February 5, 2007

UNPLED DISTRESS CLAIM NETS $25K

A couple who bought a North Haven house four years ago, and later discovered hidden rot, mold and seepage in the finished basement, not only won $96,282 for repairs, they unexpectedly got $25,000 for an emotional distress claim not even alleged in their complaint.

Soon after moving into their Todd Drive house, purchasers Paul Camerone and Jeanne Mauri discovered blackened, rotting wood under the new carpet in the basement. The rotted wood had been reinforced with some new wood, and then the new carpet had been laid on top.

Behind freshly-painted sheetrock, the dismayed buyers uncovered basement walls damaged and blackened with mold.

The couple sued the sellers, Mark and Kerri Phillips, for negligence and misrepresentation, claiming they failed to alert the buyers to hidden defects in the house foundation, support beams, plumbing and electrical systems, as well as the chronic water seepage that caused the mold build-up.

The Phillips countered that their buyers' problems were due to their failure to properly inspect the house or hire a competent home inspector.

In a bench trial before New Haven Judge Trial Referee Anthony V. DeMayo, there was testimony that the buyers' building inspector saw several patches of black mold on basement walls and reassured them it could simply be wiped away with bleach. Represented by Jonathan A. Beatty of New Haven's Esty & Buckmir, the sellers contended that, once the buyers were aware of the damp conditions, the burden shifted to them to negotiate a new contract, or reject the deal.

'Outrageous' Cover Up

The Multiple Listing Service marketed the house as in "mint condition" and "like new," DeMayo noted in his Jan. 17 decision. Seller Mark Phillips, who bought the house in 1999, did extensive renovations of the finished basement. At trial, wrote DeMayo, he "qualified his use of 'new' as meaning new since he moved in." (Click here to read the full-text version of DeMayo's ruling.)

The carpet was installed six months before Phillips sold the house, and he swore he never saw anything that suggested the house had a problem with water seepage, mold or rot. "The court does not believe him," DeMayo stated bluntly.

The numerous photos in evidence "depict deplorable conditions the defendants could not have been ignorant of," the judge found.

The most rot and mold was discovered when the "new" walls were removed. The judge found that the sellers had performed a "cosmetic transformation," spiffed up with a fresh coat of paint to fool the buyers and their inspector, and also that they lied when they checked the "no" box in a disclosure statement about water seepage and dampness.

The judge awarded $12,282 to waterproof the lower level and install drains, and $84,000 to repair the damage to the finished basement.

Then, in an unusual step, DeMayo concluded plaintiff Jeanne Mauri suffered from both negligent and intentional infliction of emotional distress, to the tune of $25,000.

He concluded that the sellers' act of covering up the known defects was "outrageous" and met the test of conduct that exceeded "all bounds usually tolerated by decent society."

The distress award was based on Mauri's in-court testimony, describing how distraught she was "especially upon realizing the potential expense now facing her."

No Medical Treatment

Beatty has asked DeMayo to set aside his verdict on grounds that his findings are against the clear weight of the evidence, and because he awarded damages for emotional distress, a claim never hinted at in the complaint.

The buyers never mentioned the words "emotional distress" in the operative complaint, Beatty argued, and the defendants were caught by surprise that this was considered part of the case.

They never undertook an independent medical examination of Mauri, or cross examined her on alleged emotional distress "because it simply was not claimed by her," Beatty maintained. Furthermore, there was no evidence that Mauri required any medical treatment, drugs or counseling, he said in an interview.

Beatty disputed DeMayo's rejection of the testimony of the seller's home inspector, Jeri Case, who said no rot, mold or water conditions existed when she looked at the house before it was sold.

There was no expert testimony about the length of time needed for mold and rot conditions to set in, Beatty noted, and the court simply accepted assertions that the sellers "must have" known of the problem.

The buyers' lawyer, Michael A. Stratton of Stratton Faxon in New Haven, acknowledged, "We did not have a separate infliction of emotional distress count, but we did claim emotional distress as part of the misrepresentation claim."

He said, "The law is very clear, albeit little used, that negligently causing property damage can encompass emotional distress if such distress could have been foreseen, as was the case here."

According to Stratton, Nationwide, the home insurer, refused to settle for $30,000, only offering $5,000.

Noble F. Allen, of Tyler, Cooper & Alcorn's New Haven office, represented a realtor and real estate agent who were dropped as defendants in the case. "I was quite surprised by the verdict," Allen said, "especially the emotional distress damages. This is something you might get from a jury, but don't expect from a judge."

Beatty said that, assuming DeMayo declines to reverse himself, his clients will appeal.