Seth Jenkins v. Michael Stonoha et al. (2011)

MEMORANDUM OF DECISION

FACTS

The Plaintiff, Seth Jenkins, purchased 25 Horace Street, Stratford, from the Defendants, Michael Stonoha and Laurelle Stonoha, in September of 2005.

The property consists of 0.11 acres, and is located in an RS–4 (Residential) Zone. The single family dwelling is a colonial style home, which was built in approximately 1926 (Ex. A).

On July 10, 2005, the parties signed a Purchase Agreement (Ex. 1), and a Residential Property Condition Disclosure Report, required pursuant to the provisions of § 20–327b of the Connecticut General Statutes (Ex. 3).

Formal contracts, listing Michael G. Stonoha and Laurelle F. Stonoha as the Sellers, and Seth Jenkins and Denise Gregorio as the Buyers, were executed on August 3, 2005 (Ex. 2).   Prior to completing the purchase, the Plaintiff secured a building inspection, performed by The Charter Oak Inspection Co., LLC (Ex. 5).

The Plaintiff resided at 25 Horace Street for three years, before he listed the property for sale in 2008.   During the course of a 2008 building inspection, performed on behalf of the prospective buyers, an underground oil tank was discovered on the property.   The tank was removed in December of 2008, prior to the sale of the property by the Plaintiff, Seth Jenkins.

This action was commenced via a writ, summons and complaint, made returnable April 3, 2009, which named Michael Stonoha, Laurelle Stonoha and Charter Oak Home inspections, LLC, as defendants.

The initial complaint consisted of eight counts.   Counts five through eight, which were directed to Charter Oak Home Inspections, LLC, were withdrawn prior to trial.

Count one alleges a breach of contract against Michael and Laurelle Stonoha.   Counts two (fraudulent misrepresentation), three (fraudulent concealment) arid four (negligent misrepresentation) were withdrawn prior to trial, leaving only the first count (see Withdrawal dated July 16, 2009).

The Plaintiff claims that the Stonohas breached their contract with him, due to the presence of the underground oil tank on the property at the time of the sale.

He claims damages in the amount of $8,351.68, representing the cost of the removal of the tank, and restoring the property (See Ex. 8 & 9).

BREACH OF CONTRACT CLAIM NOT PROVEN

The elements of a breach of contract action are the formation of an agreement, performance by one party, and breach of the agreement by the other party, resulting in damages.  Sullivan v. Thorndike, 104 Conn. 297, 303 (2007);  Bouchard v. Sundberg, 80 Conn.App. 180, 198 (2003).   There must be a bargain, in which there is manifested a mutual exchange between the parties.   Ubysz v. DiPietro, 185 Conn. 47, 51 (1981).

The Defendant claims that the Residential Property Condition Disclosure Report, Exhibit 3, contains inaccurate information concerning the presence of an underground oil tank on the property, and therefore, forms a basis for a breach of contract claim.

This disclosure form is required, pursuant to the provisions of § 20–327b(a) of the General Statutes, which reads:

(a) Except as otherwise provided in this section, each person who offers residential property in the state for sale, exchange or for lease with option to buy, shall provide a written residential condition report to the prospective purchaser at the time of the prospective purchaser's execution of any binder, contract to purchase, option or lease containing a purchase option.   A photocopy, duplicate original, facsimile transmission or other exact reproduction or duplicate of the written residential condition report containing the prospective purchaser's written receipt shall be attached to any written offer, binder or contract to purchase.   A photocopy, duplicate original, facsimile transmission or other exact reproduction or duplicate of the written residential condition report containing the signatures of both seller and purchaser shall be attached to any agreement to purchase the property.”

Exhibit 3, the Residential Property Condition Report, and Exhibit 1, the initial Purchase Agreement, are both dated July 10, 2005.

On page 2 of the property disclosure form, the Defendants slated that the residence is heated by a “Gas/Forced Hot Air (2 Zone),” and that they had experienced no problems with the heating system.   They further answered “NO,” to the question “Is there an underground fuel tank?”

Both the General Statutes, and Exhibit 3, limit the liability of a seller who completes the form.

Exhibit 3, on Page 4, the signature page, contains the following:  “To the extent of the Seller's knowledge as a property owner, the Seller acknowledges that the information contained above is true and accurate for those areas of the property listed.”

This language is consistent with § 20–327e of the General Statutes, which reads:

The representations made by the seller pursuant to section 20–327b or 20–327c shall be construed only to extend to the seller's actual knowledge or the property and no constructive knowledge shall be imputed to the seller.

On the same page of Exhibit 3, the following disclaimer appears:

III. Statements Not to Constitute a Warranty

Any representations made by the seller on this report shall not constitute a warranty to the buyer.

This language replicates the provisions of § 20–327d of the General Statutes.   That section reads:

No provision of section 20–327b or 20–327c:  (1) Shall be construed to create any new implied or express warranties on behalf of the seller of the property;  or (2) shall be construed to require the seller of the property to secure inspections, tests or other methods of determining the physical condition of the property.

Exhibit 3 reiterates the statute, with the following language, also contained on the Signature page, page 4:

IV. Nature of Disclosure Report

This residential disclosure report is not a substitute for inspections, tests, and other methods of determining the physical condition of the property.

The defendants had occupied 25 Horace Street for 22 years, prior to the sale of the property to the Plaintiff (Ex. C).  The property had been purchased from an estate, and, according to Michael Stonoha, there was little or no discussion concerning the heating system.

The residence employed gas heat during the entire time the Defendants owned the property, 22 years (Ex. 3).

Michael Stonoha testified, at trial, that Exhibit 3 was completed with the assistance of Paul DeYitto, a real estate agent.   The agent wrote the information contained on Exhibit 3, while Michael Stonoha supplied the information.

The Defendant, Michael Stonoha testified that he was unaware of the existence of the underground oil tank, during the time he resided at 25 Horace street.   The Plaintiff, Seth Jenkins, testified that he first learned of the tank, following a building inspection conducted prior to his sale of the home in 2008.   He had been unaware of its existence during the three years he resided in the home.

The evidence revealed that neither the Plaintiff or the Defendants were aware of the existence of the in ground tank prior to 2008, when a building inspector observed pipes in the basement near the water heater, prompting further investigation (Ex. 13, a & b).

It is therefore found that neither of the Defendants were aware of the presence of the tank, when Exhibit 3 was signed in July of 2005.

Section 20–327b is designed to facilitate communication beween buyers and sellers, and to avoid litigation.   A statement made pursuant to § 20–327b is made only to the best of a seller's knowledge and belief, and is not designed to create any warranty running to the buyer.  Reid v. Landsberger, 123 Conn.App. 260, 270 (2010).   Therefore, any relief which might be available, is provided only for a knowing misrepresentation.  Giametti v. Inspections, Inc., 76 Conn.App. 352, 357 (2003);  Hall v. Fonck, 122 Conn.App. 286, 293 (2010).

No provision of the General Statutes, incorporates the provisions of the Residential Property Condition Disclosure Report, into any contract of sale.   Although the parties are free to agree that a seller will be bound by the disclosure report, and that any representations will survive the closing of title, an examination of Exhibit 2 reveals no such language incorporating the representations into the written agreement, for the sale of 25 Horace Street.

To the contrary, Exhibit 2 contains the following clause:

Par. 15— “․ This agreement completely expresses the agreement of the parties, and has been entered into by the parties after discussion with their respective attorneys and after full investigation, neither party relying upon any statement made by anyone else that is not set forth in this Agreement ․”

It is found, that Exhibit 3 is not a part of the contract of sale between the Plaintiff and the Defendants, concerning 25 Horace Street, Stratford.

Although all tort claims have been withdrawn, it is further found the Defendants did not intentionally misrepresent the condition of 25 Horace Street, when they indicated that no underground fuel tank was located on the property.

The Plaintiff's failure to establish that Exhibit 3 is part of the contract for the purchase of 25 Horace Street is fatal to his claim.

Furthermore, since the Defendants completed Exhibit 3 to the best of their information and belief, it cannot form the basis of any recovery, in either tort of contract.

Judgment may enter in favor of the Defendants, Michael Stonoha and Laurelle Stonoha.

Costs are awarded to the Defendants.

RADCLIFFE, J.

Radcliffe, Dale W., J.