Court Opinion

ID: 4966722
Source: CourtListenerOpinion
Date Created: 2021-09-24 16:20:45.099512+00
Date Added: 2024-06-11T08:16:13.558387
License: Public Domain

DISSENTING OPINION BY
BENDER, J.:
I respectfully dissent. The single certainty that permeates every aspect of this case is that Janet Milliken, who has now suffered a six-figure economic loss (and untold aggravation), was destined to discern the occurrence of a murder/suicide in her new home either before consummating her purchase or — as fate would have it— afterward. I am not the first to recognize that “truth will come to light; murder cannot be hid long.” Reed v. King, 145 Cal.App.3d 261, 193 Cal.Rptr. 130, 131-32 (1983)(quoting ShakespeaRE, Merchant of VENICE, Act I, Scene II). Nevertheless, the financial penalty Mrs. Milliken has suffered was entirely avoidable had the sellers from whom she bought her home merely exercised a little more integrity and a little less greed. The Majority’s ruling, which deprives Milliken of any legal remedy, rewards those sellers and short-circuits the legislative intent of the Real Estate Seller Disclosure Law (RESDL), 68 Pa.C.S. §§ 7301-7315. Not surprisingly, it also truncates the ability of homebuyers across this Commonwealth to avoid potentially catastrophic losses in purchasing a home. The RESDL — on its face — does not countenance such an untoward result, notwithstanding the Majority’s speculation about unproven consequences in scenarios not before us. In my opinion, the circumstances of record in this case, considered *143through the prism of the RESDL and the causes of action Mrs. Milliken avers, raise questions of fact that must be resolved at trial.
I acknowledge, as does the Majority, that the RESDL requires disclosure to the buyer of “any material defects with the property known to the seller[.]” 68 Pa. C.S. § 7303. Nevertheless, the Majority attempts to limit the circumstances subject to disclosure as “material defects” to the conditions itemized in RESDL section 7304, which directs the State Real Estate Commission to promulgate “a disclosure statement that satisfies the requirements of this chapter.” 68 Pa.C.S. § 7304(a). The statute enumerates, in subsection (b), specific conditions or forms of impairment to be included in the disclosure statement. See id. at § 7304(b). Significantly, however, language limiting the necessity of disclosure to the enumerated items or circumstances is conspicuously absent — and with good reason; a companion provision of the RESDL directs that such a specification shall not be deemed conclusive of the disclosure obligation under other provisions of law. Section 7313 elucidates the point in the clearest parlance possible:
§ 7313. Specification of items for disclosure no limitation on other disclosure obligations
(a) General rule. — The specification of items for disclosure in this chapter or in any form of property disclosure statement promulgated by the State Real Estate Commission does not limit or abridge any obligation for disclosure created by any other provision of law or that may exist in order to avoid fraud, misrepresentation or deceit in the transaction.
68 Pa.C.S. § 7313(a) (emphasis added).
Inexplicably, the Majority fails even to acknowledge section 7313, much less reconcile its obvious effect on the restrictive rule the Majority Opinion devines from the “specification of items” in section 7304(b). Unlike the Majority, I find the language of section 7313 dispositive in its apparent direction that items specified in section 7304(b) do not delimit “any material defects with the property known to the seller,” id. at § 7303, and do not circumscribe grounds for potential liability for non-disclosure. Indeed, section 7304 itself allows that “[njothing in this chapter shall preclude a seller from using a form of property disclosure statement that contains additional provisions that require greater specificity or that call for the disclosure of the condition or existence • of other features of the property.” Id. at § 7304(a). Accordingly, nothing in the RESDL as a whole prevents disclosure of circumstances not specified in section 7304(b) or limits potential liability for nondisclosure to the circumstances that section does specify. See 68 Pa.C.S. § 7313.
The more comprehensive scope of liability attendant on these two sections of the RESDL is, in my estimation, precisely what the legislature contemplated in the adoption of that Act. Indeed, even without resort to sections 7304(a) or 7313, the Residential Real Estate Transfers Law (RRETL), 68 Pa.C.S. §§ 7101-7103, which provides meaning and context for the RESDL, renders the legislature’s understanding of the term, “material defect” unmistakable. Contrary to the Majority’s assertion that the RESDL requires disclosure of only structural defects on the property, legal impairments, or hazardous substances, RRETL section 7102 reveals that a “material defect” is “[a] problem with a residential real property or any portion of it that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property.” 68 Pa.C.S. § 7102.
*144In this case, the adverse impact of the murder/ suicide on the value of Milliken’s home is documented in the reports of two expert real estate appraisers, one of whom opined that the attendant stigma reduced the value of the property by ten to fifteen percent of its $610,000 sale price, and the other of whom attested that the value of the home did not exceed $525,000. To the extent that a reduction of almost $100,000 in value can be deemed a “significant adverse impact on the value of the property,” the RRETL, considered in conjunction with RE SDL, mandates that the cause of the stigma be disclosed. Thus, whereas the Majority would consign the stigma of murder/suicide to the ethereal realm of “psychological damage,” Majority Op. at 139, the statute recognizes it for what it is — documented economic loss — and a “material defect” that must be disclosed.
On this point at least, mine is not a lone voice in the wilderness. Under substantially identical circumstances, the California Court of Appeals imposed a duty of disclosure on the seller and upheld the right of the buyer to recover where the undisclosed fact “materially affect[s] the value or desirability of the property.” See Reed, 193 Cal.Rptr. at 131-32. As a measure of whether undisclosed information “is of sufficient materiality to affect the value or desirability of the property,” see id. at 132, the Court considered three elements: “the gravity of the harm inflicted by nondisclosure; the fairness of imposing a duty of discovery on the buyer as an alternative to compelling disclosure, and its impact on the stability of contracts if rescission is permitted,” see id. Balancing those factors, the Court found that commission of a multiple murder on the property (albeit ten years prior to the disputed sale) does vest the seller with a duty of disclosure. See id.
I find these same elements probative of the extent to which the murder/suicide in this case amounts to a “material defect,” i e., “[a] problem with a residential real property ... that would have a significant adverse impact on the value of the property.” Significantly, the Court in Reed first acknowledged the same reservations advanced by the Majority in this case.
The paramount argument against [the disclosure of the multiple murder] is it permits the camel’s nose of unrestrained irrationality admission to the tent. If such an “irrational” consideration is permitted as a basis of rescission the stability of all conveyances will be seriously undermined. Any fact that might disquiet the enjoyment of some segment of the buying public may be seized upon by a disgruntled purchaser to void a bargain.
Id. at 132-133. The Court then dismantled those claims, recognizing that the uniqueness of the scenario both obviates the potential for abuse and vitiates the suggestion that caveat emptor should constrain the buyer to inquire after a home’s history of criminal mortality:
In our view, keeping this genie [i.e., the potential for abuse] in the bottle is not as difficult a task as these arguments assume. We do not view a decision allowing Reed to survive a demurrer in these unusual circumstances as endorsing the materiality of facts predicating peripheral, insubstantial, or fancied harms.
The murder of innocents is highly unusual in its potential for so disturbing buyers they may be unable to reside in a home where it has occurred. This fact may foreseeably deprive a buyer of the intended use of the purchase. Murder is not such a common occurrence that buyers should be charged with anticipating and discovering this disquieting pos*145sibility. Accordingly, the fact is not one for which a duty of inquiry and discovery can sensibly be imposed upon the buyer.
Id. at 133.
The Court then recognized as well that, contrary to objections that damage to the public perception of a property, i.e., “psychological damage,” see Majority Op. at 139, is not an appropriate subject of compensation, damage to reputation is in fact cognizable as economic loss:
[The buyer] alleges the fact of the murders has a quantifiable effect on the market value of the premises. We cannot say this allegation is inherently wrong and, in the pleading posture of the case, we assume it to be true. If information known or accessible only to the seller has a significant and measure-able effect on market value and, as is alleged here, the seller is aware of this effect, we see no principled basis for making the duty to disclose turn upon the character of the information. Physical usefulness is not and never has been the sole criterion of valuation. Stamp collections and gold speculation would be insane activities if utilitarian considerations were the sole measure of value.
Reputation and history can have a significant effect on the value of realty. “George Washington slept here” is worth something, however physically inconsequential that consideration may be. Ill-repute or “bad will” conversely may depress the value of property.
Id. at 132-33 (citation and footnote omitted, emphasis added).1
Finally, the Court left no doubt that the economic loss attendant upon a failure to disclose can be recoverable based upon quantified proof of the loss:
Whether [the buyer] will be able to prove her allegation [that] the decade-old multiple murder has a significant effect on market value we cannot determine. If she is able to do so by competent evidence she is entitled to a favorable ruling on the issues of materiality and duty to disclose. Her demonstration of objective tangible harm would still the concern that permitting her to go forward will open the floodgates to rescission on subjective and idiosyncratic grounds.
Id. at 133-34 (footnote omitted).
Of course, the Court’s decision in Reed does not bind us. Nevertheless, its analysis offers a valuable perspective that should cause the Majority pause in its insistence that pragmatic considerations militate against the conclusion that damage to the reputation of a property poses a quantifiable economic loss. As the Court in Reed has amply demonstrated, the truth is quite the contrary. Moreover, to the extent that the cause of loss can be proven by expert testimony, it imposes “significant adverse impact on the value of the property,” and must be recognized as a “material defect” under the RESDL. Pursuant to the language of RESDL section 7303, disclosure of such defects by the seller should be deemed mandatory, and a seller who fails in this regard should answer for his conduct in damages.
*146Consistent with this rationale, I would vacate the trial court’s award of summary judgment and remand this matter for trial. Inasmuch as the Majority declines this course, I must respectfully dissent.

. The Majority's potential response to this reasoning, that the criminal history of a property is now discoverable with the aid of the internet, see Majority Op. at 139-40, does not bear scrutiny. Various web-based services, e.g. Reputation.com, allow users to procure the professional “scrubbing” of internet search results to avoid disclosure of facts not deemed "appropriate” for public consumption. To the extent that such services are available to "protect” one’s personal reputation, I see no reason why they might not also be employed to prevent undesirable disclosures about the history of real property.