The opinion of the court was delivered by: William C. Conner, Senior District Judge.
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.
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
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.
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[b] (3d ed. 1997); see
also Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1088 (2d
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
The Complaint alleges that this Court has subject matter
jurisdiction over this action pursuant to 28 U.S.C. § 1332
because there is complete diversity between plaintiffs, residents
of New York, and defendant, a New Jersey ...