Opinion
No. CV 99-0071359
January 21, 2004
MEMORANDUM OF DECISION
Introduction
The Plaintiffs, Paul A. Wilson and Candy A. Wilson, bring this action in four counts against the Defendant, Kevin L. Kiss, Administrator of the estate of Norman Kiss. In the First Count of the Complaint the Plaintiffs claim breach of contract. The Plaintiffs claim that on or about October 19, 1996 they entered into an agreement with Norman Kiss ("the Defendant") for the purchase of premises at 1283 North River Road in Coventry, Connecticut. The Plaintiffs claim that the conveyance was an illegal subdivision and that in August 1997 they discovered problems with the leaching fields and septic system and that as a result of the illegal subdivision the septic system was located partially on premises abutting the subject property. The Plaintiffs claim they have been forced to relocate the septic system and leaching field. In the Second Count the Plaintiffs claim fraud in that the Defendant executed a Residential Property Condition Disclosure Report in accordance with General Statutes § 20-327b and the Defendant deliberately failed to disclose that he had shut down a portion of the prior septic system thereby limiting its capacity. In the Third Count the Plaintiffs claim that the Defendant executed an owner's affidavit for the purpose of the issuance of title insurance and that the affidavit indicated that he did not violate any restrictions regulating the use of his property or zoning or land use laws and that none of the property's structures encroached on any adjoining property. The Plaintiffs claim that relying on the representations set forth in die affidavit they purchased the property. In the Fourth Count the Plaintiffs claim the Defendant, pursuant to the Residential Property Condition Disclosure Report, failed to disclose that the chimney of the house was unsafe and defective and that he did not have a building permit to construct the chimney.
The Defendant appeared through counsel and filed an answer.
Trial on this matter was held on September 24, 2003. At that time the court heard testimony from the Plaintiff, Candy A. Wilson; Jeffrey Polhemus, the Sanitarian for Coventry; and Robert McShane, a chimney cleaner and repairer; and received fifteen exhibits.
Findings of Facts
Certain facts alleged by the Plaintiffs in the Complaint have been admitted by the Defendant. The Defendant admits that on or about October 19, 1996, the Plaintiffs, Paul A. Wilson and Candy A. Wilson, entered into a written agreement with the Defendant, Norman P. Kiss, for the purchase of the premises known as 1283 North River Road, Coventry, Connecticut. The Defendant also admits that on November 26, 1996 a closing was held to effectuate the sale of the premises and a warranty deed was executed by the Defendant which deed was recorded on November 27, 1996 in Volume 575, Page 133 of the Coventry Land Records. At trial the Defendant also admitted that part of the septic system was located not on the property but on an adjoining piece.
Based upon a preponderance of the evidence the court finds the following additional facts. The subject property was listed for sale without the barn on one acre or with the barn and four acres. The Plaintiffs desired to purchase the house with one acre. They entered into an agreement with Norman Kiss to purchase the property for $99,900 subject to the buyer securing completion of a satisfactory water test and septic inspection report. In the septic system addendum attached to the agreement the seller stated that "to the best of his knowledge and belief, the entire septic system, including the leaching fields associated therewith, is functioning properly and is located within the boundaries of the property." The addendum also provided that the seller was to locate and expose the septic tank covers for pumping and inspection purposes. In the Residential Property Condition Disclosure Report also attached to the agreement the seller noted no problems with the sewage system or the chimney. That report also states that "[a]ny representations made by the seller on this report shall not constitute a warranty to the buyer" and "[t]his residential disclosure report is not a substitute for inspections, tests, and other methods of determining the physical condition of the property." Prior to the closing the Plaintiffs did have the septic system inspected by Skip's, Inc. The tank was pumped and Skip's report indicates that the tank, baffles and inlet pipes are good and the fields are taking water from the tank. From the report, the Plaintiffs believed the septic system was operating properly. Nothing in the report indicates that there is any problem with the septic system. The Plaintiffs provided the report to their mortgage lender in order to comply with its request that they provide a certification from a qualified person that the septic system is adequate and functioning properly. In addition, a water analyst found that the water supply provided satisfactory potable water. Prior to the closing the Plaintiffs also had a home inspection performed by the Home Analyst, Inc. The inspector inspected the chimney by climbing on the roof. His report indicates that the bricks and mortar of the chimney look in good condition and the flue looks clean and in satisfactory condition. Viewing the flue from below, the inspector found it to be in good condition.
The Plaintiff, Candy Wilson, walled the property with Norman Kiss who described where the lines of the property were and where the septic system was located. However the lines of the lot described by him were not the same as those set forth in a survey or the deed.
At the time of the closing Norman Kiss signed an owner's affidavit for the purpose of title insurance in which he represented that he had no knowledge of any violations of any restrictions regulating the use of the property and that he did not know or have any reason to believe that any structure on his land encroached on any adjoining property or that any structure did not conform with any applicable zoning or other land use laws. The Plaintiff, Candy Wilson, was uncertain if she saw this affidavit at the time of the closing. At the time of the closing the property line had not been flagged in accordance with the survey.
In February 1997 the Plaintiffs discovered that the lot had not been subdivided with the town and the Plaintiffs were being taxed for two acres rather than one. In July 1997 the boundary lines of the property were flagged in accordance with the deed and the survey.
In August 1997 the Plaintiffs had problems with their septic system when it began to leach and percolate out of the ground. From the time of the closing in November 1996 until then the Plaintiffs did not experience any problems with the septic system. It was then that the Plaintiffs discovered that a portion of their septic tank and outflow pipe were not located on their property. The Plaintiffs contacted the town sanitarian who inspected the system in September 1997. The sanitarian did not see a clear failure at that time. After brush was removed in the area, the sanitarian, in January 1998, saw a clear failure in that there was discharge from the leaching fields. If a system fails a new system must be installed. The sanitarian also noted that the tank and fields were not the required distances from the property lines. The sanitarian had discussions with Kiss who told him there were two dry wells and a stone leaching field all on the subject property. Kiss never indicated that he had abandoned a dry well nor did the sanitarian's inspection reveal that. Health regulations require that a private septic system all must be on the property served and ten feet from the property line. As a result of the system failure, the Plaintiffs pumped out their tank and abandoned it and relocated the septic system completely on their property at a cost of $6,400.
In October 1997 the Plaintiffs had a problem with their furnace and discovered, after it was inspected by Robert McShane, a chimney cleaner and repairer, that the chimney had a number of defects which constitute a fire hazard. The defects would not have been apparent to most laypersons. At that time the Plaintiffs also discovered that there had been no building permit issued for the chimney when it was built in 1992. The estimated cost of the repairs to the chimney is $9,400.
The Plaintiffs claim that they would not have purchased the property if they had known of the problems with the septic system, the property line and the chimney.
Discussion
The Plaintiffs have the burden of proving their claims by a fair preponderance of the evidence. Preisner v. Illman, 1 Conn. App. 264, 267 (1984). The essence of the Plaintiffs' claims are breach of contract and negligent misrepresentation.
The Plaintiffs claim that the Defendant breached his contract with them in that, as a result of the property being an illegal subdivision, a portion of the septic system was not on their property and they were forced to relocate it since the health code requires that the entire system be on the same property. In determining the claim of breach of contract the court must look at the terms of the contract. The "Agreement to Sell and Purchase Real Estate" executed by the parties provides that Norman Kiss agrees to sell to the Plaintiffs the piece of land known as 1283 North River Road, Coventry, Connecticut as described in Volume 564, page 287 of the Coventry land records. The agreement also provides that the transfer shall be by warranty deed, "conveying marketable title, free and clear of all encumbrances except those set forth in the deed of conveyance to the seller and any and all provisions of any ordinance, municipal regulation, public or private law, declarations, restrictions, covenants and easements of record and any state of facts which an accurate survey or personal inspection of the premises would disclose, provided said encumbrances do not interfere with the use of the property as a residence." There is no dispute that the property as described in the agreement was conveyed to the Plaintiffs. What did occur is that the seller believed, and so told the Plaintiffs, that the line of the property was located differently than what a survey would and did reveal. The Plaintiffs apparently did not ask that the property be flagged in accordance with the survey prior to the closing but instead relied on the representations of the seller as to the location of the property lines. The contract also provides that: "No oral representations: All of the terms and conditions of this agreement between the parties hereto are stated herein and no representations or inducements have been made to the buyer by the seller or the real estate broker(s) as to the character, quality, use, zoning, value, condition, occupancy, or other matters relating to the property." Thus the Plaintiffs, pursuant to the language of the contract, were not to rely on oral representations made by the seller. However, the Plaintiffs point to the septic system addendum to the agreement which states that: "Seller further represents that, to the best of his knowledge and belief, the entire septic system, including the leaching fields associated therewith, is functioning properly and is located within the boundaries of the property . . ." The evidence revealed that the Defendant did believe that the septic system was all on the property he conveyed to the Plaintiffs. He made this representation consistently to the Plaintiffs and to the town sanitarian when the failure of the system occurred. Apparently, unbeknownst to him, the surveyor drew the lines of the property when the land was split so that part of the septic system was not on the property conveyed to the Plaintiffs. If the land had been flagged in accordance with the survey prior to the closing the parties would likely have realized this. The Defendant did not breach the contract, he conveyed the property as stated in the agreement and it was conveyed subject to any state of facts which an accurate survey would have disclosed. A review of the lines as set forth in the survey would have revealed that the septic system was not entirely on the property. The Plaintiffs as well as the Defendant were all mistaken as to the lines established in the deed when the property was split. In addition, there was no evidence that the division of the property was an illegal subdivision. Lastly, the Plaintiffs admit that the failure of the septic system was unrelated to the location of the property lines. It was the failure which required the replacement of the system.
The Plaintiffs also claim that the Defendant is liable because of his negligent misrepresentations as to the location of the septic system, the boundary lines and the condition of the septic system and the chimney. The Plaintiffs claim these misrepresentations were made in the title insurance owner's affidavit and the residential property condition disclosure report. "This court has long recognized liability for negligent misrepresentation. We have held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth. Richard v. A. Waldman Sons, Inc., 155 Conn. 343, 346, 232 A.2d 307 (1967); see also J. Frederick Scholes Agency v. Mitchell, 191 Conn. 353, 359, 464 A.2d 795 (1983); Johnson v. Healy, 176 Conn. 97, 102, 405 A.2d 54 (1978); Warman v. Delaney, 148 Conn. 469, 473, 172 A.2d 188 (1961); Boucher v. Valus, 6 Conn. Cir. Ct. 661, 665-66, 298 A.2d 238 (1972). The governing principles are set forth in similar terms in § 552 of the Restatement (Second) of Torts (1977): `One who, in the course of his business, profession or employment . . . supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.' See also Ultramares Corporation v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931); Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922); W. Prosser W.P. Keeton, [ supra,] § 107, p. 745. (Internal quotation marks omitted.) D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 217-18, 520 A.2d 217 (1987)." (Internal quotation marks omitted.) Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 575-6 (1995). The Plaintiffs also cite Clark v. Haggard, 141 Conn. 668, 672-3 (1954) in which the Court stated: "`In matters susceptible of actual knowledge, if the party who has and is known to have the best means of knowledge, makes an affirmation contrary to the truth, in order to secure some benefit to himself, the law treats him as stating that he knows that whereof he affirms, and so as guilty of a fraud, although he spoke in ignorance of the facts; because he asserts that he knows what he does not know.' Scholfield Gear Pulley Co. v. Scholfield, 71 Conn. 1, 19, 40 A. 1046; Dwyer v. Redmond, 103 Conn. 237, 244, 130 A. 108; Water Commissioners v. Robbins, 82 Conn. 623, 644, 74 A. 938; O'Neill v. Conway, 88 Conn. 651, 653, 92 A. 425; E.F. Construction Co. v. Stamford, 114 Conn. 250, 259, 158 A. 551. A fraudulent representation in law is one that is knowingly untrue, or made without belief in its truth, or recklessly made and for the purpose of inducing action upon it. Sallies v. Johnson, 85 Conn. 77, 82, 81 A. 974."
More recently, the Appellate Court stated: "A vendor of residential property is liable to a purchaser for a negligent misrepresentation of the condition of the property to that purchaser if the purchaser would not otherwise have agreed to the terms of the sale. See Richard v. A. Waldman Sons, Inc., 155 Conn. 343, 347, 232 A.2d 307 (1967); Warman v. Delaney, 148 Conn. 469, 473-74, 172 A.2d 188 (1961); Foley v. Huntington Co., 42 Conn. App. 712, 721-22, 682 A.2d 1026, cert. denied, 239 Conn. 931, 683 A.2d 397 (1996). Accordingly, an action for negligent misrepresentation requires a plaintiff to prove that (1) the defendant made a misrepresentation and (2) the plaintiff reasonably relied upon that misrepresentation. See Citino v. Redevelopment Agency, 51 Conn. App. 262, 273-75, 721 A.2d 1197 (1998); see also Maturo v. Gerard, 196 Conn. 584, 589, 494 A.2d 1199 (1985). `Whether evidence supports a claim of . . . negligent misrepresentation is a question of fact.' (Internal quotation marks omitted.) Mips v. Becon, Inc., 70 Conn. App. 556, 558, 799 A.2d 1093 (2002)." Giametti v. Inspections, Inc., 76 Conn. App. 352, 363-4 (2003).
In considering the Plaintiffs' claims, the court notes that it does not appear that the Plaintiff in fact made any misrepresentations other than as to the boundary lines but even as to those it does not appear that he knowingly misrepresented the lines. As to the condition of the septic system, the Plaintiffs did not establish that the Defendant shut down one of the dry wells or that even if he did it was the cause of the failure of the system. At the time of the sale of the house the system was in good working order, as the inspection revealed, and worked well for over eight months thereafter. The Plaintiffs did not establish the cause of the failure of the system. As to the chimney, although the Defendant did not disclose that there was no building permit issued regarding construction of the chimney, the facts do not establish that he knew, or would have reason to know, of any defects in the chimney. Even the home inspector did not discover any defects in the chimney.
Even if we assume that misrepresentations were made, the Defendant claims that in order for the Defendant to be liable for any misrepresentation he may have made, the Plaintiffs must have relied upon those misrepresentations to their detriment. As noted above, pursuant to the terms of the agreement, the Plaintiffs took the property subject to any condition of the property an accurate survey would have revealed. Thus the Plaintiffs did not reasonably rely on the Defendant's representation as to the location of the property lines and the septic system when a survey would have revealed that the septic system was not completely on their property. As to the condition of the septic system and the chimney, the Plaintiffs obtained an inspection of the septic system as well as the house. The fact that the Plaintiffs chose to have the inspections done as well as the results of the inspections indicate that the Plaintiffs relied on them rather than simply the representations made by the seller in deciding to purchase the property. In Mehler and Russell v. Stanley, Superior Court, judicial district of Middlesex at Middletown, Docket No. CV 97-0081533S (Jan. 4, 2001, Frazzini, J.) 28 Conn. L. Rptr. 595, the court noted that the defendant there "has cited language from Prosser's treatise on torts and the Connecticut Law of Tort by Wright, Fitzgerald Ankerman to the effect that making an independent investigation precludes a home purchaser from claiming reliance on misrepresentations by the seller as to the condition of the premises. Section 547 of the Restatement (Second) of Torts more fully states the modern rule on the effect of an independent investigation on the liability of one making misrepresentations: (1) Except as stated in Subsection (2), the maker of a fraudulent misrepresentation is not liable to another whose decision to engage in the transaction that the representation was intended to induce is not caused by his belief in the truth of the representation but is the result of an independent investigation made by him. (2) The fact that the recipient of a fraudulent misrepresentation is relying upon his own investigation does not relieve the maker from liability if he by false statements or otherwise intentionally prevents the investigation from being effective. 3 Restatement (Second) Torts § 547 (1977). The comment to subsection one of § 547 confirms the assertion of the defendant that `[o]rdinarily one who makes an investigation will be taken to rely upon it alone as to all facts disclosed to him and all facts that must have been obvious to him in the course of it.' 3 Restatement (Second), Torts § 547, comment (a) (1977) . . . The Restatement makes clear that the key to whether an independent investigation precludes recovery from one making misrepresentations is the question of justifiable reliance. The law will presume reliance `as to all facts disclosed to him and all facts that must have been obvious to him in the course of the investigation . . . As comment a to § 547 indicates,' It is only when he relies upon his investigation and does not rely upon the false statement that he cannot recover. Whether he does rely upon the one or the other or in substantial part upon both . . . is a question of fact and is for the jury to determine, unless the evidence clearly indicates only one conclusion.'"
Although not citing the Restatement, the court in Giametti reversed the lower court's decision and found that its findings of fact that the Plaintiff had relied on the defendant's representation that the house was not infested with carpenter ants was erroneous because the plaintiff hired a professional inspector to inspect the property who did not uncover any infestation. The court stated: "It is undisputed that the plaintiff hired an independent professional to inspect the dwelling. The inspection did not uncover any infestation. Moreover, the plaintiff testified that the inspection lasted for only one hour and twenty minutes and that the inspector told him that he was in a rush. It is also undisputed that the plaintiff did not initially want to obtain a professional inspection and that the defendant urged him to do so. Under these circumstances, it is difficult for us to conclude that the record evinces sufficient facts establishing the plaintiff's reliance on the defendant. Section 20-327b reinforces our conclusion. The statute emphasizes the significance of an independent professional inspection by urging a purchaser to hire a professional to inspect the property despite the representations made on a § 20-327b report. General Statutes §§ 20-327b(d)(2)(B) and 20-327d. Concededly, both parties signed the § 20-327b report containing such a recommendation. We may invoke § 20-327b even though it does not govern common-law misrepresentation because it is reasonable to conclude that the legislature's statement of policy has carryover relevance to the common law. We presume that the legislature enacts legislation that `renders the body of the law coherent and consistent, rather than contradictory and inconsistent . . . [and that] courts must discharge their responsibility, in case by case adjudication, to assure that the body of the law — both common and statutory — remains coherent and consistent.' (Citation omitted.) Fahy v. Fahy, 227 Conn. 505, 513-14, 630 A.2d 1328 (1993). Under suitable circumstances, our Supreme Court has relied on statutory policy to inform common-law adjudication. Id., 514; see also Olean v. Treglia, 190 Conn. 756, 762, 463 A.2d 242 (1983). This is another such circumstance. The relationship between the policy of § 20-327b and the common law of negligent misrepresentation persuades us that, in the absence of any other evidence of actual reliance by the plaintiff, he cannot prevail in his negligent misrepresentation claim. Indeed, the plaintiff's claim that he relied on the defendant's statements is further attenuated by the undisputed fact that the defendant advised him not to do so. We conclude, therefore, that the findings of fact supporting the court's judgment for the plaintiff were insufficient to support the judgment. Specifically, the record does not reveal any evidence that the plaintiff, despite the professional inspection, was justified in relying on the statements the defendant made on the § 20-327b report." Giametti v. Inspections, Inc., 76 Conn. App. 352, 364-65 (2003).
Similarly here the evidence did not establish that despite the professional opinions given as a result of the inspections conducted of the septic system and the house, the Plaintiffs were justified in relying on the statements the Defendant made in the owner's affidavit or the residential property disclosure report. In addition, the fact that there may have not been a building permit issued for purposes of building the chimney does not establish that the Defendant knew the chimney was defective or not built in accordance with the building codes. The house inspector did not notice any defects in the chimney and Mr. McShane stated that most laypersons would be unable to discover the defects.
Conclusion
Judgment shall enter for the Defendant on all counts of the Complaint.
JANE S. SCHOLL, JUDGE.