In Tries v. Cricones, home buyers prevailed at trial on their claims against home developers and sellers. Plaintiffs sued because defendants’ failed to disclose that the buyers’ yard was contaminated by Japanese knotweed, large shards of glass, and metal debris. A jury found for the plaintiffs on their private nuisance, breach of the implied covenant of good faith and fair dealing, and Chapter 93A, Section 9 claims. The trial judge denied the defendants’ motion for a directed verdict and awarded the plaintiffs’ their damages, attorneys’ fees, and costs.

On appeal by the defendants, the Appeals Court concluded that the trial judge should have granted the defendants’ motion for a directed verdict on the plaintiffs’ private nuisance and breach of the implied covenant of good faith and fair dealing claims. As to private nuisance, the claim requires a claimant to have an interest in the property and the “invasion” causing the nuisance must “come from beyond, usually from a different parcel.” Accordingly, the plaintiffs did not have a private nuisance claim against the defendants for pre-existing contamination of their own yard. The claim would be more appropriate under an implied warranty of habitability theory.

As to the implied covenant claim, the Appeals Court similarly concluded that defendants were entitled to a directed verdict because the implied covenant cannot be used to create rights and duties not provided in an existing contractual relationship. Here, the parties’ purchase and sale agreement did not expressly require the defendants to disclose soil contaminants, and the existence of the contaminants alone was not sufficient evidence that the defendants had breached their contractual obligations in bad faith. Rather, a purchaser’s protection against latent defects in a home purchased from a builder lies in any warranty and disclosure requirements in the sale contract, and, again, the implied warranty of habitability, and Chapter 93A.

As to Chapter 93A, the Appeals Court rejected the defendants’ argument that their liability under Chapter 93A was limited to the “terms and obligations”of the parties’ contract. That is because Chapter 93A is “not dependent on traditional tort or contract law concepts for its definition” of unfair or deceptive acts or practices. In that regard, a property seller can violate Chapter 93A by not disclosing a material fact even in the absence of a contractual duty to disclose, especially when disclosure of the fact may have influenced a buyer not to enter into the transaction. 

To recover under that theory, the plaintiffs had to show that (1) the defendants knew that the property was contaminated with hazardous material; (2) the contamination was a material circumstance which would have led the plaintiffs not to purchase the property; and (3) the defendants failed to disclose the problem. Here, the evidenced adduced at trial support those findings. Also, while a defendant may avoid liability under Chapter 93A for a nondisclosure “if it is shown that the plaintiff knew about the contamination,” the evidence did not demonstrate such knowledge by the plaintiffs. Therefore, despite not having any disclosure requirements in the purchase and sale agreement, the Appeals Court affirmed the trial court’s Chapter 93A judgment against the defendants.

This decision demonstrates the importance of developer-sellers of residential homes looking beyond common law and contractual disclosure requirements and assessing whether they need to disclose any known latent defects in the property before consummating the sale. Otherwise, once discovered, latent defects may expose a developer-seller to Chapter 93A liability.