DAVID K. GLOVER, JR. and ASHLEY L. GLOVER, Plaintiffs,
CHARLES E. DAILEY and SHERMA R. DAILEY, Defendants.
in the Court of Appeals 19 April 2017.
by plaintiffs from judgment entered 20 July 2016 by Judge G.
Wayne Abernathy in Durham County Superior Court Durham
County, No. 15 CVS 5223.
Coates Kyre & Bowers, PLLC, by Jon Ward and Adam L.
White, for plaintiffs-appellants.
Law Practice, by Shauna A. Guyton, for defendants-appellees.
purchasing their home, David and Ashley Glover (plaintiffs)
incurred significant expenses in mold remediation,
restoration, and repair. They filed an action against the
former homeowners, Charles and Sherma Dailey (defendants),
for fraud, negligent misrepresentation, and unfair and
deceptive trade practices. Plaintiffs alleged that defendants
failed to disclose a prior insurance claim to repair water
damage in the master bedroom, which plaintiffs maintain was
the source of the mold growth. After a bench trial, the trial
court dismissed plaintiffs' claims against defendants. We
2005, defendants purchased a single-family home located at 9
Avonlea Court in Durham. The first-floor master bedroom is on
the right side of the house. The garage, laundry room, and
kitchen are on the left side. The house is situated on a
low-lying lot relative to an adjacent property.
March 2008, Mrs. Dailey noticed a thin trickle of water-no
wider than a pencil-running down the wall in the master
bedroom. Defendants contacted Nationwide Insurance to inspect
and repair the leak. The trial court found that "[t]he
leak was probably caused by debris which accumulated against
or in the area of the flashing where the one-story bedroom
roof butted against the two-story wall of the house."
Portions of the dry wall, ceiling, and insulation were cut
out, removed, and replaced. The wet carpet was pulled back
and a portion of the padding underneath the carpet was also
replaced. An antimicrobial agent was then applied and fans
were used for twenty-four hours to complete the drying
process. No mold was detected during the inspection and
2009, Mr. Dailey accepted an employment transfer to Atlanta.
Defendants listed their home for sale with the help of Altair
Global Relocation. Altair offered to purchase defendants'
home at a guaranteed price while granting defendants the
option to sell to another buyer for 120 days.
completed a two-page property disclosure form regarding the
condition of the property. On the first page, defendants
responded "No" when asked if
"Insurance/individual claims have been asserted against
the Property to remedy any physical condition of the
Property." Mrs. Dailey understood the question to be
couched in current terms, as in "something that was
currently going on or something that had gone on, like,
within the last couple of weeks or months." On the
second page of the disclosure form, defendants responded
"Yes" when asked if "Draining,
flooding, moisture, mold, water penetration, and/or sewer
malfunctions previously and/or currently affect
any portion of the interior and/or exterior of the
Property, " and if "Previous corrections
have been performed or current problems exist with
drainage, flooding, moisture, mold, water penetration, and/or
sewer malfunctions on the Property." Defendants
underlined the foregoing portions to clarify their responses
and included an explanation thereof: (1) "Had excess
water around front and side of house. Re-worked drain and
pipes front and side"; (2) "Pipe from crawl space
outside damaged Centex replaced no further issues [sic]. Had
water under house briefly. No [sic] corrected." Altair
signed and acknowledged the disclosure form as the buyer.
December 2009, Lindsley Waterproofing, Inc. performed a
property inspection at defendants' request. The
inspection revealed problems with "a foundation drain
and coatings." According to the inspection report,
"water intrusion had been going on for a long time"
but mold and fungus were not detected. Mr. Lindsley indicated
that either exterior or interior waterproofing was necessary.
Mrs. Dailey testified that she had the exterior waterproofing
performed but did not know who made the repairs or how much
thereafter, plaintiffs became interested in the property. On
12 January 2010, plaintiffs contracted with Altair, acting on
behalf of defendants, to purchase the property. The contract
included a $10, 000.00 repair contingency. The contract
addendum and paperwork related to the purchase referenced
both Altair and defendants as the sellers.
January 2010, plaintiffs obtained a professional home
inspection of the property. The inspection report identified
several issues, including standing water and poor drainage in
the back yard. No mold test was performed. Plaintiffs sent
their repair requests to defendants, which were completed
before closing on 13 February 2010.
two years later, on 12 March 2012, Lindsley Waterproofing,
Inc. performed another inspection, this time for plaintiffs.
Mr. Lindsley noted in his report that the property had
"concealed water (subsurface)." He informed
plaintiffs that "concealed water results in damp walls,
damp soil, and an excessively humid crawlspace; and that
lends itself to mold infestation." Despite Mr.
Lindsley's report, plaintiffs took no action for nineteen
months until Mrs. Glover found black mold in the laundry room
September 2013, plaintiffs contacted Cathy A. Richmond of LRC
Indoor Testing and Research to conduct a mold investigation
in the kitchen and laundry room. The trial court accepted
Richmond as an expert in the field of environmental testing
and mold. During her investigation, Richmond found
Stachybotrys and Chaetomium in the air inside the home. Each
genus usually requires water to grow and has the potential to
release mycotoxins which can cause respiratory problems.
Richmond suspected that "somewhere, somehow,
sometime" the mold "got into the ductwork."
She was aware of the Nationwide claim but, even without