[Cite as Roberts v. McCoy, 2017-Ohio-1329.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
BUTLER COUNTY
AMANDA ROBERTS, :
Plaintiff-Appellant, : CASE NO. CA2016-04-071
: OPINION - vs - 4/10/2017 :
DENISE MCCOY, :
Defendant-Appellee. :
CIVIL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS Case No. CV2014-10-2651
Dennis Lee Adams, 10 Journal Square, Suite 400, Hamilton, Ohio 45011, for plaintiff- appellant
Stephen C. Lane, 7419 Kingsgate Way, Suite A, West Chester, Ohio 45069, for defendant- appellee
HENDRICKSON, P.J.
{¶ 1} Plaintiff-appellant, Amanda Roberts, appeals a decision of the Butler County
Court of Common Pleas granting summary judgment in favor of defendant-appellee, Denise
McCoy. For the reasons that follow, we affirm the decision of the trial court.
{¶ 2} On August 29, 2013, McCoy purchased the property in question at 2622 Hilda
Avenue, Hamilton, Ohio. After completing the purchase, McCoy began performing repairs to Butler CA2016-04-071
prepare the property for resale. McCoy never lived at the Hamilton residence. McCoy
completed the repairs between November 2013 and March 2014. The relevant repairs
included installing a drop ceiling in the basement, replacing the lower half of portions of the
basement drywall, and replacing a toilet and faucet in the upstairs bathroom. McCoy hired a
contractor with 15 years of experience, Troy Janutolo, to perform most of the repair work. In
the basement, Janutolo replaced the drywall and installed a portion of the drop ceiling.
Specifically, Janutolo installed the track for the acoustical ceiling tiles by attaching the track to
the floor joists. McCoy then placed the acoustical ceiling tile in the tracks installed by
Janutolo. During these repairs, neither McCoy nor Janutolo observed any condition they
believed to be mold or mildew on the floor joists or on the backside of the replaced drywall.
The front of the replaced drywall did indicate residual damage from moisture.
{¶ 3} In early May 2014, Roberts found the Hamilton property listed for sale online.
She visited the property with her realtor. During the visit, Roberts did not personally walk
through the entire home. Rather, she "stood in the living room and the kitchen" for "maybe
five minutes" because she "knew [she] wanted the house." On May 13, 2014, Roberts
contracted to purchase the property. The purchase agreement included a contingency
provision making the sale subject to a whole house inspection conducted by Roberts at her
expense. McCoy indicated the repairs done to the home and underlying justifications for
such repairs by completing an Ohio Residential Property Disclosure Form ("Disclosure
Form"). On the Disclosure Form, McCoy disclosed that "[i]t appears the previous owner
unhooked [the] laundry room sink and let the basement flood, all water damaged materials
were removed[,]" and "I don't believe there is any mold in the home." McCoy did not make
any representations to Roberts other than the information contained in the Disclosure Form.
Additionally, the Disclosure Form itself advised Roberts in bold text, "every home contains
mold. Some people are more sensitive to mold than others. If concerned about this issue,
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purchaser is encouraged to have a mold inspection done by a qualified inspector."
{¶ 4} Roberts second visit occurred during the performance of a home and termite
inspection by a licensed inspector. Again, she limited her visit to the confines of the kitchen.
Shortly after the inspection, Roberts received the inspection report by e-mail and forwarded it
to her realtor. Roberts did not review the inspection report before closing and was unaware
of the parameters of the inspection. On July 10, 2014, Roberts closed on the property and
she moved into the home two days later. When Roberts attempted to put up a shower rod in
the upstairs bathroom on August 3, 2014, a portion of the wall broke free and fell to the
ground. Roberts took a closer look at the wall and noticed what appeared to be mold in the
upstairs bathroom. This revelation caused Roberts to check the basement where she moved
a ceiling tile and discovered what appeared to be mold on the floor joists.
{¶ 5} The next day, Roberts hired a certified mold inspector to conduct further
inspection on what she believed to be mold. The inspection revealed black mold on the
basement rafters, living room area, and basement exterior walls. A few weeks later, Clint
Grubb, Roberts' neighbor, advised her that McCoy informed him that the basement was
flooded at the time of McCoy's purchase and that McCoy replaced the basement drywall,
which displayed visible exterior mold.
{¶ 6} On October 8, 2014, Roberts commenced this action against McCoy alleging
negligent misrepresentation, fraudulent concealment, breach of contract, unjust enrichment,
and fraud. Roberts alleged McCoy was aware of the mold condition when she completed the
Disclosure Form, and that McCoy intentionally misrepresented the condition of the residence
to induce its sale. Roberts further alleged the mold condition was undiscoverable during
inspections prior to the sale because McCoy concealed it behind the recently installed drywall
and drop ceiling.
{¶ 7} On November 20, 2015, McCoy moved for summary judgment on Roberts' -3- Butler CA2016-04-071
claims. After briefing on the matter, the trial court granted McCoy's motion for summary
judgment on all claims. Roberts timely appealed the decision of the trial court.
{¶ 8} Assignment of Error No. 1:
{¶ 9} THE TRIAL COURT ERRED IN GRANTING APPELLEE'S MOTION FOR
SUMMARY JUDGMENT.
{¶ 10} In her sole assignment of error, Roberts presents two issues for review. First,
Roberts asserts a material issue of fact existed regarding whether the mold in the ceiling was
an observable defect that would have been discovered by a prudent person upon reasonable
inspection. Second, Roberts contends a material issue of fact existed regarding whether
McCoy had actual knowledge of the mold at the time McCoy completed the Disclosure Form.
{¶ 11} We review a trial court's ruling on a motion for summary judgment de novo.
Grizinski v. Am. Express Fin. Advisors, Inc., 187 Ohio App.3d 393, 2010-Ohio-1945, ¶ 14
(12th Dist.). "De novo review means that this court uses the same standard that the trial
court should have used, and we examine the evidence to determine whether as a matter of
law no genuine issues exist for trial." Morris v. Dobbins Nursing Home, 12th Dist. Clermont
No. CA2010-12-102, 2011-Ohio-3014, ¶ 14. Summary judgment is proper if there are no
genuine issues of material fact to be litigated, the moving party is entitled to judgment as a
matter of law, and reasonable minds can come to only one conclusion, and that conclusion is
adverse to the nonmoving party. Civ.R. 56(C); Williams v. McFarland Properties, LLC, 177
Ohio App.3d 490, 2008-Ohio-3594, ¶ 7 (12th Dist.). The moving party bears the initial
burden of demonstrating the absence of a genuine issue of material fact. Dresher v. Burt, 75
Ohio St.3d 280, 293, 1996-Ohio-107. If the moving party meets its burden, the nonmoving
party has a reciprocal burden to set forth specific facts showing a genuine issue for trial. Id.
{¶ 12} Roberts argues the trial court erred in granting summary judgment pursuant to
the doctrine of caveat emptor with respect to mold within the basement drop ceiling because -4- Butler CA2016-04-071
the condition was not observable or discoverable. "[T]he doctrine of caveat emptor precludes
recovery in an action by the purchaser for a structural defect in real estate where (1) the
condition complained of is open to observation or discoverable upon reasonable inspection,
(2) the purchaser had the full and unimpeded opportunity to examine the premises, and (3)
there is no evidence of fraud on the part of the vendor." Layman v. Binns, 35 Ohio St.3d
176, 178-79 (1988). "A defect is observable or discoverable if an ordinarily prudent person
would discover it upon reasonable inspection." Moravek v. Hornsby, 12th Dist. Clermont No.
CA96-12-113, 1997 Ohio App. LEXIS 3032, *6 (July 14, 1997). A defect meeting this
description is a patent defect, and all other defects are latent defects. Clark v. Allen, 154
Ohio App.3d 200, 2003-Ohio-4617, ¶ 15 (12th Dist.).
{¶ 13} The trial court properly found the doctrine of caveat applied with respect to the
mold condition within the basement drop ceiling. The evidence of the condition in the drop
ceiling clearly demonstrates it was observable or discoverable. However, there is no
evidence that the new basement drywall or the upstairs bathroom visibly displayed any signs
indicating moisture or mold. See, e.g., Binns at 177-78 (finding defect observable where
bowed drywall was detectible with little effort); Black v. Consentino, 117 Ohio App.3d 40, 45
(9th Dist.1996) (findings conditions observable where drywall showed clear signs of
deterioration). Therefore, we limit our analysis of the doctrine of caveat emptor to the
basement ceiling mold condition. Unlike the drywall, Roberts could have easily discovered
the condition in the ceiling by simply pushing up a single ceiling tile and examining the floor
joists. See Binns at 177 ("A duty falls upon the purchaser to make inquiry and examination").
Roberts demonstrated a present ability to conduct such inquiry when she lifted the ceiling tile
to discover the condition after moving into the residence. At her deposition, Roberts testified
that if one had moved a ceiling tile, "they would have seen the mold."
{¶ 14} Further supporting this finding, McCoy described having to move the ceiling -5- Butler CA2016-04-071
tiles back into place because other potential purchasers had moved the tiles, presumably to
inspect the floor joists. Additionally, Roberts does not dispute she had a full and unimpeded
opportunity to inspect the premises. Rather, as analyzed below, Roberts chose not to
conduct a mold inspection despite notice of several justifications supporting a mold
inspection before purchasing the property. Therefore, the trial court properly found McCoy
met the first two elements of the doctrine of caveat emptor with respect to the mold condition
in the basement ceiling. The final element of the doctrine requires a showing that there is no
evidence of fraud on the part of the seller, which we will analyze below as it is interrelated to
the analysis of Roberts' individual claims pertaining to mold found elsewhere on the property.
{¶ 15} The elements of fraud, fraudulent concealment, and negligent
misrepresentation are very similar. See Johnson v. Church of the Open Door, 179 Ohio
App.3d 532, 2008-Ohio-6054, ¶ 15 (9th Dist.). To establish a claim for civil fraud, one must
demonstrate (1) a representation or, where there is a duty to disclose, concealment of a fact,
(2) which is material, (3) made falsely, with knowledge of its falsity or with reckless disregard
for the truth, (4) with the intent to mislead, (5) justifiable reliance on the representation or
concealment, and (6) injury proximately caused by such reliance. Mertens v. Dever, 12th
Dist. Clermont No. CA2005-07-060, 2006-Ohio-1001, ¶ 14; see also Reardon v. Hale, 12th
Dist. Warren No. CA2006-09-105, 2007-Ohio-4351, ¶ 17 (analyzing the same elements for
fraudulent concealment), citing Fifth Third Bank v. Cope, 162 Ohio App.3d 838, 2005-Ohio-
4626, ¶ 25 (12th Dist.). The elements of negligent misrepresentation are as follows:
One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
-6- Butler CA2016-04-071
Delman v. City of Cleveland Heights, 41 Ohio St.3d 1, 4 (1989); Levy v. Seiber, 12th Dist.
Butler Nos. CA2015-02-019, CA2015-02-021, and CA2015-02-030, 2016-Ohio-68, ¶ 36.
{¶ 16} "An action for fraud may be grounded upon failure to fully disclose facts of a
material nature where there exists a duty to speak." Binns, 35 Ohio St.3d at 178. Pursuant
to R.C. 5302.30(D), sellers of residential real estate must complete a disclosure form to
inform potential buyers of "material matters relating to the physical condition of the property
to be transferred * * * [and] the condition of the structure of the property, including the roof,
foundation, walls, and floors * * *." The statute further requires that any disclosure be made
in good faith or "honesty in fact in a transaction." R.C. 5302.30(A)(1).
{¶ 17} However, R.C. 5302.30(D) requires sellers to disclose on the form only those
defects that are within their actual knowledge. Clark, 2003-Ohio-4617 at ¶ 18. R.C.
5302.30(F)(1) relieves sellers of liability for damages "allegedly aris[ing] from any error in,
inaccuracy of, or omission of any item of information required to be disclosed in the property
disclosure form if the error, inaccuracy, or omission was not within the transferor's actual
knowledge." Moreover, sellers have no duty to inspect or acquire knowledge regarding
defects of their property. Clark at ¶ 19. Rather, the duty to conduct a full inspection falls on
the purchasers and the disclosure form does not function as a substitute for such careful
inspection. Id.
{¶ 18} The Disclosure Form contains the only disclosures McCoy made to Roberts;
therefore, the actual knowledge standard discussed above applies to Roberts' contract
claims. Reardon, 2007-Ohio-4351 at ¶ 15. Nonetheless, R.C. 5302.30 does not displace a
seller's common-law duties to buyers, such as the "duty to disclose material facts which are
latent" when the seller possesses actual knowledge of the defect at the time of the
transaction. Binns at 178; see also Clark at ¶ 15. With respect to the knowledge element of
Roberts' tort claims, she must only prove McCoy acted with "utter disregard and recklessness -7- Butler CA2016-04-071
as to whether [a fact] is true or false," and such knowledge may be inferred. Reardon at ¶
18.
{¶ 19} Therefore, the questions presented are whether McCoy had the requisite
knowledge of mold at the residence to support Roberts' contract and tort claims, and if so,
whether such claims entitle Roberts to a remedy at law or in equity.
{¶ 20} First, we address whether there is evidence supporting a finding of a genuine
issue of material fact with regard to fraud by McCoy, which would prevent the application of
the doctrine of caveat emptor to the mold condition in the basement ceiling, and prove an
essential element of Roberts' claims with respect to the remainder of the property. The basis
of Roberts' fraud claim relies on the information contained in the Disclosure Form.
Specifically, McCoy disclosed that the basement drain was cleaned after it backed up, which
had caused "[a] small amount of water * * * in [the] laundry r[oo]m." McCoy disclosed that
she has not seen any "water leaks in [the] basement since [she] has owned" the property.
She checked "yes" to the question whether she "kn[e]w of any water or moisture related
damage to floors, walls or ceilings as a result of flooding; moisture seepage; moisture
condensation; ice damming; sewer overflow/backup; or leaking pipes, plumbing fixtures or
appliances." McCoy explained this answer by disclosing that "[i]t appears the previous owner
unhooked [the] laundry room sink and let the basement flood, all water damaged materials
were removed." Next, she checked "no" to the question: "[h]ave you ever had the property
inspected for mold by a qualified inspector?" McCoy disclosed, "I don't believe there is any
mold in the home."
{¶ 21} Based on this explanation, McCoy argues she did not make a material factual
representation, but merely expressed her opinion. If we assume arguendo, as the trial court
did, McCoy's response on the Disclosure Form was a material factual representation, then,
when considering the Disclosure Form in its entirety – Roberts still has failed to demonstrate -8- Butler CA2016-04-071
(1) the statements were made falsely, with knowledge of their falsity or with reckless
disregard for the truth, (2) with the intent to mislead, and (3) that Roberts justifiably relied
upon the representations.
{¶ 22} McCoy stated in her affidavit that she neither observed mold anywhere in the
residence nor was she advised of the presence of mold at the time of the sale. McCoy did
observe water stains on the front side of the basement drywall prior to the sale; therefore,
she replaced the drywall. However, the backside of the drywall did not display any signs of
water or moisture. Additionally, she did not observe mold when installing the acoustic ceiling
tiles on the basement drop ceiling. Likewise, the repairman, Janutolo, did not observe any
indication of moisture, mold, or mildew in the basement drywall. Janutolo further indicated
that he did not observe any mold while installing the track for the drop ceiling. However,
Grubb claimed that McCoy had informed him that the basement was flooded and the drywall
was replaced due to the presence of mold.
{¶ 23} Based on Grubb's affidavit and Roberts' deposition, Roberts argues there is a
genuine issue of material fact regarding the falsity of the statements contained within the
Disclosure Form. However, this evidence does not rebut the statements in the Disclosure
Form or the sworn statements made by McCoy and Janutolo. Rather, Grubb's statements
further demonstrate that McCoy was aware of the presence of moisture in the basement and
on the exterior of the drywall, and thus, McCoy hired Janutolo to replace the drywall. Grubb's
affidavit fails to rebut that neither McCoy nor Janutolo were aware of the presence of mold
after completing the repairs on the basement ceiling, behind the drywall, or anywhere else on
the property at the time of sale. Therefore, Roberts fails to establish a genuine issue of
material fact regarding the knowledge element of her tort claims.
{¶ 24} Moreover, there is no indication from the evidence that the disclosures made
on the Disclosure Form were made falsely or with the intent to mislead Roberts. The -9- Butler CA2016-04-071
information within the Disclosure Form and the statements from McCoy and Janutolo's
affidavits is consistent. McCoy apprised Roberts of the presence of flooding and moisture in
the basement, which McCoy believed to be repaired with the installation of the drop ceiling
and the new drywall. Roberts asserts McCoy installed the drop ceiling and drywall to cover
the mold condition; however, there is no evidence in the record to support this assertion.
{¶ 25} Furthermore, Roberts fails to present evidence that she justifiably relied upon
McCoy's representations in purchasing the home. The purchase agreement was contingent
upon a home inspection, which was performed prior to closing. "A buyer cannot be said to
have justifiably relied upon representations made by the seller where the purchase
agreement is clearly contingent upon the inspection rather than any alleged representations."
Liotta v. Eckley, 8th Dist. Cuyahoga No. 75127, 2000 Ohio App. LEXIS 68, *10 (Jan. 13,
2000); see also Kimball v. Duy, 11th Dist. Lake No. 2002-L-046, 2002-Ohio-7279, ¶ 24.
Moreover, Roberts was apprised of the presence of moisture as well as the flood history in
the basement prior to closing and chose not to hire a certified mold inspector until after
completing the purchase of the property. Roberts made this choice despite having ample
opportunity for a mold inspection before closing pursuant to the contingency agreement.
{¶ 26} Therefore, Roberts has failed to establish a genuine issue of material fact
remains regarding the above-analyzed elements for her fraud, negligent misrepresentation,
and fraudulent concealment claims. In turn, Roberts failed to present evidence rebutting the
fraud element of the doctrine of caveat emptor.
{¶ 27} Next, we turn to Roberts' contract claims. To establish a claim for breach of
contract, a plaintiff must prove (1) the existence of a contract, (2) plaintiff fulfilled his or her
contractual obligations, (3) defendant failed to fulfill his or her contractual obligations, and (4)
due to this failure plaintiff incurred damages. Nguyen v. Chen, 12th Dist. Butler No. CA2013-
10-191, 2014-Ohio-5188, ¶ 43. Roberts bases her breach of contract claim on the - 10 - Butler CA2016-04-071
representations made in the Disclosure Form. As discussed above, R.C. 5302.30(D)
required McCoy to disclose only those defects that were within her actual knowledge. Clark,
2003-Ohio-4617 at ¶ 18; see also Kearns v. Huckaby, 12th Dist. Butler No. CA2005-12-507,
2006-Ohio-5196, ¶ 28 (stating to prevail on a claim based on a disclosure form, one must
demonstrate the seller had actual knowledge of the alleged errors on the form). With respect
to Roberts' tort claims, we found above that a genuine issue of material fact did not exist as
to whether McCoy made false representations on the Disclosure Form, with knowledge of the
representations falsity or with reckless disregard for the truth. Therefore, because the actual
knowledge requirement is a higher burden to prove than reckless disregard for the truth, our
finding in regards to Roberts' tort claims extends to her breach of contract claim.
{¶ 28} Finally, Roberts asserts a claim for unjust enrichment and argues the alleged
fraud, misrepresentations, and concealment by McCoy, does not entitle McCoy to the full
purchase price for the property because if the information within the Disclosure Form was
accurate, then the property would have sold for a lower price. A party asserting a claim for
unjust enrichment must demonstrate that (1) he or she conferred a benefit upon a defendant,
(2) the defendant had knowledge of the benefit, and (3) the defendant retained the benefit
under circumstances where it would be unjust to do so without payment. Everhart v.
Everhart, 12th Dist. Fayette Nos. CA2013-07-019 and CA2013-09-026, 2014-Ohio-2476, ¶
46; see also Paugh & Farmer, Inc. v. Menorah Home for Jewish Aged, 15 Ohio St.3d 44, 46
(1984) (stating unjust enrichment is an equitable legal vehicle for obtaining a just result and
to provide a remedy where none is otherwise available).
{¶ 29} Consistent with our findings above, we find McCoy has not been unjustly
enriched by retaining the full purchase price. We note the purpose of an unjust enrichment
action is not to compensate Roberts for any loss or damages that she may have suffered, but
rather to compensate Roberts for the benefit she unjustly conferred on McCoy. Accord - 11 - Butler CA2016-04-071
Hughes v. Oberholtzer, 162 Ohio St. 330, 335 (1954). Contrary to Roberts' claim otherwise,
Roberts failed to demonstrate that McCoy had knowledge of any inaccuracies within the
Disclosure Form. Therefore, Roberts has failed to demonstrate McCoy had knowledge of
any benefit conferred upon her that would require compensation for Roberts in equity.
{¶ 30} Accordingly, Roberts' sole assignment of error is overruled.
{¶ 31} Having construed the evidence in a light most favorable to Roberts on each
issue presented for review, we find Roberts has failed to demonstrate genuine issues of
material fact exist. The trial court properly determined that McCoy is entitled to judgment as
a matter of law.
{¶ 32} Judgment affirmed.
RINGLAND and PIPER, JJ., concur.
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