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NATIONAL CENTER FOR DISPUTE SETTLEMENT

IN THE MATTER OF:

Buyers, Claimant, v.

Seller.

RE: NCDS CASE# 17- -MN

ANSWER TO CLAIM IN ARBITRATION AND COUNTERCLAIM FOR

ATTORNEY’S FEES AND COSTS

COMES NOW, Seller, , as and for her Answer and Defenses to Buyers’,

, claims, respectfully states as follows:

INTRODUCTION

This arbitration claim by these Buyers is not well taken. Seller made no misrepresentations

or omissions of any kind, material or otherwise, that misled these Buyers about the condition of the

pool attached to the home, which is the subject of this arbitration. Seller provided no warranties to

Buyers related to the pool attached to this home and Buyers acknowledged that fact in writing.

Seller disclosed all material facts within her knowledge about this pool to the best of her ability.

Buyers had a complete and unobstructed time period in which to undertake all necessary

professional inspections of this pool prior to purchase, and even prior to making an offer on the

home.

In sum, Seller is simply not liable for anything that Buyers have alleged within their

Statement of Claim. Therefore, she respectfully asks the Arbitrator in this matter to find her not

liable the Buyers and to award Seller her attorneys’ fees and costs incurred as a result against of this

claim which lacks merit.

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ANSWER

Seller Disclaimed And Buyers Waived Any Warranties

1. Buyers (“Buyers”) knowingly declined to purchase a warranty

for the property located at , Eagan, Minnesota 55122 (“Home”),

despite being advised of the availability of it. Exhibit 1 – Purchase Agreement, ¶¶235-

242.

2. Seller (“Seller”) provided no warranty with respect to the pool, pool lining, or

any other pool equipment. Id.

Buyers Bought Home Fully Aware Of Condition Of Pool

3. On May 13, 2017, Buyers, after having been allowed to fully inspect the pool area of the

Home, insisted upon an Amendment to the Purchase Agreement which required the Seller to

provide that the “Gate to the outdoor fence to pool be functional.” Exhibit 2 – Amendment

to Purchase Agreement.

4. Exhibit 2 is evidence that Buyers fully inspected the pool area to their satisfaction, made

changes to the Purchase Agreement, and reduced the price of the Home after insisting that

the Seller fix a broken gate around the pool area.

5. Exhibit 2 is also the best evidence that not only did the Buyers have an opportunity to

inspect the Home’s pool, but that they demanded that Seller make repairs to the pool gate

and thereafter reduced their offering price.

6. Seller agreed to this Amendment to repair the pool gate, including a reduction in the price of

the Home from the Buyers that came along with it. Ex. 2.

Sellers Had Multiple Opportunities To Inspect Pool

7. The high temperature at the Home on May 13, 2017, was 80F and the low was 54F, with the

temperature hovering between 60.1F and 80.1F between the hours of 8:00 a.m. and 6:00 p.m.

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There was absolutely no precipitation there that day, and it was partly cloudy or clear

throughout that time at that location. Exhibit 3 – Historical Weather Charts for Zip Code

55122 from https://www.wunderground.com, accessed Nov. 6, 2017.

8. There were absolutely no weather events of any kind between the dates of May 1, 2017 and

May 13, 2017, which would have prevented Buyers from fully inspecting the subject pool

attached to Home. Ex. 3.

9. Seller used Town & County Pool and Spa in St. Paul, Minnesota to professionally open this

pool during Spring 2016, which involved removing the cover, checking the pumps and

adding various chemicals.

10. Likewise, absolutely nothing prevented the Buyers from removing the pool cover

themselves and inspecting the inside of the pool using a professional pool company

available locally before they bought this Home.

11. According to All Poolside Services, Inc., in St. Paul, Minnesota, it charges $125 for the

removal of a pool cover, the professional inspection of in-ground home pool prior to a

buyer’s purchase, and the re-installation of the pool cover.

Seller Did Not Hide Anything From Buyers About This Pool’s Condition

12. From the pool’s initial opening on May 8, 2016, it took Seller until May 22, 2016, to clean

and clarify the water in the pool and make it fresh and fully swimmable.

13. Part of the opening process was the removal of the pool’s safety cover by Town & Country

Pool in Spring 2016.

14. Likewise, part of the closing process was the re-installation of the pool’s safety cover in Fall

2016.

15. The Seller had closed her pool for the year in Fall 2016 and did not intend to reopen it for

her personal use given the impending sale of the Home in Spring 2017.

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16. In Fall 2016, Seller had Valley Pool & Spa re-install the pool’s safety cover over the open

water surface to prevent the accidental drowning of children or animals, and to reduce the

intrusion of leaves, debris, snow and ice into the pool.

17. The use of a pool cover is a safety practice recommended by the safety experts at the

American Red Cross: “Place a safety cover on the pool or hot tub when not in use and

remove any ladders or steps used for access.” http://www.redcross.org/get-help/how-to-

prepare-for-emergencies/types-of-emergencies/water-safety/home-pool-safety, accessed on

Nov. 6, 2017.

18. The use of a pool cover for safety is also mandated by the findings and recommendations of

the U.S. Consumer Product Safety Commission. https://www.poolsafely.gov/wp-

content/uploads/2016/06/PoolSafely_ConsumerEducationalBrochure_ENG.pdf, last

accessed on Nov. 6, 2017.

19. Moreover, a pool safety cover must be firmly attached to the pool such that a person falling

onto the cover will not subsequently collapse the cover, become entangled in it, and drown.

https://www.cpsc.gov/s3fs-public/359.pdf, last accessed on Nov. 6, 2017 (“ASTM

[American Society for Testing Materials] requires that a cover withstand the weight of two

adults and a child to allow a rescue should an individual fall onto the cover.”).

20. In other words, for safety reasons alone, an unused pool needs to be firmly covered when it

is not in use.

21. This was an unused pool and it was appropriately and professionally covered for both safety

and aesthetic reasons, and not for any ulterior motive, such as to hide the pool’s condition,

as suggested by the Buyers who failed to undertake a professional inspection of this pool.

22. Buyers never requested access to the property from Seller to have their own independent

inspection performed of this pool, as would have been their right prior to purchase.

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Buyers Failed To Undertake Reasonable Inspection Of Pool

23. Buyers were free to hire a pool inspection service, at their own expense, to confirm the

condition of the pool to their satisfaction before they purchased this Home.

24. Seller was under no obligation to pay for this professional inspection of the pool.

25. Local pool service companies routinely provide this pre-sale inspection service locally for

$125.

26. According to All Poolside Services, Inc., it takes about 45 minutes to remove the cover,

inspect the pool, advise the customer, and replace the cover.

27. Buyers have not alleged and no evidence exists that Seller made any affirmative material

misrepresentations, lies, or false statements about the pool’s condition.

28. Buyers have not alleged and no evidence exists that Seller prevented or refused to allow

them to physically inspect the pool at the Home during the time they visited it prior to their

purchase.

29. Buyers have not alleged and no evidence exists that Seller prevented them from removing

the cover to inspect the pool’s condition.

30. Buyers have not alleged and no evidence exists that Seller prevented them in any way from

entering the back yard of the Home to perform any inspections of this pool, that they

deemed appropriate, prior to making an offer on this home and thereafter ultimately

purchasing it.

31. Buyers have not alleged and no evidence exists that they made their purchase of this home

contingent upon a final inspection of this pool prior to closing.

32. Seller was perfectly ready, willing, and able to permit Buyers to undertake whatever

inspection they chose to do of this pool at Buyer’s own expense.

33. Buyers purchased this home without undertaking any of the inspections that were fully and

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fairly available to them on May 1, 2017, thru May 13, 2017.

34. Nothing prevented Buyers from undertaking the inspection of this pool on May 1, 2017 or

May 13, 2017, when they entered into a purchase agreement for the Home, or anytime in

between.

35. At the time of sale, this property was vacant. There were no dogs or other obstructions that

would have prevented access to Buyers, which Seller would have gladly provided such

access if it had been requested.

36. After buying the Home, Buyers asked three separate pool contractors, All Poolside Services,

Shamrock Pools, and KCI Construction, to provide bids for the pool work they now want to

undertake after they purchased it.

37. According to the Minnesota Secretary of State, all three of these contractors were in

business on and before May 1, 2017. Exhibit 4 – Corporate formation documents for

these entities for All Poolside Services (1978), Shamrock Pools (2011), and KCI

(4/7/2017).

38. It might have been prudent for these Buyers to have hired one of these pool contractors for a

pre-sale inspection before making their purchase decision given that they now are

experiencing apparent buyer’s remorse.

Controlling Minnesota Law Requires That Real Estate Buyers Beware

39. Caveat emptor, meaning "let the buyer beware,"1 is a common law doctrine2 which serves as

the general rule with regard to the purchase of realty3 absent protections provided by

1 Reininger v. O'Neill, 316 Ga. App. 477, 729 S.E.2d 587 (2012); Manning v. Lewis, 400 S.W.3d 737 (Ky. 2013). 2 Reininger v. O'Neill, 316 Ga. App. 477, 729 S.E.2d 587 (2012); Manning v. Lewis, 400 S.W.3d 737 (Ky. 2013); Bowman v. Presley, 2009 OK 48, 212 P.3d 1210 (Okla. 2009). 3 Reininger v. O'Neill, 316 Ga. App. 477, 729 S.E.2d 587 (2012); Weitz v. Green, 148 Idaho 851, 230 P.3d 743 (2010); Hewitt v. Kirk's Remodeling and Custom Homes, Inc., 49 Kan. App. 2d 506,

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contract or by law.4 The rule of caveat emptor requires a purchaser of an existing house to

reduce purported warranties to contractual form5 if he or she is unable to examine it fully or

intelligently or lacks the knowledge to judge accurately of its quality or value.6 In general,

the rule of caveat emptor applies to sales of used real property.7 See generally, 77 Am. Jur.

2d Vendor and Purchaser § 264. The principal of caveat emptor has held in Minnesota real

estate transactions for more than a century:

It was not enough, to justify the plaintiff in relying upon the vendor's representation of value, that the plaintiff was unacquainted with the values of real estate and of this property, while the defendant was well acquainted with such values. There does not appear to have been any reason why the plaintiff could not, without difficulty, and even without inconvenience, have informed himself concerning the value of the land; and under ordinary circumstances the rule of caveat emptor prevails, as respects representations of the vendor as to the value of the property sold.

Tretheway v. Hulett, 52 Minn. 448, 450, 54 N.W. 486, 486 (1893) (bold added).

40. In 1991, the Minnesota Court of Appeals again followed this same logic, holding:

In the absence of evidence to the contrary, the price the subsequent purchasers paid presumably reflected the existence of the patent defect. The rule of caveat emptor has applied for many years in Minnesota, particularly when the buyer could, without difficulty, discover the true value of the property.

Arden Hills N. Homes Ass'n v. Pemtom, Inc., 475 N.W.2d 495, 501 (Minn. Ct. App. 1991),

aff'd as modified, 505 N.W.2d 50 (Minn. 1993), aff'd (Aug. 16, 1993) (bold added).

310 P.3d 436 (2013), review denied, (June 20, 2014); Manning v. Lewis, 400 S.W.3d 737 (Ky. 2013); Behar v. Glickenhaus Westchester Development, Inc., 122 A.D.3d 784, 996 N.Y.S.2d 678 (2d Dep't 2014), leave to appeal dismissed, 25 N.Y.3d 1084, 12 N.Y.S.3d 23, 34 N.E.3d 51 (2015) and leave to appeal denied, 26 N.Y.3d 914, 23 N.Y.S.3d 640, 44 N.E.3d 938 (2015); Northpoint Properties v. Charter One Bank, 2011-Ohio-2512, 2011 WL 2112666 (Ohio Ct. App. 8th Dist. Cuyahoga County 2011). 4 Hewitt v. Kirk's Remodeling and Custom Homes, Inc., 49 Kan. App. 2d 506, 310 P.3d 436 (2013), review denied, (June 20, 2014). 5 Fretschel v. Burbank, 351 N.W.2d 403 (Minn. Ct. App. 1984); Arvai v. Shaw, 289 S.C. 161, 345 S.E.2d 715 (1986). 6 Manning v. Lewis, 400 S.W.3d 737 (Ky. 2013). 7 Teer v. Johnston, 60 So. 3d 253 (Ala. 2010).

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41. In this case, Buyers point to absolutely nothing that would overturn the caveat emptor

presumption under Minnesota Law in an arms-length real estate transaction with Seller.

42. Nothing that Seller said, or did, misled Buyers about the quality and condition of the pool at

this Home.

43. Nothing that Seller said or did prevented Buyers from undertaking their own complete

inspection of the pool at this Home, either before they made and offer on it, or before they

closed on the Home purchase.

This Pool Was Fully Functional And Fully Enjoyable At Time Of Purchase

44. Seller, along with her family and friends enjoyed this pool repeatedly during the Summer of

2016—less than 10 months before Buyers made an offer on this Home. Exhibit 5 – Seller’s

Pool Photo from July 23, 2016; Exhibit 6 – Seller’s Pool Photo from August 22, 2016.

Exhibit 5 – Pool In Use By Seller on July 23, 2016

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Exhibit 6 – Pool In Use By Seller on August 22, 2016

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45. Buyers now complain about a variety of defects that amount to a veritable “laundry list” of

complaints, in essence arguing that their Home’s pool is not a perfect, brand-new, pool.

46. Seller did not represent that this pool was either perfect or brand new.

47. Seller did represent to Buyers that this pool was in working order, which it was.

48. The pictorial evidence clearly shows that the Seller and her family fully used and enjoyed

this pool throughout Summer 2016, before professionally winterizing it in the Fall 2016.

49. Seller used this pool the entire year before closing with Buyers without incident, leakage, or

other problems.

50. Every part of the pool and its plumbing system was functioning and was professionally

serviced by Seller’s pool service companies, Valley Pool and Spa, Town & Country Pool,

and before it was used by Seller and her family.

51. All of the pool chemicals were purchased from and utilized with the instructions provided

by Classic Pool & Spa during the entire time Seller owned this Home.

52. Seller was not aware of any condition that would reasonably affect the use or enjoyment of

this pool, as best evidenced by the overwhelming use and enjoyment she had with the pool

in 2016. See Exs. 5 and 6, supra.

53. The Minnesota Court of Appeals has held:

The [home purchaser’s] argument with respect to the use-and-enjoyment disclosures also is without merit. A seller of real property must in good faith disclose all material facts that could “adversely and significantly affect” the prospective buyer's use and enjoyment of the property. Minn.Stat. § 513.55, subd. 1 (2008). The duty to disclose, however, is limited to facts of which the seller is aware, based on the seller's knowledge at the time of the disclosure. Id.

Burmeister v. Westerhouse, No. A08-0320, 2009 WL 234072, at *2 (Minn. Ct. App.

Feb. 3, 2009).

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54. In this case, Seller was unaware of any facts that she needed to disclose about this pool’s

condition that would adversely affect the Buyer’s use and enjoyment of it.

55. Seller’s professional companies both inspected the pool and did not indicate that there was

anything wrong with the pool or that it required repairs.

56. Seller and her real estate agent allowed full and unrestricted access to Buyers so that they

could fully inspect this Home and its pool to their satisfaction.

57. Seller bears absolutely no legal liability to these Buyers for their failure to undertake an

inspection of this pool when they had the unrestricted opportunity to do so.

58. Buyers’ concerns about this pool, if they had any, could easily have been mitigated in this

purchase by insisting on an Amendment to make the Purchase Agreement contingent upon

their satisfactory inspection of this pool, or by simply paying the $125 it would have taken

to get it inspected.

Seller Fully Complied With The Pre-Sale Disclosure Requirements Of Minnesota Law

59. Minnesota release estate disclosure law provides as follows:

513.55 GENERAL DISCLOSURE REQUIREMENTS. Subdivision 1. Contents.

(a) Before signing an agreement to sell or transfer residential real property,

the seller shall make a written disclosure to the prospective buyer. The disclosure must include all material facts of which the seller is aware that could adversely and significantly affect:

(1) an ordinary buyer's use and enjoyment of the property; or (2) any intended use of the property of which the seller is aware. (b) The disclosure must be made in good faith and based upon the best of

the seller's knowledge at the time of the disclosure.

60. Seller made such a disclosure to Buyers. Exhibit 7 – Disclosure Statement.

61. On May 1, 2017, Seller delivered a complete disclosure statement for which Buyers

specifically acknowledged that:

I/We, the Buyer(s) of the property, acknowledge receipt of this Seller's

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Property Disclosure Statement and agree that no representations regarding facts have been made other than those made above. This Disclosure Statement is not a warranty or a guarantee of any kind by Seller or licensee(s) representing or assisting any party in the transaction and is not a substitute for any inspections or warranties the party(ies) may wish to obtain. The information disclosed is given to tile best of Seller's knowledge. Signed: Signed: 5/1/2017 6:22.15 PM CDT 5/1/2017 6:14.42 PM CDT

Ex. 7, ¶¶429-436.

62. This written disclosure contained a specific accurate representation by Seller, made in good

faith, that the subject pool was in working order, to the best of Seller’s knowledge at the

time of the disclosure on May 1, 2017. Ex. 7, ¶178.

63. The evidence is clear that the pool was in excellent working order, as demonstrated by the

photographs of Seller fully using and enjoying the pool on August 22, 2016, eight months

prior to the Buyers’ purchase of the Home. Exs. 5 and 6, supra.

64. This written disclosure was made to the Buyers at the time of the Purchase Agreement and

they explicitly acknowledged receiving it. Ex. 7, ¶436.

65. The Minnesota Court of Appeals has held

Minnesota imposes a duty on sellers to make certain disclosures. The seller's disclosure statute states in relevant part:

(a) Before signing an agreement to sell or transfer residential real property, the seller shall make a written disclosure to the prospective buyer. The disclosure must include all material facts of which the seller is aware that could adversely and significantly affect:

(1) an ordinary buyer's use and enjoyment of the property; or

(2) any intended use of the property of which the seller is aware.

Minn.Stat. § 513.55, subd. 1 (2008). “The disclosure must be made in good faith and based upon the best of the seller's knowledge at the time of the disclosure.” Id. “A seller who fails to make a disclosure as required by [section 513.55] and was aware of material facts pertaining to the real property is liable to the prospective buyer.” Minn.Stat. § 513.57 (2008). But a

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seller is not liable for “any error, inaccuracy, or omission of any information” required by section 513.55 “if the error, inaccuracy, or omission was not within the personal knowledge of the seller.” Id.

Roers v. Pierce, No. A08-0391, 2009 WL 67061, at *7 (Minn. Ct. App. Jan. 13, 2009). 66. Moreover, the Court of Appeals has further held:

Minnesota law requires sellers of residential real property to make a written disclosure to prospective buyers of all material facts pertaining to conditions in the property of which the seller is aware that could adversely affect the use and enjoyment of the property. Minn.Stat. § 513.55, subd. 1(a) (2006). “The disclosure must be made in good faith and based upon the best of the seller's knowledge at the time of the disclosure.” Id., subd. 1(b) (2006). If a seller fails to disclose a known adverse condition, the seller is liable for any resulting harm. Minn.Stat. § 513.57, subd. 2 (2006). But courts will not impose liability on a seller for “any error, inaccuracy, or omission” if it “was not within the personal knowledge of the seller.” Id., subd. 1 (2006). Nor will courts impose liability on a seller for its failure to disclose information “that could be obtained only through inspection or observation of inaccessible portions of the real estate or could be discovered only by a person with expertise in a science or trade beyond the knowledge of the seller.” Id.

Nance v. Evje, No. A06-1730, 2007 WL 2472449, at *2 (Minn. Ct. App. Sept. 4, 2007). 67. In other words, Nance stands for the proposition that the Seller cannot be required to inspect

and observe conditions that even Buyers, by their own admission, found inaccessible.

68. Even so, Seller denies that the Buyers’ use and enjoyment of the pool has been affected in

any way.

69. Buyers make demands for cosmetic issues that were readily apparent or easily discovered

had they taken the initiative to inspect this pool.

70. Buyers also attach a bid to their claim for more than $17,000 to replace a pool deck that was

completely visible at the time Buyers visited the Home and surrounding yard.

71. Seller is not a pool maintenance person or in the business of selling pools, although the

evidence is crystal clear that Seller was a user of this pool, which operated perfectly the

entire time she owned the Home.

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72. Furthermore under Nance, Buyers cannot hold Seller to a standard that they could not

themselves meet in terms of the specialized knowledge.

73. This expertise was readily available for hire by Buyers for $125 and 45 minutes of time to

examine, inspect, and test this pool to their satisfaction before buying the Home.

74. In short, Seller met her all of her legal disclosure obligations to Buyers.

CONCLUSION

Obviously, if these Buyers were sophisticated enough to insist on the repair of the pool gate,

they were equally sophisticated enough to have this pool professionally inspected, if they so desired.

Buyers failed to do so and now instead seek to force Seller into buying them a new pool because of

their own misgivings. The evidence is clear that the Seller did not provide a warranty for this pool

and did not in any way misrepresent its condition to Buyers. Seller did not fail to disclose any

material fact to Buyers within her knowledge about the pool that would have adversely affected

their use and enjoyment of it. Seller did not prevent Buyers from undertaking their own

professional inspection of the pool. Seller owes no further legal duties to these Buyers in their

purchase of this Home and its pool. Finally, it is a misuse of the arbitration system for these Buyers

to assert a claim for a new replacement pool because they failed to undertake a $125 inspection with

a local pool company, before closing this deal. Buyers’ claim should be denied in its entirety

because it is neither well-grounded in law or in fact. The rule of caveat emptor applies as against

these Buyers. Seller asks to be awarded her attorney’s fees and costs incurred in defending against

this claim.

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Dated: November 7, 2017

Respectfully submitted,

BARRY & HELWIG, LLC

By: s/ Peter F. Barry Peter F. Barry, Esq. MN Attorney I.D. #0266577 2701 University Ave. SE, Suite 209 Minneapolis, Minnesota 55414-3236 Telephone: (612) 379-8800 Facsimile: (612) 379-8810 pbarry@lawpoint.com

Attorneys for Plaintiff

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NATIONAL CENTER FOR DISPUTE SETTLEMENT

IN THE MATTER OF:

,

Buyers, Claimant, v.

Seller.

RE: NCDS CASE# 17- -MN

CERTIFICATE OF SERVICE

Pursuant to 28 U.S.C. § 1746, I swear under the penalties of perjury, that I caused the

following:

ANSWER TO CLAIM IN ARBITRATION

with all of its associated Exhibits to be sent via U.S. Mail to the following person(s) at the following

address(es) along with an emailed courtesy copy where indicated on the date below:

National Center for Dispute Resolution Ms. Deborah L. Lech 12900 Hall Road, Suite 401 Sterling Heights MI 48313 dlech@ncdsusa.org

Dated: November 7, 2017

Respectfully submitted,

BARRY & HELWIG, LLC

By: s/ Peter F. Barry Peter F. Barry, Esq. MN Attorney I.D. #0266577 2701 University Ave. SE, Suite 209 Minneapolis, Minnesota 55414-3236 Telephone: (612) 379-8800 Facsimile: (612) 379-8810 pbarry@lawpoint.com