal of Property Condition Contingencies, dated October 31, 2007, which stated in pertinent part as follows: "Electrical wiring to home is to [sic] small and needs replacement";
5. Said statement indicates that "Seller agrees to the above conditions";
6. Plaintiff's attorney issued an approval letter, dated November 5, 2007, which stated in pertinent part that "Seller will upgrade electric service from the utility pole to the house. . . .";
7. Said approval letter required that the seller ". . . sign below acknowledging this request";
8. No evidence was presented indicating that the seller agreed to said terms;
9. The defendant did not upgrade the main service line, which ran from the house to the utility pole from 100 amperes to 150 amperes;
10. The defendant replaced the existing 150 ampere main service circuit panel box with a 100 ampere main service circuit panel box, so that same matched the 100 ampere main service line running from the house to the utility pole;
11. At the time of the closing both the main circuit panel box and the main service line had a capacity of 100 amperes;
12. The attorney for the buyer/plaintiff retained Five Hundred Dollars ($500.00) in escrow at the closing to insure that the system in question would be upgraded subsequent to the closing;
13. The property was inspected after the closing, which resulted in the discovery that both the main electrical service circuit panel box and the main service line had a capacity of 100 amperes;
14. Paragraph 13 of the Purchase and Sale Contract indicated that "The buyer agrees to purchase the property and any items included in the purchase AS IS. . .";
15. Paragraph 19 of the Purchase and Sale Contract stated that "This contract when signed by both Buyer and Seller will be the record of the complete agreement between Buyer and Seller concerning the purchase and sale of the property. No oral agreements or promises will bebinding . Seller's representations in this contract shall not survive after closing."
Issues Presented
Does the inaccuracy of Property Condition Disclosure Statement provide the plaintiff with a basis for a cause of action?
Did the Buyer's Notice of Conditional Removal of Property Condition Contingencies abrogate the "AS IS" provision of the Purchase and Sale Contract?
Did the Merger Clause of the Purchase and Sale Contract extinguish any right of theplaintiff to any damages based on the failure of the defendant to update the electric system to150 amperes?
Did the plaintiff obtain the benefit of her bargain?
Legal Discussion A. Does the inaccuracy of Property Condition Disclosure Statement provide the plaintiff with a basis for a cause of action?
The Property Condition Disclosure Statement, which was attached to the contract as required by Real Property Law Section 462, implied that the entire electrical system had a capacity of 150 amperes. The fact that same was not the case did not in and of itself require the defendant to modify the electric system accordingly. "Unlike consumer protection legislation found in the General Business Law which gives a right of action either to the consumer or the attorney general, this Act provides no such specific right of action to the purchaser for the breach of the Disclosure Form." Malach v.Chuang (Civ.Ct. City of NY, 2002) 194 Misc 2d 651,654 754 NYS2d 835, 838. Thus the plaintiff cannot rely on the representations relative to the electrical system as set out in the Property Condition Disclosure Statement for purposes of seeking relief herein.
B. Did the Buyer's Notice of Conditional Removal of Property Condition
Contingencies abrogate the "AS IS" provision of the Purchase and Sale Contract? The the notice in question, which was signed by both parties was an addendum to the contract. It stated in pertinent part "Electrical wiring to home is to [sic] small needs replacement." However, no specifics relative to increasing the amperage are set out in the addendum. One is left to wonder as to what was in fact agreed to by the parties. No help is provided by the buyer's attorney approval letter, which conditions approval of the contract upon seller's assent to the condition, that the seller will "upgrade electric service from the utility pole to the house". Also, no written proof was provided that seller/defendant agreed to said condition. Since all agreements involving real property must be in writing as required by the Stature of Frauds as codified in General Obligations Law Section 5-701(a)(10), and there is no writing specifically setting forth the requirement that the main service line be upgraded from 100 amperes to 150 amperes, the Court must, at least initially return to the "AS IS" provision.
The Court next turns to the " Parol Evidence Rule"as codified by General Obligations Law Section 15-301(1), which states as follows:
"A written agreement or other written instrument which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or his agent."
In other words, litigants are normally prohibited from entering evidence about the agreement of the parties that is not found within the four corners of the written agreement. However, the instant written agreement is not completely clear as to the issue of the electric system found within the residence in question. "Because the agreement was not complete, clear and unambiguous on its face, the parol evidence rule would not bar extrinsic proof as to the entire purported agreement. ( Levy v.Keslow, 213 AD2d 276, 624 NYS2d 132)." Homayouni v. Paribas (App.Div. 1st Dept. 1997) 241 AD2d 375,377, 660 NYS2d 413,414. Thus the court herein must permit parol evidence to explain the agreement of the parties. The parol evidence consisting of the buyer's attorney's approval letter and the testimony of the parties in court, would indicate that both parties initially agreed that the 100 ampere main electric service line should be replaced by a 150 ampere service line.
C. Did the Merger Clause of the Purchase and Sale Contract extinguish any right of the plaintiff to any damages based on the failure of the defendant to update the electric system to 150 amperes?
The merger clause of the purchase and sale contract stated that "Seller's representations in this contract shall not survive the closing." It is well settled law that "Virtually all property condition representations under an as is' contract with a standard merger' clause, do not survive delivery of the deed and are not actionable in New York. Bishop v. Graziano (2005) 10 Misc 3d 342,345, 804 NYS2d 236, 239. However, in this case the parties agreed to an escrow of Five Hundred Dollars ($500.00) to be withheld by buyer's attorney to compensate the buyer if the main electric service line was not upgraded to 150 amperes.Thus, the parties agreed to modify the merger clause, so that the duty to upgrade the electric system would survive the closing. D. Did the plaintiff obtain the benefit of her bargain?
The plaintiff has proven by a preponderance of the evidence, that the agreement she entered into with the defendant called for the installation of a main service line running from the house to the utility pole with a 150 amperage capacity to match the existing main circuit circuit panel box which had a 150 amperage capacity. Instead, the defendant testified that she had the original main circuit panel box, which had a capacity of 150 amperages replaced with a 100 amperage capacity main circuit panel box. Defendant testified that to upgrade the main service line would be cost prohibitive and that downgrading the main circuit panel box from 150 amperages to one with a 100 amperage capacity, so that it matched the amperage apacity of the main service line that connected the house with utility pole, made the entire system safer. Nevertheless, this was not the agreement of the parties. In fact, the evidence indicates that the plaintiff was not aware at the "walk through" that the system had been downgraded to a 100 amperage main circuit panel box by the defendant. In any event, the parties agreed at said "walk through" to the Five Hundred Dollar ($500.00) escrow to cover the cost of compliance with the terms of the contract. It would not be substantial justice to restrict the plaintiff's damages to the amount in escrow, since she was not fully aware of the actual condition of the electric system of the house at the time of the closing.
Conclusion
The plaintiff entered three estimates into evidence at the small claims hearing, i.e. $1,335.00, $1,580.00 and $1,930.00.There is no proof as to what would be the most reasonable of three estimates. However, in small claims matters the court must apply the standard of substantial justice. See Uniform Justice Court Act, Section. 1804. Admittedly, the "substantial justice" standard can be somewhat subjective. "Section 1804 of the Uniform Justice Court Act contains the basic standard for determining small claims. The court is directed to do substantial justice' . . . according to the rules of substantive law'. This is a fluid criterion, and sometimes substantial justice is found by turning the judicial face slightly away from the technical rule of substantive law." Uniform Justice Court Act, Section. 1804, Siegel Practice Commentaries, 1989 Main Volume.
As a result, in the spirit of providing substantial justice to both sides, without allowing for unjust enrichment, the plaintiff is hereby entitled to a judgment equal to the amount of the lowest estimate, to wit: $1,335.00. The counterclaim of the defendant is hereby dismissed for the reasons set out herein. This constitutes the decision and order of this court.
If the defendant releases the Five Hundred Dollars ($500.00) held in escrow by plaintiff's attorney to the plaintiff, then the amount of damages awarded herein shall be adjusted accordingly.