Ilkowitz v. Durand
| Decision Date | 27 March 2018 |
| Docket Number | 17 Civ. 773 (PGG) |
| Parties | JENIECE ILKOWITZ and ADAM ILKOWITZ, Plaintiffs, v. MICHAEL DURAND, MARLENE ZARFES a/k/a MARLENE DURAND, ALAN C. PILLA, HOULIHAN LAWRENCE, INC., JANE H. CARMODY, THE JUDICIAL TITLE INSURANCE AGENCY LLC, and ENCO HOME INSPECTIONS LLC., Defendants. |
| Court | U.S. District Court — Southern District of New York |
In this action, Plaintiffs Jeniece and Adam Ilkowitz assert claims against Defendants Michael and Marlene Durand, Alan Pilla, Houlihan Lawrence, Inc., Jane Carmody, The Judicial Title Insurance Agency LLC, and ENCO Home Inspections LLC (collectively, "Defendants") for (1) violations of the Residential Lead-Based Hazard Reduction Act (the "Lead Paint Act"), 42 U.S.C. §§ 4851 et seq.; (2) negligent misrepresentation or concealment; (3) fraud; (4) breach of contract; and (5) negligence. (Cmplt. (Dkt. No. 1) ¶¶ 1, 22-67) Plaintiffs claim that Defendants did not disclose the presence of known-lead based hazards before Plaintiffs' purchase of a residence, and Plaintiffs seek damages related to the cost of repairs to the home and any resulting medical expenses.
The Durands, Houlihan Lawrence, and Carmody filed cross-claims for contribution and/or indemnification against each other, Alan Pilla, Judicial Title, and ENCO. On April 25, 2017, the Durands filed a stipulation dismissing their cross-claim for contractual indemnification as against Judicial Title. (Stip. (Dkt. No. 62)) On June 19, 2017, Houlihan Lawrence and Carmody filed a stipulation dismissing their cross-claims against Judicial Title. (Stip. (Dkt. No. 68)) Accordingly, the only remaining cross-claim against Judicial Title is the Durands' cross-claim for common-law contribution.
On June 27, 2017, Plaintiffs filed a stipulation dismissing their claims against ENCO. (Stip. (Dkt. No. 69) at 1) The Durands, Houlihan Lawrence, and Jane Carmody have likewise filed stipulations dismissing their cross-claims against ENCO. (Stips. (Dkt. Nos. 72, 73)) Accordingly, ENCO is no longer a party to this action.
Defendant Judicial Title has moved to dismiss, or in the alternative, for summary judgment on (1) Plaintiffs' negligence claim; and (2) the Durands' cross-claim for contribution. (Jud. Title Mot. (Dkt. No. 75)) Judicial Title has also moved for sanctions pursuant to Fed. R. Civ. P. 11 against Plaintiffs and/or their attorney Jean-Claude Mazzola. (Jud. Title Mot. (Dkt. No. 102) at 1)
Defendant Alan Pilla has moved to dismiss (1) Plaintiffs' claims against him; and (2) the Durands', Houlihan Lawrence's, and Jane Carmody's cross-claims for contribution and/or indemnification against him. (Pilla Mot. (Dkt. No. 82))
For the reasons stated below, Judicial Title's motion for summary judgment will be granted. Judicial Title's motion for sanctions will be granted in part and denied in part. Pilla's motion to dismiss will be granted.
Plaintiffs Jeniece and Adam Ilkowitz are married and reside in Pelham, New York. (Cmplt. (Dkt. No. 1) ¶ 5) Plaintiffs' claims arise out of the Durands' sale of a residence located at 498 Manor Lane, Pelham, New York (the "Property") to Plaintiffs on March 9, 2015. (Id. ¶ 12)
Defendant Houlihan Lawrence is a real estate brokerage firm, and Jane Carmody is a real estate broker at Houlihan Lawrence. (Id. ¶ 8) Alan Pilla is the Durands' real estate attorney. (Id. ¶¶ 9, 16) Defendants Houlihan Lawrence, Carmody, and Pilla allegedly acted "as agents of the Durand Defendants" in the sale of the Property. (Id. ¶ 12)
Judicial Title is a title insurance company. (See id. ¶ 10) As part of the sale and closing process, Judicial Title performed a title search concerning the Property. (Id. ¶ 12) The title search did not reveal a "history or presence of lead in the Property." (Id.)
On March 6, 2015, the Durands signed a Disclosure of Information on Lead-Based Paint Hazards form (the "Lead Disclosure Form") as part of the contract of sale concerning the Property. (Id. ¶ 15; Cmplt., Ex. B (Lead Disclosure Form) (Dkt. No. 1-2) at 2) The Durands certified on this form that they had "no knowledge of lead-based paint and/or lead-based paint hazards in the [Property]," and that they had "no reports or records pertaining to lead-based paint or hazards" in the Property. (Cmplt., Ex. B (Lead Disclosure Form) (Dkt. No. 1-2) at 2) The Durands also signed the form's Certification of Accuracy, stating that they had"reviewed the information above and certify, to the best of their knowledge, that the information they have provided is true and accurate." (See id.)
The Lead Paint Act requires the seller's "agents" to initial the Lead Disclosure Form, and acknowledge that they have "informed the seller of the seller's obligations under 42 U.S.C. § 4952(d) and [are] aware of [their] responsibility to ensure compliance." (Cmplt. (Dkt. No. 1) ¶ 16) According to Plaintiffs, Houlihan Lawrence, Carmody, and Pilla acted as "agents" of the Durands. (Id.) They did not initial the Lead Disclosure Form or make the required acknowledgement, however. (Id.)
Unbeknownst to Plaintiffs, the Property had been cited on multiple occasions for lead contamination by the Westchester County Department of Health. (Id. ¶ 13) In a March 30, 2001 letter to the Durands, the Health Department cited the Property for lead contamination at levels exceeding the Health Department guidelines. (Id.) In follow-up inspection, the Health Department found that the Property was not in compliance with residential lead contamination laws and regulations. (Id.) The Health Department memorialized these findings in letters to the Durands and in reports that are available to the public through public records requests. (See id., Ex. A (Public Records) (Dkt. No. 1-1))
Plaintiffs did not become aware that the Property contained dangerous amounts of lead until after the purchase of the Property, however. (Cmplt. (Dkt. No. 1) ¶ 19) After learning that the Property was contaminated with lead, Plaintiffs had their daughter tested for the presence of lead in her blood, and she tested positive. (Id. ¶ 20) Plaintiffs then undertook costly repairs to the Property "in the interest of their family's health." (Id. ¶ 21) Had the Plaintiffs would not have purchased the Property. (Id. ¶ 19)
The Complaint was filed on February 1, 2017. In the First Cause of Action, Plaintiffs claim that the Durands - as sellers - and Pilla, Houlihan Lawrence, and Jane Carmody - as the sellers' "agents - did not make the required disclosures under the Lead Paint Act. (Id. ¶¶ 24-35) In Second and Third Causes of Action, Plaintiffs claim that the Durands, Houlihan Lawrence, Carmody, and Pilla induced Plaintiff to purchase the house by negligently and/or intentionally misrepresenting, concealing, or failing to disclose material facts regarding known lead-based paint hazards in the Property. (Id. ¶¶ 36-54) In the Fourth Cause of Action, Plaintiffs claim that the Durands breached the residential sale contract by failing to disclose material facts concerning the presence of lead, as required by "the specific terms and assurances of the contract of sale." (Id. ¶¶ 55-61) In the Fifth Cause of Action, Plaintiffs assert a claim against all of the Defendants, alleging that they failed to discharge their "duty [to] ensure the Property adhered to the contract of sale and was not in a hazardous condition," and to discover and disclose any known lead-based risks. (Id. ¶¶ 62-67)
In connection with Plaintiffs' purchase of the Property from the Durands, Plaintiffs hired Judicial Title to perform a title search of the Property prior to the closing. It is undisputed that Judicial Title did not produce to Plaintiffs any information or records disclosing lead contamination in, or lead-related violations regarding, the Property prior to the June 19, 2015 closing. )
In connection with the title search, Plaintiffs paid Judicial Title $324.00 to perform searches of municipal housing, building, fire, and certificate of occupancy records related to the Property. ).
The title report set forth the results of a municipal data search - conducted on March 13, 2015 - listing the unpaid taxes, water rates, and assessments "which are properly filed and indexed liens as of the date of the search." (Morano Decl., Ex. 3 (Municipal Data Search Report) (Dkt. No. 77-3) at 1; Def. R. 56.1 Stmt. (Dkt. No. 76) ¶ 4) Judicial Title's municipal data search report states: "[o]ur policy does not insure against such items which have not become a lien up to the date of the policy or installments due after the date of the policy." (Morano Decl., Ex. 3 (Municipal Data Search Report) (Dkt. No. 77-3) at 1; Def. R. 56.1 Stmt. (Dkt. No. 76) ¶ 5)
Judicial Title's title report also includes the results of its departmental searches - including searches of municipal housing, building, fire, and certificate of occupancy records. The first sentence of Judicial Title's Departmental Search Report states:
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