Sears v. Gregory

• Decision Date: 13 September 2004
• Docket Number: No. M2002-02771-COA-R3-CV.,M2002-02771-COA-R3-CV.
• Citation: 146 S.W.3d 610
• Parties: David T. SEARS, et al. v. Charles GREGORY, et al.
• Court: Tennessee Court of Appeals

146 S.W.3d 610

David T. SEARS, et al. v. Charles GREGORY, et al.

No. M2002-02771-COA-R3-CV.

Court of Appeals of Tennessee, Middle Section, at Nashville.

September 2, 2003 Session.

January 23, 2004.

Permission to Appeal Denied by Supreme Court September 13, 2004.

Appeal from the Circuit Court, Davidson County, Barbara N. Hayes, J Lawrence H. Hart, Nashville, Tennessee, for the appellants, David T. Sears and wife, Anita G. Sears, David T. Sears as natural guardian and next friend of M.L.S., a minor and B.S., a minor.

M. Bradley Gilmore and Kathleen W. Smith, Nashville, Tennessee, for the appellees, Charles Gregory, d/b/a Charles Pest Control and Charles O'Brien, individually and severally, Western Surety Company.

OPINION

WILLIAM B. CAIN, J., delivered the opinion of the court, in which PATRICIA J. COTTRELL, J., joined.

Plaintiff homeowners sued Defendant pest control operators for negligent misrepresentation and breach of warranty relative to the issuance by the Defendants of a wood destroying insect infestation inspection report pursuant to Tennessee Code Annotated section 62-21-201 to 206. The trial court granted summary judgment to Defendants. Because civil liability is limited by section 62-21-202 and Plaintiffs allege no damages caused by the presence of wood-destroying insects, we affirm the judgment of the trial court.

David T. Sears and Wife, Anita G. Sears, were first time home buyers in the market for a moderately priced home. Mrs. Margaret L. Jones owned such a home located at 3815 Marydale Court in Nashville. This home was located near to Mrs. Sears' place of employment and she observed a Crye-Leike Realtor "for sale" sign in the front yard. At the suggestion of their home loan originator, they contacted real estate agents Sandra Hill and Michelle Thatcher, d/b/a "The Buyer's Agent." The Sears signed a contract with the buyer's agent under which they would pay Hill and Thatcher 3% of the sale price of any home that they purchased. They looked at two or three other properties with their agent but settled on the Marydale Court residence and made an offer of $79,900 for the property. This offer was rejected, but ultimately, Mrs. Jones accepted their offer of $83,000.

As it relates to termites and wood destroying insects, David Sears testified:

Q. As you sit here today, do you have—what is your first recollection of thinking about, hey, we need an inspection or we are going to get an inspection for termites or other wood-destroying insects?

A. What would be my concerns?

Q. What I am asking is when—as you sit here today, when was the first time that you recall even thinking about that issue?

A. At closing.

Q. So prior to closing, you don't have any recollection of even discussing that issue with Ms. Hill or Ms. Thatcher or even thinking about it?

A. No.

Q. Did you and Ms. Hill or Ms. Thatcher or anybody from The Buyer's Agent ever talk about the fact that you should have a home inspection done?

A. Yes.

Q. Tell me about the discussions there.

A. She talked us out of it.

Q. Did you bring it up or did she bring it up?

A. She brought up if we wanted a home inspection.

And I said, Yes. And I said how much would it cost.

And she said $400.

And I said we don't have $400.

And she said you don't really need it. All they are going to do is check out your plugs and stuff.

Q. By who?

A. Ms. Hill.

Plaintiffs made no inspections themselves in the crawl space or by testing the floor boards or probing the walls prior to the closing on March 9, 2001.

The inspection by the Defendants, who provided to the buyers on behalf of the sellers the wood destroying infestation inspection report in issue in this case, occurred on February 22, 2001. Neither of the Plaintiffs ever had any contact with Defendants, Charles O'Brien or Charles Gregory, until well after the date of closing and after they had discovered moisture and mold problems with the house.

The facts up to this point of the chronology are essentially undisputed. Indeed, there is little material dispute as to the facts of the case. However, the facts subsequent to the closing on March 9, 2001 reveal something of a nightmare to Plaintiffs. As this case is before the Court on summary judgment, the recitation of the facts is subject to the caveat that the facts are found and considered by the Court in the light most favorable to Plaintiffs. Byrd v. Hall, 847 S.W.2d 208 (Tenn.1993).

Within days after moving into the home, Plaintiffs began to experience nasal irritation and severe headaches. These symptoms were accompanied by a burning sensation in the eyes and disagreeable odors. Plaintiffs first removed their newly installed carpet from their bedroom on the assumption that it was a causal factor of their symptoms. They then called Home Depot, who suggested the installation of a plastic vapor barrier in the crawl space under the house. When this did not alleviate the problem, they called Steamatic of Nashville for an evaluation of their house. Next, they called Terminex and, following Terminex' inspection, installed new ventilators and applied timbor, a chemical designed to control excessive moisture.

The basic problem is probably best explained in the report of J. Scott, senior inspector for Inspection Services by Scott. Said Mr. Warrington:

Conclusions And Recommendations: Mold spores are present everywhere except where special "clean room" conditions are maintained. Therefore the mere presence of mold does not mean there is a problem. However, where there is a food source and sufficient moisture the colonies will grow and multiply producing a reservoir of spores. This increased activity can pose a health threat depending on the individuals exposed and the type of mold. This results from exposure to mycotoxins. These are a byproduct of growth and are toxic to humans.

The pattern of moisture in the walls (more dampness near the floor) indicates the moisture is coming from below and wicking into the absorbent material of the drywall. First priority should be given to ensuring that the source of moisture is eliminated. The installation of ventilation equipment and a moisture barrier should be of considerable help in this situation. Treating the effected areas with a sanitizer/mildewcide such as sodium hypochlorite solution is suggested. A supply of dehumidified air to the crawl space would also be helpful.

Commercial dehumidifiers should be used to assist in drying the walls. Baseboards can be removed and holes drilled that allow access to the wall cavity. Using negative pressure, damp air can be sucked out of the wall cavity and replaced with drier air. When the walls are dried to normal level of moisture content and the humidity is maintained below 50% reservoirs of mold growth will no longer be a problem. This drying should be able to be accomplished in approximately 2 days. After drying, the baseboards are replaced covering the holes.

Air removed from the walls should enter a HEPA filter to remove any spores and mycotoxins from the air. Simply exhausting the air into the home can spread the mold spores.

For added assurance, a mildewcide can be applied to the inside of the wall cavity using a sprayer with a nozzle extension that fits through the holes at the base of the wall. These openings can also be used with a fiber optic inspection tool to examine the inside of the wall cavity for mold.

Charles Pest Control is an individual proprietorship owned by Defendant Charles Gregory. At the time of the February 22, 2001 inspection at 3815 Marydale Court in Nashville, Charles O'Brien was an employee of Charles Gregory and was in the process of buying the business from Mr. Gregory. Charles Pest Control was contacted by agents of the seller for the purpose of providing to the buyers a wood-destroying insect infestation inspection report. Charles O'Brien inspected the property on February 22, 2001, after which he prepared and signed the report.¹ The report states that the inspector found "No Visible evidence of a wood destroying insect infestation."(emphasis in original). The report further made exception as to inaccessible areas, same being insulation in the crawl space, fixed ceilings, fixed wall covering, floor covering, and cabinets or shelving. Mr. O'Brien made no notation of any kind on the report about moisture in the crawl space or wide spread mold, although in deposition he acknowledged that at the time of his inspection, 80% of the crawl space was affected by mold.

The only defendants in this case are the two men who operated Charles Pest Control. Their liability for either negligent misrepresentation or breach of warranty depends entirely upon the wood-destroying insect infestation inspection report of February 22, 2001. This particular report is on a form prescribed by the National Pest Management Association and the United States Department of Housing and Urban Development.

In granting summary judgment to Defendants, the trial court held:

As grounds for its decision, this Court finds that the gravamen of the plaintiffs' claims are negligent misrepresentation under § 552 of the Restatement (Second) of Torts, as that section has been adopted in Tennessee, and breach of warranty as set forth in subsection (c) of Tenn.Code Ann. § 62-21-202. To be successful, both claims require the plaintiffs to have detrimentally relied on a misrepresentation or false statement made by the defendants, or on a warranty that has been breached. The undisputed facts of this case show, however, that the defendants did not make any false statement or misrepresentation upon which the plaintiffs relied to their detriment in the Wood Destroying Insect Infestation Report given to the plaintiffs by defendant Charles O'Brien, nor did the defendants breach the warranty created by the statute cited above. The defendants are, therefore, entitled to judgment as a matter of law.

This particular HUD form had been in existence long prior to Chapter 668 of the...