195 A.3d 277
Pa. Super. Ct.2018Background
- Buyers (Medlocks) purchased a home from the Gitomers after a Chilmark home inspection; Chilmark inspected but did not open an access panel that later revealed significant water-related rot in a finished basement.
- Medlocks sued Chilmark (inspector and owner) for negligence, negligent misrepresentation, UTPCPL, and breach; Chilmark then sought contribution/indemnification and asserted assigned claims against the Gitomers for nondisclosure under the Pennsylvania Real Estate Seller Disclosure Law (RESDL).
- At bench trial the court found the Gitomers did not know of the ceiling water damage behind the access panel and therefore did not conceal it; trial court credited Gitomers’ testimony that the 2004 basement renovation was considered cosmetic and that they were unaware of water intrusion.
- Chilmark argued on appeal that the Gitomers nevertheless violated RESDL by failing to disclose the 2004 basement renovation on the seller disclosure form (an affirmative disclosure item), and that this nondisclosure caused actual damages to the buyers.
- The Superior Court agreed the Gitomers violated Section 7308’s duty not to make representations the seller knows or has reason to know are false (i.e., omission of the 2004 alteration), but affirmed because Chilmark failed to prove actual damages causally resulting from that omission.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a seller’s failure to list a past renovation on the RESDL form constitutes an actionable RESDL violation | Chilmark: Listing of 2004 renovation was required by the form; omission was false/deceptive under §7308 and thus actionable | Gitomers/Trial Ct: Liability under RESDL requires disclosure of known material defects; mere omission of an alteration does not equal concealment of defect | Court: Omission of a listed alteration can violate §7308 (seller must not make representations seller knows or has reason to know are false) |
| Whether the RESDL requires proof of seller knowledge of a defect to impose liability for failing to list an alteration | Chilmark: §7304/7308 combine to impose duty to disclose alterations listed on the form regardless of defect knowledge | Gitomers: RESDL duty centers on disclosure of known material defects (§7303); listing alterations alone does not create liability absent knowledge of a defect | Court: §7308’s plain language independently prohibits making statements the seller knows or has reason to know are false, so omission of a listed alteration can be a violation when seller knew or had reason to know the answer was false |
| Whether the Chilmark parties (as assignees) proved causation and actual damages under §7311 from the Gitomers’ failure to disclose the 2004 renovation | Chilmark: Medlocks testified they would not have purchased if they knew of an unpermitted renovation, so omission caused loss | Gitomers: Trial court found uncertainty whether work required a permit or was unpermitted; no evidence disclosure would have revealed water damage or led to a different result | Court: Chilmark failed to prove actual damages causally linked to the omission; therefore §7311 damages not established |
| Whether the trial court’s factual credibility findings should be disturbed on appeal | Chilmark: Challenges trial court’s interpretation and contends liability follows from undisputed facts | Gitomers: Trial court credibility findings supported by testimony; appellant bears burden to show error | Court: Accepted trial court credibility findings; factual findings supported by record and not disturbed |
Key Cases Cited
- Koken v. Reliance Ins. Co., 893 A.2d 70 (Pa. 2006) ("shall" is mandatory in statutory construction)
- Retina Assocs. of Greater Phila., Ltd. v. Retinovitreous Assocs., Ltd., 176 A.3d 263 (Pa.Super. 2017) (rules on statutory interpretation and reading sections together)
- Nicholas v. Hofmann, 158 A.3d 675 (Pa.Super. 2017) (standard of review for bench trial findings and credibility determinations)