TIMOTHY R. RICE, Magistrate Judge.
Plaintiffs Leslie and Jonathan H. Bari ("the Baris") allege Defendants Robert Saeid Farivar and Firoozeh Mostashari ("the Farivars") defrauded them and violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL") by failing to disclose defects in a home ("the Home" or "the Property") the Baris purchased from them in 2014. They seek compensatory damages totaling approximately $594,000, along with treble and punitive damages and legal fees. As explained below, I conclude that the Baris have failed to prove their claims and I will enter judgment in favor of the Farivars.
This is an unfortunate case of buyers who coveted an elegant and historic home, but ignored or failed to fully investigate warnings and disclosures of potential defects in the Property. After realizing the scope of the problems upon purchase, the buyers desperately sought to depict the sellers as frauds who lured them to purchase the Home through lies, half-truths, and trickery. Sadly, the evidence portrays two sophisticated, detail-oriented, and well-educated buyers, who now suffer from buyers' remorse, not fraud.
The Home, which is located along the Main Line of suburban Philadelphia, was constructed in 1807, shortly after our nation was founded, with additions built in 1941 and 1985. After an unsuccessful attempt to purchase the Home from a previous owner in 2012, the Baris purchased the Home from the Farivars just two years later. Despite having benefited from two comprehensive inspections of the Home, the Baris now report problems with the heat, air conditioning, drainage and water infiltration, tennis court, pool, and Internet wiring.
Based on my observations of the parties' demeanor and review of the evidence, I find Mr. and Mrs. Bari's testimony mostly sincere, but often exaggerated and embellished. I instead credit the testimony of Dr. Farivar and Mrs. Mostashari. Although the Baris blame the Farivars for multiple problems in the Home, I conclude that the Farivars disclosed what they knew to the Baris. To the extent they omitted information, or did not update their disclosure statement, the Baris have failed to show that such information needed to be disclosed or that they suffered damages as a result of the Farivars' actions.
The Baris' main allegation, concerning the defective heating system, was disclosed by the Farivars before the Baris purchased the Home. The disclosure gave the Baris ample opportunity to explore potential causes of the heating problems. They did so, even enlisting a plumbing and heating contractor to supplement the standard home inspection. The Baris likewise had notice of the drainage and water infiltration issues based on disclosures made by the Farivars and the Home's previous owner, as well as candid warnings provided during their two inspections of the Home. Recognizing this, the Baris base their claim on the Farivars' failure to tell them of the need to keep the drains clear during rainstorms, which was not a defect and did not trigger disclosure.
Although the Baris also charge the Farivars with failing to disclose issues related to the air conditioning, damage to the tennis court following a winter storm, and a water line leak, not all of this information constituted defects that required disclosure. Indeed, the Farivars timely remedied much of the damage — conduct that the Baris claim shows the Farivars' attempts to mislead them. Instead, I find the Farivars acted in good faith to maintain the Property and transfer it in good condition.
Based on the evidence presented at trial, and pursuant to Federal Rule of Civil Procedure 52, I make the following findings of fact and conclusions of law by a preponderance of the evidence.
1. The Home sits at the bottom of a long downhill driveway and consists of three main parts. N.T. 8/3/2017-II at 118; N.T. 8/4/2017 at 89. The center section, which includes a kitchen, living room, dining room, and several upstairs bedrooms, dates back to 1807, although some parts have been recently modernized. N.T. 8/3/2017-II at 117-18; Plaintiff Exhibit ("P") 1121. The right side, which includes a family room, bar room, and guest room, was built in 1941. N.T. 8/3/2017-II at 117-18; P1121. The left side, which includes a garage and upstairs master bedroom, was built in 1985. N.T. 8/3/2017-II at 117-18; P1121.
2. The Property also features a pool, pool house, tennis court, and gym situated on five acres of land with several hundred trees. N.T. 8/4/2017 at 87-88.
3. In July 2012, the Baris entered into an Agreement of Sale for the Property with Todd and Barbara Albert, who had owned the Home since 2000. N.T. 8/3/2017-II at 84; P1083; Defendant Exhibit ("D") 7 at Bari3158.
4. During that transaction, the Alberts provided the Baris with a Seller's Property Disclosure Statement ("Albert SPD"), in which they stated that they did not know of any problems related to the nine-year-old heating system. N.T. 8/3/2017-II at 84; D7 at Bari3160.
5. The Alberts also stated there were no problems with the air conditioning system, which was upgraded with a new unit in 2006 and completely rezoned in 2010. D7 at Bari3053; D8 at Bari45.
6. The Alberts reported that the Property had two sump pumps, and noted "water leakage, accumulation, or dampness within the basement or crawl space." D7 at Bari3158. In an addendum, the Alberts explained that water had damaged the basement in the summer of 2004 after a substantial rainfall.
7. The Alberts additionally stated they knew of "past or present drainage or flooding problems affecting the property."
8. In mid-July 2012, the Baris had various inspections performed at the Home, including a general inspection of all the Home's major systems and components, and inspections of the tennis court, pool, and trees. N.T. 8/7/2017-II at 17-18; D10; D13; D14 at Farivar4368-70.
9. Inspector Michael Baltrush of ValueGuard Home Inspections completed the general inspection and reported that the heating system, which consisted of two boilers, "functioned properly when tested and appear[ed] in generally good condition." D10 at Farivar3016. Baltrush used an infrared thermometer to determine that the radiators and baseboards were getting hot, and found no lack of heat at any of the radiators or baseboards in his report. N.T. 8/7/2017-I at 43. Baltrush cautioned that "[t]he adequacy of heat distribution is difficult to determine during a one-time visit to the home." D10 at Farivar3016.
10. Baltrush noted that the two air conditioning compressors responded properly to operating controls.
11. Baltrush warned the Baris that basement leakage during rainy periods or spring "is a way of life" for owners of older homes.
12. Baltrush also warned that the "front porch and grading were lower/sloped toward the house," and the driveway "slopes toward the house/garage," which could allow water to enter the Home.
13. The tennis court inspector reported that although 90 percent of courts older than 15 years contain some structural cracks, the Alberts' court had none. D13 at Bari3248. He also recommended that the court be resurfaced because it showed signs of wear.
14. The tree inspection report noted approximately eight trees surrounding the tennis court that needed to be removed, as well as "hanging broken limbs" that were "damaging light fixtures." D14 at Farivar4370; N.T. 8/7/2017-II at 39-40.
15. After the inspections were completed, the Baris sent the Alberts a 10-page spreadsheet outlining the problems found during the inspections and asked the Alberts to remedy some of the problems, including removing the trees around the tennis court that had "damaged lighting fixtures and could continue to damage lighting fixtures, [the] court, and fencing." D14 at Farivar4364-80; N.T. 8/7/2017-II at 32-37.
16. When the Alberts and Baris failed to agree on those issues, the Baris terminated the agreement of sale. N.T. 8/3/2017-I at 91-92.
17. On August 3, 2012, the Farivars agreed to purchase the Property from the Alberts. P653.
18. The Farivars arranged for an inspection of the Home on August 9, 2012. N.T. 8/7/2017-II at 176-80; P24; P25. A few days later, the inspector emailed the Farivars a report outlining several defects, including uninsulated air conditioning ducts. P25, P24 at Farivar4047-4049; N.T. 8/7/2017-II at 183-84. The inspector recommended cleaning and insulating the ducts. P24 at Farivar4046-4049. The inspector testified that the uninsulated ducts did not impact the effectiveness of the air conditioning system; rather, the lack of insulation could cause condensation, dripping water, and possible mold. N.T. 8/7/2017-II at 183-85.
19. The Farivars' inspection report cited no other defects related to the air conditioning, heating, water infiltration and drainage, tennis court, pool, or Internet wiring. P24; N.T. 8/7/2017-II at 187-88.
20. The Farivars never read the report. N.T. 8/8/2017-II at 62-62; N.T. 8/9/2017 at 67. Instead, Dr. Farivar talked briefly with the inspector about whether the House had any major defects.
21. In September 2012, the Farivars purchased the Home from the Alberts for $1,700,000. P653 at Farivar6182.
22. One of the first improvements made by the Farivars, based on Mrs. Albert's recommendation, was to enlarge the drain in the front of the Home to make it more effective. N.T. 8/8/2017-II at 38; P9A at Bari3002.
23. Because Mrs. Albert advised the Farivars to make sure the driveway drains were clear during storms, Mrs. Mostashari was vigilant about clearing the drains pursuant to a biyearly maintenance schedule, and before and during storms.
24. The Farivars noticed the basement was moist after one storm and installed a second dehumidifier to help remedy this situation. N.T. 8/9/2017 at 61-62, 65; P34 at 201-11; P9A at Bari3001.
25. The Farivars testified that they did not otherwise experience water in the basement or any other area of the Home. N.T. 8/8/2017-II at 39; N.T. 8/9/2017 at 61-62, 64. I credit their testimony because it is corroborated by the Alberts, who reported experiencing water infiltration only twice, after substantial storms. Moreover, the Farivars were in the Home for just 22 months and there was no evidence of a rainfall during that time sufficient to cause water infiltration.
26. On December 28, 2012, the Farivars called Oliver Heating and Cooling, pursuant to their maintenance contract, about the heat.
27. Approximately one week later, the Farivars called Oliver again.
28. A few weeks later, on January 26, 2013, Dr. Farivar emailed the Baris, asking if they were still interested in the Home because he may be putting it back on the market. P632, Bari0006; N.T. 8/3/2017-II at 94-95.
29. Later that day, Mr. Bari spoke with Dr. Farivar, who explained that he was considering selling the Home because he still owned a home in Iowa, he wanted to live closer to his job in Philadelphia, and he wanted a more open and modern home. N.T. 8/3/2017-II at 95. Mr. Bari followed up with an email to Dr. Farivar, seeking an opportunity to meet the Farivars to discuss a possible private sale of the Property. P632, Bari0007.
30. Two days later, on January 28, 2013, the Farivars called Oliver again about the heat. D113. Mauger went to the Home and noted the reason for the call as "insufficient heat."
31. Mauger also explained on the service ticket that he "educated [Mrs. Mostashari] on the heating and A/C troubles of [the] home that are preexisting to the purchase of the home." D113;
32. Mauger characterized the right wing heat as "intermittent" because it worked unless it was freezing cold outside.
33. Mauger could not recall what he told Mrs. Mostashari about the air conditioning other than recommending that the right wing air conditioning unit be replaced with a heat pump. N.T. 8/3/2017-I at 22; N.T. 8/8/2017-II at 16.
34. The Farivars did not call Oliver for heating issues during the remainder of the 2013 winter.
35. The Farivars, however, used portable space heaters in the right wing to help warm that area. N.T. 8/8/2017 at 33; N.T. 8/9/2017 at 59-60; P34 at 169.
36. In early February, the Farivars informed the Baris that they had decided not to sell the Home. N.T. 8/3/2017-II at 96. The Baris emailed the Farivars several times after that to see if they had changed their minds.
37. In late April 2013, Oliver returned to the Home to check the three air conditioning units. D116; N.T. 8/3/2017-I at 23. After replacing the air filters, flushing the drains and traps, and performing other checks, the technician reported that all three systems were "operational." D116. The technician also recommended upgrading the air filters and obtaining a new unit in the right wing because it was 28 years old and in poor condition.
38. The Farivars did not call Oliver about air conditioning issues during the summer of 2013.
39. In October 2013, Oliver performed an annual service check on the Home's heating system and determined that it was operating properly. D118; N.T. 8/3/2017-I at 24-25.
40. In the fall of 2013, the Farivars informed the Baris that they were moving because Dr. Farivar had obtained a new job in Minnesota. N.T. 8/3/2017-II at 97. They inquired whether the Baris were interested in purchasing the Home.
41. On December 9, 2013, the Farivars called Oliver about the heat. D119; N.T. 8/3/2017-I at 25. Mauger went to the Home and noted "no heat right wing" as the reason for the call on the service ticket. D119;
42. At approximately 4:00 p.m. on December 11, 2013, the Baris met the Farivars at the Home. P1; N.T. 8/7/2017-II at 42. Although it was approximately 32-34 degrees Fahrenheit outside, Mr. Bari did not notice any issues with the heat in the Home. N.T. 8/7/2017-II at 41-44; D80; D81.
43. The following day, the Farivars provided the Baris with a list of additions and improvements. N.T. 8/7/2017-I at 44-45; D21. The list did not note any improvements to the tennis court lights or the air conditioning ductwork.
44. On December 13, 2013, the Farivars again called Oliver. D120. Mauger noted on the service ticket that "one boiler [was] not coming on" because a wire on the relays attached to the boiler was not connected. D120; N.T. 8/3/2017-I at 28. After he reconnected the wire, both boilers came on during a cycle. D120. Because Oliver resolved the heat issue, I find that this service call did not further alert the Farivars to a defect with the heat.
45. On December 18, 2013, the Farivars provided the Baris a Sellers' Property Disclosure Statement ("Farivar SPD"). N.T. 8/3/2017-II at 97; P9A.
46. The Farivar SPD noted the Farivars were required by the Pennsylvania Real Estate Seller Disclosure Law, 68 Pa. C.S. § 7301 et seq. ("RESDL"), to "disclose to a buyer all known material defects about the property that are being sold that are not readily observable." P9A at Bari3000. It defined material defects as problems "with a residential real property or any portion of it that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property."
x 47. The Farivar SPD further stated it included "disclosures beyond the basic requirements of the law in an effort to assist buyers in evaluating the property" and did not relieve the Farivars of their "obligation to disclose a material defect . . . not addressed on [the] form." P9A at Bari3000. The SPD, however, "was not a substitute for any inspection or warranties that [the Baris] may wish to obtain."
48. The Farivars stated on the SPD that the Property had one sump pump, which was in good working order.
49. The Farivars stated they were not aware of any "fire, storm, water or ice damage to the property."
50. The Farivars said that the heating system was serviced "under contract" and "fireplaces" were "an additional and/or backup heating system."
51. The Farivars stated that they were aware of "problems or repairs needed" for the heating system, explaining the "family room heat is intermittent, predates our purchase, bar room heat is intermittent, guest room above family room heat [is] cool if very cold."
52. The Farivars stated that they were not aware of any problems with the air conditioning.
53. The Farivars also said they did not know of "any past or present drainage or flooding problems affecting the property," or "any past or present drainage or flooding mitigation on the property."
54. The Farivars stated they were not aware of any other material defects to the Property.
55. In early January 2014, the Farivars spoke with Oliver about replacing the air conditioning unit with a heat pump, as Mauger had recommended. N.T. 8/8/2017-II at 16. Oliver informed the Farivars that it did not carry the appropriate size heat pump and they should contact another company, such as Sila Heat and Air Conditioning.
56. On January 16, 2014, Matthew Migliore at Sila provided the Farivars a work order for a heat pump/air handler ("heat pump") for $7,396. N.T. 8/7/2017-I at 6-7; N.T. 8/8/2017-II at 24-25; P464 at Farivar3404; P472.
57. A few weeks later, on February 4, 2014, the Farivars and Baris, with the assistance of counsel, entered into an agreement of sale ("Sale Agreement") for the Property for $1,835,000. N.T. 8/7/2017-II at 67-68, 89-90; D24. Settlement was scheduled for June 23, 2014. D24 at Bari372.
58. In the Sale Agreement, the Baris elected to undertake several types of inspections of the Property between March 4 and March 13, 2017. D24 at Bari376. Within this same period, the Baris could: (a) accept the Property with the information stated in the inspection reports and agree to the release in the Sale Agreement; (b) terminate the Sale Agreement and obtain a refund of their deposit; or (c) present the inspection reports to the Farivars with a proposal for corrections and/or credits.
59. The Farivars agreed to "maintain the Property, grounds, fixtures and personal property specifically listed in [the] Agreement in its present condition, normal wear and tear excepted."
60. The Sale Agreement stated that it contained "the whole agreement between [the parties], and there are no other terms, obligations, covenants, representations, statements or conditions, oral or otherwise, of any kind whatsoever concerning this sale."
61. The Baris agreed "to purchase the Property IN ITS PRESENT CONDITION, subject to the inspection contingencies elected in [the] Agreement."
62. The Baris and Farivars also executed an Addendum to modify and supplement certain provisions of the agreement. D24 at Bari393. In the event of a conflict between the Addendum and the Sale Agreement, the Addendum would prevail.
63. On the same day that the Sales Agreement and Addendum were executed, Mrs. Mostashari met with Migliore from Sila and signed the work order for the new heat pump. P472.
64. The next day, February 5, 2014, Migliore sent Mrs. Mostashari an email stating that they would need to use a different brand heat pump to fit into the designated space, and confirming that the device was "a supplementary (back up) heating source for these rooms as the boiler zone is not working." P465; N.T. 8/7/2017-I at 13; N.T. 8/8/2017-II at 25-27. Mrs. Mostashari testified that she told Migliore about the right wing problems as part of explaining why they needed a heat pump. N.T. 8/8/2017-II at 26-27. I find Mrs. Mostashari's testimony credible because Migliore also testified that he believed Mrs. Mostashari had told him that information and he did not make any diagnosis of the right wing hearing issues. N.T. 8/7/2017-I at 6. It also was consistent with the Farivars' earlier disclosure of heating issues in the right wing.
65. Migliore also stated in his email that he wanted to be "100% sure [Mrs. Mostashari understood] that this is not going to be a perfectly temperate room in the winter time. On the cooling side this unit will be fine." P465 at Farivar571. Mrs. Mostashari replied that she understood.
66. Sila installed the heat pump on February 10.
67. On February 26, 2014, Sila returned to the Home to balance the system. N.T. 8/8/2017-II at 27; P464 at Farivar3407. The technician "made adjustments to the airflow of the heat pump system" and noted everything was working "ok." P464 at Farivar3407. However, he also noted that the heat pump would "not completely fix the lack of heat to the bar/sitting area."
68. Migliore testified at trial that the heat pump was operating and improved the heat, but it was not a complete remedy and may not provide enough heat for some people. N.T. 8/7/2018-I at 18, 26-28, 30, 32.
69. During a February 2014 storm, several trees fell on the Property. N.T. 8/8/2017-II at 42-43, 49. Photographs taken by Mrs. Mostashari show: (a) a tree lodged on the tennis court fence near the backboard, N.T. 8/8/2017-II at 44; P482 at Farivar4421; (b) damage to the tennis court fence from the tree, N.T. 8/8/2017-II at 46; P482 at Farivar4423; and (c) a tree limb lying on top of snow covering the tennis court, N.T. 8/8/2017-II at 44; P482 at Farivar4422.
70. On February 24, 2014, Mrs. Mostashari called her insurance company to see if the tree removal was covered.
71. Although the insurance report stated that Mrs. Mostashari reported tennis court damage, Mrs. Mostashari testified that she solely intended to report damage to the tennis court fence because that was all she observed. N.T. 8/8/2017-II at 45. I find this testimony credible because Mrs. Mostashari would not have been able to see any damage to a tennis court covered with snow. N.T. 8/7/2017-II at 73.
72. The Farivars ultimately did not pursue insurance coverage because the damage did not exceed their deductible. N.T. 8/8/2017-II at 49; P477A.
73. Mrs. Mostashari also met with a tree company about the fallen trees on February 24. N.T. 8/8/2017-II at 52; P483. Regarding the trees near the tennis court, the company proposed: "clean[ing] up of down limbs in pool area, between pool area and tennis court, remove 16 [inch] diameter fir top that [has] damaged the tennis court fence, down limbs around the tennis court, climb one white pine to remove hanging limbs (this tree is close to the tennis court fence on the driveway side), remove down pine limbs on eastern property line." P483 at Farivar538. The proposal did not note a fallen tree on the tennis court.
74. Mrs. Mostashari asked the company to perform the proposed work "as soon as possible" because they were showing the Home to the Baris the following week.
75. Around the same time, Mrs. Mostashari also had the tennis court fence fixed. N.T. 8/8/2017-II at 52.
76. Mrs. Mostashari testified that she had the trees removed and fence fixed so the Home would look nice when the Baris inspected it.
77. The Baris scheduled an inspection of the Home by the same inspector they used in 2012, Michael Baltrush of ValueGuard, for March 4, 2014. N.T. 8/3/2017-II at 107-108; P26. Prior to the inspection, Mrs. Bari asked the Farivars to turn off the fireplaces for twelve hours before and during the inspection to permit radon testing. N.T. 8/4/2017 at 103-107; D27.
78. The Baris also arranged for Ron Miller of Adelphia Plumbing & Heating to attend the inspection to consider a gas line for a generator and to inspect the boiler and boiler systems. N.T. 8/3/2017-II at 111.
79. Before the inspection, Mr. Bari reviewed the Farivar SPD in conjunction with the Albert SPD. N.T. 8/7/2017-II at 116. Mr. Bari also provided both Baltrush and Miller a copy of the Farivar SPD. N.T. 8/4/2017 at 83.
80. The Baris attended the inspection, which lasted approximately four hours, and took multiple photographs of the Home. N.T. 8/7/2017-II at 117; N.T. 8/9/2017 at 138-39; D68. Those photographs show that the fireplaces were off during the inspection, as Mrs. Bari had requested.
81. Although it was approximately 10-15 degrees Fahrenheit outside, the Baris did not recall it being cool in the Home. D26 at Bari1800; N.T. 8/7/2017-II at 120-21; N.T. 8/9/2017 at 141, 143.
82. Mrs. Mostashari met the Baris at the Home for the inspection and told them about the winter storm and fallen trees, although she did not recall saying anything about the tennis court. N.T. 8/8/2017-II at 53, 78. She also informed the Baris about the installation of the new heat pump.
83. Mr. Bari testified that Mrs. Mostashari told him and Mrs. Bari that they were the beneficiaries of a new heat pump that "would resolve the issues as disclosed of intermittent heat in the [SPD]." N.T. 8/3/2017-II at 110. Mrs. Bari also initially testified that Mrs. Mostashari told them that the intermittent heat issue was resolved by the heat pump. N.T. 8/9/2017 at 143-44. Mrs. Bari later testified, however, that she and Mr. Bari had been "led to believe" that the issue was resolved based on Mrs. Mostashari's statement that they were the beneficiaries of a new heat pump.
84. Dr. Farivar testified in his deposition that they installed the heat pump in an attempt to remedy the right wing heat issues. Such testimony does not establish that the Farivars believed the heat pump fully resolved the heat issues or that Dr. Farivar, who was not present during the March 4 inspection, told the Baris it corrected the intermittent heat issue.
85. As he had done in his 2012 inspection report, Baltrush cautioned the Baris in his 2014 inspection report that it was difficult to determine the adequacy of the "heat distribution system in a one-time inspection."
86. Based on Baltrush's findings, and the fact that no one could recall the Home being cold during the inspection, I find that the Home was adequately heated during the March 2014 inspection when the outside temperature was 10-15 degrees Fahrenheit.
87. Baltrush was not able to test the air conditioning system because of the cold temperatures. P26 at 1814; N.T. 8/7/2017-I at 39.
88. Baltrush reported the same drainage and water infiltration information he cited in 2012: basement leakage can be a "way of life" in old homes; that the front porch and grading were lower/sloped toward the Home; and the driveway sloped towards the Home/garage.
89. At some point, the Farivars told the Baris that the Home's drainage system worked, but advised them to keep the drains clear. N.T. 8/4/2017 at 52, 76, 85-86; N.T. 8/7/2017-II at 24; N.T. 8/9/2017 at 63. The Farivars also provided the Baris a maintenance calendar that stated the drains were cleaned twice per year. N.T. 8/4/2017 at 76, 86.
90. Baltrush's inspection of the pool and pool house was limited because the pool was winterized and there was snow on the ground. P27 at Bari1831-32. Baltrush recommended that the condition of the pool be confirmed when weather permitted.
91. On March 13, 2014, the Baris sent the Farivars copies of their inspection reports and a corrective proposal letter. N.T. 8/7/2017-II at 133-34; D30. The Baris asked to: (a) reduce the purchase price by $11,250 to allow them to remediate and remove asbestos, repair exterior wood rot and electrical issues, and remove a dead tree; (b) extend the inspection contingency period to allow them to conduct additional asbestos testing; (c) make four repairs on the Property; and (d) inspect the pool and pool house during the pre-closing walk-through. N.T. 8/7/2017-II at 135-36; D30 at Bari549-550. The Baris made no request for price reductions based on the heating, drainage, or other issues.
92. The Farivars agreed to reduce the purchase price by $11,250, allow the additional time for asbestos testing, and complete three of the requested repairs. N.T. 8/7/2017-II at 142, 146; D36 at Bari569-70; D37; P9D at Bari1286. The Farivars also stated that although the Baris could view the pool and pool house during the walk-through to make sure they were they were in working order, they could not inspect the pool. N.T. 8/7/2017-II at 146-47; D36 at Bari569; P9D at Bari1286.
93. On April 9, 2014, while the Farivars' pool technician was attempting to open the pool, the water line began leaking into the yard behind the pool house. N.T. 8/7/2017-II at 190; N.T. 8/8/2017-II at 56, 60; P555.
94. The Farivars immediately called Oliver and a plumber arrived about 1.5 hours later. N.T. 8/7/2017-II at 198; N.T. 8/8/2017-II at 57; P546; P555. The plumber capped the water line and recommended that a new line be installed as soon as possible. N.T. 8/7/2017-II at 191, 194; P542. The Farivars paid Oliver $537. N.T. 8/7/2017-II at 192; P542.
95. On April 15, the Farivars paid Oliver approximately $1,000 to repair the water line. N.T. 8/7/2017-II at 193; N.T. 8/8/2017-II at 58; P552. Because the repair was successful, replacement of the water line was not necessary at that time. N.T. 8/7/2017-II at 196 (Oliver would have needed to replace the line if the repair did not work).
96. An April 15 photograph taken during the repair shows the leak was several yards away from the pool and no flooding damage is evident. N.T. 8/7/2017-II at 199, 204; P576.
97. On April 22, 2014, Oliver checked the Home's three air conditioning units. D126; N.T. 8/3/2017-I at 29-30. The technician determined that all air conditioning systems were "operating well," D126, or in accordance with the standards for cooling homes in the area, N.T. 8/3/2017-I at 30.
98. On June 19, 2014, the Baris' attorney contacted the Farivars' attorney in anticipation of the June 23 settlement. N.T. 8/7/2017-II at 103-04; P8 at Bari5316. He reminded her that the Farivars needed to update their SPD with a written addendum if any changes occurred since they completed the SPD. P8 at Bari5316. He then stated that because the Baris had "not received any such Addendum [they] will assume that there have been no changes to the underlying facts unless [they] hear otherwise."
99. The Baris' attorney asked the Farivars to have the air conditioning on for the walk-through and the pool and pool house open.
100. After consulting with the Farivars, the Farivars' attorney responded by stating the Farivars had no additional disclosures to the SPD. N.T. 8/7/2017-II at 91-94; N.T. 8/9/2017 at 54, 70; P8B at Bari6322-23. Dr. Farivar testified that he did not include information about the water line leak because he believed they had sufficiently repaired the leak pursuant to the Sale Agreement and he did not believe the leak was a material defect that was required to be disclosed.
101. The Farivars' attorney also told the Baris' attorney that the air conditioning would be activated for the walk-through and Dr. Farivar would be there to show the Baris how the pool worked. The attorney, however, cautioned that the walk-through was not an inspection. P8B at Bari6323.
102. The Baris' attorney stated that they would refrain from bringing a pool technician to the walk-through if Dr. Farivar explained the pool to them and the Farivars provided all of their pool maintenance and service documents. N.T. 8/7/2017-II at 112; P8B at Bari6321-22. He also requested that the Farivars cool the Home to 72 degrees Fahrenheit. P8B at Bari6322.
103. The Farivars subsequently provided the Baris with information related to the pool, but did not provide any documents related to the repaired water line.
104. On June 23, 2014, the Farivars and Baris met at the Home for the walk-through, which lasted approximately two hours. N.T. 8/3/2017-II at 112-13; N.T. 8/7/2017-II at 148.
105. They walked through almost all of the Home and Mr. Bari personally tested the temperature of the air coming from some of the vents with an infrared thermometer. N.T. 8/3/2017-II at 114; N.T. 8/7/2017-II at 148. The thermometer showed the air temperature was between 70 and 75 degrees Fahrenheit. N.T. 8/3/2017-II at 114.
106. The Farivars also showed the Baris the pool and tennis court. The Baris did not notice any issues. N.T. 8/7/2017-II at 148-51; N.T. 8/9/2017 at 151-52.
107. Following the walk-through, the parties and their attorneys met in Philadelphia for the settlement. N.T. 8/3/2017-II at 112-13, 117. The parties closed on the Property without any additional issues being raised about the heat, air conditioning, water infiltration and drainage, tennis court, water line, or Internet wiring.
108. Armed with the Farivars' disclosure and two inspection reports, the Baris moved into the Property on July 3, 2014. N.T. 8/3/2017-II at 119.
109. After moving into the Home, the Baris noticed that one of the tennis court light poles was broken.
110. Mr. Bari also claimed that he observed a crack in the tennis court underneath the light pole. N.T. 8/4/2017 at 17-20. A crack, however, is not visible in July 2014 photographs of the light pole and the tennis court taken by Mr. Bari.
111. The July 2014 tennis court photographs taken by Mr. Bari do not show damage to the tennis court fence.
112. Shortly after moving in, the Baris noticed that the air conditioning did not seem to be working and contacted Oliver.
113. On July 18, 2014, the Baris contacted Oliver about a possible gas leak and the plumber informed them about the water line leak that had been repaired in April.
114. Around the same time, the Baris also contacted Oliver about clogged drains in the front and side of the House. N.T. 8/4/2017 at 31; P1136 at 4; P91; P92. Oliver cleared the drains, allowing proper water flow. P91.
115. On July 30, 2014, the Baris sent the Farivars a letter, claiming for the first time that the Farivars had failed to make accurate and complete disclosures in the Farivar SPD with respect to the air conditioning, heating, boilers, water heater, Viking Grill, window treatments, hardwood flooring, pool water line, plumbing, leaking kitchen faucet, electrical system, indoor lighting, tennis court lights, appliances, gas, and environmental concerns "(including a dying Hemlock tree that could have fallen any moment on the house and posed life safety issues and danger to the main house)."
116. The Farivars disputed the Baris' claims. N.T. 8/4/2017 at 69; P23. They explained that the air conditioning and heating-other than in the right wing, which had been disclosed-were adequate. P23 at Bari1558-59. They said they were unaware of issues with the tennis court lights and had fixed the water line leak, but apologized for not remembering to update the SPD with information about the leak.
117. The Baris demanded mediation, seeking $120,000 in damages. N.T. 8/4/2017 at 69; N.T. 8/9/2017 at 156-57; D42. The Farivars refused to participate. N.T. 8/4/2017 at 70.
118. In April 2015, the Baris filed their complaint in the Court of Common Pleas of Montgomery County, Pennsylvania.
119. The case was removed by the Farivars to this Court.
120. The Baris testified that the heat does not work in any of the Home's three wings.
121. Mrs. Bari testified that although the air conditioner functions, it is not effective and they have issues with condensation and dripping onto the living room floor. N.T. 8/9/2017 at 96, 177.
122. Although I find the Baris' testimony about their current experiences with the Home's heat and air conditioning sincere, such testimony fails to establish that the Farivars experienced the same extensive problems, or knew about them. No evidence supports that at the time of the sale, the Home lacked working heat or air conditioning in all three wings, as the Baris now allege.
123. The Baris also testified that since March 2015 they have experienced significant flooding around the Home as well as water infiltration in the basement, kitchen, and bar area during thunderstorms. N.T. 8/4/2017 at 31-32, 49-52; N.T. 8/9/2017 at 97-99, 104-08;
124. The Baris stated that if the Farivars had fully disclosed the issues with the heat, air conditioning, drainage and water infiltration, water line leak, and tennis court, it would have affected their decision to buy the Home. N.T. 8/4/2017 at 6-7, 11-12, 39, 44, 57-58, 71-72; N.T. 8/9/2017 at 100-01, 112-13, 115-16.
125. The Baris seek approximately $594,000 in compensatory damages based on a 10-page spreadsheet they created to summarize their expenses and estimates allegedly related to the undisclosed defects. Pl. Findings ¶ 490; P1142; N.T. 8/9/2017 at 120-30.
126. The Baris presented Michael Shade as an expert in heating and air conditioning systems, electrical wiring, and remediation approaches and costs. N.T. 8/8/2017-II at 81-82.
127. Shade examined the Home's HVAC systems in October 2015.
128. Shade disagreed with Baltrush's 2014 inspection findings that the heating system functioned properly when tested and appeared to be in generally good condition.
129. Shade explained that the air conditioning system had old fiberglass ductwork that needed to be replaced and that condensation tended to form on some of the air conditioning units.
130. Shade initially testified that the heat and air conditioning problems had existed for years,
131. Shade said the Internet wiring was randomly put in the Home and did not follow the proper standards.
132. Shade initially testified that the damages claimed by the Baris for the heating, air conditioning, and Internet problems were reasonable.
133. I credit Shade's testimony that the Home had heat problems in all three wings when he inspected it in October 2015. Such testimony, however, fails to establish that the Farivars experienced the same problems during their ownership more than one year earlier. Indeed, if such problems existed, Shade's testimony shows that Baltrush should have been able to identify issues with the heat supply during his March 2014 inspection. Similarly, although I credit Shade's testimony that the air conditioning ductwork should be replaced and insulated, his testimony fails to show that the Farivars knew this. Shade's testimony also does not establish that the Internet wiring did not work; it merely shows that it was not properly installed.
134. The Baris presented Fred Albert as an expert in landscaping, hardscaping, storm water management, tennis courts, swimming pools, and water lines.
135. Albert said that when he first visited the Home in October 2015, he observed damage to the tennis court fence, damage to the backboard, a crack in the center of the court, a three-foot structural crack underneath the tennis court lights, and indentations from something dropped on the court. N.T. 8/8/2017-II at 152-54; P42C at 33-41. He did not testify to the cause of these damages. N.T. 8/8/2017-II at 158-59. I precluded such testimony because it was speculative and Albert did not provide any reliable methodology for his opinions.
136. Albert also determined from photographs taken by the Baris that a light pole on the tennis court was damaged when the Baris moved into the Home. N.T. 8/8/2017-II at 154-56. Albert opined that the light was hit by a fallen tree during the February 2014 storm.
137. Based on videos taken by the Baris, Albert found that the Home had severe drainage problems.
138. Albert opined that the April 2014 water line leak eroded the coping around the pool.
139. Albert testified that the damages claimed by the Baris relating to the tennis court, drainage and water infiltration, and pool problems were reasonable. N.T. 8/8/2017-II at 181-87; N.T. 8/9/2017 at 31. Albert, however, could not explain when some of the estimates were provided, the identity or qualifications of who provided them, or why certain amounts did not coincide with the supporting documentation. N.T. 8/9/2017 at 32-38, 41. Albert also insisted that certain damages claimed by the Baris related to the water line leak even though such relationship was tenuous at best.
140. Albert was not credible and I reject his testimony because it was riddled with inconsistencies, half-truths, and blind reliance on damage summaries prepared by the Baris. I also find that much of his testimony was speculative and he was biased in favor of the Baris, whom he had known for 13 years.
141. Neal Jacobs, who examined the tennis court in August 2015 to provide Mr. Bari with an estimate for resurfacing, testified that there were only two very small cracks totaling three feet on the court.
1. The Baris claim that the Farivars are liable for fraud and violating the UTPCPL for failing to disclose: (a) the heating defects throughout the Home; (b) the air conditioning defects; (c) the exterior drainage and water infiltration defects; (d) the tennis court defects; (e) the water line defects; and (f) the Internet wiring defects.
2. Although the Baris agreed in the Sale Agreement to release and discharge the Farivars from all claims for damage and its consequences arising from defects or conditions of the Property, this release did not preclude the Baris from bringing a claim against the Farivars if they were in default under the terms of the Sale Agreement or violated seller disclosure laws.
3. Because the Sale Agreement did not incorporate any of the representations made by the Farivars in their SPD, the Farivars did not breach that agreement by making misrepresentations in their SPD.
4. The RESDL required the Farivars to disclose known material defects on a seller disclosure statement.
5. If "an item of information required to be disclosed [was] unknown or not available to the [Farivars, they could] make a disclosure based on the best information available to [them]." 68 Pa. C.S. § 7306. The Farivars also were not obligated "to make any specific investigation or inquiry in an effort to complete the [SPD]."
6. The Farivars could "not make any representations" in the SPD that they knew or had "reason to know [were] false, deceptive or misleading" and could "not fail to disclose a known material defect."
7. The Farivars, however, cannot be held liable under the RESDL "for any error, inaccuracy or omission of any information" required by the RESDL if: (a) they "had no knowledge of the error, inaccuracy or omission"; or (b) "the error, inaccuracy or omission was based on a reasonable belief that a material defect or other matter not disclosed had been corrected."
8. To prove fraud, the Baris had to establish by clear and convincing evidence: (a) a representation, which may include an affirmative statement, a concealment, or a failure to disclose where there was a duty to disclose; (b) which was material to the transaction at hand; (c) made falsely with knowledge of its falsity or recklessness as to whether it was true or false; (d) with the intent of misleading another into relying on it; (e) justifiable reliance on the misrepresentation; and (f) damage proximately caused by the reliance.
9. The UTPCPL prohibits various "unfair methods of competition or deceptive acts or practices in the conduct of any trade or commerce." 73 P.S. § 201-3. The Baris contend the Farivars breached the UTPCPL by making misrepresentations and omissions, and engaging in fraudulent and deceptive conduct that created a likelihood of confusion or misunderstanding.
10. The Baris contend that the Farivars failed to properly disclose the "systematic hydronic heating problems that were pervasive throughout the entire house." Pl. Findings at 160. They assert the Farivars knew about these problems based on their experiences living in the Home and information provided to them by Oliver and Sila.
11. Because the Farivars knew about a heating defect in the right wing of the Home,
12. The Farivars properly disclosed the right wing heating defect by stating in their SPD that they knew of problems or repairs needed with the heat, and by explaining that the family room and bar room heat was "intermittent" and the upstairs guest room heat was "cool if very cold."
13. The Farivars were not required by the RESDL to state that there was either an airbound or flow issue, as reported on Oliver's December 2013 service ticket, because that issue still needed to be investigated and the Farivars had no duty to "make any specific investigation or inquiry" to complete the SPD.
14. The Farivars did not need to update their SPD pursuant to the Sale Agreement to state that the boiler zone in the right wing was not working, as reported by Sila in February 2014, because that was not a new diagnosis of new problems.
15. The Farivars likewise did not need to update their SPD to state that the heat pump ductwork was not ideal and should be reconfigured if not limited by space, as reported by Sila.
16. The Baris also have failed to show that Mrs. Mostashari's statement that the heat pump should make the intermitted heat better was false, deceptive, or misleading.
17. Even assuming Mrs. Mostashari's statement could be construed as false, deceptive, or misleading, the Baris cannot show they justifiably relied on it to conclude that the right wing heat issues were resolved.
18. The integration clause in the Sale Agreement was broad, barring representations "of any kind whatsoever concerning [the] sale." D24 at Bari379;
19. If the Baris believed from Mrs. Mostashari's oral representation that the intermittent heat had been resolved, they needed to "insist upon written contractual protection."
20. The Farivars' failure to disclose their use of space heaters in the right wing as "an additional and/or backup heating system" on their SPD could, when viewed in isolation, be deemed a false or misleading nondisclosure. However, the Farivars' use of space heaters related to the same right wing "intermittent" heat problems that they disclosed to the Baris in their SPD. Given the explicit disclosure of right wing heat problems, the Baris cannot show that they justifiably relied on the nondisclosure of space heaters in failing to discover the right wing heating issues, or that this nondisclosure proximately caused their harm. Such evidence undermines their ability to establish that their reliance was reasonable or that they would have acted any differently if they had been provided information about the Farivars' use of space heaters in the right wing.
21. The Baris have failed to prove their claims of fraud or violation of the UTPCPL based on the Farivars' failure to disclose heating defects.
22. The Baris contend the Farivars failed to disclose that certain air conditioning ducts were not insulated and that the right wing air conditioning unit was in poor condition.
23. Even assuming the Farivars knew about the uninsulated ducts based on the inspection performed for them in 2012,
24. The Baris also failed to show the Farivars were required by the RESDL to report a material defect with the right wing air conditioning unit. The unit was working; Oliver recommended that they replace it only because it was 28 years old and in poor condition.
25. The Baris failed to prove their claims of fraud and violation of the UTPCPL based on the Farivars' failure to disclose air conditioning defects.
26. The Baris argue the Farivars failed to disclose that the outside drains required constant clearing to ensure they worked and water did not infiltrate the Home.
27. The need to clear the drains of leaves or other debris during rainstorms was not a material defect required to be disclosed by the RESDL. This was a matter of common sense, especially given the Property's landscape (downhill with water runoff) and inspector Baltrush's warnings.
28. The Baris also assert that the Farivars' frequent need to clear the outside drains shows that they experienced drainage and water infiltration issues that were not disclosed. However, I found the Farivars' testimony that they experienced only the one water infiltration issue disclosed in their SPD credible.
29. The Baris failed to prove their claims of fraud and violation of the UTPCPL based on the Farivars' failure to disclose the drainage and water infiltration defects.
30. The Baris argue the Farivars failed to disclose damage to the tennis court from the February 2014 storm or their insurance claim for this incident.
31. The Farivars were required to state in their SPD whether they were aware of any storm damage to the Property. P9A at Bari3001. The Farivars also were required by the Addendum to the Sale Agreement to update the SPD within two days of any event/issue that would require disclosure under the SPD.
32. Even if the Farivars should have updated the SPD with information about the February 2014 storm damage, the Baris have failed to show the Farivars acted with an intent to mislead, as required to prove their fraud and UTPCPL claims.
33. The Farivar SPD also asked whether the Farivars were aware of insurance claims filed relating to the Property.
34. The Baris have failed to prove their claims of fraud and violation of the UTPCPL based on the Farivars' failure to disclose air conditioning defects
35. The Baris argue the Farivars failed to disclose the April 2014 water line leak.
36. In the SPD, the Farivars were required to disclose whether they were aware of any leaks or other problems relating to the water supply, pumping systems, and related systems, as well as the location of any such leaks, the extent of the problem, and any repair or remediation efforts. P9A at Bari3003. Even assuming the Farivars should have updated this response with information about the April 2014 water line leak pursuant to the Addendum to the Sale Agreement,
37. The Baris also have not shown that the Farivars' failure to provide information about the water line leak proximately caused them damage. Although Oliver initially recommended that the water line be replaced, Oliver was able to successfully repair the line, making a replacement no longer necessary, which is a common practice in making home repairs.
38. The Baris argue I should find in their favor because the Farivars' repair of the leak without first informing them of it prevented them from investigating the damages from the leak. In deciding whether to sanction a party for destruction of evidence, I must consider: (1) the fault of the party who destroyed evidence; (2) prejudice to the opposing party; and (3) what sanction will avoid substantial unfairness to the opposing party and deter misconduct by others in the future.
39. The Baris failed to prove their claims of fraud and violation of the UTPCPL based on the Farivars' failure to disclose the water line defect.
40. Although the Baris argue that the Farivars did not disclose the defective Internet wiring throughout the Home, they have failed to prove that the wiring was defective or that the Farivars knew about the defect.
41. Because I conclude that the Baris have failed to prove their claims of fraud and violation of the UTPCPL with regard to all of their claims, I deny their claims for compensatory, treble, and punitive damages, as well as attorney fees.
42. Judgment shall be entered in favor of the Farivars. An appropriate Order follows.
