FINDINGS, ORDER, AND JUDGMENT
Bruce C. Mallonee, Justice
case arises out of the sale by the Rancourts to the
Wuestenbergs of a house located at 363 Sawyer Road in
Hampden, Maine. The Rancourts, millwrights by trade,
developed over the years a side business of building and then
selling houses. The house they sold to the Wuestenbergs was
built for themselves rather than for their business. They
lived in it for more than a decade before the sale.
defects in the house were observed by the Wuestenbergs and
others before the sale but the full magnitude of these
shortcomings was not appreciated until after the transaction
was complete. Other defects became known only after thorough
post-sale examinations by professionals, Both to remedy the
defects and to realize their desire to alter the residence,
the Wuestenbergs undertook substantial remediation and
reconstruction before they moved into the house. This
post-sale construction cost hundreds of thousands of dollars.
In part because of financial difficulties, the Wuestenbergs
were unable to occupy the house for more than two and a half
years after the purchase.
Wuestenbergs sued the Rancourts by complaint dated July 25,
2014, for damages they claim arise out of the defects in the
house. An amended complaint was filed on February 9, 2016,
followed by a second amended complaint, which was allowed by
order dated June 28, 2016. Of the 11 counts in the second
amended complaint, 8 survived the court's order on
summary judgment dated March 17, 2017. The remaining counts
were presented in a bench trial conducted on March 12, 13,
15, 16, 19, 20, 22, and 23; and on July 9, 10, 11, 12, 13,
18, and 20, 2018. Thereafter, counsel submitted written
summations and the court heard oral argument on November 1,
2018. The case is now in order for decision.
trial, Plaintiffs were represented by Attorneys Timothy
Woodcock and David Pierson and Defendants by Attorney David
Herzer. The court renews in writing its thanks to counsel for
their courtesy to the witnesses, their cooperation in
managing an ever more complex marking system for hundreds of
exhibits, and their concentration of presentational effort on
issues rather than ephemera. Before, during, and after trial,
they have served their clients and the court well.
threshold issue for the court's analysis is the
Rancourts' claim that certain evidence or claims should
be precluded because the evidence of their alleged inadequate
construction was lost in the Wuestenbergs' rebuilding.
The parties analyzed this issue with accompanying citations
to a number of cases, none of them precisely apposite to the
situation presented but all of them informative. For this
court's analysis, the summary of elements presented in
Driggin v. American Security Alarm Co., 141
F.Supp.2d 113, 120 (D. Me. 2000) is particularly useful:
(1) Whether the defendant was prejudiced as a result of
the destruction of the evidence; (2) whether the prejudice
can be cured; (3) the practical importance of the evidence;
(4) whether the plaintiff was in good faith or bad faith; and
(5) the potential for abuse if the evidence is not
prejudice resulting from Plaintiffs' construction
efforts, if any, cannot be cured. All of the other factors
cited militate against a sanction based on spoliation. The
court specifically finds the Wuestenbergs acted in good faith
in rebuilding the house they had bought so that they could
live in it. There seems no realistic hazard that any person
would view this court's decision on the issue as a
license for spoliation in the future. And, mostly,
Plaintiffs' reconstruction seems not to have had any
effect on the case: through weeks of trial and hundreds of
pages of argument, the Rancourts appeared unhampered in their
defense of the Wuestenbergs' claims. For the foregoing
reasons, Defendants' request for sanctions based on
spoliation must be DENIED.
Wuestenbergs seek damages for claims presented in Counts I,
II, and III (all sounding in fraud); IV (negligent
misrepresentation); VII (negligence); IX (violation of the
Unfair Trade Practices Act); and XI (breach of contract
requiring mediation). They also seek punitive damages in
Count X. The court first lists the elements of each cause of
I, II, and III: These claims are interrelated though not
entirely overlapping. Plaintiffs seek damages arising out of
certain claimed communications and silences they assert are
actionable as common law fraud or as violations of the
statute requiring certain disclosures from sellers to buyers
of residential real estate.
recover for common law fraud, Plaintiffs must prove that
Defendants made a material misrepresentation that was false,
was known to be false or was made recklessly as an assertion
of fact without knowledge of its truth or falsity, and was
made with the intention that it be acted upon. Further,
Plaintiffs must show they acted on the material
misrepresentation with resultant damages. Letellier v.
Small, 400 A.2d 371, 373 (Me. 1979); see also
Fitzgerald v. Gamester, 658 A.2d 1065, 1069 (Me. 1995).
Actionable conduct includes not only false affirmative
statements but either active concealment of the truth or
silence when there is an affirmative duty to disclose.
Fitzgerald, 658 A.2d at 1069.
Property Disclosure Act, 33 M.R.S §§ 171-179
(2017), affirmatively requires certain disclosures from
sellers to buyers. Pertinent to the Wuestenbergs' claims,
this requires disclosure of "known defects/' defined
as "a condition, known by the seller, that has a
significant adverse effect on the value of the property,
significantly impairs the health or safety of future
occupants of the property or, if not repaired, removed or
replaced, significantly shortens the expected normal life of
the premises." 33 M.R.S. § 171(1).
IV: This claim sounds in negligent misrepresentation, an
alternative theory of recovery based on the communications
underlying Counts I, II, and III. The elements of negligent
misrepresentation are as follows:
One who, in the course of his business, profession or
employment, or in any other transaction in which he has a
pecuniary interest, supplies false information, for the
guidance of others in their business transactions, is subject
to liability for pecuniary loss caused to them by their
justifiable reliance upon the information if he fails to
exercise reasonable care or competence in obtaining or
comunicating the information.
Binette v. Dyer Library Association, 688 A.2d 898,
903 (Me. 1996) (quoting Restatement (Second) of Torts §
VII: This claim sounds in negligence and seeks recovery for
the Rancourts' flawed design, construction, and
alteration or modification of the house. The basic elements
are the same as in any negligence case: duty, breach,
causation, and resulting damages. See Searles v. Trustees
of St. Joseph's College, 1997 ME 128, ¶ 5, 695
IX: This claim asserts violation of Maine's Unfair Trade
Practices Act, found at 5 M.R.S. §§ 205-A - 214
(2017). To prevail on this claim, the Wuestenbergs must at
the outset establish that their purchase of the house took
place in a business context. Binette, 688 A, 2d at
907. Thereafter, they must establish that the Rancourts'
actions constituted unfair or deceptive practices, as defined
by law, that caused the Wuestenbergs a financial loss. Unlike
the foregoing claims, a claimant under the UTPA need not show
the offending party had a culpable state of mind. State
v. Weinschenk, 2005 ME 28, ¶ 17, 868 A.2d 200
(citing Binette, 688 A.2d at 906).
X: Plaintiffs seek an award of punitive damages. To recover
them, they must first show that Defendants committed a tort;
thereafter, they must prove by clear and convincing evidence
that Defendants acted with express or implied malice. This
well known standard was articulated in the seminal case of
Tuttle v. Raymond, 494 A.2d 1353 (Me, 1985).
XI: In this count, Plaintiffs seek damages for
Defendants' failure to participate in mediation, thereby
violating a clause in the parties' contract that required
mediation before filing of a civil action. To prevail on this
claim, Plaintiffs must prove that ...