Ayres v. United States

66 Fed. Cl. 551, 2005 U.S. Claims LEXIS 176, 2005 WL 1540932
CourtUnited States Court of Federal Claims
DecidedJune 29, 2005
DocketNo. 04-987C
StatusPublished
Cited by7 cases

This text of 66 Fed. Cl. 551 (Ayres v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ayres v. United States, 66 Fed. Cl. 551, 2005 U.S. Claims LEXIS 176, 2005 WL 1540932 (uscfc 2005).

Opinion

MEMORANDUM OPINION AND ORDER

BRADEN, Judge.

RELEVANT FACTS1

On February 12, 2002, the United States Department of Housing and Urban Development (“HUD”) acquired property located at 2710 Classen Avenue, Baltimore, Maryland (the “Property”) after the former owner defaulted on an FHA-insured mortgage. See PI. OppApp. Ex. 16; see also Gov’t App. at 19.2 When the Property was acquired, HUD assigned Michaelson, Connor & Boul, Inc. (“Michaelson”) to be the contractor responsible for the management and disposition of the Property. See Gov’t App. at 20. On February 15, 2002, AAA Appraisers prepared a Uniform Residential Appraisal Report (“Appraisal Report”) for HUD. See Compl. Ex. G. The Appraisal Report noted that the Property was in “below average condition due to lack of maintenance,” but that “[tjhere were no adverse environmental [554]*554conditions noted at the visual interior and exterior inspection.” Id.

On May 1, 2002, Plaintiff signed a Sales Contract (the “Contract”) to purchase the Property from HUD. See Gov’t App. at 1-13.3 The Contract provided that title to the Property was to be taken in the name S & A Development Group. See Gov’t App. at 1112. The purchase price was $3,503.00 and the net amount due HUD was $3,297.00 after commissions were paid to the broker. Id. at Ulf 3, 6a, 6b, 7. The Contract specified that Plaintiff would pay in cash or apply for other non-FHA financing. Id. at 114. The Contract was accepted by HUD on May 10, 2002 and became effective on that date. See Gov’t App. at 1, 2 H K.

Paragraph B of the Conditions of Sale provided:

Seller makes no representations or warranties concerning the condition of the property, including, but not limited to mechanical systems, dry basement, foundation, structural, or compliance with code, zoning or building requirements and will make no repairs to the property after execution of this contract. Purchaser understands that regardless of whether the property is being financed with an FHA-insured mortgage, Seller does not guarantee or warrant that the property is free of visible or hidden structural defects, termite damage, lead-based paint, or any other condition that may render the property uninhabitable or otherwise unusable. Purchaser acknowledges responsibility for taking such action as it believes necessary to satisfy itself that the property is in a condition acceptable to it, of laws, regulations and ordinances affecting the property, and agrees to accept the property in the condition existing on the date of this contract. It is important for Purchaser to have a home inspection performed on the property in order to identify any possible defects. If FHA insured financing is used, up to $200 of the cost to perform the inspection may be financed into the mortgage. Names of home inspection companies can be found in the yellow pages of your telephone directory under the heading “Home Inspection Services.”

Gov’t App. at 2 11B. The Contract was signed by a broker for Coldwell Banker Stevens Realtors that certified that the broker “explained fully to the purchaser the entire terms of the contract, including Condition B on the reverse hereof[.]” Gov’t App. at 1.

Paragraph J of the Conditions of Sale further provided:

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 Seller prior to closing. Purchaser understands and agrees that 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 pamphlet which discusses lead-based paint hazards and has signed, on or before the date of this contract, the Lead-Based Paint Addendum to Sales Contract — Property Built Before 1978. Purchaser understands that the Lead-Based Paint 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.

Gov’t App. at 2 H J (emphasis in original).

On May 1, 2002, Plaintiff also signed a Lead-Based Paint Addendum — Property Built Before 1978 (“Addendum”) that was attached to and incorporated into the Contract. See Gov’t App. at 1 U11; see also Gov’t App. at 3-13. The Addendum consisted of three parts: Part A, Seller’s Disclosure; Part B, Purchaser’s Acknowledgement; and Part C, Owner-Occupant Certification [555]*555Form. Part A had two sections. The first Section contained the seller’s disclosure regarding the presence of lead-based paint and/or lead-based paint hazards, and the Addendum indicated that HUD, as seller, had “no actual knowledge of lead-based paint hazards in the property.” See Gov’t App. at 3 HA.2. The second Section contained a “no” written next to “Seller has provided the purchaser with all available records or reports pertaining to lead-based paint hazards in the property.” This language was written by Plaintiffs realtor, because “[a]t no time was I given an inspection report or Lead-Base[d] paint records, to give to my client prior to the purchase of said property, by Michaelson, Connor & Boul, Inc. or HUD.” See PI. Opp. App. Ex. 5.

Part B of the Addendum included Purchaser’s Acknowledgement of receiving the United States Environmental Protection Agency pamphlet, “Protect Your Family From Lead In Your Home.” See Gov’t App. at 3 If D. In Part B, Plaintiff also waived a 10 day opportunity to conduct an assessment/inspection of the property. See Gov’t App. at 3-4 II E.2. It also contained a purchaser’s acknowledgement that “Seller is under no obligation to correct any lead-based paint and/or lead-based paint hazards identified by the lead-based paint inspection and/or risk assessment.” See Govt.App. at 4. Part C of the Addendum was not completed because this Part was to be completed by owner-occupant purchasers only. See Gov’t App. at 4.

When the Contract was signed on May 1, 2002, Plaintiff certified that “in affixing her signature to this contract she understood that: (1) all the contents thereof (including the Conditions of Sale) and is in agreement therewith without protest; (2) Plaintiff assumed responsibility for knowing the full condition of the property; and (3) that Seller will not perform repairs after acceptance of this contract.” Gov’t App. at 1 H13.

On May 28, 2002, the Baltimore City Health Department issued an Emergency Violation Notice and Order to Remove Lead Nuisance (“Notice”) to the Secretary of HUD as owner of the Property. See PLApp. Ex. 3. The Notice indicated that an inspection of the dwelling revealed that the Property contained lead-based paint. Id.

The closing of the Contract for the purchase of the Property occurred on June 21, 2002. See PI. Opp.App. Ex. 14; see also Gov’t App. at 14-15.

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Bluebook (online)
66 Fed. Cl. 551, 2005 U.S. Claims LEXIS 176, 2005 WL 1540932, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ayres-v-united-states-uscfc-2005.