Insight

Real Estate Liability: Recovery Denied in “As Is” Sale Despite Quick Discovery of Mold

Published on: June 1, 2019

In the recent case of Riedel v. Fenasci,2018-0540 (La. App. 1 Cir. 12/28/18), _______ So. 3d _______, 2018 WL 6818716,home buyers sued the sellers and the involved real estate agents after mold wasdiscovered shortly following the sale. This is a common fact pattern in humidSouth Louisiana. The buyers lost in the trial court when there was no evidencethat the sellers or the agents knew of the problem. The result was affirmed bythe First Circuit Court of Appeal.

The Riedels identified mold weeks afterthe closing and filed a claim with their homeowner’s insurer. But the claim wasdenied when the insurer’s inspection revealed long- term damage, rot, anddeterioration in a ceiling due to water damage. That finding prompted thesuit.

Against the sellers, the Riedels contendedthat they “had to have known” about the moisture and mold in the home prior tothe sale. Because the home was sold “as is,” they had to establish fraudto recover. However, the sellers had not lived in the home for years and hadreceived no complaints from tenants over this time. Under such facts, the claimof fraud was not supported.

The Riedels also sued both agents for negligent misrepresentation, and their own agent for breach of fiduciary duty. In assessing the claim against the agents, the Riedel Court agreed that real estate agents are liable for negligent misrepresentation when they fail to disclose hidden defects in the property which were known or should have been known to them. The Court also agreed that a purchaser’s real estate agent owes a fiduciary duty, the highest duty of care recognized by law. Nevertheless, when the plaintiffs’ own inspector found no visible evidence of mold prior to the sale and there was no indication that the agents possessed prior knowledge of the mold, the claim against the agents was also dismissed.

Marty Golden has been practicing law based in Baton Rouge, Louisiana for over thirty years, concentrating in civil litigation primarily involving injuries, property damage, insurance coverage, and contract disputes. Much of his practice is defending and advising real estate agents in suits by property buyers and sellers, but Marty also defends other professionals, insurance companies, manufacturers, and business owners. Marty has a special interest in all things procedural, because they are the rules of the road for litigators and knowing them better than his opponent gives him a leg up in court.

Posted by:

Disclaimer

Keogh Cox & Wilson, Ltd. provides this blog as a public service for general information only. The materials contained herein may not reflect the most current legal developments or even express the opinion of all or even most of Keogh Cox attorneys. Such material does not constitute legal advice or form any attorney-client relationship. Keogh Cox and all contributing author(s) expressly disclaim all liability to any person with respect to the contents of this Web site and Blog and expect that no reliance will be made upon the information provided.

Continue Reading

Explore legal perspectives on the issues shaping Louisiana's key industries and courtrooms.

Insight

Google Earth Images Ruled Admissible

Recently, a Louisiana appellate court found that images fromGoogle Earth images were admissible. In Walker v. S.G.B.C., LLC,2019-506 (La.App. 3Cir. 2/5/20); --- So.3d ---, 2020 WL 563818, theLouisiana Third Circuit rejected a challenge to the use of the images on thebasis that they were not properly authenticated.

In this case, the plaintiff sought recognition of ahistorical servitude of passage from his landlocked property. During the trial,the plaintiff offered Google Earth images of the property to show a gravelpathway on the alleged right of way. The images were dated January 2004,November 2005, and December 2017. Multiple witnesses identified the pathon the images. Thereafter, the trial court admitted the images into evidenceover the defendant’s objections.

On appeal, the defendant argued that the images were notproperly authenticated under La. C.E. art. 901 because the plaintiff did not:(1) have the creator of the images testify to their authenticity; (2) get acertification from Google that the images were what they purported to be; and(3) have an expert testify that the images were accurate depictions of whatthey claimed to be.

The Walker court affirmed the trial court ruling thatthese images were admissible. Louisiana Code of Evidence Article 901(B)(1)provides the testimony of a witness with personal knowledge may supply theauthentication of evidence required for its admission. Because the plaintiffidentified various landmarks on each image, and each image was subsequentlyrecognized by multiple witnesses (including the defendant’s witnesses), theCourt concluded there was sufficient support for finding the images authentic.

In Walker, the precise dates the photographs were taken were not critical. Under different facts, courts may choose to apply the authentication rules of Article 901 more stringently.

Chris Jones is a partner with Keogh Cox in Baton Rouge, LA. He focuses his practice on class actions and mass torts, and handles these matters in courts throughout the country. He is a life-long resident of Baton Rouge, where he lives with his wife and four children.

Insight

Louisiana Supreme Court issued a significant ruling in a class action case involving tax credits for solar panels

Recently, the Louisiana Supreme Court issued a significant ruling in a class action case handled by Keogh Cox partners Chris Jones and Nancy Gilbert. The case involved tax credits for solar panels. The Court’s ruling overturned a lower court decision that held an Act of the Legislature unconstitutional. After the plaintiffs’ Application for Rehearing was denied, the Court’s decision is now final.

In Ulrich, et al. v. Kimberly Robinson, Secretary of the Louisiana Department of Revenue, 2018-0534 (La. 3/26/19), 2019 WL 1395316, the class action plaintiffs were persons who purchased and installed residential solar panel systems in their homes. When they claimed the solar electric system tax credits on their 2015 state tax returns pursuant to La. R.S. 47:6030, the tax credits were denied by the Louisiana Department of Revenue, based on Act 131 of the 2015 legislative session. Act 131 capped the maximum amount of solar panel tax credits to be granted by the Department of Revenue, and the plaintiffs’ claims were made after the cap was exhausted.

When their claims for the tax credits were denied, plaintiffs filed a declaratory judgment action seeking to declare Act 131 unconstitutional. During the pendency of the suit in the district court, the Louisiana Legislature enacted Act 413 which provided additional funding for solar tax credits. Under Act 131, all taxpayers whose solar panel tax credit claims were previously denied would receive the entirety of their tax credits over installments. The district court declared Act 131 unconstitutional and concluded that Act 413 did not moot the controversy.

Because the district court declared Act 131 unconstitutional, the Department directly appealed the decision to the Louisiana Supreme Court. Oral arguments occurred in October of 2018. In the Court’s recent opinion, it concluded that Act 413 mooted the controversy. According to the Court, the plaintiffs no longer maintained a “justiciable controversy” because Act 413 provided for the payment of the entirety of the previously denied tax credits. Accordingly, the Court overruled the district court’s judgment that declared Act 131 unconstitutional. Plaintiffs filed an Application for Rehearing and that request was recently denied, making this decision final.

News

A Jury Awards $5 Million In Favor of Spoked Manufacturing

A Louisiana federal jury awarded $5 million in favor of Spoked Manufacturing in a suit against Besco Tubular. Keogh Cox Partner, Tori S. Bowling and other counsel represented Spoked Manufacturing in the case. Find out more about this decision at LAW 360.

https://www.law360.com/articles/1180212/jury-hits-besco-with-5m-verdict-in-oil-drilling-patent-case