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DISTRICT OF COLUMBIA COURT OF APPEALS

No. 14-CV-374

THORSTEN P. SUNDBERG, et al., APPELLANTS,

v.

TTR REALTY, LLC, et al., APPELLEES.

Appeal from the Superior Court

of the District of Columbia

(CAB-4366-13)

(Hon. Judith N. Macaluso, Trial Judge)

(Argued December 11, 2014 Decided February 12, 2015)

Timothy R. Clinton, with whom Matthew J. Peed was on the brief, for 

appellants.

Dale K. Cathell, pro hac vice, by special leave of court, with whom J. Hess

and Richard M. Kremen were on the brief, for appellee David Winer.

Spencer K. Stephens for appellees TTR Realty, LLC, and Mansour AbuRahmeh.

Before WASHINGTON, Chief Judge, BLACKBURNE-RIGSBY, Associate Judge, 

and OKUN, Associate Judge, Superior Court of the District of Columbia.

 



Sitting by designation pursuant to D.C. Code § 11-707 (a) (2012 Repl.).
2

OKUN, Associate Judge, Superior Court of the District of Columbia: We 

live in an age of seemingly boundless information, and this information serves as 

one of our most vital currencies. In this case, the purchasers of a residence allege, 

in effect, that they were deprived of this currency because they were not provided 

with accurate information concerning an impending construction project at a 

neighboring building. With one exception, the trial court found that the purchasers 

failed to sufficiently allege a cause of action in their complaint and granted the 

seller‟s and realtor‟s motions to dismiss. In granting the motions to dismiss, the 

trial court found that the purchasers could not establish that they detrimentally 

relied on the seller‟s and realtor‟s alleged misrepresentations and omissions, and 

could not establish a breach of the covenant of good faith and fair dealing, because 

the alleged misrepresentations and omissions occurred after the purchasers signed 

the contract to buy the property. Although we believe that there may be cases 

where a cause of action can properly be based on the failure to provide accurate 

information about a property, even if the misrepresentations or omissions occur 

after the sales contract is signed, this case is not one of them. Accordingly, for the 

reasons set forth below, we affirm. 
3

PROCEDURAL AND FACTUAL BACKGROUND

In the fall of 2012, appellants Thorsten P. Sundberg (“Sundberg”) and Debra 

T. Huang (“Huang”) purchased a residence from appellee David Winer (“Winer”), 

who sold the residence by using the services of a realty company and realtor, 

appellees TTR Realty, LLC (“TTR Realty”), and Mansour Abu-Rahmeh (“AbuRahmeh”). According to the complaint filed by appellants, after the parties signed 

a contract for the sale of the property, but before the parties actually transferred 

title to the property, appellees intentionally provided false information and 

withheld material information from appellants about a construction project that 

was scheduled to occur at the Old Pawn Shop, a building across the street from 

their residence. The complaint further alleged that the construction project began 

shortly after appellants moved into their residence, and that this construction 

substantially and permanently diminished the value of their property. Finally, 

appellants claimed that they would not have purchased the property, and instead 

would have breached the contract and been subject to the contract‟s remedies for 

breach of contract, had they been truthfully informed of the impending 

construction project. The appellants alleged that appellees‟ actions violated the 

Consumer Protection Procedures Act (“CPPA” or the “Act”) and the covenant of 
4

good faith and fair dealing, and involved fraudulent and negligent 

misrepresentations and omissions. 

Appellees TTR Realty and Abu-Rahmeh filed a motion to dismiss the 

complaint, arguing that the complaint failed to state a cause of action for two 

reasons. First, they argued that all the components of the sales contract were 

subsumed into the deed that was signed by the parties more than two months after 

the contract was signed, and that the deed did not contain any false statements 

concerning the construction plans of the Old Pawn Shop. Second, they claimed 

that their disclosure obligations were limited to disclosures concerning the physical 

condition of the property purchased by appellants, and did not extend to the 

condition of neighboring properties. The trial court rejected these arguments and 

denied the motion to dismiss. 

Appellee Winer, meanwhile, filed a motion to dismiss on very different 

grounds. Winer argued that the trial court should dismiss the counts alleging 

fraudulent and negligent misrepresentations and omissions because the alleged 

misrepresentations and omissions occurred after the execution of the sales contract 

and appellants, therefore, could not have relied on them at the time they signed the 

contract. In addition, Winer asserted that the CPPA count should be dismissed 
5

because the statute only applies to merchants and he was not a merchant as defined 

by the Act. Finally, Winer claimed that the count alleging a breach of the covenant 

of good faith and fair dealing should be dismissed because he fully performed his 

obligations under the contract when he conveyed good title to the purchasers and 

vacated the premises in a timely manner. 

The trial court granted Winer‟s motion, dismissing the CPPA and breach of 

good faith and fair dealing counts with prejudice, and dismissing the 

misrepresentation and omission counts without prejudice. More specifically, the 

trial court rejected appellants‟ argument that the CPPA applied to Winer, even 

though he was not a merchant, because Winer conspired with TTR Realty and 

Abu-Rahmeh, and aided and abetted their violations. The court held that a nonmerchant could not be vicariously liable under the CPPA, noting that a contrary 

result would establish a cause of action against a non-merchant even though the 

CPPA excluded non-merchants from its coverage.1The trial court also dismissed 

the breach of good faith and fair dealing count with prejudice, rejecting appellants‟ 

argument that the withholding of accurate information about the construction plans 

 

1

 Although appellants argued that Winer could be liable under both 

conspiracy and aider and abettor theories, the trial court only addressed appellants‟ 

conspiracy theory in its order granting Winer‟s motion to dismiss. However, the 

trial court explicitly rejected appellants‟ aider and abettor theory when it denied 

appellants‟ subsequent motion for reconsideration. 
6

at the Old Pawn Shop deprived appellants of the fruits of the contract, and agreeing 

with Winer that appellants received the fruits of the contract when they received 

title to the property at settlement. 

Finally, the trial court held that the fraudulent and negligent 

misrepresentation and omission counts should be dismissed, finding that appellants 

failed to show detrimental reliance because the alleged misrepresentations and 

omissions occurred after the contract was signed. The court rejected appellants‟ 

argument that appellees‟ misrepresentations and omissions deprived them of the 

opportunity to not purchase the property and instead face the remedies provided in 

the contract for breach of contract. The trial court dismissed these counts without 

prejudice, providing appellants the opportunity to allege with more particularity 

any misrepresentations or omissions that occurred prior to the signing of the sales 

contract. 

After the trial court granted Winer‟s motion to dismiss, TTR Realty and 

Abu-Rahmeh filed a motion for judgment or, in the alternative, for reconsideration. 

The trial court granted this motion in part, dismissing the fraudulent 

misrepresentation and omission counts, without prejudice, and dismissing the 

breach of good faith and fair dealing count with prejudice, for the reasons set forth 
7

in the order granting Winer‟s motion to dismiss. However, the trial court did not 

dismiss the CPPA count against TTR Realty and Abu-Rahmeh, finding that they 

were merchants under the CPPA and also noting that the complaint adequately 

alleged a violation of the CPPA because the Act does not require detrimental 

reliance as an element of a claim.

Following the trial court‟s grant of Winer‟s motion to dismiss and its partial 

grant of TTR Realty‟s and Abu-Rahmeh‟s motion for judgment, appellants filed a 

motion to certify the case for appeal and to stay the trial proceedings, pursuant to 

Super. Ct. Civ. R. 54 (b). The trial court granted appellants‟ motion, and this 

appeal followed.2 

 

2

 Rule 54 (b) authorizes the trial court to enter a final appealable judgment 

in cases involving multiple claims or multiple parties, even if some claims in the 

case remain pending, upon a finding that there is no just reason to delay the appeal 

and upon an express direction for entry of judgment. Because the trial court 

entered such an order in this case, we have jurisdiction over this appeal. See, e.g.,

Dyhouse v. Baylor, 455 A.2d 900, 901 (D.C. 1983).
8

ANALYSIS

Motion to Dismiss Standard

We review de novo the dismissal of a complaint under Super. Ct. Civ. R. 12 

(b)(6) for failure to state a claim upon which relief can be granted. Potomac Dev. 

Corp. v. District of Columbia, 28 A.3d 531, 543 (D.C. 2011); Grayson v. AT&T 

Corp., 15 A.3d 219, 228 (D.C. 2011) (en banc). In determining whether a 

complaint sufficiently sets forth a claim, the court must construe the complaint in 

the light most favorable to the plaintiff and must take the facts alleged in the 

complaint as true. Casco Marina Dev., L.L.C. v. District of Columbia 

Redevelopment Land Agency, 834 A.2d 77, 81 (D.C. 2003). However, “the tenet 

that a court must accept as true all of the allegations contained in a complaint is 

inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of 

action, supported by mere conclusory statements, do not suffice,” and “unadorned, 

the-defendant-unlawfully-harmed-me accusation[s]” also are insufficient. Ashcroft 

v. Iqbal, 556 U.S. 662, 678 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 

544, 555 (2007) (“a plaintiff‟s obligation to provide the „grounds‟ of his 

„entitlement to relief‟ requires more than labels and conclusions, and a formulaic 

recitation of the elements of a cause of action will not do.”).
9

Rather, “[t]o survive a motion to dismiss [under Rule 12 (b)(6)], a complaint 

must contain sufficient factual matter, accepted as true, to state a claim to relief 

that is plausible on its face. A claim has facial plausibility when the plaintiff 

pleads factual content that allows the court to draw the reasonable inference that 

the defendant is liable for the misconduct alleged. The plausibility standard is not 

akin to a „probability requirement,‟ but it asks for more than a sheer possibility that 

a defendant has acted unlawfully.” Potomac Dev. Corp., 28 A.3d at 544 (quoting 

Ashcroft, 556 U.S. at 678); see also Bell Atl. Corp., 550 U.S. at 555 (“Factual 

allegations must be enough to raise a right to relief above the speculative level.”). 

Likewise, “[w]here a complaint pleads facts that are „merely consistent with‟ a 

defendant‟s liability, it „stops short of the line between possibility and plausibility 

of entitlement to relief.‟” Id.

CPPA

The CPPA is a “comprehensive statute designed to provide procedures and 

remedies for a broad range of practices which injure consumers.” District 

Cablevision Ltd. P’ship v. Bassin, 828 A.2d 714, 723 (D.C. 2003) (quoting Atwater 

v. District of Columbia Dep’t of Consumer & Regulatory Affairs, 566 A.2d 462, 

465 (D.C. 1989)). Indeed, we have long considered the CPPA to be a remedial 
10

statute that must be “construed and applied liberally to promote its purpose.” 

Grayson, 15 A.3d at 244-45 (quoting D.C. Code § 28-3901 (c) (2012 Repl.)). 

Nonetheless, the CPPA does not cover all consumer transactions, and instead only 

covers “trade practices arising out of consumer-merchant relationships.” Snowder 

v. District of Columbia, 949 A.2d 590, 599 (D.C. 2008) (quoting Howard v. Riggs 

Nat’l Bank, 432 A.2d 701, 709 (D.C. 1981)). The CPPA defines a “merchant” in 

relevant part as a person who, in the ordinary course of business, sells or supplies 

consumer goods or services. See D.C. Code § 28-3901 (a)(3).

In this case, appellants acknowledged that Winer was not a “merchant” 

under the CPPA because he was not in the business of selling residential 

properties. Nonetheless, they argued that Winer‟s actions were covered by the 

CPPA because he conspired with and aided and abetted TTR Realty and AbuRahmeh, who indisputably were merchants. See, e.g., Gomez v. Independence 

Mgmt. of Delaware, Inc., 967 A.2d 1276, 1287 n.12 (D.C. 2009). The trial court 

rejected this argument because it would extend liability beyond that authorized by 

the CPPA. We agree with the trial court for the following reasons.

First, we have not recognized the tort of aiding and abetting in the District, 

see Flax v. Schertler, 935 A.2d 1091, 1107 (D.C. 2007), and we likewise have 
11

cited authority suggesting that “a claim of civil conspiracy does not lie for 

violation of a statute” absent statutory language to the contrary. See Executive 

Sandwich Shoppe, Inc. v. Carr Realty Corp., 749 A.2d 724, 739 (D.C. 2000) 

(citing Monsanto v. Electronic Data Sys. Corp., 529 N.Y.S.2d 512 (N.Y. App. Div. 

1988)); see also Findlay v. CitiMortgage, Inc., 813 F. Supp. 2d 108, 122 (D.D.C. 

2011) (rejecting civil conspiracy claim under CPPA and noting that “the District of 

Columbia Court of Appeals has expressed skepticism about statutory violations 

serving as underlying torts for civil conspiracy claims where the statutory right at 

issue has no common law tort analogue”); Armstrong v. Accrediting Council for 

Continuing Educ. & Training, Inc., 832 F. Supp. 419, 425 (D.D.C. 1993) (“[T]he 

court holds that the CPPA creates only those causes of action specifically 

enumerated within its provisions; a cause of action creating liability for aiders and 

abettors of those who allegedly violate the CPPA is not included.”), vacated on 

other grounds, 84 F.3d 1452 (D.C. Cir. 1996). 

Second, as the trial court noted, if we were to allow a non-merchant to be 

held liable under the CPPA either as an aider and abettor or a co-conspirator, we 

would be extending the liability specifically authorized by the CPPA to cover the 

actions of a wide variety of people or entities, such as appellee Winer, who are not 

within the category of people or entities covered by the Act. Although the CPPA 
12

“was intended to be a far-reaching consumer protection law,” Howard, 432 A.2d at 

710, there is no provision in the Act that either explicitly or implicitly authorizes 

aider and abettor liability or civil conspiracy liability to be imposed upon a nonmerchant. See Armstrong, 832 F. Supp. at 425 (“[N]o provision of the CPPA 

creates a cause of action for aider-and-abettor liability[;] . . . it is not clear from the 

language of the statute why a „person‟ not subject to primary liability should be 

subject to secondary liability.”). 3 Thus, we conclude that the CPPA does not 

authorize liability to be imposed on non-merchants for either aiding and abetting or 

civil conspiracy, and we uphold the trial court‟s dismissal of the CPPA count 

against appellee Winer. 

 

3

 Appellants argue that the CPPA authorizes both aider and abettor liability 

and civil conspiracy liability for non-merchants because the CPPA was modeled 

after a comparable California statute under which this type of liability has been 

imposed, citing People v. Toomey, 203 Cal. Rptr. 642 (Cal. Ct. App. 1984), in 

support of their argument. However, Toomey does not dictate a different result. 

First, the defendant in Toomey clearly was a merchant because he was one of the 

two co-owners of the business, along with his wife, and also was “the president 

and operating officer” of the company who “orchestrated all aspects of the 

business.” 203 Cal. Rptr. at 652. Second, although certain provisions of the CPPA 

were modeled on the California statute, there is no indication that the CPPA was 

meant to include aider and abettor liability or co-conspirator liability; to the 

contrary, the provisions that were modeled on the California statute were contained 

in the 2000 amendments to the CPPA, authorized the remedies of disgorgement 

and restitution and representative actions on behalf of other consumers, and did not 

address either aider and abettor or civil conspiracy liability. See Grayson, 15 A.3d 

at 241-42 & nn. 63-64.
13

Fraudulent and Negligent Misrepresentations and Omissions

In order to sufficiently allege fraudulent misrepresentations or omissions, a 

plaintiff must allege facts showing that a person or entity “(1) made a false 

representation of or willfully omitted a material fact; (2) had knowledge of the 

misrepresentation or willful omission; (3) intended to induce [another] to rely on 

the misrepresentation or willful omission; (4) the other person acted in reliance on 

that misrepresentation or willful omission; and (5) suffered damages as a result of 

[that] reliance.” Schiff v. American Ass’n of Retired Persons, 697 A.2d 1193, 1198 

(D.C. 1997) (citing Howard, 432 A.2d at 706); see also Saucier v. Countrywide 

Home Loans, 64 A.3d 428, 438 (D.C. 2013) (to sufficiently allege common law 

fraud, a plaintiff must allege facts demonstrating “(1) a false representation (2) in 

reference to a material fact, (3) made with knowledge of its falsity, (4) with the 

intent to deceive, and (5) action is taken in reliance upon the representation.”). A 

false representation may be either “an affirmative misrepresentation or a failure to 

disclose a material fact when a duty to disclose that fact has arisen.” Id. (quoting 

Rothenberg v. Aero Mayflower Transit Co., 495 F. Supp. 399, 406 (D.D.C. 1980)). 

A misrepresentation is “material” if it would be “likely to induce a reasonable 

person to manifest his assent, or if the maker knows that it would be likely to 

induce the recipient to do so.” Id. at 438-39 (quoting Sarete, Inc. v. 1344 U Street 
14

Ltd. P’ship, 871 A.2d 480, 493 (D.C. 2005), citing RESTATEMENT (SECOND) OF 

CONTRACTS, § 162 (1981). Although the non-disclosure of material information 

may constitute fraud when there is a duty to disclose, “mere silence does not 

constitute fraud unless there is a duty to speak.” Id. at 439 (quoting Kapiloff v. 

Abington Plaza Corp., 59 A.2d 516, 517 (D.C. 1948)).

In contrast to a complaint that alleges fraudulent misrepresentations, a 

complaint alleging negligent misrepresentations need not allege that the defendant 

had knowledge of the falsity of the representation or the intent to deceive. 

However, a plaintiff alleging negligent misrepresentations or omissions still must 

allege facts indicating that he relied on the defendant‟s misrepresentation or 

omission to his detriment. See, e.g., Kumar v. District of Columbia Water & Sewer 

Auth., 25 A.3d 9, 15 (D.C. 2011). More specifically, a plaintiff alleging negligent 

misrepresentations or omissions must show “(1) that [the defendant] made a false 

statement or omitted a fact that he had a duty to disclose; (2) that it involved a 

material issue; and (3) that [the plaintiff] reasonably relied upon the false statement 

or omission to his detriment.” Id. at 15 n.9 (quoting Redmond v. State Farm Ins. 

Co., 728 A.2d 1202, 1207 (D.C. 1999)).
15

In this case, appellants did not allege in their complaint that appellees made 

any misrepresentations or omissions prior to the time that appellants signed the 

sales contract for the property. Thus, as the trial court found, appellants failed to 

allege that they detrimentally relied on any such misrepresentations or omissions

when they signed the sales contract. Appellants claim, however, that they 

detrimentally relied on these misrepresentations and omissions after they signed 

the contract, because they would not have purchased the property at closing had 

they been provided with truthful information about the impending construction at 

the Old Pawn Shop, and instead would have breached the contract and then been 

subject to the breach of contract remedies set forth in the sales contract.

The difficulty with appellants‟ argument is their premise that they had a 

right to breach the contract, and that this right was unlawfully foreclosed by 

appellees‟ alleged misrepresentations and omissions. To the contrary, a party has 

no “right” to breach a contract, and appellants therefore cannot rely on such a 

“right” in support of their detrimental reliance argument. Indeed, we have 

carefully delineated the various circumstances under which a party may seek to 

avoid his or her obligations under a contract, but have not included the “right” to 

breach a contract as one of these circumstances. See, e.g., Hernandez v. Banks, 65 

A.3d 59, 75 (D.C. 2013) (en banc) (party may avoid obligations under contract if 
16

that party was mentally incapacitated at time contract was signed); Island Dev. 

Corp. v. District of Columbia, 933 A.2d 340, 349-50 (D.C. 2007) (party may avoid 

contract obligations if performance of contract has become impossible or 

impracticable, or if events beyond parties‟ control have frustrated the contract‟s 

purpose); Isaac v. First Nat’l Bank, 647 A.2d 1159, 1163 (D.C. 1994) (party may 

avoid contract obligations based on mutual mistake, fraud in the inducement or 

duress); Truitt v. Miller, 407 A.2d 1073, 1079 (D.C. 1979) (party may avoid 

contract obligations if contract violates statute designed to protect public); see also 

RESTATEMENT (SECOND) OF CONTRACTS, § 7 (providing similar examples of 

voidable contracts).

Appellants argue that they had a “right” to breach the contract because “the 

modern law of damages is based on the premise that a contractual obligation is not 

necessarily an obligation to perform, but rather an obligation to choose between 

performance and compensatory damages.” See Charles J. Goetz & Robert E. 

Scott, Liquidated Damages, Penalties and the Just Compensation Principle: Some 

Notes on an Enforcement Model and a Theory of Efficient Breach, 77 COLUM. L.

REV. 554, 558 (1977) (emphasis in appellants‟ brief); see also Northwest Airlines, 

Inc. v. U.S. Dep’t of Transp., 15 F.3d 1112, 1121 n.5 (D.C. Cir. 1994) (citing 

RESTATEMENT (SECOND) OF CONTRACTS, ch. 16, intro. note at 100) (“„Efficient 
17

breach‟ refers to the principle that a breaching party has the option of paying 

damages rather than performing its contractual obligations where damages are an 

adequate substitute for specific performance.”). Although this argument has some 

force, it also has a number of shortcomings. Indeed, as the drafters of the 

RESTATEMENT (SECOND) OF CONTRACTS have noted, this approach “fails to take 

account notions of the sanctity of contract and the resulting moral obligation to 

honor one‟s promises.” Id. Moreover, this argument has no support in our case 

law, and is contrary to relevant Supreme Court case law. See Rousey v. Jacoway, 

544 U.S. 320, 328 (2005) (contracting parties do not have “an unrestricted right to 

breach a contract simply because the price of doing so is the payment of 

damages.”).

Furthermore, the contract itself did not provide appellants with the right to 

breach the contract. Rather, the default clause in the contract stated as follows:

If purchaser fails to complete settlement for any reason 

other than default by seller, at the option of seller, the 

deposit may be liquidated damages (not as a penalty) in 

which event purchaser shall be relieved from further 

liability to seller. If seller does not elect to accept the 

deposit as liquidated damages, the deposit may not be the 

limit of purchaser‟s liability in the event of a default.
18

Sales Contract at ¶ 23 (emphasis added). Thus, contrary to appellants‟ argument, 

the sales contract provided appellees with the option to seek liquidated damages 

or other damages resulting from appellants‟ default, but did not give appellants 

the option of breaching the contract had they received the information that 

appellees allegedly failed to provide.4

In sum, appellants failed to sufficiently allege that they detrimentally relied 

on appellees‟ alleged fraudulent and negligent misrepresentations and omissions. 

Therefore, the trial court did not err in granting appellees‟ motions to dismiss 

these counts.

 

4 Appellants argued in their appellate brief that the sales contract provided 

them with the option of consummating the purchase on the agreed-upon terms or 

“walking away” from the contract, citing Dodek v. CF 16 Corp., 537 A.2d 1086 

(D.C. 1988), in support of their argument. However, at oral argument, appellants 

clarified that they were not asserting that the sales contract was an option contract, 

rather than a binding contract that required them to purchase the property under the 

terms set forth in the contract. Moreover, even if appellants had not clarified their 

position in this manner, it is clear that the sales contract in this case was not an 

option contract. In fact, in Dodek, we found that the contract at issue was an 

option contract because it gave the purchaser the “option and privilege to „choose 

between consummating the purchase on the agreed upon terms or of walking away, 

for any reason or no reason, with no obligation or liability whatever save the loss 

of his deposit.” Id. at 1095 (quoting Green Manor Corp. v. Tomares, 295 A.2d 

212, 214 (Md. 1972)). In this case, by contrast, the sales contract did not give the 

purchaser the right to walk away from the contract and face only the loss of the 

deposit; rather, the contract gave the sellers the right to seek the recovery of the 

deposit or any other damages if the purchasers defaulted on their obligations under 

the contract.
19

Breach of Covenant of Good Faith and Fair Dealing

Every contract contains an implied covenant of good faith and fair dealing. 

See, e.g., Wright v. Howard Univ., 60 A.3d 749, 754 (D.C. 2013). This covenant 

precludes any party from doing “anything which will have the effect of destroying 

or injuring the right of the other party to receive the fruits of the contract . . . .” 

Abdelrhman v. Ackerman, 76 A.3d 883, 891 (D.C. 2013) (quoting Hais v. Smith, 

547 A.2d 986, 987 (D.C. 1988)). To state a claim for breach of the implied 

covenant of good faith and fair dealing, a plaintiff must allege either “bad faith or 

conduct that is arbitrary and capricious.” Id. at 891-92; Wright, 60 A.3d at 754. If 

a party “evades the spirit of the contract, willfully renders imperfect performance, 

or interferes with performance by the other party, he or she may be liable for 

breach of the implied covenant of good faith and fair dealing.” Paul v. Howard 

Univ., 754 A.2d 297, 310 (D.C. 2000) (quoting Hais, 547 A.2d at 987-88); see also 

RESTATEMENT (SECOND) OF CONTRACTS, § 205 (“Subterfuges and evasions violate 

the obligation of good faith in performance . . . [b]ut the obligation goes further: 

bad faith may be overt or consist of inaction, and fair dealing may require more 

than honesty.”).
20

In this case, appellants allege that appellees violated the duty of good faith 

and fair dealing through misrepresentations and omissions after the sales contract 

was signed and before the parties closed the transaction. They further allege that 

these misrepresentations and omissions deprived them of the fruits of the sales 

contract – namely, a residence whose value would not be diminished by the 

impending construction at the Old Pawn Shop. The trial court disagreed with 

appellants, finding that they received the fruits of the sales contract because they 

received good title to the property at issue under the terms and conditions set forth 

in the contract.

We agree with the trial court. As an initial matter, we must review the terms 

of the contract at issue in order to determine whether appellees violated the duty of 

good faith and fair dealing by evading the spirit of the contract, purposefully 

failing to perform their obligations under the contract, or interfering with 

appellants‟ ability to perform under the contract. The contract required Winer to 

provide good and marketable title to the property at an agreed-upon price and by a 

specified date. There is no dispute that Winer fully and timely performed this 

obligation. The contract also contained a contingency clause that allowed 

appellants to void the contract if the residence did not pass a home inspection 

within a specified time period. There is no dispute that appellants did not exercise 
21

this contingency clause. Moreover, this provision only covered an inspection of 

the property that appellants agreed to purchase, and did not include or authorize an 

inspection of any neighboring property. Therefore, any misrepresentation or 

omission concerning the Old Pawn Shop would not have affected the home 

inspection contingency clause contained in the contract. 

The sales contract also contained a property condition statement furnished 

by the seller that addressed the property‟s structural conditions; the operating 

condition of its heating, air conditioning, plumbing and electrical systems; any 

known defects existing in numerous specified appliances; any problems relating to 

the exterior of the property; any environmental hazards (such as asbestos, radon 

gas, lead based paint, underground storage tanks, formaldehyde, contaminated soil, 

or other contaminants); and any zoning violations, non-conforming uses, violation 

of building restrictions or setback requirements, or any easements (other than 

utilities) on or affecting the property. Notably, the property condition statement 

did not require appellees to provide any information about conditions, including 

impending construction, at any neighboring properties.5 Accordingly, because the 

 

5 Arguably, appellees would have been required to disclose information 

about the impending construction at the Old Pawn Shop if this construction 

constituted a non-conforming use, or violated relevant zoning or building 

regulations, and affected the property to be purchased by appellants. However, 

(continued....)
22

sales contract did not impose any duty on appellees to inform appellants about the 

impending construction project at the Old Pawn Shop, any misrepresentations or 

omissions concerning this project did not deprive appellants of the fruits of the 

contract. 

Our conclusion with respect to the covenant of good faith and fair dealing in 

this case does not mean, as appellees have argued, that a seller or realtor can never 

violate the covenant of good faith or fair dealing based on misrepresentations or 

omissions that occur after the sales contract is signed but before the parties transfer 

title to the property. To the contrary, had appellees made fraudulent or negligent 

misrepresentations or omissions concerning the structural conditions of the 

property to be purchased by appellants, or concerning some other condition 

explicitly set forth in the sales contract, such misrepresentations or omissions may 

have given rise to a cause of action for violating the covenant of good faith and fair 

dealing, even if the misrepresentations or omissions occurred in the time period 

between the signing of the contract and the transfer of title. However, we need not 

 

(....continued)

appellants did not allege such a violation or non-conforming use in their complaint 

and did not make any such argument in their appellate briefs. To the contrary, they 

only briefly cited this provision in their opposition to TTR Realty‟s and AbuRahmeh‟s motion to dismiss, and did not provide any factual information in 

support of this argument. Thus, even if this argument had been properly preserved 

for appeal, it would have lacked a sufficient factual foundation in any event. 
23

decide that issue because there is no evidence in this case, and no allegation in the 

complaint, that appellees made any such misrepresentations or omissions here. 

Accordingly, we affirm the trial court‟s dismissal of the count alleging a breach of 

the covenant of good faith and fair dealing.

CONCLUSION

For the foregoing reasons, the judgment of the trial court is affirmed.

So ordered.