Preview:

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

ROBERT V. ADAMS, et al. Plaintiffs vs. NVR HOMES, INC., t/a RYAN HOMES, et al. Defendants

* * * * CIVIL NO. H-99-846

*

*

*

*

o0o

*

*

*

Robert Brager, Pamela D. Marks and Beveridge & Diamond, P.C. Baltimore, Maryland, for plaintiffs Steven A. Allen, Randall M. Lutz and Hodes, Ulman, Pessin & Katz, P.A., Towson, Maryland and Arnold M. Weiner and Snyder, Weiner, Weltchek, Jacobs & Slutkin, Baltimore, Maryland, for the Ryan Defendants Susan M. Souder, Defendants Catonsville, Maryland, for the Brantly

Terrence M. McShane and Lee & McShane, P.C., Washington, D.C., for Third-Party Defendant Gutschick

HARVEY, Senior Judge DATED: MEMORANDUM AND ORDER

In this multi-party case, families residing in a residential development in Howard County, Maryland seek recoveries from certain home builders who developed, built and marketed the

homes in which the plaintiffs live.

In addition to the many

claims asserted by the plaintiffs, cross-claims and third-party claims are also at issue in this case. Suit was originally brought here by the members of seventeen different families who reside in the Calvert Ridge development which is located in Elkridge, Howard County. In their amended

complaint, plaintiffs allege that their homes were built on a solid waste dump and that defendants concealed the properties' past use homes. and contamination from them when they bought their

Substantial compensatory and punitive damages as well as

injunctive and other relief are sought by plaintiffs under both federal and state law. Fourteen of the families (the "Ryan Families") reside in homes developed, built or marketed by defendants NVR, Inc. ("NVR") and NVR Homes, Inc. ("NVR Homes"), corporate entities which do business in Maryland under the trade name "Ryan Homes". These defendants will be referred to herein as the "Ryan

Defendants."

Three of the families (the "Brantly Families")

reside in homes developed, built or marketed by defendants Brantly Development Group, Inc. ("Brantly Development"), Brantly Management Group, Inc. ("Brantly Management") and Nantucket Island Homes, Inc. ("Nantucket"). Also named as defendants are

John Liparini, who is President and a director of those Brantly corporations, and Nick Liparini, a private contractor who is the son of John Liparini. All five of these defendants will be Defendants." an amended cross-claim

referred to herein as the "Brantly The Ryan Defendants have 2

filed

against Brantly

six

cross-defendants,

namely

Brantly

Development, Limited

Management,

Nantucket,

Marshalee

Woods

Partnership ("Marshalee")1 and the two Liparinis. Defendants and Marshalee in turn have filed a

The Brantly cross-claim

against the Ryan Defendants.

Brantly Development and Nantucket,

two of the defendants named in the amended cross-claim of the Ryan Defendants, have filed third-party claims against three engineering firms, namely Hillis-Carnes Engineering Associates, Inc. ("Hillis-Carnes"), MAFI Associates, Inc. ("MAFI") and

Gutschick, Little & Weber, P.A. ("Gutschick"). There have been extensive pretrial proceedings in the case. In its Memorandum and Order of February 17, 2000, this Court granted in part and denied in part the Brantly Defendants' motion to dismiss, and also granted in part and denied in part the Ryan Defendants' motion to dismiss. Adams v. NVR Homes, Inc., 193 F.R.D. 243 (D. Md. 2000). reached between the plaintiffs and A settlement has now been the Brantly Defendants,

including Marshalee.

However, the six Brantly cross-defendants

remain as parties in this case as a result of their cross-claims asserted against the Ryan Defendants and also as a result of the cross-claims asserted against them by the Ryan Defendants.

There has also been a settlement of the third-party claims asserted by Brantly Development and Nantucket against HillisCarnes. severed. Moreover, the third-party claims against MAFI have been Accordingly, the only third-party claims presently

Brantly Development is a general partner of Marshalee, and John Liparini and his wife are joint limited partners. 3

1

before the Court at this time are those of Brantly Development and Nantucket against Gutshick. Extensive discovery has been undertaken by the parties. The following eight motions for summary judgment or partial summary judgment are now pending before the Court: (1) Plaintiffs' motion for partial summary judgment on Count I of the amended complaint; (2) Plaintiffs' motion for partial summary judgment on Counts VIII, IX and X of the amended complaint; (3) The Ryan Defendants' motion for summary judgment on all counts of the amended complaint; (4) The Ryan Defendants' motion for summary judgment on the cross-claims of the Brantly Defendants and Marshalee; (5) The motion for summary judgment of crossdefendants John Liparini and Nick Liparini on the cross-claims asserted against them; (6) The motion for summary judgment of crossdefendants Brantly Development and Marshalee on the cross-claims asserted against them; (7) The motion for summary judgment of crossdefendants Brantly Management and Nantucket 4

on the cross-claims asserted against them; and (8) The motion for summary judgment of thirdparty defendant Gutschick on the third-party claims asserted against it by Brantly Development and Nantucket. Lengthy memoranda and voluminous exhibits have been

submitted by the parties in support of and in opposition to these pending motions for summary judgment or partial summary judgment. A massive record has been presented to the Court, and For the reasons to be that some of these It is

lengthy oral argument has been heard. stated herein, the Court has

concluded

pending motions must be granted and others denied.

apparent to the Court that some of plaintiffs' claims, some of the parties' cross-claims and the here must all proceed to trial. I Facts From the 1940's and continuing until the early 1970's, some of the land located in Howard County which today constitutes the Calvert Ridge subdivision development was the site of a sand and gravel surface mine operation (the "quarry"). Pits of third-party claims pending

approximately twenty to thirty feet in depth were excavated during the mining operations which ceased in the early 1970's. From time to time, solid waste was deposited in the pits and on other portions of the quarry land. The Calvert Ridge subdivision is located on approximately 5

twenty-four acres of land in Elkridge, Howard County, Maryland. The subdivision contains twenty-six lots, seventeen of which are involved in this litigation. agreement with the plaintiffs, Pursuant to their settlement the Brantly Defendants and

Marshalee have now agreed to purchase Lots 21, 22, and 23, which contain homes built by Nantucket and owned by the three Brantly Families. Families. The other fourteen lots are owned by the Ryan

The Adams family recently entered into a contract to

sell Lot 15, and the Muller family recently entered into a contract to sell Lot 19. Helen O'Connor owned the land comprising the Calvert Ridge subdivision from 1945 until October 1995, when the site was purchased by Brantly Development. A three to four acre parcel

of land in the center of the property had been used for the earlier sand and gravel mining operations. In 1973, the

O'Connor family began reclaiming the quarry by using dirt, tree stumps, asphalt, concrete and tires as fill material. By the

late 1980's the quarry had been completely filled and covered with topsoil. In late 1991, John Liparini began discussions with Thomas O'Connor, Helen O'Connor's grandson, regarding the purchase of the Calvert Ridge property. Thomas O'Connor informed John

Liparini that at one time a portion of the property had been used as a sand and gravel quarry but had since been filled with tree stumps, concrete, asphalt, and general construction debris. John Liparini also reviewed two subsurface investigation reports prepared by Hardin-Kight Associates, Inc. ("Hardin-Kight") in 6

May 1989 and January 1991. In October 1992, Hardin-Kight completed a third evaluation of subsurface conditions at the Calvert Ridge property on behalf of Brantly Development. This study estimated that "35,000 cubic

yards of unsuitable fill would have to be undercut and replaced below building pads." It was also reported that "a decaying

organic odor (faint to strong) was encountered in all of the [test] pits," and "alternate foundation systems for the proposed single family dwellings may be used on the site if the odors are not problematical." In the summer of 1993, Geo-Technology Associates, Inc. examined the Calvert Ridge site on behalf of Centex Homes, another builder. This report concluded that "[d]ue to the

presence of existing fill materials, . . . the majority of the site is not suitable for development without some improvement to soil condition. Deep undercuts and soil replacement or deep

foundation alternatives may be necessary to render the site suitable for structural support." In addition, it was

determined that

the "site is a further liability with regard to

the unknown nature of the existing fill materials," and it was strongly recommended that "a more thorough exploration of the site conditions be conducted to evaluate geotechnical as well as environmental issues associated with the development of the subject property." As a result of these studies, John Liparini decided not to buy the property in 1992 or 1993 because the overall cost of developing the Calvert Ridge subdivision would have been too 7

expensive in light of the additional costs associated with removing and replacing fill in areas where structures were to be built. By 1995, however, the price of the Calvert Ridge

property had decreased, and on July 17, 1995, John Liparini as President of Brantly Development executed an agreement on behalf of Brantly Development to purchase the Calvert Ridge property from Helen O'Connor. ("Eco Dynamics") Shortly thereafter, Eco Dynamics, Inc. a Phase I Environmental Site

conducted

Assessment for Brantly Development's financial lender, Signet Bank/Maryland. According to the Eco Dynamics report of September 1995, "[t]he assessment was performed to fulfill the due diligence requirements under the Superfund Amendments and Reauthorization Act of 1986 (SARA), and in order to insure that Signet

Bank/Maryland is covered by the `innocent landowner defense' provision of SARA." Ridge site did The assessment concluded that the Calvert contain any hazardous materials or

not

environmental contamination.

Accordingly, on October 5, 1995,

Brantly Development completed the purchase of the Calvert Ridge property from Helen O'Connor.2 Beginning in late 1995, Brantly Development improved the Calvert Ridge subdivision by hiring contractors to grade lots, construct roads, prepare building pads, and install water,

sewer, electric and natural gas lines.

Hillis-Carnes prepared

The purchase agreement between Brantly Development and Helen O'Connor stated that the land had not been used for "the storage, treatment, or disposal of hazardous substances." 8

2

most of the building pads by excavating any uncontrolled fill and replacing it with compacted fill. For some of the lots

which were located over the former quarry, MAFI was hired to install Tensar Geogrid reinforcements under the building pads in order to counteract the possible formation of sink holes due to the existence of unstable fill material.3 Both John and Nick

Liparini directed and supervised all development work. On September 5, 1995, Marshalee entered into a Contract of Sale with NVR Homes, Inc. for the sale of fifty-one lots to NVR Homes, Inc. ("Contract of Sale"). These lots were located in a

subdivision known as "Marshalee Woods, Section Two, Area Two", which was not a part of but was adjacent to the Calvert Ridge subdivision. On the same date, Marshalee also entered into a

Land Development Contract with NVR Homes, Inc. whereby Marshalee would develop and improve the Marshalee Woods subdivision in which the fifty-one lots were located ("Land Development

Contract"). In the summer of 1996, the Ryan Defendants entered into negotiations with John Liparni to purchase lots at Calvert Ridge. At the time, John Liparini informed the Ryan Defendants

of the existence of the reclaimed quarry, and he told them that it did not pose any environmental problems because hazardous waste had not been detected on the site. John Liparini also

gave the Ryan Defendants a copy of Eco Dynamic's September 1995

"Geogrid" reinforcements were used on nine lots, including Lots 8, 21, 22 and 23. The Ryan Defendants built the home on Lot 8. Nantucket built the homes on Lots 21, 22 and 23. 9

3

Phase I Environmental Site Assessment and informed them of a July 24, 1996 supplement, which reiterated that there were no hazardous materials or environmental contamination at the site. John Liparini did not at the time give the Ryan Defendants copies of the 1989, 1991 and 1992 Hardin-Kight reports nor did he give them the 1993 Geo-Technology Associates' report. On September 19, 1996, the Ryan Defendants purchased ten lots which were located within the Calvert Ridge subdivision. As a matter of convenience, to John this Liparini and the by Ryan

Defendants

agreed

consummate

transaction

simply

attaching an addendum to both the Contract of Sale and the Land Development Contract. In November of 1997, the Ryan Defendants purchased eleven additional Calvert Ridge lots, some of which were located over the reclaimed quarry. Brantly Development provided lot

certifications from MAFI and Hillis-Carnes for the lots which were located over the former quarry. Again, the parties

attached an addendum to both the Contract of Sale and the Land Development Contract instead of drafting new contracts. According to these contracts and the addenda, the Ryan Defendants would be primarily responsible for improving

individual lots, while Brantly Development would be responsible for improving the overall subdivision. For instance, Brantly

Development would continue to install sewer, water, electric, telephone and utility lines throughout Calvert Ridge, and the Ryan Defendants would be required to connect to these lines each house which they constructed. 10

The Ryan Families signed purchase agreements for their homes in Calvert Ridge between April 21, 1996 and December 31, 1997, and their actual settlement dates occurred between February 28, 1997 and June 25, 1998. contain an express Eight of the purchase agreements limitation provision which

warranty

disclaims any warranty or representation not contained in the "Ryan Homeowners Manual." agreements also contain a Although the other six purchase limited warranty provision, the

disclaimer of oral statements and promises is located in a separate and independent provision. in addition executed a General Each of the Ryan Families to their purchase

Addendum

agreement which disclaims any oral statements, representations, warranties or promises. Karen Hensel ("Hensel"), Catherine Taylor ("Taylor") and Jack Rupp ("Rupp") were the sales representatives who, acting on behalf of the Ryan Defendants, sold homes to the Ryan Families. Neither Hensel nor Taylor was aware that a portion of the

Calvert Ridge subdivision had formerly been used as a sand and gravel quarry. Rupp, however, had been informed by Kevin

Kerwin, the division manager for Ryan Homes, that construction debris was buried near Lots 7, 8, 9, 10, 11 and 12. Prior to the purchase of their houses, none of the Ryan Families was told that part of the Calvert Ridge subdivision was located over a reclaimed quarry. Five of the Ryan Families were

informed that the property had been used as a "farm" and four other Ryan Families were informed that the site had been a

11

"horse farm."4 On September 2, 1998, three houses in the Calvert Ridge subdivision were evacuated after elevated levels of methane gas were detected in the basement of each house.5 The Howard County

Fire Department tested fourteen other houses that same day but did not detect methane in any of those homes.6 Within the next

two days, the Ryan Defendants purchased natural gas detectors, four of which were installed in each of the homes of the Ryan Families. Two detectors were placed in each basement, and one

on each of the first and second floors. Over the next two months, the Ryan Defendants sealed the basement floors of all fourteen of the Ryan Families' houses, and installed a passive ventilation system in eleven of the houses.7 The Ryan Defendants also engaged two engineering firms, Hillis-Carnes and Brook Environmental, and several independent

A horse farm is in fact located adjacent to the Calvert Ridge neighborhood. The three houses are located on Lots 9, 11 and 12, but none of these Lots are involved in this litigation. Methane gas is not toxic or poisonous, and in fact, a small percentage of the atmosphere consists of naturally occurring methane gas. However, when the percentage of methane in the atmosphere reaches at least 5% (the Lower Explosive Limit or LEL), an explosion can then occur if the methane is mixed with oxygen in a confined space and ignited by a spark. Also, high concentrations of methane can lead to asphyxiation by displacing the oxygen that humans need to breathe. Plaintiff Banfer rejected the Ryan Defendants' offer to install a passive ventilation system, and plaintiffs Rowe and Lee already had such systems in their homes. 12
7 6 5

4

experts

to

evaluate

the

methane

problem

at

Calvert

Ridge.

Indoor and outdoor air sampling was conducted, and on November 10, 1998, Hillis-Carnes completed a report which was distributed to each of the Ryan Families and to experts retained by the Ryan Defendants. Based upon this report, it was determined that

portions of Lot 11, which is not involved in this litigation, were the primary source of the methane generation. In Defendants December and 1998, the Ryan Defendants, parts of the Brantly The

Marshalee

excavated

Lot

11.

excavated materials, which included chunks of concrete, two empty drums, some metal objects, tires, tree stumps, branches and leaves, were taken to a landfill offsite. areas were then filled with new clean material. The Environmental Protection Agency ("EPA") and the Maryland Department of the Environment ("MDE") have each investigated conditions at Calvert Ridge. to exist. No solid waste problem was found The excavated

The EPA closed its file in June of 1999, and the MDE

closed its file in August of 1999. Since September 2, 1998, the Howard County Fire Department, plaintiffs' themselves, experts, have defendants' the Ryan experts, Families' and plaintiffs for the

tested

homes

presence of methane on more than 175 occasions.

All of these

tests have been negative except for one test on September 9, 1998, in which methane was detected at a level of 2% in the basement of the house on Lot No. 8 owned by plaintiff Ratliff. Over the same period, however, plaintiffs' natural gas detectors have alarmed dozens of times, and elevated levels of methane 13

gas have occasionally been detected in the yards of certain Calvert Ridge homes. According to plaintiffs, sales representatives of the Ryan Defendants made fraudulent and misleading statements to them or omitted providing material information to them concerning the quality and former use of the property which they were

purchasing.

It is alleged in the amended complaint that the

acts and omissions of the defendants with regard to the presence of solid waste at the Calvert Ridge site were fraudulent and were undertaken with reckless disregard for the health and safety of the plaintiffs. According to the amended complaint,

each defendant directed or actively participated and cooperated in the negligent conduct and wrongful actions and omissions of the other defendants. II The Pending Claims, Cross-Claims and Third-Party Claims The amended complaint contains fourteen counts. Several of

these counts were dismissed by the Court in its Memorandum and Order of February 17, 2000. Adams, 193 F.R.D. at 257. counts have been voluntarily dismissed by the Other

plaintiffs.

Accordingly, there are now ten counts

in the amended complaint

which allege claims against the Ryan Defendants and which remain pending in this case, as follows: Count I Federal Solid Waste Law

Count III - Public Nuisance Count V Fraud 14

Count VI Count VII

- Concealment - Negligent Misrepresentation Consumer Protection - Unfair or Deceptive

Count VIII Trade

Practices Count IX Count X Count XI Count XII - Breach of Contract - Breach of Implied Warranties - Breach of Express Warranties - Negligence

The following cross-claims have been asserted by the Ryan Defendants against some of the Brantly Defendants and Marshalee: Count I - Breach of warranty against Marshalee and Brantly Development Count II - Express indemnity against Marshalee and Brantly Development Count III - Joint tortfeasor liability against Brantly Development, Brantly Management, Nantucket, Marshalee, John Liparini and Nick Liparini. The Brantly Defendants and Marshalee have in turn alleged cross-claims of contribution and indemnity against the Ryan defendants. The amended third-party complaint of Brantly Development and Nantucket asserts the following claims against third-party

defendant Gutschick: Count I Count II - Breach of contract - Negligence. 15

Plaintiffs' original and amended complaint contain a veritable laundry list of legal theories asserted under federal and state law whereby plaintiffs seek to recover substantial sums for losses allegedly sustained by them as a result of their purchase of new homes in the Calvert Ridge subdivision. as defendants are numerous corporate entities and Named several

individuals. Plaintiffs' expansive allegations have given rise to cross-claims and third-party claims, adding to the large number of parties in this litigation. Extensive discovery and the settlement of some of the parties' claims have resulted in the elimination of only a few of the issues and in only a slight reduction in the number of the parties who are still involved. The number of suing The

families has now been reduced from seventeen to fourteen.

Brantly Defendants and Marshalee, although having settled with the plaintiffs, still remain in the case as a result of their cross-claims and the cross-claims brought against them by the Ryan Defendants. Only two third-party defendants remain, and

the third-party claims against one of them have been severed. As a result of rulings previously made by the Court and

plaintiffs' voluntary dismissals, ten counts of the amended complaint are still pending. The contentious dispute between the parties began when, in September of 1998, methane gas was detected not in plaintiffs' homes but in homes located nearby in the Calvert Ridge

subdivision.

It was plaintiffs' fear that their health and

their property values were or would be adversely affected by 16

methane discovered in nearby lots which led to the commencement of this civil action. However, in the intervening years, none

of the plaintiffs have suffered any physical injuries caused by the presence of methane on their properties. detectors have from time to time alarmed, Although methane most of these

incidents have been false alarms.

With the one exception which

occurred more than two and one-half years ago in the Ratliff home, no methane has ever been detected in any one of

plaintiffs' homes.

There have been no explosions or fires

because of the presence of methane, and two plaintiff families have been able to enter into contracts for the sale of their properties at a prices number higher of than those originally here paid.

Nevertheless,

plaintiffs

have

presented

evidence indicating that they have suffered emotional damage as a result of their concern that methane may be or will be detected in their homes. Plaintiffs have also presented

evidence that their property values have been adversely affected because it is now known that their homes were built on a quarry and because methane has been detected nearby. According to the Ryan Defendants, plaintiffs are overly sensitive and have overreacted to the events which occurred in September of 1998 and later when methane detectors in their homes alarmed. Although there is evidence of record supporting

this contention of the Ryan Defendants, this issue cannot be finally decided as a matter of law at this stage of the case by way of defendants' pending motion for summary judgment. As

determined by the Court herein, two of the claims brought by 17

plaintiffs against the Ryan Defendants will be presented to the jury at the trial in this case. decide, after hearing It will be for the jury to

the plaintiffs' testimony and other

evidence in the case, whether they have overreacted to what they perceive to be a methane problem and whether they have suffered emotional damage and sustained losses in the value of their properties because, without their knowledge, their homes were built over an abandoned quarry. On the record here, this Court

has concluded that two of the counts of the amended complaint must proceed to trial while eight of them are not sustainable as a matter of law. III Summary Judgment Principles It is well established that a party moving for summary judgment or partial summary judgment bears the burden of showing the absence of any genuine issue of material fact and that it is entitled to judgment or partial summary judgment as a matter of law. 1984). Barwick v. Celotex Corp., 736 F.2d 946, 958 (4th Cir. The movant's burden may be met by consideration of

affidavits, exhibits, depositions and other discovery materials. Id. The burden is on the moving party at the summary judgment

stage to show that there is an absence of evidence to support the nonmoving party's position. U.S. 317, 325 (1986). While the facts and all reasonable inferences drawn Celotex Corp. v. Citrate, 477

therefrom must be viewed in the light most favorable to the party opposing the motion, Ross v. Communications Satellite 18

Corp., 759 F.2d 355, 364 (4th Cir. 1985), when the moving party has carried its burden under Rule 56, its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. Matsushita Elec. Indus. Co. v. Zenith Radio "'A mere scintilla of evidence

Corp., 475 U.S. 574, 586 (1986).

is not enough to create a fact issue; there must be evidence on which a jury might rely.'" Barwick, 736 F.2d at 958-59 (quoting Seago v. North Carolina Theaters, Inc., 42 F.R.D. 627, 640 (E.D.N.C. 1966), aff'd, 388 F.2d 987 (4th Cir. 1967), denied, 390 U.S. 959 (1968)). material fact, determined cert.

Moreover, only disputed issues of by reference to the applicable

substantive law, will preclude the entry of summary judgment. "Factual disputes that are irrelevant or unnecessary will not be counted." (1986). Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 The Fourth Circuit has stated that, with regard to

motions for summary judgment, the district courts have "an affirmative obligation . . . to prevent `factually unsupported claims and defenses' Co., from 818 proceeding F.2d 1126, to trial." (4th Felty Cir. v.

Graves-Humphreys

1128

1987)

(quoting Citrate, 477 U.S. at 323-24). IV Motion for Summary Judgment of the Ryan Defendants (a) Count I - Federal Solid Waste Law Count I of the amended complaint is brought pursuant to the "Citizen Suit" provision of the federal Resource, Conservation 19

and Recovery Act ("RCRA"), which states that any person "may commence a civil action on his own behalf against any person . . . who has contributed or who is contributing to the past or present handling, storage, treatment, transportation or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment." 42 U.S.C.

Download Robert V. Adams, et al. v NVR Homes, Inc t/a Ryan Homes, et al.pdf

Maryland Law