Cynthia R. Kane v. NVR, Inc.

Court of Chancery of Delaware·Decided June 5, 2020·No. C.A. No. 2019-0568-PWG·Published

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CYNTHIA R. KANE, ) ) Plaintiff, ) ) v. ) C.A. No. 2019-0569-PWG ) NVR, INC., ) ) Defendant. )

ORDER REGARDING EXCEPTIONS TO MASTER’S FINAL REPORT

In 2019, Plaintiff Cynthia R. Kane (“Plaintiff”) purchased a home from

Defendant NVR, Inc. d/b/a Ryan Homes (“Defendant” or “Ryan Homes”). A few

months later, Plaintiff filed this action to rescind the purchase, including cancellation

of the deed, alleging that Defendant made intentional misrepresentations about

possible mold contamination and committed trespass. Defendant moved to dismiss

the complaint pursuant to Court of Chancery Rule 12(b)(1), arguing that the Court

of Chancery lacks subject matter jurisdiction over this action because Plaintiff has

an adequate remedy at law, and under Rule 12(b)(6), contending that Plaintiff failed

to plead sufficient facts to support claims of intentional misrepresentation or

trespass.

On February 6, 2020, the Master recommended that the Court deny

Defendant’s motion to dismiss. The Master concluded that this Court has subject

matter jurisdiction over this action and that Plaintiff had stated claims for intentional misrepresentation and trespass upon which relief can be granted (the “Final

Report”). Defendant filed exceptions to the Final Report on February 14, 2020.

Plaintiff filed her opposition on March 30, 2020, and Defendant filed its reply on

April 15, 2020. On May 5, 2020, the Court held oral argument on Defendant’s

exceptions to the Final Report.

Upon de novo review of the issues raised in Defendant’s exceptions to the

Master’s Final Report, I conclude that this Court has subject matter jurisdiction over

this action and that Plaintiff has adequately pleaded claims for intentional

misrepresentation and trespass. Therefore, I deny the exceptions to the Master’s

Final Report.

I. Factual Background

The facts recited in this order come from Plaintiff’s Amended Complaint for

Equitable Rescission, Cancellation of Deed to Real Property and Related Relief (the

“Amended Complaint” or “AC”) and the exhibits attached thereto.1 All of the well-

pleaded facts are accepted as true, and all reasonable inferences are drawn in

Plaintiff’s favor. The factual recitation is generally limited to those pertinent to

deciding the exceptions to the Master’s Final Report.

On September 14, 2018, the parties entered into an agreement (the “Purchase

Agreement”), whereby Defendant agreed to construct a single family house located

1 Dkt. 6.

2 in Frankford, Delaware (the “Property” or “House”) and to sell the Property to

Plaintiff. 2

During an October 5, 2018 pre-construction meeting involving Plaintiff, her

son, and Defendant’s agents, there was extensive discussion about the crawl space

design of the House.3 The Amended Complaint alleges Plaintiff’s son explained that

“a crawl space free of mold was essential because he had experienced a previous

mold exposure which resulted in severe illness and extensive losses.”4

At the October 5, 2018 pre-construction meeting, Defendant’s agents, one of

whom was the project manager, made affirmative representations to Plaintiff and her

son that the design of the crawl space would keep it dry and free of any moisture or

mold problems. 5 They also assured Plaintiff and her son that the design of the crawl

space guaranteed a climate-controlled environment and that there was no chance of

any crawl space contaminants entering the living area.6

At the pre-settlement inspection on January 18, 2019, attended by Plaintiff,

her son, and the project manager, Plaintiff’s son noticed water around the foundation

and expressed concern over moisture and mold. 7 Plaintiff’s son recounted his prior

2 Id. ¶ 4, Ex. A (Delaware Purchase Agreement). 3 Id. ¶ 6. The Amended Complaint identifies Defendant’s agents by name. 4 AC ¶ 6. 5 Id. ¶ 7. 6 Id. 7 Id. ¶ 9.

3 incident with mold exposure and explained that “Plaintiff could not risk

experiencing any such problems because she has significant breathing problems and

asthma.” 8 The project manager re-explained the crawl space design and assured

Plaintiff’s son that the foundation of the Property would remain dry and not permit

any mold. 9 A second conversation about Plaintiff’s breathing problems and asthma

took place inside the House on that same day. 10 Prior to final settlement, Defendant

delivered to Plaintiff a written disclosure report. 11 In that report, Defendant

answered “No” to the question: “Are you aware of anything else you should disclose

to a prospective Buyer because it may materially and adversely affect the

property?”12 Later that same day, the parties settled the Property, and Defendant

delivered the Property’s deed to Plaintiff. 13

On January 29, 2019, Plaintiff discovered two workers in the crawl space

wearing hazmat suits and respirators.14 The workers were removing insulation from

8 Id. 9 Id. 10 Id. 11 Id. ¶ 11, Ex. B (State of Delaware Seller’s Disclosure of Real Property Condition Report New Construction Only). 12 Id. 13 Id. ¶ 12, Ex. C (Deed dated Jan. 18, 2019). 14 AC ¶¶ 17–18.

4 between the floor joists.15 Plaintiff alleges that the workers told her the House had

tested positive for mold and they had been hired by Defendant to remediate it. 16

Plaintiff returned to the House and placed a call to the project manager.17

While awaiting the project manager’s return call, Plaintiff noticed a strong chemical-

like smell, which triggered her asthma and caused shortness of breath, eye swelling,

burning eyes and throat, and itchiness to her face, forcing her to leave the House.18

Plaintiff returned about two hours later to find the remediation workers spraying the

underside of the House. 19 When she confronted the workers, Plaintiff was told they

were spraying a chemical by the name of Microban.20

Later that day, the project manager returned Plaintiff’s call and said that “due

to increased rainfall, a few houses in the development tested positive for mold and

he had the mold remediation company check Plaintiff’s house while they were in the

neighborhood and that it too had tested positive for mold.”21

At no time prior to discovering the mold remediation workers on January 29,

2019 was Plaintiff aware of any mold contamination in the Property, nor did Plaintiff

consent to having the Defendant’s mold remediation workers enter her Property and

15 Id. ¶ 18. 16 Id. ¶ 19. 17 Id. ¶ 20. 18 Id. ¶ 21. 19 Id. ¶ 22. 20 Id. 21 Id. ¶ 24.

5 spray Microban on it. 22 In the weeks following Defendant’s mold remediation

measures, Plaintiff was unable to stay in her House for more than a few minutes at

a time without difficulty breathing due to her asthma and allergic reactions.23

Plaintiff’s pulmonologist has recommended that Plaintiff not live in the House.24

According to Plaintiff, air quality testing conducted inside the House on

February 20, 2019 disclosed the presence of elevated levels of volatile organic

compounds (“VOCs”) higher than environmentally acceptable; testing on July 29,

2019 showed levels of VOCs acceptable to an average person, but which would act

as respiratory irritants to a person with Kane’s sensitivities; and air quality and

surface testing on September 16, 2019 disclosed elevated levels of mold in the

kitchen and crawl space requiring remediation. 25

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Cynthia R. Kane v. NVR, Inc., (Del. Ct. App. 2020).

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