Lawley v. Northam
| Decision Date | 01 December 2011 |
| Docket Number | Civil Action No.: ELH-10-1074 |
| Parties | DARREN LAWLEY, ET AL., Plaintiffs, v. PAUL E. NORTHAM, ET AL., Defendants. |
| Court | U.S. District Court — District of Maryland |
This diversity case arises from a real estate transaction involving a single-family home in Worcester County, Maryland (the "Property"), which was sold in September 2008 to Dona May Willoughby, plaintiff,1 by Paul Northam and Lynn Immell ("Sellers"), defendants. Although Ms. Willoughby was the purchaser, her daughter and son-in-law, Misha and Darren Lawley (the "Lawleys"), plaintiffs, were to reside at the Property. Deborah Hileman and Hileman Real Estate, Inc. ("Hileman, Inc.") (collectively, the "Hilemans"),2 defendants, were the Sellers' real estate agents and brokers.
Based on purported defects in the Property, allegedly discovered after the Lawleys moved in, plaintiffs filed suit against the defendants. Their Amended Complaint ("Complaint," ECF 43) contains fourteen counts, as follows: Negligence (Count I); Breach of Contract (Count II, against Sellers only); Fraudulent Inducement/Deceit (Count III); Fraud/Concealment (Count IV); Negligent Misrepresentation (Count V); Negligent Supervision and Retention (Count VI, against Hileman, Inc. only); Respondeat Superior (Count VII, against Hileman, Inc. only);Unfair or Deceptive Trade Practices under the Maryland Consumer Protection Act ("CPA"), MD. CODE (2005 Repl. Vol., 2011 Supp.), COM. LAW ("C.L.") § 13-101 et seq. (Count VIII, against Sellers only); Civil Conspiracy (Count IX); Breach of Warranty (Count X, against Sellers only); Loss of Consortium (Count XI); Declaratory Judgment (Count XII); Rescission (Count XIII); and Unjust Enrichment (Count XIV).
On February 4, 2011, the Hilemans filed a "Motion for Partial Summary Judgment" ("Hilemans' First Motion," ECF 50), as to the eleven counts in which they were sued. Briefing was completed on March 21, 2011. On April 5, 2011, I issued a Memorandum Opinion (ECF 67, "First Opinion") and Order (ECF 68), granting the Hilemans' First Motion as to the requests for Declaratory Judgment (Count XII) and Rescission (Count XIII), as well as the claim for Unjust Enrichment (Count XIV), but only as to the Lawleys, not Ms. Willoughby. Those counts remain pending as to Ms. Willoughby.
One day before I issued the First Opinion, on April 4, 2011, the Sellers filed a "Motion For Summary Judgment Of Defendants Paul E. Northam And Lynne Immell" ("Sellers' Motion," ECF 58), as well as a supporting memorandum of law ("Sellers' Memo," ECF 58-1). Plaintiffs filed an "Opposition To Motion For Summary Judgment" ("Opposition to Sellers," ECF 71),3 to which the Sellers filed a reply ("Sellers' Reply," ECF 74).4
Also on April 4, 2011, the Hilemans filed a second summary judgment motion, captioned ("Hilemans' Second Motion," ECF 60), in which they "assert[ed]the same arguments in support of Summary Judgment as have been asserted by Defendants Paul Northam and Lynne Immell" (see ECF 58), as well as several other arguments.5 Hilemans' Motion at 1. The Hilemans also submitted a "Statement Of Undisputed Material Fact[,] Applicable Law And Argument Of Hileman Real Estate And Deborah Hileman" ("Hilemans' Memo," ECF 60-1).6 In their opposition, see plaintiffs' "Opposition To Motion For Summary Judgment" ("Opposition to Hilemans," ECF 73), plaintiffs "adopt and incorporate . . . by reference all grounds and authorities set forth" in their Opposition to Sellers (ECF 71), as well as their earlier submissions, including ECF 52, their opposition to the Hilemans' First Motion. Opposition to Hilemans at 1-2.
Thereafter, the Sellers filed an "Adoption Of Other Defense Motions For Summary Judgment By Defendants Paul E. Northam And Lynne Immell" (ECF 61), in which they adopted the "arguments, authorities, and evidence" in the Hilemans' Second Motion (ECF 60), "to the full extent to which said motion is applicable to Defendants Northam and Immell and are consistent with their positions." In opposing this second motion for summary judgment, ECF 72, plaintiffs adopted and incorporated "all grounds and authorities set forth in their filing (ECF 71) . . . and the other filings in opposition to Motions for Summary Judgment in this matter, including ECF 52." Id. at 1.
The issues have been fully briefed, and the Court now rules pursuant to Local Rule 105.6, as no hearing is necessary. For the reasons that follow, defendants' motions for summary judgment shall be granted in part and denied in part.
Ms. Willoughby, a resident of Hawaii, purchased the Property from Northam and Immell on September 5, 2008. Complaint ¶ 26. "The purchase offer . . . was in the amount of $192,450.00." Id. ¶ 22. Ms. Willoughby is the mother of Ms. Lawley and the mother-in-law of Mr. Lawley, the occupants of the Property. See Hilemans' "Memorandum Of Grounds And Authorities In Support Of Motion For Partial Summary Judgment" ("First Memo," ECF 50-1) at 2, 7; Plaintiffs' "Opposition To Motion For Partial Summary Judgment" ("First Opposition," ECF 52) at 3. The Sellers are the first cousins of Ms. Hileman, a real estate broker licensed in Maryland and the sole shareholder of Hileman, Inc. See Hilemans' First Motion at 1; First Opposition at 3.8 In connection with the sale of the Property, Hileman, Inc. received a commission from the Sellers in the amount of $4,811.25. First Opposition at 22.
At the relevant time, Ms. Hileman's mother, Peggi Bortz, was Ms. Hileman's administrative assistant. Ms. Bortz has been a "licensed real estate broker" for forty years. Id. at3-4; see First Opposition Exh. 2, at 24:11. At her deposition, Ms. Bortz testified that, for about twenty-eight years, she owned the house adjacent to the Property. Id. at 9:1-9:4. Her father, Otis Northam (Ms. Hileman's grandfather), had once owned the Property, as well as the adjacent Bortz property, but later subdivided and gave the portion referred to as the Property to his son, David Northam. Id. at 17:2-17:6. In 1957, David Northam and his wife, Irene, built the Property. Id. at 12. David Northam lived in that house until he died; Irene Northam lived there until 2003.9
After Irene Northam moved from the Property, Paul Northam10 and his sister, Lynne Immell, arranged with Hileman, Inc. to rent, and later sell, the Property. First Opposition at 4. Ms. Bortz testified that she was involved with managing repairs of the Property while it was a rental. First Opposition Exh. 2, at 30:15-31:19. The Property was rented between 2003 and 2008. James Kelly Carrigan was one of the persons who rented it. First Opposition at 4-5; First Opposition Exh. 18. During the period in which the Property was a rental, the Hilemans allegedly learned about several defects with respect to the Property. Their alleged non-disclosure of those defects forms the basis of this suit.
On January 23, 2007, Mr. Carrigan, who was living at the Property with his son and daughter-in-law, wrote a letter to Ms. Hileman, stating: First Opposition Exh. 4.
In an e-mail dated February 14, 2007, Ms. Hileman wrote to Northam to discuss the Property, including the "high number of nitrates currently (14 versus a safe level [which] should be less than 10) in the water." First Opposition Exh. 5. A letter addressed to Ms. Hileman from the Worcester County Department of Environmental Programs, dated March 27, 2007, indicated that a point of use system on the kitchen sink would be sufficient to address the nitrate level, but that "the well owner must notify any future owner or tenant that the water is considered potable only through the treatment system." First Opposition Exh. 6.
By letter to Ms. Hileman dated January 23, 2007, Mr. Carrigan indicated that "asbestos in the basement is a huge concern." First Opposition Exh. 4. In an e-mail from Ms. Hileman's attorney to Ms. Hileman, dated August 16, 2007, regarding Mr. Carrigan's complaints concerning the Property, counsel acknowledged that asbestos was "a really big issue." First Opposition Exh. 7.11
The basement of the Property has a history of "water intrusion." First Opposition at 6. According to Ms. Bortz's deposition testimony, the basement flooded in 1989 and, as a result, Mr. Northam arranged for installation of a sump pump. First Opposition Exh. 2, at 55-56. Ms. Hileman testified at her deposition that, when the water level became high, the sump pump pumped the excess water into a ditch along Worcester Highway. First Opposition Exh. 1, at 111:3-111:10. In a letter dated February 28, 2007, in which Ms. Hileman requested repair service for the sump pump, she stated: "Just to give you a bit of information to keep in mind for your service people, this is a system that is needed on a daily basis to keep the basement dry."First Opposition Exh. 8. Ms. Hileman also testified that she had seen water in the basement around the sump pump area when the backup battery was not functioning. First Opposition Exh. 1, at 104:9-104:10.
The sump pump repeatedly malfunctioned and was repaired or replaced on a number of occasions, under Ms. Bortz's watch. See First Opposition Exh. 10-15.12 It appears there was at least one other flood, in 2004. First Opposition Exh. 10. In an e-mail dated June 20, 2005, from Ms. Bortz to Ms. Hileman and Northam, Ms. Bortz wrote that the plumber had not been able to find a sump pump with sufficient horsepower "to suit him." First Opposition Exh. 11.
By e-mail dated August 25, 2005, Ms. Bortz wrote Northam and Immell about the...
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