Tingler v. Graystone Homes, Inc.

• Decision Date: 31 October 2019
• Docket Number: Record No. 180791
• Citation: 834 S.E.2d 244
• Court: Virginia Supreme Court
• Parties: George TINGLER, et al. v. GRAYSTONE HOMES, INC.

834 S.E.2d 244

George TINGLER, et al.

v.GRAYSTONE HOMES, INC.

Record No. 180791

Supreme Court of Virginia.

October 31, 2019

David Hilton Wise (Wise & Donahue, on briefs), for appellants.

Melissa H. Katz (Stephen A. Horvath ; Charles J. Nucciarone; Bancroft, McGavin, Horvath & Judkins, on brief), for appellee.

PRESENT: Lemons, C.J., Goodwyn, Mims, Powell, Kelsey, and McCullough, JJ.

OPINION BY JUSTICE D. ARTHUR KELSEY

The pleadings in this case allege that George and Crystal Tingler entered into a construction contract in 2009 with a home builder, Graystone Homes, Inc., to construct a new home on property owned by a family-run company, Belle Meade Farm, LLC. After the house had been built, rain water leaked into the house and mold developed. Graystone tried, but failed, to fix the leaks and to remediate the mold.

The Tinglers and their four children¹ abandoned the home due to the mold and sued Graystone, seeking tort remedies for personal injuries, property damage, and economic losses. The Tinglers and Belle Meade separately sued Graystone, seeking contract remedies for property damage and economic losses. Sustaining Graystone's demurrers, the circuit court dismissed all claims in each of the complaints. We affirm in part and reverse in part.

I.

A.

"Because this appeal arises from the grant of a demurrer, we accept as true all factual allegations expressly pleaded in the complaint and interpret those allegations in the light most favorable to the plaintiff." A.H. ex rel. C.H. v. Church of God in Christ, Inc. , 297 Va. ––––, ––––, 831 S.E.2d 460, 465 (2019) (citation omitted). " ‘To survive a challenge by demurrer,’ however, factual allegations ‘must be made with "sufficient definiteness to enable the court to find the existence of a legal basis for its judgment." ’ " Id. (citation omitted).² "A plaintiff may rely upon inferences to satisfy this requirement but only ‘to the extent that they are reasonable .’ " Id. (emphasis in original) (citation omitted). "Distinguishing between reasonable and unreasonable inferences is ‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense’ guided by the principle that ‘a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable.’ " Id. (citations omitted).

B.

In 2015, the Tingler family and Belle Meade filed a single complaint alleging 24 contract, tort, and statutory claims against Graystone. On the ground of misjoinder, the circuit court entered a consent order requiring the plaintiffs to file separate complaints. The order specified that the Tinglers and their four children must file separate complaints asserting "each of their personal injury claims." J.A. at 4. The order further directed that the Tinglers and Belle Meade must file a single complaint asserting "any non-personal injury claims." Id.

After the plaintiffs had refiled seven separate complaints pursuant to the court's directions, the court sustained Graystone's demurrers to all counts and dismissed each complaint with leave to amend. The court held that, under the source-of-duty rule, no negligence claim could prevail because "Graystone's alleged misdeeds consist[ ] of its failure to perform or fully perform its contractual duties." Id. at 452-53. The court dismissed Belle Meade's contract claims, holding that Belle Meade was not a party to the agreement and thus had no standing to bring the claims. The court dismissed the Tinglers' contract claims because the Tinglers had no standing given that the home had become a fixture of the land owned by Belle Meade, not by the Tinglers.³

In response to the circuit court's ruling on the demurrers, the Tinglers and Belle Meade filed a second amended complaint,⁴ which amplified their contract claims that were based upon agency and third-party-beneficiary principles. They also asserted negligence claims for various forms of property damage: real and personal as well as tangible and intangible.⁵ The Tinglers and their children each filed amended complaints that attempted to bolster their tort claims for personal injuries. The Tingler family also claimed to have sustained property damage to the home and its contents and to have incurred unspecified expenses. Graystone responded with another round of demurrers to each of the complaints. The court sustained the demurrers, finding that its earlier reasoning applied equally to all the amended complaints. In its final orders, the court dismissed all claims in each of the cases with prejudice.

C.

With a few exceptions, the amended complaints assert a common set of factual allegations. We repeat these allegations as if they were true, but, of course, we only presume them to be so given the procedural posture of the case.

1.

In 2009, Graystone entered into a construction contract with the Tinglers to build a new home with a purchase price of $495,000. The first paragraph of the contract states: "This agreement is made this date between George and Crystal Tingler (hereinafter referred to as ‘Owner’) and Graystone Homes, Inc. (hereinafter referred to as ‘Contractor’) for the purpose of erecting a new home." Id. at 99 (emphasis omitted). At the end of the contract, under the heading "Owner," the Tinglers signed their names. Id. at 106 (altering capitalization). Under George Tingler's signature appears the title "Owner Representative." Id.

The contract does not mention Belle Meade or expressly state that the Tinglers were executing the contract in any agency capacity. At the time of construction, however, Belle Meade was the title owner of the farm land on which the home was built. The address listed for the location of the new home was "21416 Belle Meade Farm Road." Id. at 82, 123, 136, 149, 161, 174, 186; see id. at 99, 107, 121. The second amended complaint asserts that Graystone knew that Belle Meade would and did make all payments due under the contract. Graystone further understood that "Belle Meade Farm and the Tinglers intended in the future to partition the real property on which the Home was located from the rest of the farm land ... and transfer ownership of both the real property and the completed Home to the Tinglers." Id. at 83. Based upon these allegations, the Tinglers claim that they entered into the contract on behalf of their principal, Belle Meade, and thus, that Belle Meade was in privity of contract with Graystone and could sue to enforce the contract. In the alternative, they claim that Belle Meade was an intended third-party beneficiary of the contract with Graystone.

The second amended complaint avers that in early 2010, "[a]t the time of the 30-day inspection of the Home" permitted under the contract, the Tinglers discovered leaks at the patio French doors in the dining room and reported the leaks to Graystone. Id. at 84. Graystone responded by applying additional sealants and by replacing damaged hardwood flooring. In early 2011, the Tinglers discovered and reported another leak in the dining room. Graystone responded by installing additional flashing and by replacing hardwood flooring. On neither occasion did Graystone specifically look for mold.

After experiencing medical symptoms in early 2014, the Tinglers hired an inspector who discovered mold in the basement underneath the dining room where the leaks had occurred, elevated levels of airborne mold spores throughout the home, and elevated levels of moisture in the dining and kitchen areas near the patio French doors. In October 2014, Graystone removed and reinstalled the patio French doors, windows, and hardwood flooring. Graystone also installed drain pans underneath the patio French doors. When the patio French doors continued to leak rainwater thereafter, Graystone installed additional sealants around the patio French doors. Graystone also applied an anti-microbial solution, attempting to clean up the mold and to prevent its growth. At that time, however, Graystone did not inspect for mold behind the drywall in this area.

Later that month, a reinspection of the home revealed elevated moisture levels in the dining and kitchen areas near the patio French doors. A Graystone employee met the inspector at the home. The Graystone employee cut a hole in the dining room drywall and removed from the wall cavity "a large section of wet, moldy" insulation. Id. at 86, see also id. at 125-26, 138-39, 152, 164, 176, 188. The employee dropped the insulation on the floor and cleaned up the mess with the Tinglers' vacuum cleaner. Before the Graystone employee performed this work, Crystal Tingler had asked whether the personal property and furniture in the area should be covered, but the Graystone employee said that such action was not necessary and did not place a containment barrier around the work site.

After removing the mold-laden insulation, the Graystone employee covered the drywall hole with a black garbage bag. In November 2014, Graystone placed containment sheeting in the dining room at the Tinglers' request. A little over a week later, the Tingler family vacated the home because of continued physical symptoms that they attributed to mold exposure. After the Tinglers had vacated the home, a remediation contractor concluded that Graystone's containment sheeting had been improperly placed, and another inspector visited the home and found elevated levels of mold spores and moisture.

2.

In their second amended complaint, the Tinglers and Belle Meade allege that Graystone breached the contract during the construction process by failing to supervise its workers and by failing to construct the home as promised — "skillfully, carefully, diligently, in a good, workman-like manner, and in compliance with all applicable laws, ordinances, and building codes." Id. at 90. They also allege that Graystone breached its contractual warranty by not building the home in accordance with industry standards, by not fixing the original defects, and by not remediating the mold that occurred...