Drullinsky v Tauscher Cronacher Engrs.

[*1] Drullinsky v Tauscher Cronacher Engrs. 2006 NY Slip Op 52440(U) [14 Misc 3d 1207(A)] Decided on December 21, 2006 Supreme Court, Nassau County O'Connell, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 21, 2006
Supreme Court, Nassau County

Pamela Drullinsky, M.D., Plaintiff(s),

against

Tauscher Cronacher Engineers and Norma Hirschman, Defendant(s).



15257/04



Lawrence J. Saas, Esq.

Atty for Plaintiff

170 Broadway, Suite 600

New York, NY 10038

Marcus, Gould & Sussman, LLP

Kenneth J. Gould, Esq.

Attys for Deft., Norma Hirschman

222 Bloomingdale Rd.

White Plains, NY 10605-1513

O'Connor, McGuinness, Conte, Doyle & Oleson, Esqs.

Monica G. Snitily, Esq.

Attys for Deft., Tauscher Cronacher Prof. Eng.

One Barker Ave., Suite 675

White Plains, NY 10601

Geoffrey J. O'Connell, J.

Defendant Tauscher Cronacher Engineers applies to the Court for an order granting it summary judgment dismissing the claims in the Complaint against it. By separate motion Defendant Norma Hirschman also seeks summary judgment. Plaintiff opposes both motions.

Factual Background

Plaintiff Pamela Drullinsky is a divorced mother of two sons under the age of ten. She is also a medical doctor with a specialty in oncology. By contract dated April 14, 2003, Plaintiff agreed to purchase from Defendant Norma Hirschman a one-family home located at 1558 Pebble Lane, Hewlett, New York, for $755,000.00. The printed form contract contained a customary "as is" clause which also granted the purchaser the right to inspect the premises personally and by an authorized representative. There was a separate additional "as is" clause in the "Rider to Contract" which included a statement that, "None of the warranties herein shall survive delivery of the deed or possession, whichever is later."

On March 20, 2003 Plaintiff had entered into a "Standard Form of Building Inspection Agreement" with Defendant Tauscher Cronacher Engineers pursuant to which Tauscher Cronacher agreed to perform a standard pre-purchase inspection in return for a fee of $750.00. Specific provisions of this agreement will be quoted later in this decision. That same day Richard Haber conducted an inspection of the house in question. Plaintiff was present at the premises, but did not accompany Mr. Haber during the inspection. Following the inspection Plaintiff alleges that she had an oral conversation with the inspector during which he stated that the house was "a [*2]good house" and that Plaintiff "shouldn't be running into any major problems. Sometime thereafter Plaintiff received the formal written report that included photographs and notes on a preprinted form that Mr. Haber had apparently used to memorialize his inspection observations. Again pertinent portions of this report will be quoted later.

On Aug. 20, 2003, the day before the date set for title closing, Plaintiff did a walk through inspection of the premises and detected a "sweet" smell and observed a "large area of water" in the middle of the basement. There was also peeling ceiling paint in the master bedroom to which the seller had alerted Plaintiff and which was attributed to a leak in the air conditioning system. Plaintiff's attorney advised her to proceed with the closing and thereafter to call Tauscher Cronacher back to assess the problem. Prior to the closing the leak in the air conditioning system that had caused damage in the master bedroom had been repaired by the Seller. At the closing, the purchase price was reduced $6,300.00 to compensate for the ceiling and rug damage that the leak had caused. The other the problems noted by Plaintiff in her walk through inspection were not addressed.

At Plaintiff's request, Frederick W. Glaser inspected the home on Aug. 22, 2003 and issued a written report dated Aug. 25, 2003. The puddle of water was noted and attributed to water table problems and a "french drain" was recommended. The report also notes "spalling of the foundation wall" an indication of concrete damage due to "chronic exterior saturation." A regrading of the ground near the foundation was suggested.

In November of 2003 Plaintiff became concerned about a black substance near the basement laundry and retained Insight Environmental Consultants and Scientists ("Insight Environmental") to investigate. They conducted an investigation on Nov. 12, 2003 and issued a report dated Dec. 3, 2003. The report states that fungal colonization was found in the main basement room, the storage area and the laundry/mechanical room which was attributed to water vapor entering through the foundation walls and inadequate dehumidification.

Water damage to the foundation was also noted. Further fungal colonization was observed in the cedar closet and a "massive fungal colonization" was described in the entry vestibule. The report comments that a survey of the exterior revealed standing water in close proximity to the foundation and is critical of the location of downspouts. The slate roof is described as deficient. Water damage to the folding attic entry stairs was attributed to wind blown rain entering a roof vent. The report identifies certain microorganisms and states that at least two "produce mycotocins (microbal toxins) that have significant potential to adversely affect humans." The concluding recommendations include measures to remove the fungal contamination and to reduce the moisture in and around the basement.

Following receipt of the Insight Environmental report, Plaintiff had the mold removed from the basement. When she hired someone to remove carpeting in the living room, she noticed an indentation in the hardwood floor near the fireplace. Plaintiff then hired John Cusumano to repair the floor. According the Plaintiff, John Cusumano discovered problems with the support for the living room floor, problems with the support for the ceiling above in the area of the fireplace mantel and that "the left side of the house was collapsing."

In an affidavit dated Sept. 11, 2006, Plaintiff avers that on March 24, 2004, the LevineGroup Inc. Conducted a survey and investigation for the Nationwide Insurance Company. Assumedly this was pursuant to the claim Plaintiff had made. The affidavit states that copies of the reports concerning "water damage from the shower area, water damage to the foundation and [*3]water damage to the roof" are attached as an exhibit, but the exhibit consists only of photographs.

Plaintiff testified that Defendant Tauscher Cronacher conducted a third inspection of the premises after she had spoken to them on the telephone. A letter dated March 26, 2004 and signed by Warren Cronacher recites that the premises were viewed by Fred Glaser on Mar. 24, 2004 and Richard Haber on Mar. 25, 2004 for the purpose of investigating claims of water damage. According to this letter, among the conditions observed were "rot damage and mold" below the surface of walls. Termite damaged wood studs in the exposed portions of the living room wall. Daylight was visible between the sides of the chimney and the adjacent wood walls where the interior wall had been demolished.

Plaintiff testified that she discontinued the services of John Cusumano when she; "realized there was something unethical and incorrect and unprofessional about [him]."

Insight Environmental issued a "Technical Specification for Mould Remediation at Pebble Lane, Hewlett, NY." Plaintiff states that she summoned them back for another inspection after John Cusumano had

made his discoveries and done some demolition. The introduction to Insight Environmental's undated "Technical Specification" recites that it relates; "to the remediation of previously identified mould-contamination existing in building materials on three elevations of a private residential dwelling . . . ." Under "scope of work" the "Technical Specification" discusses "removal of contaminated construction and finish materials and content decontamination." According to Plaintiff, one of the options presented to her by Insight Environmental was demolition of the house. She then sought a second opinion from an entity called "Microecologies" and, when they said that complete demolition was the only way to be certain that all mold had been removed, she had the house demolished.

Plaintiff testified at her deposition that the attorney who represented her at the closing was subsequently jailed for misuse of client funds.

Discussion

1) Defendant Tauscher Cronacher

Plaintiff's first cause of action alleges that Defendant Tauscher Cronacher was grossly negligent with respect to its pre-purchase inspection of 1558 Pebble Lane, Hewlett, New York. Defendant Tauscher Cronacher applies for summary judgment dismissing this claim.

In support of the motion Defendant offers an affidavit of Richard Haber, the person who performed the inspection and authored the report. Mr. Haber avers that he conducted a thorough, complete and adequate visual inspection of the property pursuant to the contract between Plaintiff and Tauscher Cronacher. He further asserts that the conditions subsequently discovered were not visible at the time of his inspection.

In opposition to the motion addressed to the first cause of action Plaintiff offers an affidavit from Lawrence J. Ubell who avers that he is a professional home inspector licensed in New York, New Jersey, Connecticut and Massachusetts. Mr. Ubell never saw the premises prior to demolition and bases his opinions on documents and photographs. He opines that the pre-purchase inspection was grossly negligent in that the

inspector failed to appreciate the significance of certain visible and accessible conditions including black mold in the laundry room, in header and duct work encasement, cracked beams, water staining, water damage, foundation damage, fungal colonization and the delamination of floor tiles. Mr. Ubell also asserts that it was grossly negligent for the inspector not to use a moisture meter which he acknowledged having available. As to the report of inspection, Mr. Ubell contends that it is incomplete and misleading.

A professional home inspector may be subject to tort liability for the failure to exercise reasonable care in performing his professional duties. (Kohl v Green, 235 AD2d 671 [3d Dept, 1997]). Expert opinion is required to support allegations of professional negligence unless the alleged act of malpractice falls within the competence of a lay jury. (530 East 89 Corp. v Unger, 43 NY2d 776, 777 (1977); 470 Owners Corp. v Heimer, 258 AD2d 558, 559 [2d Dept, 1999]). Nevertheless, the contract pursuant to which the services of a home inspector are retained may limit or exclude liability of the inspector for ordinary negligence in performing the inspection absent some special relationship between the parties. (Rector v Calamus, 17 AD3d 960, 961 [3d Dept, 2005]). There is no public policy prohibiting the limitation of liability as evidenced by the fact that neither Article 12-B of the Real Property Law enacted in 2004 to regulate professional home inspectors nor the regulations adopted pursuant to it prohibit contractual limitations on liability. The kind of "special relationship" necessary to render a contractual provision limiting liability unenforceable is something more than a conventional relationship between a consumer and a service provider. (See, Murphy v Kuhn, 90 NY2d 266, 271 (1997)).

Plaintiff contends that a "special relationship" arose after the inspection when Plaintiff "took Mr. Haber into her confidence and poured out her heart to him." Generally, a "special relationship" analysis has taken place in the context of determining whether a duty should be imposed where one would not otherwise exist. (See, Murphy v Kuhn, 90 NY2d 266 (1997), Kimmel v Schaefer, 89 NY2d 257 (1996)). Here the question is not whether a duty existed, but whether a contractual provision limiting liability should be enforced. In any event, there must be something more than an ordinary consumer merchant relationship to give rise to a "special relationship." (Murphy v Kuhn, supra at 271; Bennice v Lakeshore S & L Assoc., 254 AD2d 731 [4th Dept, 1998]). Plaintiff's circumstances did not differ materially from those of any other prospective home purchaser.

A professional home inspector may nevertheless be held liable for gross negligence notwithstanding an otherwise enforceable contractual limitation on liability. (Peluso v Tauscher Cronacher, 270 AD2d 325

[2d Dept, 2000]; see, Sommer v Federal Signal Corp., 79 NY2d 540, 554 (1992)). Used in such a context, "gross negligence" means; "conduct which smacks' of intentional wrongdoing or evinces a reckless indifference to the rights of others (Colnaghi, U.S.A. v Jewelers Protective Servs., 81 NY2d 821, 823-4; see, Sommer v Federal Signal Corp., 79 NY2d 540, 554; Fed. Ins. Co. v Automatic Burglar Alarm corp., 208 AD2d 495)." (Adler v Columbia S & L Assoc., 26 AD3d 349, 350 [2d Dept, 2006]).

The "Standard Form of Building Inspection Agreement" which Plaintiff admittedly signed on Mar. 20, 2003, states that it is not a guaranty or warranty of the premises. Any [*4]damages arising out of the inspection or report; "shall be limited to the fee paid by the client for the inspection and report." The agreement informs the client that; "A comprehensive engineering evaluation which may include invasive testing and/or laboratory testing may be obtained upon request but would be at a substantially higher cost . . . ." It also states that the inspection and report will provide; "a description of the physical condition of visible and accessible areas . . . ."

Of the eight specific items which Plaintiff's expert asserts constitute gross negligence four relate to a failure to identify "fungal colonization/mold." The three areas identified are a "tar-like spot" on the wall of the basement laundry room, the basement ceiling and the "header and ductwork encasement running through the finished part of the basement." Defendant Tauscher Cronacher's initial report stated the following under the heading "Indoor Air Quality;" "Indoor air quality is a growing concern. There is evidence of some moisture accumulation in the basement of this home. You may want to consider additional tests of the air quality to determine whether there are any significant levels of mold, mildew and other airborne materials that might be troublesome. Possible additional sources of mold and mildew problems are dampness conditions in the basement/lower level . . . ."

Page 7 of the report notes "evidence of leaks on the basement ceiling that need to be fully investigated. This observation and recommendation is reiterated on page 16; "All evidence of leaks should be investigated and corrected as necessary. Some of these were noted in the basement ceiling, . . . ." Among the recommendations in the report is; "Water stain evidence resolution." Under the heading "Drainage" the report noted evidence of water entry into the basement.

The fact that the Tauscher Cronacher inspection and report identified potential existence of mold and recommended further investigation of evidence of water leaks precludes any finding of negligence whether

gross or simple in this regard. Plaintiff chose not to follow the recommendation that the water staining be investigated. The Court notes that Plaintiff, according to her pretrial deposition, did have the property tested for radon, not because the Tauscher Cronacher had recommended such testing which it did, but because a friend had experienced a problem. (Drullinsky EBT, p. 30.) In this instance she chose not to pursue further testing.

With some overlapping of items dealing with fungal colonization, three of the specific items deal with water staining in the area of the folding attic stairs and water staining of the foundation and foundation damage. The engineering data sheet attached to the report notes water leakage through old vents in the attic. This was apparently the same condition which Insight Environmental subsequently noted. There is no evidence that the water staining near the attic access stairs was other than a cosmetic issue.

Plaintiff testified that on the day of the inspection Richard Haber pointed out to her water damage in the corner of the basement. (Drullinsky EBT, p. 17). As noted above, the Tauscher Cronacher initial report identifies evidence of water entry into the basement, but the foundation was found to be structurally sound. Evidence of the foundation damage was first recorded by Insight Environmental after John Cusumano had told Plaintiff that "the left side of the house was [*5]collapsing" and had attempted to address the problem. The Insight Environmental report of Dec. 3, 2003 notes the presence of a "new concrete pad." The water staining of the foundation and attic access stair area were sufficiently identified in the initial Tauscher Cronacher report to preclude any finding of negligence with regard to them. However, an issue of fact exists as to whether the failure to identify structural damage to the foundation (if there was in fact such damage) constituted negligence or gross negligence.

A portion of one specification of gross negligence in Mr. Ubell's affidavit refers to delaminated floor tiles. Mr. Ubell does not develop this point. However, Plaintiff testified that on the day of the inspection Richard Haber pointed out to her, "water damage of the tile in the basement." (Drullinsky EBT, p. 16). The initial Tauscher Cronacher report noted evidence of water entry into the basement and included photographs which show a tile floor in less than ideal condition. The report also mentions other tile and flooring problems. There is no evidence that could support a finding of negligence or gross negligence with respect to delaminating tile.

Finally Mr. Ubell asserts that it was grossly negligent to fail to note the cracked beams supporting the living room floor. While the Court notes that this problem was only identified after John Cusumano removed

the living room carpet, there are sworn allegations that the cracked and deteriorating floor beams were readily observable from the basement and Plaintiff has offered photographs which she avers are a fair and accurate representation of what was there to be seen. An issue of fact exists as to whether Defendant Tauscher Cronacher was negligent in failing to identify this condition.

Insofar as Mr. Ubell asserts that Richard Haber was grossly negligent a moisture meter which he admittedly possessed and had available, it suffices to observe that Mr. Haber noted the existence of moisture

and dampness problems and recommended measures to address these problems. The report states, and Plaintiff acknowledges her understanding, that Defednant Tauscher Cronacher's report was a "red flag" report intended to identify potential problems, but not to trace their source. (Tauscher Cronacher Report dated Mar. 21, 2003, p. 16; (Drullinsky EBT, p. 23)).

Defendant Tauscher Cronacher's motion for summary judgment dismissing the First Cause of Action is granted except as to the issues of fact which the Court has identified. Resolution of those issues of fact require a trial. If it is determined that there was negligence, but not gross negligence, Plaintiff's recovery will be limited to recovery of the fee paid pursuant to the agreement between the parties.

Given that the duty which Plaintiff claims Defendant Tauscher Cronacher breached arose from the contract between them, there is no reason on the facts of this case to separately address Plaintiff's Second Cause of Action for breach of contract. (See, Sommer v Federal Signal, 79 NY2d 540 (1992)).

Plaintiff's Third Cause of Action alleges a breach of fiduciary duty by Defendant Tauscher Cronacher. A fiduciary duty does not exist absent a special relationship and this Court has already found the relationship here was no more than that between any consumer and any service provider. (See, Murphy v Kuhn, 90 NY2d 266, 271 (1997)).

Defendant Tauscher Cronacher's motion for summary judgment dismissing the Third Cause of Action is granted. [*6]

2) Defendant Hirschman

Plaintiff's Fourth Cause of Action alleges that the Defendant Norma Hirschman actively concealed material structural defects and dangerous conditions. Defendant Hirschman denies any active concealment and seeks summary judgment dismissing the claims against her.

Although Real Property Law § 462 was in effect at the time of this transaction and it required a seller

of residential real property to complete, sign and deliver to the purchaser a "Property Condition Disclosure Statement," no such document is attached to any of the papers submitted on these motions nor does the closing statement reflect the payment of any credit pursuant to Real Property Law § 465. Rather the Plaintiff presents a common law claim of active concealment. Thus the Court need not construe or apply Real Property Law Article 14. (See, Middleton v Calhoun, 13 Misc 3d 949 [Renssalear Co.Ct., 2006]; Gabberty v Pisarz, 10 Misc 3d 1010 [Sup.Ct., Nas.Co., 2005]).

Plaintiff alleges that Defendant Hirschman actively concealed the serious water infiltration problem in the premises by attributing the puddle of water Plaintiff had found on the day before the closing to rainwater entering the basement through to exterior basement stairs. She further alleges that the deteriorated structural support of the ceiling above the living room fireplace was concealed. Defendant denies knowledge of the water infiltration and dampness related problems and avers that bracing within the wall above the living room mantel was placed there in the 1970's to support a mirror which hung over the mantel.

"It is settled law in New York State that the seller of real property is under no duty to speak when the parties deal at arm's length . . . . The buyer has the duty to satisfy himself as to the quality of his bargain . . . ." (London v Courduff, 141 AD2d 803, 804 [2d Dept., 1988]). "If, however, some conduct (i.e. more than mere silence) on the part of the seller rises to the level of active concealment' (Slavin v Hamm, 210 AD2d 831, 832; see, Stambovsky v Ackley, 169 AD2d 254, 257), a seller may have a duty to disclose information concerning the property." (Bethka v Jensen, 250 AD2d 887, 888 [3d Dept, 1998]; Gizzi v Hall, 300 AD2d 879, 881 [3d Dept, 2002]). For conduct to constitute fraudulent nondisclosure or active concealment it must thwart the buyer's efforts to satisfy him or herself as to the quality of the bargain. (Ercole v McKay, 2006 Wl 3490419 [App.Term, 9th and 10th Jud. Dists., 2006]).

The claimed statement of Defendant Hirschman's daughter and attorney-in-fact attributing the puddle of water to the external cellar stairway did not thwart Plaintiff in the discharge of her responsibilities as a purchaser. She had already had a professional inspection and the water infiltration in the basement had been pointed out to her. Richard Haber had told her there was a water table problem and that a sump system might be required to address it. (Drullinsky EBT, p. 17). Further there is no evidence that the representation was false or that Plaintiff's daughter knew or should have known it to be false. (See, Platzman v Morris, 283 AD2d

561 [2d Dept, 2001]). According to her deposition, if Plaintiff relied upon anyone with respect to the puddle problem, it was upon her attorney. (Drullinsky EBT, p. 32).

In opposition to Defendant Hirschman's sworn statement that the modification of the wall above the living room mantel was performed solely to support a mirror, Plaintiff offers the opinion of Lawrence Ubell based on his interpretation of a photograph of the fireplace wall after the interior portion had been removed. Mr. Ubell never personally observed what the picture depicts but opines that the "new wood" was placed there anywhere from two to ten years previously in an attempt to "reinforce the top plate of the fireplace wall." Whatever the weight to be given to this opinion, the structural problem allegedly identified when the carpet was removed was with the living room floor and its supports. Plaintiff offers photographs which she contends

show the cracked beams supporting the living room floor. She and Mr. Ubell assert that the cracked beams were readily observable from the basement and should have been detected. On these facts, there is no basis for concluding that whatever work was done to the fireplace was done with a purpose of concealment or to thwart a reasonably thorough inspection from identifying the problem. (Gabberty v Pisarz, 10 Misc 3d 1010 [Sup.Ct., Nas.Co., 2005]; see Jablonnski v Rapalje, 14 AD2d 484 [2d Dept, 2005]).

Defendant Hirschman's motion for summary judgment dismissing the Fourth Cause of Action is granted.

It is, SO ORDERED.

_________________________________

HON. GEOFFREY J. O'CONNELL, J.S.C.