Background
Erick Galban Salinas purchased a renovated home from 3919 NEH, LLC. Although the sales contract described the property as being sold “as is,” a pre-settlement inspection found animal feces beneath insulation in the attic. NEH hired its renovation contractor, Distinct Construction Services, LLC, to address the condition, and Salinas received an invoice at closing stating that the animal feces, insulation, and related ceiling staining had been repaired.
After taking possession, Salinas noticed a foul odor and noises from the attic. An Orkin inspection later found extensive animal waste, contaminated insulation, and inadequately screened entry points. A jury found NEH liable for intentional misrepresentation, negligent misrepresentation, and violations of the Maryland Consumer Protection Act, awarding Salinas $15,579.02. The circuit court also made attorney-fee awards to both sides. NEH appealed the merits judgment, discovery and evidentiary rulings, jury instructions, and fee awards.
The Court’s Holding
The Appellate Court of Maryland affirmed the judgment on the merits. It upheld the jury’s finding that Distinct Construction acted as NEH’s agent and that the contractor’s knowledge of continuing attic defects could be imputed to NEH. NEH did not adequately brief a distinct challenge to the existence of the agency relationship, instead focusing primarily on the seller-disclosure statute. The court also held that Maryland’s residential disclosure statute did not displace common-law misrepresentation claims or remedies under the Maryland Consumer Protection Act.
The court found no abuse of discretion in the protective order excusing Salinas’s spouse from an oral deposition based on evidence from mental-health professionals, or in admitting the pest-control technician as an expert while limiting her testimony to the subjects addressed in her report. It also rejected NEH’s spoliation argument because the animal waste was discarded during remediation more than a year before suit and NEH did not timely object on that ground. The court nevertheless vacated both sides’ attorney-fee awards and remanded because the circuit court had not thoroughly considered and articulated findings under Maryland Rule 2-703(f)(3).
Key Takeaways
- An independent contractor may qualify as a seller’s agent, allowing the contractor’s knowledge of latent defects to be imputed to the seller when the evidence supports that relationship.
- Maryland’s residential property-disclosure statute does not eliminate otherwise available claims for intentional misrepresentation, negligent misrepresentation, or violations of the Maryland Consumer Protection Act.
- Attorney-fee awards based on statute or contract must reflect a detailed analysis of the applicable Maryland Rule 2-703(f)(3) factors.
Why It Matters
The decision confirms that an “as is” clause and compliance with Maryland’s disclosure form do not insulate a residential seller from liability for later misrepresentations about whether a known defect was repaired. Sellers who rely on contractors to remediate pre-closing defects may face imputed knowledge when an agency relationship is established.
The ruling also underscores that Maryland trial courts must explain the factual and legal basis for fee awards, even when both parties qualify as prevailing parties under different fee-shifting provisions.