APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE. Hon. Nancy Torresen , U.S. District Judge.
Damon M. Seligson, with whom Dinicola, Seligson & Upton, LLP was on brief, for appellant, cross-appellee.
Christopher R. Largay, with whom Largay Law Offices, P.A. was on brief, for appellees, cross-appellants.
Before Selya, Stahl and Lipez, Circuit Judges.
LIPEZ, Circuit Judge.
After Michael Thompson purchased a multimillion-dollar oceanfront property in Bar Harbor, Maine from Nancy Cloud and Michael Miles, he discovered a number of problems with the property tat required significant expenditures to repair. He brought this suit to recover damages for those repairs, alleging, inter alia, breach of contract, fraud, and negligent misrepresentation. The district court entered summary judgment for the defendants, holding that Maine's implied warranty of habitability did not apply under the circumstances of this case, and that defendants had no duty of disclosure. The district court also entered judgment on the
record for the plaintiff on the defendants' counterclaim for attorney's fees.
Plaintiff now appeals and defendants cross-appeal. We affirm the district court's decisions on all counts, albeit employing slightly different reasoning.
In October 2008, appellant Thompson purchased a home in Bar Harbor (called " Seascape" ) from appellees Miles and Cloud for $2.9 million. Miles and Cloud originally purchased the land for a home in 2000 and subsequently had Seascape constructed there. The pair lived at Seascape during the summer seasons between 2002 and 2004, and then listed the property for sale. While the property was listed, Miles and Cloud rented it out on a seasonal basis, but otherwise (in their own words) " had very little to do with Seascape."
Seascape was constructed from plans for an existing home in South Carolina that had been prepared by Architect Stephen Fuller. Having seen that Fuller-designed home, Miles purchased the plans for use in the construction of Seascape. The plans did require some modification. Although Miles listed himself on the Seascape building permit application as " owner and general contractor," his employee Michael Gallant, along with a number of other subcontractors hired by Miles, actually constructed the home. While Seascape was under construction, Miles and Cloud spent part of the year in Florida and part at their other properties in Maine. When in Maine, Miles would stop by to see the progress of Seascape's construction.
After living in the house for the 2004 summer season, Miles and Cloud listed Seascape for sale at $3.5 million. In September 2007, Miles and Cloud signed a Seller's Property Disclosure stating that there were no known " material defects." Around that time, Thompson became interested in the property.
Through their respective real estate brokers, Thompson and Miles exchanged a number of emails pertaining to potential problems with the residence, including possible water damage. As a result of those conversations, Miles and Cloud signed another Seller's Property Disclosure, acknowledging that there had previously been issues with leaking around the fireplace, the copper canopy, and the stone work that (to their knowledge) had been resolved. This second disclosure, like the first, stated that it was not to be interpreted as a warranty on the property and would not be incorporated as part of the contract between buyer and seller.
Ultimately, in August 2008, Thompson entered into an agreement with Miles and Cloud to purchase the property for the reduced price of $3.1 million. Before the closing, however, Thompson engaged Bill Barter to conduct an inspection of the home, which identified more potential issues. Performing a standard visual inspection only, Barter could not determine the full extent of any potential damage. Thompson then had the home examined by a contractor who recommended that all of the windows be replaced. As a result of these inspections, Thompson sought a further reduction in the purchase price. Miles and Cloud agreed to lower the price in exchange for the incorporation of an " as-is" provision in the Purchase and Sale Agreement. The Purchase and Sale
Agreement was thus modified to include an Investigation Contingency Amendment that reduced the sale price by $190,000 and specified that the property was being sold " as is." The provision of the Purchase and Sale Agreement stated, in pertinent part:
Buyer is encouraged to seek information from professionals regarding any specific issue or concern. Neither [s]eller nor Licensee makes any warranties regarding the condition, permitted use or value of Seller['s] real or personal property. This Agreement is subject to the following investigations, with results being satisfactory to Buyer: [(a) General Building, (b) Chimney, (d) Sewage Disposal, (e) Water Quality, (f) Water Quantity, (g) Air Quality), (i) Mold, (r) Insurance.] All investigations will be done by persons chosen and paid for by Buyer in Buyer's sole discretion. ...