Denneler Wins Defense Verdict In Professional Liability Case

July 23, 2009

Last week, Joseph W. Denneler, Esquire, a shareholder with Zarwin, Baum, DeVito, Kaplan, Schaer & Toddy, P.C., obtained a defense verdict in a jury trial in the matter of Edward & Mary Sharples v. Blaise A. DeSanto, Roseann DeSanto, Fox & Roach, L.P., d/b/a Prudential Fox & Roach, Beth Coppola, Joan Lewis, Value Guard USA, Inc., & Prudential Residential Services, L.P. Chester County, Pa Court of Common Pleas, No. 07-07591.  Denneler represented Defendant, Value Guard USA, Inc.  The case was tried to a verdict before the Honorable Jacqueline Cody for nine days beginning July 13, 2009 and concluding on July 23, 2009. 

This case arose from the sale of a home in Berwyn, PA in August 2006. Plaintiffs purchased the home from the DeSantos.  Prior to the sale, the Plaintiffs contracted with Defendant, Value Guard for a home inspection.  The Inspection Report noted defects including water staining in the basement and improper grading around the home.  As a result, the Plaintiffs entered into an Addendum to the Agreement of Sale with the DeSantos wherein they were to have the water staining in the basement investigated and repaired prior to closing.  Plaintiffs learned at the pre-closing walk-thru that this issue had not been addressed by the DeSantos, but closed on the home anyway.  After they moved into the home, the Plaintiffs began noticing staining on walls throughout the home and water penetration into the basement.  They also noticed severe flooding in the backyard.  While investigating the water penetration Plaintiffs removed wall coverings in the first and second floors of the home, along with the basement, revealing significant wood rot and mold growth in the wall cavities.  They commissioned an infrared camera study of the home that revealed that the exterior stucco cladding had been improperly installed allowing water to penetrate the stucco causing deterioration in the wall cavities in the upper floors of the home.  They also discovered that water was penetrating the basement from the backyard. 

Plaintiffs alleged in their Complaint that the DeSantos committed fraud and misrepresented the condition of the home and surrounding property.  They claimed the DeSantos’ real estate agent, Joan Lewis, was aware of the water penetration issues in the home from a prior home inspection for a sale that did not close.  They alleged their real estate agent, Beth Coppola, also misrepresented the condition of the property.  Finally, they alleged Value Guard committed fraud in failing to disclose an advertising arrangement with Prudential, the employer of the agents involved in the sale, that Value Guard violated Pennsylvania’s Home Inspection Law in performing the inspection, and that Value Guard breached its contract with Plaintiffs to provide a home inspection pursuant to the Standards of Practice of the American Society of Home Inspectors, Inc. (“ASHI”), in particular by failing to note the improperly clad stucco.  Plaintiffs claimed damages in excess of One Million ($1,000,000.00) Dollars, including litigation fees and treble damages under the Pennsylvania Unfair Trade Practices and Consumer Protection Law.

During cross-examination, Denneler was able to get Plaintiffs’ home inspection expert to admit that Value Guard’s inspector followed the appropriate standard of care in performing the inspection, reported on all of the components of the home required, and that there was no evidence that any of the alleged stucco defects were visible at the time of the inspection in 2006.  Denneler also got Plaintiffs’ inspection expert to admit that the standard of care did not require Value Guard to provide a detailed analysis of the condition of the stucco absent some visible evidence of water penetration into the home being caused by the defective stucco installation.  Further, Denneler was able to get Plaintiffs’ architect to disclose on cross-examination that had the Plaintiffs followed the recommendations concerning possible water penetration in the basement that were contained in the Inspection Report, Plaintiffs would have known of the nature and extent of those water penetration issues.

Following eight days of testimony, the jury found that Denneler’s client, Value Guard, did not breach the home inspection contract and did not commit fraud or any violations of the Home Inspection Law or the Unfair Trade Practice Law.   The jury of twelve concluded that the DeSantos did misrepresent the condition of the property in failing to disclose prior repairs to the interior of the home resulting from the stucco being improperly clad.  The jury found the DeSantos’ real estate agent, Joan Lewis, failed to disclose water penetration issues in the basement revealed by the prior home inspection for the prior sale that did not close, but found that the misrepresentation by Lewis was not-actionable because Value Guard noted water penetration in the basement in its report prepared for the Plaintiffs.  The jury awarded only Seventy-Five Thousand ($75,000.00) Dollars to the Plaintiffs for the DeSantos’ misrepresentation.

Mr. Denneler is a shareholder in the Firm’s Professional Liability Defense Group who specializes in the defense of real estate professionals, including home inspectors.  Mr. Denneler is a frequent lecturer to various home inspector associations in Pennsylvania and New Jersey.