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Milner v Biggs: Buyer's Mold Lawsuit Dismissed

An Ohio federal court has considered a purchaser’s claims against the seller, real estate professionals involved in the transaction, the inspector, and the title company over the discovery of water problems and potential mold on the property.

Jason and Natasha Milner (“Buyers”) hired Brenda DePugh of Realtec Real Estate (“Buyer’s Representative”) to assist her in locating a home for purchase.  The Buyers eventually purchased a home owned by Robin Biggs (“Seller”).  The Buyers had visited the home twice before purchasing, but were unable to view certain areas due to boxes filling rooms or no ladder to enter the attic. 

The purchase contract contained an “as-is” clause and also a “Mold Addendum”, in which the Buyers acknowledged they had a duty to inspect the property for mold and they had not relied upon any representations by the Seller.  The Seller had stated on the property condition disclosure form that she did not know of any moisture intrusion or related issues on the property.

The Buyers asked the Buyer’s Representative for a home inspector recommendation.  The Buyer’s Representative gave the Buyers a list of home inspectors, but said that Frank Roberts (“Inspector”) was “the best” and “certified”.  The Buyers hired Roberts to perform the inspection.  At the time of the inspection, he was not yet a member of the American Society of Home Inspectors because he had not completed the required number of inspections but he had passed the certification test.

During his inspection, the Inspector was limited in his ability to inspect the crawl space due to fallen duct work.  In the report, he stated that he had not seen any moisture in the crawl space but had limited access to the space.  The Buyers testified that they did not read the Inspector’s report until after the closing.

Following the closing, the Buyers discovered that the floor joists in the crawl space were rotted and also they suspected that there was mold in various parts of the house that had not been easily accessible during their previous visit to the house.  They hired a second inspector, who found moisture penetration and termite damage in the crawl space.  The second report also noted drainage problems in the backyard.  The Buyers never had the suspected mold tested by a professional.

The Buyers filed a lawsuit against the seller, the real estate professionals involved in the transaction, the inspector, and the title company, with a wide variety of allegations against the parties.  The court considered motions for judgment made by certain defendants as well as the Buyer. 

The United States District Court for the Southern District of Ohio granted judgment for all of the defendants and dismissed the lawsuit.  The court examined the various claims made by the Buyers.  One of the claims made against both licensees was that the Buyer’s Representative and the Seller’s representative had failed to register their business names with the Secretary of State and thus violated the state’s consumer fraud statute.  The court rejected these arguments, finding that the Buyers had not shown that the failure to register constituted in deceptive behavior and thus did not violate the statute.

Next, the court looked at the Buyers’ negligent misrepresentation allegations against the Buyer’s Representative over her recommendation of the Inspector.  While the Buyer’s Representative had given the Buyers a list of inspectors, she had asserted that the Inspector was “the best” and “certified”. 

The court ruled that there was no evidence that either statement was false.  First, the Inspector had passed a certification test, and so had obtained a level of certification.  Ohio does not otherwise license inspectors, and so there was nothing false about asserting that he was “certified”.  Second, statements of puffery such as saying that the Inspector was the “best” are not actionable for negligent misrepresentation claims.  The court entered judgment for all of the defendants and rejected all of the Buyers’ allegations.

Milner v. Biggs, No. 2:10-CV-904, 2012 WL 1188274 (S.D. Ohio Apr. 6, 2012).  [This is a citation to a Westlaw document.  Westlaw is a subscription, online legal research service.  If an official reporter citation should become available for this case, the citation will be updated to reflect this information.]