Please ensure Javascript is enabled for purposes of website accessibility

Appeals court: Verdict against bank over moldy house stands

By: Erika Strebel, [email protected]//December 24, 2015//

Appeals court: Verdict against bank over moldy house stands

By: Erika Strebel, [email protected]//December 24, 2015//

Listen to this article

A state appeals court has ruled that the seller of a Menomenee Falls home is liable for mold and water damage to a home although the paperwork the buyer signed included disclaimers about the home’s condition.

A three-judge panel for the District 2 Court of Appeals on Wednesday let stand a verdict handed up by a jury against Bank of America, the home’s seller, awarding $50,000 in compensatory damages to a woman who bought the home, which had extensive water and mold damage.

The bank had acquired the home in a foreclosure in Februrary 2012, and a real estate agent the bank hired to list the property for sale discovered the home had water damage, including ceilings that had fallen, plumbing fittings that had given way and wet floors. Bank of America approved repairs on the home, and the agent notified the bank in September 2012 that the work was complete but was unsatisfactory.

The bank then went on to list the home, show it and sold it to the woman and her fiancé.

Wednesday’s ruling stems from a lawsuit filed in 2013 by the woman against the bank after she closed on the home in December 2012 and later discovered, while renovating the home’s kitchen cabinets, that there was mold throughout the house. According to court documents, the house had to be stripped down to the studs and reconstructed.

The woman alleged that the bank, in the offer agreement and addendum it prepared, had misrepresented that it did not know that the home had extensive mold and water damage. The language in paperwork she signed included various disclaimers, including that the bank had “little or no direct knowledge regarding the condition of the property” and that they buyer agreed to accept the home in “as is” condition at the time of closing without limitation.

A jury in Waukesha County Circuit Court agreed that the ban had misrepresented its knowledge about the water and mold damage in order to sell the home and that the woman had suffered a loss as a result of that misrepresentation. The jury awarded the woman $50,000 in compensatory damages. The total judgement against the bank, according to court records, was nearly $400,000.

Bank of America attempted to challenge the verdict, arguing, among other things, that the disclaimers in the paperwork freed it of any liability and that there was not enough evidence that the bank had induced the woman to buy the home.

However, Judge Patrick Haughney denied the bank’s motion. Bank of America appealed, arguing that it was entitled to a judgment in its favor that dismissing the woman’s claim. However, the appeals court on Wednesday affirmed the trial court’s decision, unconvinced by the bank’s arguments.

“We can perceive of no reason — and the Bank offers none — why falsely induced ‘as is’ and exculpatory clauses should necessarily bar, as a matter of law, liability for deceptive statements made in violation of Wisconsin’s deceptive trade practices statute.”

Polls

Should Steven Avery be granted a new evidentiary hearing?

View Results

Loading ... Loading ...

Legal News

See All Legal News

WLJ People

Sea all WLJ People

Opinion Digests