Cafferata v Richmond Home Inspection Inc.
Annotate this CaseDecided on January 28, 2013
Civil Court of the City of New York, Richmond County
Daniel Cafferata, Claimant,
against
Richmond Home Inspection Inc., Defendant. DANIEL CAFFERATA, Claimant, POST EXTERMINATING COMPANY INC, Defendant.
DANIEL CAFFERATA, Claimant,
against
POST EXTERMINATING COMPANY INC, Defendant.
645/11
Philip S. Straniere, J.
Claimant, Daniel Cafferata, commenced these two small claims actions against the defendants, Richmond Home Inspection, Inc.(Richmond)(SCR#645/11), and Post Exterminating Company, Inc. (Post)(SCR#646/11), alleging that owing to the gross negligence of each defendant in performing their respective inspection in regard to claimant's purchase of the premises, 296 Tanglewood Drive, Staten Island, New York, he was induced to purchase the premises believing that there were no structural problems. Claimant alleges that after closing title to the premises he learned that there was a water problem that Richmond failed to disclose which caused structural damage and there was also termite activity and damage that Post did not discover.
Because the inspections were conducted by the same individual who is the principal for each of the defendants, the court, by order dated June 4, 2012, consolidated the matters for a joint trial. A trial was held on January 3, 2013. All parties were represented by counsel.
SCR#645/11
Claimant alleges that when Richmond conducted its home inspection on November [*2]3, 2009, it was grossly negligent in failing to disclose the existence of a serious drainage issue along an exterior wall which caused water to drain toward the house rather than away from it. As a result the structure of the house was compromised, a staircase became lopsided, windows were bowed and walls weakened. The claimant asserts that because of the failure of defendant to disclose the water problem, in reliance on the report, he purchased the premises closing title in January 2010. Subsequently, while doing renovations, he discovered the problems and had to have concrete poured around the foundation, the drainage changed and a new sill plate installed. Claimant admitted that he was present when the defendant conducted the inspection but added the caveat that he was not with the inspector the entire time.
Defendant denies any liability and asserts that all of the damage the claimant alleges existed was hidden by the siding and therefore not observable upon reasonable inspection. Defendant points out that at several places in the written report there are disclaimers in regard to inaccessible and unobservable areas. Defendant testified that he is a licensed home inspector, that the claimant was present while he did the inspection and that he provided a written report to the claimant in a timely manner. Defendant reiterated that the report clearly states that there "is no guarantee or warrantee [sic] expressed or implied."
Defendant noted that in the section of the report entitled "siding" he pointed out that the siding was too low at the front of the house and being in contact with the grade
"will encourage a capillary drawback of moisture off of the grade/sidewalk, and into the drier substructural framing and adjacent drywall. The grade should be dropped wherever possible to allow for natural and gravitational downflow away from the house."
In the section of the report "drainage/grade" defendant made the following observation:
The drainage and grade are pitched towards the right side of the house, with low spots noted. Also, there is a wall a few feet away from the foundation which is trapping and holding water. Water that is adversely pitched towards the house, will expose the foundation to excess water....There is a large cant block (triangular wedge of concrete) installed at the side of the house, to help deflect water away from the foundation. This was most likely installed due to a previous problem with water penetration.
The defendant contends that this information was sufficient to alert the claimant that there was a potential water problem and that the claimant should have used the information to question the seller as to the existence of any water condition.
There are several problems with the evidence in this case on the part of both claimant and defendant. The burden of proof is on the claimant. Claimant has failed to provide a copy of his contract with the defendant. Likewise the defendant alleges that he is a licensed home inspector as is required by Real Property Law Article 12-B, yet he also failed to produce a copy of the contract with the claimant. The court cannot determine if in fact defendant is licensed because no where on the report is his license number indicated. The failure to keep a copy of the contract as well as the failure to disclose his license [*3]number on the report are not practices the statute and the court would expect from an experienced licensed home inspector.
Based on the court's experience in these matters, generally the contract from a licensed home inspector has a clause limiting the inspector's liability to the amount paid for the inspection report. Cases have held these exculpatory clauses as valid and enforceable in regard to allegations of "ordinary negligence," but these clauses will not preclude a claim for "gross negligence" which is what claimant alleges occurred here [Schietinger v Tauscher Cronacher Professional Engrs., PC., 40 AD3d 954 (2007); Ryan v IM Kapco, 88 AD3d 682(2011)].
In order to establish gross negligence, the defendant's conduct must reach the level of either intentional wrongdoing or reckless indifference to the rights of others [Ryan @ 683]. There is nothing in the record to establish that the defendant's actions reached the level of gross negligence so as to make it liable for the alleged damages. In fact, all of the problems which the claimant alleges the defendant failed to discover are set forth in the written report including a notation that the house had settled which would explain the problem with the staircase and the windows.
The claimant failed to establish the elements of gross negligence, so he would only be entitled to recover the amount of the fee paid to the defendant pursuant to the contractual exculpatory clause, if he could prove ordinary negligence. As noted above, neither side bothered to produce the contract so the court would only be speculating that such a clause existed and that the clause limited the recovery to the fee paid, which the parties testified was $400.00.
This leaves the claimant with a common law negligence claim against the defendant. In order to prove common law negligence, claimant must establish that the defendant failed to conduct the inspection in the manner and up to the standards of licensed home inspectors in the community. To establish this community standard, expert testimony was needed [Dori v Rabco Engineering, PC 33 Misc 3d 1217(A) (2011)]. No expert testimony was offered so the claimant has failed to prove his prima facie case.
As this court has previously noted in Carney v Coull Bldg. Inspections, Inc., 16 Misc 3d 1114(A) (2007) and Brady v Posse, 14 Misc 3d 1232(A) (2007) a serious question exists as to whether there still exists a common law cause of action against an unlicensed home inspector since the passage of Real Property Law Article 12-B. As pointed out in those decisions, unlike in many other consumer protection statutes, the legislature has not created a private right of action in the event there is a violation of the statute nor has the legislature specifically preserved any common law rights of action. Both of which the legislature has done in other consumer protection statutes. This article gives the secretary of state the authority to pursue violations of the statute [RPL§§444-n & 444-o] and specifically mentions only criminal penalties.
A check of the Regulations promulgated by the secretary 19 NYCRR 197-1 et seq. [*4]does not disclose any additional information in regard to the issue of whether the statute creates a private right of action against both licensed and unlicensed inspectors and whether the statute preserves or preempts any common law remedies.
The statute is also unclear as to whether a person with a claim against a licensed or unlicensed home inspector must exhaust his or her administrative remedies prior to seeking redress through civil litigation. There is nothing in the rules of the secretary of state to clarify this issue either. Although RPL §444-p clearly provides that any action of the secretary must be redressed in a CPLR Article 78 proceeding.
The above being said, defendant has failed to establish that he had a license. That being the case, it is the intent of the statute that an unlicensed defendant has to make restitution to the claimant consumer of the fee paid irrespective of the quality of the report.
Judgment for claimant against defendant Richmond in the amount of $450.00 together with interest from the date of judgment, costs and disbursements.
The $450.00 includes the $400.00 the defendant testified he charged for the inspection. Claimant failed to contradict that as the amount paid to the defendant. In addition, claimant failed to prove as a matter of law that the defendant's inspection was negligently performed. The report referenced all of the defects the claimant asserted existed. Expert testimony was needed to establish a departure from the standards utilized by home inspectors and none was offered.
In addition to restitution of the $400.00, claimant is entitled to the sum of $50.00 as provided by General Business Law §349. The failure of the defendant to have his license number on the report in violation of RPL Article 12-B is a deceptive business practice under GBL §349 as it does not inform the consumer of the businesses legal status.
Based on the nature of the structural problems, claimant may want to consult counsel as to whether a claim might exist against the seller for failing to disclose conditions which were not discoverable upon reasonable inspection if it can be established that the seller had such knowledge.
SC#646/11
Claimant alleges that when defendant Post conducted its pest infestation inspection on November 3, 2009, it was grossly negligent in failing to discover termite damage to the premises. The person who conducted the pest infestation inspection for Post was the same individual that performed the structural inspection for Richmond.
Claimant testified that when he started to do renovations in the kitchen he discovered prior termite damage and current termite activity in the walls. The damage was so extensive that he was required to incur unexpected expenses to remove walls to correct the damage. Claimant also noted that Richmond failed to discover the damage when it did its structural inspection as well. [*5]
Claimant asserts that he hired another company to treat the premises and that company pointed out drill holes in the concrete around the building which is indicative of a prior termite treatment. In fact, defendant at trial admitted that such holes customarily would establish that there had been a termite treatment in the past and that he had failed to notice them when he did the inspection. However, defendant reiterated that there was no observable termite activity when he inspected and to support that allegation he pointed out that the claimant only noticed the prior damage when he removed all items from the cabinets under the kitchen sink. Claimant further stated that the extent of the damage was discovered when he began removing sheet rock from the first floor walls.
Similar to the situation in SCR#645/11, no written contract between the parties has been produced by either side. All that is in evidence is the "termite inspection report" from defendant dated November 3, 2009. A copy of which was also attached with the home inspection report used in SCR#645/11. Unlike the home inspection report, the termite report has a license number for defendant Post on it and defendant produced copies of his "Commercial Pesticide Applicators" license issued by the New York State Department of Environmental Conservation.
Environmental Conservation Law [ECL] Article 33 requires that persons who apply pesticides be licensed. There is no license required to do pest infestation inspections, only to remediate any such condition. So apparently anyone can come in and opine that they know the difference between termites, carpenter ants and carpenter bees or the damage that these insects caused. There is no penalty in the statute for an improper inspection. If there is a violation of ECL Article 33, ECL Article 71, Title 29 provides administrative, civil and criminal sanctions and specifically does so without affecting "the rights of any other person seeking damages arising out of a violation"[ECL§71-2901(5)]. However, because defendant Post did not treat termites at the claimant's home, there is no redress against Post under the statute.
Also in a state and city where there is extensive licensing of businesses and concern about the environmental impact of certain activities, it is somewhat ironic that there is no central or countywide registration required when a building is treated with pesticides. If the application process is so dangerous that persons engaged in the business must be licensed, it follows that the public should have some method of checking whether a premises has been treated and what chemicals were used. If there was such a registration of treated properties by address, inspectors such as the defendant could check the records not only advise a potential purchaser of the existence of the prior condition but also then make a more educated inspection of the premises for new infestation activity. Registration would also supplement the information relevant to infestation asked in the Property Condition Disclosure Act at questions #22 & #23 [RPL§462].
Defendant Post's report only deals with the existence of termites at the premises and no other common causes of infestation. It concludes that "there is no evidence of active termite condition in the structure." It points out that the substructure is inaccessible because of the slab on grade construction and the there is no guarantee in regard to areas [*6]that are inaccessible. Because the claimant failed to produce a copy of his contract with the seller to purchase the premises, along with the failure to submit his contract with Post, it is impossible to determine whether Post's inspection met the claimant's obligation under the terms of the purchase contract.
Judgment for defendant. Claimant has failed to prove his prima facie case. Claimant has not submitted any documentation that establishes that there was an active termite condition at the premises that the defendant failed to detect.
Claimant needed expert testimony to establish that the defendant breached the standards used by termite inspectors in the community. No such testimony was produced. There is no evidence that the claimant hired another inspector that found a current active infestation condition nor is there any evidence that he paid someone to treat the alleged infestation and repair the damages.
Based on the nature and extent of the problems claimant has found at the premises, claimant may have a cause of action against the seller if it can be established that the seller knew about the termite problem and failed to disclose it if required to do so by the contract of sale.
Claimant also submitted one estimate for repairs to the premises which the claimant asserts was made necessary because of the failure of the defendant in each of these actions to properly perform the service each was hired to do. There are several problems with the proposal.
First, there is no differentiation between what repairs were attributable to the negligence of Richmond and what were the responsibility of Post.
Second, there is no indication that the contractor was paid. The bill is not marked "paid"and under the rules of small claims court, claimant either needed a paid bill, two estimates, or live testimony, none of which was presented.
Third, the contract used by the contractor claimant hired does not indicate that it is a licensed home improvement contractor by the New York City Department of Consumer Affairs. All home improvement contractors in NYC must be licensed. The court cannot award damages to the claimant if the claimant uses an unlicensed contractor. There is no license number disclosed on the proposal, nor is there any independent evidence establishing the contractor was licensed.
Fourth, the total of the repairs in the proposal is $15,800.00 an amount more than triple the $5,000.00 jurisdictional limit of small claims court. Rather than sue in the regular civil part of the court, claimant sought to break his claim into two $5,000.00 causes of action thereby qualifying for small claims court and incredibly walking away from an additional $5,800.00 in damages which he attributes to the defendants. Aside from the fact that the policy of the small claims part is to prohibit claimant's from severing one claim [*7]into components solely to meet the jurisdictional limit of the small claims part, and giving the claimant the benefit of the doubt that such action was not his motivation here, claimant had the burden of proof to establish what portion of the repairs was attributable to each defendant. He failed to do so. He has lumped all of the damages into one bill without any differentiation as to the cause of the problems listed. It should also be noted that the proposal fails to differentiate between materials and labor. Neither was any sales tax charged.
Judgment for defendant. Claimant's cause of action against Post is dismissed on the merits.
Exhibits, if any, in each matter will be available at the office of the clerk of the court thirty days after receipt of a copy of this decision.
The foregoing constitutes the decision and order of the court.
Dated:January 28, 2013
Staten Island, NY HON. PHILIP S. STRANIERE
Judge, Civil Court
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