Bailey v. DeLaCruz

143 So. 3d 1220, 2014 WL 2702926, 2014 La. App. LEXIS 1552
CourtLouisiana Court of Appeal
DecidedJune 16, 2014
DocketNo. 49,032-CA
StatusPublished
Cited by5 cases

This text of 143 So. 3d 1220 (Bailey v. DeLaCruz) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bailey v. DeLaCruz, 143 So. 3d 1220, 2014 WL 2702926, 2014 La. App. LEXIS 1552 (La. Ct. App. 2014).

Opinion

BROWN, Chief Judge.

|! Purchasers of real property brought this action in redhibition and fraudu[1223]*1223lent/negligent misrepresentation against the seller and the seller’s real estate agent and broker. The seller, Laura DeLaCruz, had moved to Nevada and was served pursuant to Louisiana’s long arm statute. She did not answer the lawsuit or appear at trial. A preliminary default was entered and its confirmation followed the trial. The trial court found for plaintiffs and awarded plaintiffs $109,891.66 in redhibition against the seller, DeLaCruz. The seller’s real estate agent and broker were found liable for negligent misrepresentation in solido with the seller for $66,164.88. Plaintiffs’ motion for new trial sought to increased the damages awarded and was denied. Plaintiffs appealed. Defendants did not answer or file their own appeal. We affirm in part, reverse in part and render.

Facts

Plaintiffs, Jack and Toye Bailey (“Baileys”), purchased a house located on 2380 Covington Circle, Shreveport, Louisiana, on October 29, 2004, for $415,000. Plaintiffs were represented by a Coldwell Banker real estate agent, Sue White (“White”). The seller, Laura DeLaCruz (“DeLa-Cruz”), was represented by defendant, Mary Bamburg (“Bamburg”),1 who was also a real estate agent affiliated with defendant, Coldwell Banker.

In February 2004, approximately nine months before the sale to the Baileys, DeLaCruz purchased the Covington Circle house and was also represented in that previous transaction by Bamburg. Before completing that purchase, DeLaCruz paid to have two inspections conducted on the home, 12both of which revealed some moisture and structural issues. One inspection was completed by John Worthey (‘Wor-they”). The second inspection was performed by World Inspection Network (“World Inspection”).

Worthey, a general contractor, who was a certified mold, moisture and EIFS2 inspector, conducted a thorough inspection of the exterior and interior of the house. He specifically focused on the interior and stated that he used instruments to scan all interior portions. He concluded: “This residence is well constructed overall. The exterior finish system (EIFS) is in need of repair, but can be made sound and dry utilizing known repair methods ... The areas in need of repair were caused by application errors and lack of attention to construction details ... The interior was found to be dry and sound and I find no red flags that would warrant the testing for toxic molds at this time.”

Worthey oversaw the repairs that were made to the Covington Circle house by Reggie Doe and Dowden Plastering. When the exterior spots where Worthey had found moisture were taken down, he looked for and found no signs of mold. Worthey was satisfied that the repairs he recommended were completed and problems he listed were fixed. These repairs were paid for by the seller.

On October 4, 2004, the Baileys entered into a buy/sell agreement with DeLaCruz. The Baileys were provided with a Louisiana Residential Disclosure Form in accordance with La. R.S. 9:3894(B) and 9:3199(B). On the form, DeLaCruz and [1224]*1224Bamburg responded negatively to all inquiries [.^concerning damage to the property including but not limited to: water damage, existing damage, and mold damage.

The buy/sell agreement gave the Baileys five days from October 5, 2004, to conduct a home inspection. The Baileys relied upon the opinion of their realtor, Sue White, who was affiliated with Coldwell Banker, she assured them that an inspection had been performed on the house during the DeLaCruz purchase and it was good for one year. Relying on this statement, the Baileys performed only a walk-through inspection.

At the closing, the Baileys were only given one of the two inspection reports performed during the DeLaCruz purchase, that of World Inspection. However, they were not given the entire World Inspection report, just three pages of this document. One page contained the Building Inspection Summary which listed six items that needed attention. The first item listed was “Exterior Structure, Siding Condition: maintenance — The exterior siding is in need of attention or repairs. There is a crack in the brick veneer under the upper right window and on the side at the rear of the home. These are not structural but should be sealed with caulk to prevent moisture intrusion.” The summary also noted that the exterior finish on the patio doors needed attention. Other minor issues were listed. The summary found that gas furnace, heating pump and cooling operations were all normal.

Omitted portions of the World Inspection report included 16 pages of worksheets which covered 17 specified categories. The items needing attention in the summary were noted on the worksheets. Significantly, in the 17th and last category, it is stated “Toxix(sic) mold detection and testing is ]4NOT within the scope of a home inspection. This home inspector is not a qualified professional mold expert.” At the time of the closing, the Baileys inquired as to whether the repairs referenced in the World Inspection’s summary had been completed. Both White and Bamburg indicated that they had been.

Upon moving into their new home, the Baileys hired Donnie Mclnnis to remodel a television cabinet in the living room. Mclnnis discovered mold, moisture and water intrusion on the inside of the sheet-rock. The Baileys then hired their own inspector who informed them that the “flashing was not properly installed for EIFS, the windows of the home were not properly installed, sealed, or caulked, the brick fascia on the home was not properly installed, there were severe structural defects in the home, there were no weep holes in the brick, the EIFS was not properly applied, there were issues with the base boards in the garage, and there was evidence of water intrusion and mold in more than two places.” Two additional air inspections determined the presence of three types of mold.

On October 25, 2005, Jack and Toye Bailey, individually and on behalf of their three minor children, filed suit against De-LaCruz, Bamburg, and Coldwell Banker, alleging breach of mandatory obligations under the property disclosure statute, breach of duties of real estate agents, fraud, bad faith breach of contract, breach of warranty, detrimental reliance, negligent misrepresentation, deliberate misrepresentation, conspiracy, and redhibition.

The gist of the complaint is that the Baileys relied, to their detriment, on representations of Coldwell Banker, Bam-burg, White and DeLaCruz and the mandatory disclosure form. They alleged that [1225]*1225they would not have | .¡purchased the house if the mold and water intrusion had been disclosed. They claim that all defendants are “fully liable individually and in solido for all damages ... as deliberate tortfea-sors and violators of the mandatory disclosure laws from the date of sale ...” The Baileys continued to reside in the home and were living in the home on the date of trial in 2010.

Discussion

Findings of the trial court

The trial court found that there were structural defects to the home. In particular, multiple areas of water intrusion, flooding and mold, “which could not be discovered by simple inspection ...” The trial ' court found that DeLaCruz had knowledge of moisture/water problems, mold and structural defects in the house but failed to disclose these problems to the Baileys.

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Bluebook (online)
143 So. 3d 1220, 2014 WL 2702926, 2014 La. App. LEXIS 1552, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bailey-v-delacruz-lactapp-2014.