Jameson C. RANDALL, Plaintiff, Appellant, v. LACONIA, NH, Defendant, Appellee.
No. 11-1412.
United States Court of Appeals, First Circuit.
Heard Oct. 6, 2011. Decided May 8, 2012.
Robert C. Dewhirst and Devine, Millimet & Branch, P.A. for appellee.
Before BOUDIN, HOWARD, and THOMPSON, Circuit Judges.
THOMPSON, Circuit Judge.
Federal law requires home sellers to alert potential home buyers to the pres
BACKGROUND
In 1998, the appellee, the City of Laconia (the “City” or “Laconia“), purchased a house located at 192 Elm Street in Laconia (the “property” or “home“). The property was an older house, built before 1978. The City purchased the property, which at the time was a group home, to provide extra storage and parking for the adjacent branch of the Laconia Public Library (the “Library“). In connection with the transaction, the seller turned over a “Lead Paint Inspection Report,” which detailed the results of a 1996 inspection performed by Alpha Lead Consultants, Inc. (the “Alpha report“). The Alpha report indicated that lead-based paint was present in the home. After the purchase, the Library maintained a copy of the Alpha report in its files.
Some years later the City decided to sell the property and in 2003, the appellant, Jameson Randall, contracted to purchase it. When Randall signed the purchase and sale agreement he received a blank, preprinted, standard lead-based paint disclosure form titled “Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards for Housing Sales” (the “disclosure form“). The disclosure form included a section titled “Seller‘s Disclosure,” in which the seller (the City) was to indicate whether it had any knowledge of lead-based paint hazards1 in the home and whether it had any reports or records pertaining to the same. The disclosure form also provided for a “Purchaser‘s Acknowledgment” that included an acknowledgment that the buyer (Randall) had a ten-day window in which to conduct a lead-based paint hazard inspection. Randall and his buyer‘s agent signed the blank disclosure form. The buyer‘s agent then informed Randall that the City would complete the disclosure form later. However, the City never completed the form nor did it turn over the Alpha report.2 Randall opted not to have his own inspection performed.3
Despite not having received the completed disclosure form from the City, Randall went ahead and closed on the property, taking title on July 22, 2003. He then moved into the home with his wife and two daughters. In 2006, the couple had a third child, a son. In 2008, tests taken at the son‘s two-year physical revealed an elevated blood lead level. As a result, the state of New Hampshire sent a representative to the property to perform an inspection
On February 9, 2010—approximately six and one-half years after he purchased the property—Randall filed this lawsuit. The sole count in the complaint alleged that the City had violated
A few months later, the City moved for summary judgment, alleging that Randall‘s cause of action was barred by the applicable three-year state statute of limitations. The City‘s position was that Randall‘s cause of action accrued when he took title to the property on July 22, 2003 and therefore his suit, filed six and one-half years later, came too late. The district court agreed and granted summary judgment in favor of the City. Randall appealed.
ANALYSIS
We review a grant of summary judgment on statute of limitations grounds de novo, construing the record in the light most favorable to the non-movant. See Montalvo v. Gonzalez-Amparo, 587 F.3d 43, 46 (1st Cir.2009). We affirm if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
i. Residential Lead-Based Paint Hazard Reduction Act
Randall filed suit under the Residential Lead-Based Paint Hazard Reduction Act (the “Act“),
The City does not attempt to argue that it met these requirements, nor does it appear that it truthfully could make this argument. It is undisputed that prior to selling Randall the property the City did not complete the disclosure form, turn over the Alpha report, or otherwise inform Randall about the lead-based paint hazards in the home. The only question is whether the City‘s non-compliance should be excused on timeliness-of-suit grounds.
ii. Applicable Statute of Limitations
Now, for the first time, Randall asserts that instead of looking to the three-year New Hampshire limitations statute, the district court should have applied the federal four-year catch-all statute of limitations for civil actions. See
iii. The Separate Cause of Action Argument
Before we go any further, we wish to dispose of an argument of Randall‘s. It is a meritless argument that unfortunately for Randall permeates his entire position on appeal. In a nutshell Randall characterizes the City‘s failure to turn over the Alpha report as a separate and distinct violation from the City‘s other alleged violations of the Act (e.g., not completing the disclosure form, not providing a lead information pamphlet, not including a lead warning statement in the sales contract). And, in Randall‘s mind, each such violation is its own cause of action complete with its own statute of limitations. So, while he now concedes that all of the City‘s “other” violations are barred by the statute of limitations, Randall argues that his cause of action for the City‘s failure to turn over the Alpha report survives. Relying on the discovery rule, Randall‘s stance is that accrual did not occur until May 2010 when he learned that the Alpha report existed after the City turned it over in discovery. Randall claims he could not have discovered the factual basis for his claim until this time.
As we said though, this argument is founded on a faulty thesis, namely that the City‘s failure to turn over the Alpha report is a stand-alone violation of the Act with its own limitations period. We have found no support for this position, nor does Randall point us to any. Perhaps the closest he comes is to reference Smith v. Coldwell Banker Real Estate Services, Inc., a district court case out of Connecticut, which Randall claims stands for the proposition that violations of the Act are cumulative and each requirement of the Act is separate and distinct. See 122 F.Supp.2d 267 (D.Conn.2000). However, we do not see any such language in Smith. The only arguably comparable point in that case is when the court expressed an unwillingness to accept the home seller‘s argument that it had a “substantial compliance” defense because it met some, though not all, of the Act‘s requirements. See id. at 272-73. But we decline to speculate as to whether this point is what Randall is attempting to rely on.
Moreover, we do not disagree that the Act places multiple requirements on a seller as far as what actions must be taken (e.g., provide a lead hazard information pamphlet and permit a ten-day inspection period) and what disclosures must be made (e.g., disclose the presence of lead-based paint hazards and hand over any evaluation reports). See
iv. Accrual
While we are utilizing New Hampshire law for the applicable statute of limitations, the date of accrual is a federal law question. See Gorelik v. Costin, 605 F.3d 118, 121-22 (1st Cir.2010); Greenwood, 527 F.3d at 14. Though we have not had occasion to decide the accrual particulars for a
Our take-away from these cases is that causes of action typically accrue when the aggrieved party suffers his injury (absent application of a discovery rule, which we will get into later). At the time of injury, the potential plaintiff has a present and complete cause of action and can sue. What this means for Randall is that his cause of action accrued on July 22, 2003, the closing date.
A violation of the Act occurs when the seller fails to make the necessary disclosures. See Mason ex rel. Heiser v. Morrisette, 403 F.3d 28, 31 (1st Cir.2005). This reading is consistent with the purpose
to provide the purchaser ... with notice that there could be a lead-based paint hazard present in the subject premises, and the opportunity to either decline to enter into a contract regarding the premises or proceed forward with the transaction in the face of the knowledge that a lead-based paint hazard could be present.
v. The Discovery Rule
As a general proposition, a discovery rule “allow[s] a claim to accrue when the litigant first knows or with due diligence should know facts that will form the basis for an action.” Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 644 (2010) (citing 2 C. Corman, Limitation of Actions § 11.1.1, p. 134 (1991 & Supp. 1993)). To the extent that such a rule is applicable to this case, it does not help Randall. Randall‘s deposition testimony strongly suggests that he had actual knowledge that the City had not returned the disclosure form prior to closing. Even generously assuming this not to be the case, it is clear that at the very least, in the exercise of due diligence, Randall should have known. He had previously signed the blank disclosure form and been told by his agent that the City would complete it. The City never did. Nonetheless, Randall did not follow-up with his agent to see why he had not received the signed form. Instead he went ahead with the purchase.
That Randall did not (and could not) specifically know about the Alpha report at that time is of no weight in our discovery-rule analysis. Turning over the report was just one in a series of obligations imposed by the Act, and in fact, identification of the report was one of the disclosures that the City was required to make on the disclosure form. Because at the time of closing Randall had discovered (or at a minimum should have discovered) that
Ultimately we cannot say for certain whether the Alpha report would have come to light had Randall pressed for a completed disclosure form. But this uncertainty does not change our conclusion. Even applying the discovery rule, Randall‘s cause of action still accrued when he closed on the property on July 22, 2003.
CONCLUSION
Because Randall filed this lawsuit six and one-half years after his cause of action accrued, the suit is untimely under New Hampshire‘s three-year limitations period. We affirm the district court‘s grant of summary judgment in favor of the City.
HOWARD, Circuit Judge, (Concurring).
A person damaged by a violation of the Residential Lead-Based Paint Hazard Reduction Act may seek recovery against the violator.
Moreover, the seller‘s further arguments that the buyer was on at least inquiry notice do not persuade me. I do not accept the seller‘s argument that its failure to provide to the buyer a timely and completed lead paint hazard disclosure form put the buyer on inquiry notice that the seller had also failed to hand over an existing lead paint report; in fact, all indications are that even had the seller provided the form, it would not have disclosed the existence of the report. Nor do I accept the seller‘s argument that the buyer‘s ability and opportunity to test for lead paint also put the buyer on inquiry notice that a report existed.
Despite these misgivings, I agree with the result in this case, based upon an argument made by the seller in the district court. Under the Act, sellers are liable to