Roberts v. McCoy
2017 Ohio 1329
Ohio Ct. App.2017Background
- McCoy bought a Hamilton, Ohio house, repaired visible basement drywall and installed a basement drop ceiling and sold the house to Roberts; McCoy never lived there and hired a contractor (Janutolo) for repairs.
- McCoy completed repairs Nov 2013–Mar 2014; neither she nor her contractor observed mold on the joists or backside of replaced drywall; exterior/front drywall showed moisture stains.
- Roberts contracted to buy in May 2014 with a home-inspection contingency; McCoy completed the Ohio Residential Property Disclosure Form noting prior basement flooding, removal of water-damaged material, and that she did not believe there was mold; the form advised buyers to obtain a mold inspection if concerned.
- Roberts limited her walkthroughs, did not review the inspection report before closing, and declined a preclosing mold inspection; after moving in, Roberts discovered mold in the upstairs bathroom wall and basement joists and hired a mold inspector.
- Roberts sued alleging negligent misrepresentation, fraudulent concealment, fraud, breach of contract, and unjust enrichment; the trial court granted summary judgment for McCoy and the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether caveat emptor bars recovery for mold in the basement drop ceiling | Roberts: basement ceiling mold was latent/unobservable and thus caveat emptor does not bar recovery | McCoy: mold in drop ceiling was discoverable on reasonable inspection (lift a tile); buyer had full opportunity to inspect | Held: caveat emptor applies to the basement ceiling mold — mold was discoverable and buyer had full, unimpeded opportunity to inspect |
| Whether McCoy had actual knowledge of mold such that fraud/fraudulent concealment/negligent misrepresentation are viable | Roberts: McCoy knew or recklessly disregarded the mold (claims based on Disclosure Form and neighbor affidavit) | McCoy: she and contractor did not observe mold; disclosures were truthful about moisture/flooding; no evidence of intent or actual knowledge of mold | Held: no genuine issue of material fact that McCoy knew of mold; affidavits support no actual knowledge or intent to mislead |
| Whether Roberts justifiably relied on McCoy’s representations given inspection contingency | Roberts: relied on Disclosure Form representations about no mold | McCoy: purchase was contingent on inspection; buyer cannot justifiably rely on seller statements when contract conditions an inspection | Held: Robert’s reliance was not justifiable—inspection contingency and the buyer’s opportunity for a mold inspection foreclose reliance |
| Whether contract or unjust-enrichment claims survive (Disclosure Form obligations) | Roberts: false disclosures entitled her to contract remedies or equitable relief (unjust enrichment) | McCoy: statutory disclosure requires disclosure only of defects within seller’s actual knowledge; no evidence McCoy had actual knowledge; unjust enrichment not available absent seller’s bad knowledge | Held: breach-of-contract and unjust-enrichment claims fail—Roberts did not show McCoy had actual knowledge of mold or that retaining the purchase price would be unjust |
Key Cases Cited
- Layman v. Binns, 35 Ohio St.3d 176 (Ohio 1988) (doctrine of caveat emptor bars recovery for observable defects unless fraud is shown)
- Delman v. City of Cleveland Heights, 41 Ohio St.3d 1 (Ohio 1988) (elements for negligent misrepresentation)
- Clark v. Allen, 154 Ohio App.3d 200 (Ohio Ct. App.) (seller’s disclosure duties limited to actual knowledge; buyer’s duty to inspect)
- Johnson v. Church of the Open Door, 179 Ohio App.3d 532 (Ohio Ct. App.) (similarity of elements for fraud, fraudulent concealment, and negligent misrepresentation)
- Paugh & Farmer, Inc. v. Menorah Home for Jewish Aged, 15 Ohio St.3d 44 (Ohio 1984) (elements and purpose of unjust enrichment)