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GEBHARDT v. ALLSPECT

May 16, 2000

BRUCE GEBHARDT AND CELESTE GEBHARDT, PLAINTIFFS,
V.
ALLSPECT, INC., DEFENDANT.



The opinion of the court was delivered by: William C. Conner, Senior District Judge.

OPINION AND ORDER

Plaintiffs Bruce and Celeste Gebhardt bring the instant action against defendant Allspect, Inc. alleging that defendant improperly performed an inspection of their home. Plaintiffs claim that they purchased the home in reliance on defendant's inspection and suffered damages as a result. Defendant now moves to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6), arguing that the action is barred by the three-year statute of limitations applicable to nonmedical malpractice actions set forth in N.Y.C.P.L.R. § 214(6). Plaintiffs claim that the action is an action for breach of contract or, in the alternative, negligence in the performance of defendant's home inspection obligations, and is thus subject to the six-year statute of limitations provided by N.Y.C.P.L.R. § 213. For the reasons that follow, defendant's motion is denied.

BACKGROUND

The following discussion of the facts is based on the allegations in plaintiffs' complaint.*fn1 Plaintiffs, husband and wife, purchased their residence on Lookout Road in Tuxedo Park, New York for $1.5 million in 1996. The residence had been advertised as an historic home and the sellers represented to plaintiffs that the home needed no significant repairs and was essentially in "move-in" condition. However, the sellers would make no representations or warranties as to the condition of the house.

Prior to closing on the purchase of the house, plaintiffs hired defendant to perform a building inspection and issue a report indicating the condition of the house, including any significant defects requiring repair. The parties entered into a Home Inspection Authorization Agreement dated August 2, 1996, whereby defendant agreed to use its "best efforts and abilities to perform the inspection and prepare the report in accordance with the CODE OF ETHICS and STANDARDS OF PRACTICE of the American Society of Home Inspectors, Inc." (Complt., Ex. B.) On or about August 4, 1996, defendant issued a report of its inspection.

The report, which was attached to the Complaint, listed defects plaintiffs claim were consistent with representations made to plaintiffs by the sellers of the house. A "Defects Summary" was included in the report. The Defects Summary listed several defects uncovered during inspection of the home and the estimated cost of repairing them. (Complt., Ex. A.) According to this summary, taking the upper limits of the ranges of estimates, the estimated total cost of repairs was $6,205. (See id.)

In reliance on the report, including the Defects Summary and the report's conclusion that no major repairs were necessary, plaintiffs purchased the house for $1.5 million and moved in shortly thereafter. Plaintiffs claim that "[a]lmost immediately" after moving into the house, they began to notice unsafe conditions omitted from defendant's report. (Complt. ¶ 13.) Plaintiffs contend that, among other things, defendant failed to discover that the roof of the residence was substantially separated from the facade of the house and the house lacked a proper drainage system.

Plaintiffs state that they have spent $1 million on repairs to date and that more repairs are necessary.

DISCUSSION

I. Standard of Review

On a motion to dismiss under Rule 12(b)(6), the issue is "whether the claimant is entitled to offer evidence to support the claims." Scheuer, 416 U.S. at 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984). A complaint should not be dismissed for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Padavan v. United States, 82 F.3d 23, 26 (2d Cir. 1996) (quoting Hughes v. Rowe, 449 U.S. 5, 10, 101 S.Ct. 173, 176, 66 L.Ed.2d 163 (1980)). Generally, "[c]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." 2 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 12.34[1][b] (3d ed. 1997); see also Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1088 (2d Cir. 1995).

In assessing the legal sufficiency of a claim, the Court may consider not only the facts alleged in the complaint, but also any document attached as an exhibit to the Complaint or incorporated by reference. See Fed.R.Civ.P. 10(c); Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991). The Complaint incorporates by reference the Home Inspection Authorization Agreement into which the parties entered and the report prepared by defendant pursuant to that agreement. Accordingly, these documents will be considered by this Court in the disposition of defendant's motion.

II. The Three-Year Statute of Limitations for Nonmedical Malpractice

The Complaint alleges that this Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. ยง 1332 because there is complete diversity between plaintiffs, residents of New York, and defendant, a New Jersey ...


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