Wallace v. U.S.

• Decision Date: 09 September 2004
• Docket Number: No. C.A.00-179S.,C.A.00-179S.
• Citation: 335 F.Supp.2d 252
• Parties: Eugene WALLACE, Elizabeth Gonsalves, Eugene Wallace as Parent and Next Friend of Melain Gonsalves, Eugene Wallace as Parent and Next Friend of Kina Gonsalves, Eugene Wallace as Parent and Next Friend of Terris Gonsalves, Eugene Wallace as Parent and Next Friend of Lisa Gonsalves, Eugene Wallace as Parent and Next Friend of Coran Gonsalves, and Eugene Wallace as Parent and Next Friend of Jaymin Wallace, Plaintiffs, v. The UNITED STATES of America, The North Providence Housing Authority, and Micki Gold Realtors, Inc., d/b/a Coldwell Banker Gold, Defendants.
• Court: U.S. District Court — District of Rhode Island

335 F.Supp.2d 252

Eugene WALLACE, Elizabeth Gonsalves, Eugene Wallace as Parent and Next Friend of Melain Gonsalves, Eugene Wallace as Parent and Next Friend of Kina Gonsalves, Eugene Wallace as Parent and Next Friend of Terris Gonsalves, Eugene Wallace as Parent and Next Friend of Lisa Gonsalves, Eugene Wallace as Parent and Next Friend of Coran Gonsalves, and Eugene Wallace as Parent and Next Friend of Jaymin Wallace, Plaintiffs, v. The UNITED STATES of America, The North Providence Housing Authority, and Micki Gold Realtors, Inc., d/b/a Coldwell Banker Gold, Defendants.

No. C.A.00-179S.

United States District Court, D. Rhode Island.

September 9, 2004.

COPYRIGHT MATERIAL OMITTED

Thomas M. Dickinson, Jeffrey B. Pine, Paul S. Cantor, Providence, RI, for Plaintiffs.

Michael P. Iannotti, Providence, RI, Eric Gotting, Leland S. Van Koten, Theodore L. Hunt, Washington, DC, Daniel J. Vieira, Giannini, Craven, Vieira & DiGianfilippo, Providence, RI, Douglas C. Default, Jr., Dedham, MA, C. Russell Bengtson, Patricia A. Buckley, Carroll, Kelly & Murphy, Providence, RI, for Defendants.

DECISION AND ORDER

SMITH, District Judge.

Plaintiffs Eugene Wallace ("Wallace"), individually and on behalf of his six minor children (the "Children"), and Elizabeth Gonsalves ("Gonsalves") (collectively "Plaintiffs") initiated this action against the United States of America, Micki Gold Realtors, Inc., d/b/a Coldwell Banker Gold ("Micki Gold"), and the North Providence Housing Authority ("NPHA") (collectively "Defendants") asserting claims for violations of the Residential Lead-Based Paint Hazard Reduction Act of 1992 ("RLPHRA" or the "Act"), 42 U.S.C. § 4852d et seq., negligence, breach of contract, and violations of R.I. Gen. Laws § 5-20.6-1 et seq. and R.I. Gen. Laws § 5-20.8-1 et seq. The Plaintiffs' principal complaint in the lawsuit is that the Defendants failed to warn them about lead-based paint in a house Wallace purchased and subsequently leased to Gonsalves and the Children. Before the Court are the Motions for Summary Judgment of NPHA and Micki Gold. For the reasons set forth below, Micki Gold's Motion for Summary Judgment is granted in part and denied in part, and NPHA's Motion for Summary Judgment is granted in part and denied in part.

I. Standard of Review

Summary judgment is warranted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When a motion for summary judgment is directed against a party that bears the burden of proof, the movant bears the "initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If that showing is made, the nonmovant then has the burden of demonstrating the existence of a genuine issue of material fact requiring a trial. Dow v. United Bhd. of Carpenters and Joiners of Am., 1 F.3d 56, 58 (1st Cir.1993). In other words, the nonmovant is required to establish that it has sufficient evidence to enable a jury to find in its favor. DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir.1997). However, regardless of who bears the burden, all inferences must be drawn in favor of the non-moving party. See The Beacon Mutual Ins. Co. v. OneBeacon Ins. Group, 376 F.3d 8, 14 (1st Cir.2004); Douglas v. York County, 360 F.3d 286, 290 (1st Cir.2004).

II. Facts

Wallace was a resident of Providence, Rhode Island.¹ In 1996, Wallace began a search for a house, with the intention to purchase the property and rent it to Gonsalves and their six children. The search eventually brought Wallace to a residence located at 10 Union Avenue in North Providence, Rhode Island (the "Property"), which was owned by the United States Department of Housing and Urban Development ("HUD"). Micki Gold, HUD's real estate agent² and representative, showed Wallace the Property prior to purchase. During the viewing of the Property, Wallace claims to have noticed paint that had "chipped" and "flaked." Although Wallace asked the Micki Gold agent questions regarding the Property, he never asked about the presence of lead paint.

Wallace eventually submitted a bid on the property of $55,000, which was accepted by HUD. On September 3, 1996, Wallace signed a purchase and sale agreement (the "Agreement") for the Property, which was a standard HUD form entitled "Property Disposition Form." The Agreement was forwarded to HUD and signed by a representative on September 4, 1996.³ The HUD representative signed the Agreement on the bottom-right of the document below a description entitled "Authorizing Signature & Date." The HUD representative did not, however, sign the Agreement below Wallace's signature on a line entitled "Seller." Adjacent to the "Seller" line is a box labeled "Date Contract Accepted by HUD," which also was never signed by the HUD representative.

Item number 13 of the Agreement stated that the contract "was subject to the Conditions of Sale on the reverse hereof, which are incorporated herein and made part hereof." Item K of the Conditions of Sale, on the reverse side, states the following:

If this property was constructed prior to 1978. Seller has inspected for defective paint surfaces (defined as cracking, scaling, chipping, peeling or loose paint on all interior and exterior surfaces). Seller's inspection found no defective paint surfaces, or if defective paint surfaces were found, Seller has treated or will treat such defective surfaces in a manner prescribed by HUD prior to closing. Purchaser understands and agrees that the Seller's inspection and/or treatment is not intended to, nor does it guarantee or warrant that all lead-based paint and all potential lead-based paint hazards have been eliminated from this property. Purchaser acknowledges that he/she/it has received a copy of a notice which discusses the lead-based paint hazard and has signed, on or before the date of this contract, the addendum, Lead-Based Paint Health Hazard-Property Constructed Prior to 1978. Purchaser understands that the Addendum must be signed by all Purchasers and forwarded to Seller with this contract. Contracts which are not in conformance with these requirements will not be accepted by Seller.

(Defendant Micki Gold's Statement of Undisputed Facts at ¶ 11.) Despite this condition, Wallace never received a copy of the Lead Paint Health Hazard Property Addendum referenced in Item K. The closing for the Property was held on September 25, 1996.

Wallace subsequently initiated renovations on the Property, which involved, among other things, removing rugs, replacing windows and defective radiators, installing new ceilings, as well as sanding and stripping the wood inside the house. Wallace also hired painters to paint the exterior of the home. In late November 1996, Gonsalves leased the Property from Wallace, and moved into the Property with the Children. After Gonsalves and the Children had moved into the Property, Wallace continued making renovations with the assistance of Gonsalves.

Gonsalves leased the Property with the intention of obtaining assistance from the NPHA through its Section 8 housing subsidy program. Before Gonsalves signed the lease, the NPHA inspected the Property and completed a detailed inspection checklist, which considered the presence of lead paint. The NPHA determined that the Property "passed" the inspection with respect to all rooms in the house. A second home inspection was conducted by the NPHA on or about October 20, 1997, which also did not detect the presence of lead-based paint on the Property.

Within months after moving into the Property, the Children were found to have elevated levels of lead in their blood. Subsequent testing of the house revealed the presence of lead paint throughout the Property. On April 6, 2000, the Plaintiffs initiated this action against the United States, Micki Gold, and the NPHA asserting negligence, breach of contract, and violations of the RLPHRA, R.I. Gen. Laws §§ 5-20.6-1 et seq. and 5-20.8-1. By Order of the Court, on September 8, 2000, the Plaintiffs amended their Complaint to comply with Fed.R.Civ.P. Rule 8(c) and (e).

Judge Mary M. Lisi, of this Court, previously dismissed the tort claims contained in Counts I and III of the Amended Complaint because Wallace and Gonsalves failed to file administrative claims as required by the Federal Tort Claims Act, 28 U.S.C. § 2675(a). See Memorandum and Decision of August 28, 2000, at 2. Additionally, the Court dismissed Wallace's breach of contract claim (asserted in Count I) because the Tucker Act, 28 U.S.C. § 1491, vests exclusive jurisdiction over breach of contract claims in the United States Court of Federal Claims. Id. In late 2002 this case was transferred to the undersigned. On January 8, 2004, the Court dismissed Count V of the Amended Complaint, which was asserted against the United States, because it is barred by the misrepresentation exception of the Federal Tort Claims Act, 28 U.S.C. § 2675(a). Wallace v. United States, C.A. 00-179S, 2004 WL 63503, at ^*3 (D.R.I. Jan.8, 2004). As a result, the following claims remain pending in this action: (1) common law negligence and breach of 42 U.S.C. § 4852d brought by Wallace against Micki Gold (Count II); (2) common law negligence and breach of 42 U.S.C. § 4852d brought by Gonsalves against Micki Gold (Count IV); (3) common law negligence and breach of 42 U.S.C. § 4852d brought by Wallace, as next friend of the Children, against Micki Gold (Count VI); (4) common law negligence brought by Wallace, as next friend of the Children, against NPHA (Count VII); (5) common law negligence brought by Wallace against NPHA (Count VIII);...