Wednesday, April 10, 2013

Middleton v. Calhoun case brief

Middleton v. Calhoun case brief summary
13 Misc.3d 949

Appellant buyer sued appellee sellers in the Small Claims Part of the Hoosick Falls Village Court (New York), pursuant to Real Property Law § 465, for a claimed failure to disclose a defective condition on real property, for breach of contract, and for fraud. The trial court dismissed the cause of action. The buyer appealed. The sellers filed a motion to dismiss.

-The buyer entered into a contract to buy the sellers' house.
-The contract contained a clause that the premises was being sold "as is", without warranty to condition.
-The contract was contingent upon a test of the septic system.
-However, no such test was apparently conducted.
-A completed property condition disclosure statement (PCDS) was provided, as required by Real Property Law § 462(1).
-The buyer claimed that she purchased the house in reliance on the PCDS, which contained misrepresentations about the septic system.

On appeal, the court found that Real Property Law § 465(2) was unclear in its meaning and was therefore unenforceable.

-Further, it was difficult to reconcile a cause of action against the sellers for lying on the PCDS with Real Property Law § 462(1), which specifically preserved the parties' ability to enter into an "as is" contract.
-Furthermore, even if the court found that a cause of action existed for an alleged misrepresentation contained in the PCDS, the proof offered at the hearing failed to prove that the seller's negative answer to a question of any known material defects was, in fact, false.
-Finally, the buyer failed to prove her claims under the common law.

-The law itself was intended to increase clarity regarding the nature of a property and to provide greater certainty to contracts entered into by better informed buyers and sellers. L 2001, ch. 456, § 1. -The law was enacted to alert both buyers and sellers to aspects of properties which may require attention: environmental, structural, mechanical or other potential problem areas, particularly those not readily observable by a visual inspection of the property.
-Although the act requires a seller to disclose information to the buyer in cases other than active concealment, the act was in no way intended to diminish the responsibility of buyers to carefully examine the property which they intend to purchase.
-The only mention made of liability and remedy is that the act was not intended to and does not limit existing responsibilities by a seller, buyer or agent concerning the condition of the property or potential liabilities or remedies at law, statute or in equity.

OUTCOME: The sellers' motion to dismiss was denied, and the judgment was affirmed.

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