Court allows Claim To Proceed Against Home Builder For Failing To Disclose Wetlands

In Stalvey v. NVR, Inc., 2012 U.S. Dist. LEXIS 2506 (N.D. Ohio 1/09/12), the plaintiffs entered into an Ohio Purchase Agreement with defendant for the construction and purchase of a house. As part of the Agreement, defendant provided plaintiff with a Topographic Survey & Improvement Plan that did not depict the presence of wetlands on the property.

After taking possession of the house, plaintiffs learned that their home had been built on or near wetlands in violation of federal regulations and the local zoning regulations. Plaintiffs then began to notice odors in their home that they associated with the wetlands. After notifying the defendant, the parties agreed that they would each pay one-half of the cost to install a radon pump beneath the garage floor to eliminate the odor. After the installation, the garage floor coating began to bubble from the wet concrete floor. When the defendants declined to pay their half of the costs of the work, the plaintiffs filed their action.

Plaintiff alleged the defendant had breached the Ohio Consumer Sales Practices Act (“OCSPA”) prohibiting unfair or deceptive act or practice in connection with a consumer transaction. The trial court initially granted the defendant’s motion to dismiss on grounds OCSPA claim pertains only to real property and the law did not provide a remedy for real estate transactions.

Plaintiff filed a motion for reconsideration, arguing that its allegations went beyond the presence or failure to inform of the existence of wetlands but concerned the construction of the home itself.  The plaintiff said the defendant was required to build a home that was in compliance with local zoning ordinances and federal law but had built a home that was too large for the lot since a portion of the house encroached upon wetlands. The court reversed its ruling and held that the OCSPA claim would survive but only to the extent that it is based on allegations that the construction of the house was in violation of applicable zoning laws because the construction encroaches upon wetlands.

The plaintiffs alleged the defendant materially breached the Purchase Agreement because it represented that no wetlands existed on the property. The defendant did not check the “wetlands addendum.” Plaintiffs allege that the addendum created a duty on the part of Defendant to disclose the existence of wetlands. In response, the defendant maintained that the failure to check the wetlands addendum meant that the parties did not contract in any manner in regard to wetlands. The court concluded that the contract was ambiguous since the failure to check the wetlands addendum might be read to suggest that since there are no wetlands. Accordingly, the court denied the defendant’s Motion to dismiss the breach of contract claim.