Pastora et al v. Pualani

Filing 32

MEMORANDUM AND ORDER GRANTING 20 Motion of Defendant for Summary Judgment; DENYING Motion of Defendant to Strike; DENYING AS MOOT Motion of Defendant for Contempt; and DISMISSING the complaint. Signed by Judge Lydia Kay Griggsby on 7/29/2022. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

RICHARD PASTORA, et al.,
Plaintiffs,
v.
GLORIA D. PUALANI,
Defendant.

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Civil Action No. 21-cv-00782-LKG
Dated: July 29, 2022

MEMORANDUM OPINION AND ORDER
I.

INTRODUCTION
Plaintiffs, Richard and Mihan Pastora, bring breach of contract and fraudulent

inducement claims against defendant, Gloria Pualani, related to a contract for the sale of a
residential property located in Fort Washington, Maryland. See generally Compl., ECF No. 2.
Defendant has moved for summary judgment on plaintiffs’ claims, pursuant to Fed. R. Civ. P.
56, upon the grounds that plaintiffs have failed: (1) to establish how defendant breached the
contract at issue and (2) to establish that defendant made a knowing misstatement of fact with
intent to defraud, to support their fraudulent inducement claim. See generally Def. Mot., ECF
No. 20; Def. Mem., ECF No. 20-1. Defendant also seeks to strike the affidavit and testimony of
plaintiffs’ expert witness, Darin Mann. Def. Reply at 6-8, ECF No. 31. Lastly, defendant has
also moved to hold Mr. Mann in contempt, pursuant to Fed. R. Civ. P. 45(g). Def. Mot. for
Contempt, ECF No. 18.1
Defendant’s motion for summary judgment is fully briefed and no hearing is necessary to
resolve the pending motions. Pl. Resp., ECF No. 30; Def. Reply; see also L.R. 105.6 (D. Md.
2021). For the reasons that follow, the Court: (1) GRANTS defendant’s motion for summary
The Court directed Mr. Mann to file a response to defendant’s motion for contempt on December 15,
2021, and on January 28, 2022. ECF Nos. 23, 26. To date, Mr. Mann has not filed a response to
defendant’s motion for contempt.
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judgment; (2) DENIES defendant’s motion to strike; (3) DENIES-as-MOOT defendant’s
motion for contempt; and (4) DISMISSES the complaint.
II.

FACTUAL AND PROCEDURAL BACKGROUND2
A.

Factual Background

In this civil action, plaintiffs allege that defendant, Gloria Pualani, breached a contract for
the sale of a residential property and fraudulently induced them to enter into that contract.
Compl. at ¶¶ 7-13. As relief, plaintiffs seek to recover, among other things, compensatory and
punitive damages. See id. at Prayer for Relief.
As background, in April 2020, plaintiffs entered into a residential contract of sale (the
“Contract”) with defendant for the purchase of a residential property located in Fort Washington,
Maryland (the “Property”). Id. at ¶ 8; see also Compl. Ex. 1. The Contract contains a clause
entitled “CONDITION OF PROPERTY AND POSSESSION,” which provides that:
At settlement, Seller shall deliver possession of the Property and shall
deliver the Property vacant, clear of trash and debris, broom clean, and in
substantially the same condition as existed on the Date of Contract
Acceptance. Buyer reserves the right to inspect the Property within five (5)
days prior to Settlement. EXCEPT AS OTHERWISE SPECIFIED IN
THIS CONTRACT, INCLUDING THIS PARAGRAPH, THE
PROPERTY IS SOLD “AS IS.” The obligations of Seller as provided in
this paragraph shall be in addition to any Disclosure and Disclaimer
Statement as required by Section 10-702, Real Property Article, Annotated
Code of Maryland and any provision of any inspection contingency
addendum made a part of this Contract. . . .
Compl. Ex. 1 at 5. The Contract also incorporates a Maryland Residential Property Disclaimer
Statement, in which defendant checked a box marked “No” next to the following question:
“Does the seller(s) has actual knowledge of any latent defects.” Compl. at ¶ 8; Compl. Ex. 1 at
27; see also Compl. Ex. 1 at 4 (stating that the disclaimer statement is incorporated into the
Contract).
Plaintiffs allege that, approximately 45 to 60 days after they took possession of the
Property, they noticed wet carpet and wet walls in the Property’s basement. Compl. at ¶ 9.
The facts recited in this Memorandum Opinion and Order are taken from the complaint (“Compl.”);
defendant’s motion for summary judgment (“Def. Mot.”); and the memorandum in support thereof (“Def.
Mem.”).
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Plaintiffs also allege that a licensed contractor subsequently inspected the Property’s basement
and discovered, among other things, “wet wall board, wet insulation, black mold behind the
insulation, and water intrusion through [the] basement walls and evidence of apparent attempts to
apply Flexseal or [an]other substance . . . to stop the water flow without success . . . .” Id.
Plaintiffs contend that they could not reasonably have been expected to observe the
aforementioned defects upon a careful visual inspection of the Property prior to taking
possession, and that they have incurred damages as a result of these latent defects. Id. at ¶¶ 9-10.
And so, plaintiffs further contend that defendant fraudulently induced them to enter into the
Contract, and that defendant breached the Contract, by failing to disclose these latent defects. Id.
at ¶¶ 7-13.
B.

Procedural Background

Plaintiffs commenced this case in the Circuit Court for Prince George’s County,
Maryland on February 12, 2021. See Not. of Removal, ECF No. 1. Defendant removed the case
to this Court on March 26, 2021. See id.
On April 12, 2021, defendant filed an answer to the complaint and a counterclaim against
plaintiffs for breach of the Contract. See Ans. & Countercl., ECF No. 8. Plaintiffs answered
defendant’s counterclaim on July 13, 2021. Pl. Ans., ECF No. 13.
On November 4, 2021, defendant filed a motion for contempt, regarding Darin Mann,
pursuant to Fed. R. Civ. P. 45(g). Def. Mot. for Contempt.
On December 13, 2021, defendant filed a motion for summary judgment and a
memorandum in support thereof, pursuant to Fed. R. Civ. P. 56. Def. Mot.; Def. Mem.
Plaintiffs filed a response in opposition to defendant’s motion for summary judgment on March
29, 2022. Pl. Resp. Defendant filed a reply in support of her motion for summary judgment on
April 12, 2022. Def. Reply.
Defendant’s motion for summary judgment having been fully briefed, the Court resolves
this motion and the defendant’s other pending motions.

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III.

LEGAL STANDARDS
A.

Fed. R. Civ. P. 56

A motion for summary judgment filed pursuant to Fed. R. Civ. P. 56 will be granted only
if there exists no genuine issue as to any material fact and the moving party is entitled to
judgment as a matter of law. See Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 250 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). And so, if there
clearly exist factual issues “that properly can be resolved only by a finder of fact because they
may reasonably be resolved in favor of either party,” then summary judgment is inappropriate.
Anderson, 477 U.S. at 250; see also Pulliam Inv. Co., Inc. v. Cameo Props., 810 F.2d 1282, 1286
(4th Cir. 1987); Morrison v. Nissan Motor Co., Ltd., 601 F.2d 139, 141 (4th Cir. 1979).
When ruling on a motion for summary judgment, the Court must construe the facts
alleged in the light most favorable to the party opposing the motion. See United States v.
Diebold, 369 U.S. 654, 655 (1962); Gill v. Rollins Protective Servs. Co., 773 F.2d 592, 595 (4th
Cir. 1985). In this regard, the moving party bears the burden of showing that there is no genuine
issue as to any material fact and that the party is entitled to judgment as a matter of law. See
Fed. R. Civ. P. 56(c); Catawba Indian Tribe of S.C. v. State of S.C., 978 F.2d 1334, 1339 (4th
Cir. 1992), cert. denied, 507 U.S. 972 (1993). But, a party who bears the burden of proof on a
particular claim must also factually support each element of his or her claim. See Celotex Corp.,
477 U.S. at 322-23. Given this, “a complete failure of proof concerning an essential element . . .
necessarily renders all other facts immaterial.” Id. at 323. And so, on those issues on which the
nonmoving party will have the burden of proof, it is the nonmoving party’s responsibility to
confront the motion for summary judgment with an affidavit or other similar evidence in order to
show the existence of a genuine issue for trial. See Liberty Lobby, 477 U.S. at 256.
In addition, the United States Court of Appeals for the Fourth Circuit has held that, “[a]
mere scintilla of evidence in support of the nonmovant’s position will not defeat a motion for
summary judgment.” Detrick v. Panalpina, Inc., 108 F.3d 529, 536 (4th Cir. 1997). And so,
there must be “sufficient evidence favoring the nonmoving party for a jury to return a verdict for
that party. If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.” Liberty Lobby, 477 U.S. at 249-50 (internal citations omitted).

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B.

Breach Of Contract Claims

Under Maryland law, the elements of a breach of contract claim are: (1) a contractual
obligation and (2) a material breach of that obligation. Allstate Ins. Co. v. Warns, No. 11-1846,
2012 WL 681792, at *10 (D. Md. Feb. 29, 2012) (citing Taylor v. NationsBank, N.A., 365 Md.
166 (Md. 2001)). And so, plaintiffs must plead that there existed a “contractual obligation,
breach, and damages” to state a plausible breach of contract claim. Class Produce Grp., LLC v.
Harleysville Worcester Ins. Co., No. 16-3431, 2018 WL 1471682, at *8 (D. Md. Mar. 23, 2018)
(citations omitted).
C.

Fraudulent Inducement Claims

Lastly, under Maryland law, the elements of fraudulent inducement are: (1) a false
representation made by a defendant; (2) the defendant’s knowledge that the representation was
false, or reckless indifference for the truth of the representation; (3) a purpose of defrauding the
person claiming to be injured; (4) justifiable reliance on the representation by the injured party;
and (5) actual damages directly resulting from the misrepresentation. See Dean v. Beckley, No.
10–297, 2010 WL 3928650, at *4 (D. Md. Oct. 1, 2010) (citing Suburban Props. Mgmt., Inc. v.
Johnson, 204 A.2d 326, 329 (Md. 1964)). A plaintiff must establish each of these elements, by
clear and convincing evidence, to prevail on a fraudulent inducement claim. See Price v.
Berman's Auto., Inc., No. 14-763, 2015 WL 5720429, at *4 (D. Md. Sept. 28, 2015); see also
Skrzecz v. Gibson Island Corp., No. 13-1796, 2015 WL 370049, at *3 (D. Md. Jan. 27, 2015)
(“At the summary judgment stage, a plaintiff must ‘set forth specific facts showing that there is a
genuine issue for trial,’ rather than . . . speculation and beliefs . . . . Moreover, any evidence of
fraudulent intent must be scrutinized under the clear and convincing evidence standard, as it is
the standard applied at trial.”) (citation omitted).
IV.

LEGAL ANALYSIS
Defendant has moved for summary judgment on plaintiffs’ breach of contract and

fraudulent inducement claims, upon the grounds that the undisputed material facts in this case
show that plaintiffs cannot establish: (1) that she breached any obligation under the Contract to
disclose known latent defects at the Property or (2) that she made a knowing misstatement of fact
about the condition of the Property, with the intent to defraud plaintiffs. Def. Mem. at 3-7. And

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so, defendant requests that the Court enter summary judgment in her favor and dismiss these
claims. Id. at 7.
Plaintiffs counter in their response in opposition to defendant’s motion, that entry of
summary judgment is not appropriate in this case, because there are material facts in dispute
about whether defendant delivered the Property free of any latent defects and whether defendant
had actual knowledge of the latent defects alleged in this case. Pl. Resp. at 3-16. And so,
plaintiffs request that the Court deny defendant’s motion for summary judgment. Id. at 16.
Defendant has also moved to strike the affidavit of plaintiffs’ expert, Darin Mann, which
plaintiffs have submitted with their response in opposition to defendant’s motion for summary
judgment. See Def. Reply at 6-8; Pl. Resp. Ex. 5. In addition, defendant seeks to hold Mr. Mann
in contempt, pursuant to Fed. R. Civ. P. 45(g), for his alleged failure to respond to her discovery
requests in this litigation. See Def. Mot. for Contempt.
For the reasons that follow, the undisputed material facts in this case show that plaintiffs
cannot establish that defendant had actual knowledge of the alleged latent defects at the Property,
to prevail on their breach of contract and fraudulent inducement claims. In addition, the Court
will consider the affidavit of Darin Mann for the limited purpose of resolving defendant’s motion
for summary judgment. And so, the Court: (1) GRANTS defendant’s motion for summary
judgment; (2) DENIES defendant’s motion to strike; (3) DENIES-as-MOOT defendant’s
motion for contempt; and (4) DISMISSES the complaint.
A.

The Undisputed Material Facts Do Not Show That
Defendant Had Actual Knowledge Of The Alleged Latent Defects

As an initial matter, the undisputed material facts in this case do not establish that
defendant had actual knowledge of the alleged latent defects at the Property, to allow plaintiffs to
prevail on their breach of contract claim. Plaintiffs allege in this case that defendant breached
the Contract by failing to disclose certain latent defects that she knew existed at the Property,
when the parties executed the Contract—including wet wall board, wet insulation, black mold
behind the insulation, and water intrusion. Compl. at ¶ 9. To prevail on this claim, plaintiffs
must show that defendant: (1) knew of these latent defects; (2) had a contractual obligation to
disclose these latent defects to plaintiffs; and (3) breached that obligation by failing to do so.

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See, e.g., Class Produce Grp., LLC, 2018 WL 1471682, at *8 (citations omitted). Defendant
persuasively argues that plaintiffs cannot make such a showing in this case.
First, the undisputed material facts make clear that the Contract requires defendant to
disclose any known latent defects at the Property. It is undisputed that the parties completed a
Maryland Residential Property Disclaimer Statement for the Property and that defendant checked
the box marked “No” on this statement in response to the question “[d]oes the seller[s] has actual
knowledge of any latent defects” at the Property. Compl. at ¶ 8; Compl. Ex. 1 at 27. Paragraph
18 of the Contract provides that the Maryland Residential Property Disclaimer Statement is
incorporated into the Contract. Compl Ex. 1 at 4.3 And so, defendant had an obligation to
disclose any known latent defects to plaintiffs under the plain terms of the Contract.
The undisputed material facts in this case do not show, however, that defendant breached
this contractual obligation. There is no evidence before the Court to establish that defendant had
actual knowledge of any latent defects at the Property when the parties completed the Maryland
Residential Property Disclaimer Statement and executed the Contract. See generally Pl. Resp.;
see also Lombardi v. Montgomery Cty., 678 A.2d 762, 769 (Md. Ct. Spec. App. 1996) (citing
Black’s Law Dictionary 34 (6th ed. 1990)) (holding that “actual knowledge” means “[knowledge
that is] ‘real, in opposition to constructive or speculative.’”). Rather, plaintiffs speculate in this
case that defendant must have known of these alleged latent defects, because their contractor
discovered a previous attempt by defendant and her husband to repair a leak in the basement of
the Property. Pl. Resp. at 7. In this regard, it is undisputed that this repair work occurred at least
11 years before the parties executed the Contract. Def. Reply at 3; Pl. Resp. at 13. Given the
significant passage of time between when the parties agree that this repair work occurred and
when the parties executed the Contract, the Court agrees with defendant that is evidence is not
sufficient to show that she had actual knowledge of the alleged latent defects when the Property

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Paragraph 22 of the Contract also provides, in relevant part, that:
EXCEPT AS OTHERWISE SPECIFIED IN THIS CONTRACT, INCLUDING
THIS PARAGRAPH, THE PROPERTY IS SOLD ‘AS IS.’ The obligations of
Seller as provided in this paragraph shall be in addition to any Disclosure and
Disclaimer Statement . . . .

Compl. Ex. 1 at 5.

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was sold to plaintiffs. See Lombardi, 678 A.2d at 769.
Plaintiffs’ reliance upon evidence showing the presence of water and a “musty smell” in
the basement of the Property in 2020, to establish that defendant had actual knowledge of the
alleged latent defects, is also misplaced. Pl. Resp. at 11-15. Plaintiffs allege that they noticed
wet carpet and wet walls in the Property’s basement approximately 45 to 60 days after they took
possession of the Property. Compl. at ¶ 9. But, again, plaintiffs fail to identify any evidence in
this case to connect these conditions with the condition of the Property at the time that the parties
executed the Contract. See generally Pl. Resp. Plaintiffs also do not explain how this evidence
shows that defendant had knowledge of these conditions (if they existed) when the parties
completed the Maryland Residential Property Disclaimer Statement and executed the Contract.
See generally id.
Plaintiffs, nonetheless, argue that a factfinder could reasonably infer that defendant had
actual knowledge of these latent defects, based upon the evidence in this case showing that
defendant previously repaired at leak at the Property a decade earlier and that there was water
damage in the basement of the Property approximately two months after they purchased the
Property. See id. at 14. But, again, this evidence neither establishes that the Property had a
latent defect when the parties executed the Contract, nor that defendant was aware of any such
defect at that time. Plaintiffs must provide more at this mature stage of this litigation to support
their breach of contract claim and successfully confront defendant’s motion for summary
judgment. See Liberty Lobby, 477 U.S. at 256. Because they fail to do so, the Court GRANTS
defendant’s motion for summary judgment on this claim. Fed. R. Civ. P. 56.
B.

Plaintiffs Cannot Prevail On Their Fraudulent Inducement Claim

For similar reasons, the undisputed material facts also show that plaintiffs cannot prevail
on their fraudulent inducement claim. Plaintiffs allege that defendant fraudulently induced them
to enter into the Contract, by failing to disclose the aforementioned latent defects at the Property.
Compl. at ¶ 12. But, to prevail on this claim, plaintiffs must show, among other things, that
defendant knew that her statement that she had no actual knowledge of any latent defects at the
Property was false, or that she made this statement with a reckless disregard for the truth. See
Dean, 2010 WL 3928650, at *4. Again, the undisputed material facts show that plaintiffs cannot
meet their burden.
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As discussed above, the undisputed material facts in this case do not establish that
defendant had actual knowledge of the alleged latent defects when she completed the Maryland
Residential Property Disclaimer Statement. The evidence relied upon by plaintiffs also fails to
show that defendant stated that she had no knowledge of latent defects at the Property with a
reckless disregard for the truth. See generally Pl. Resp. In addition, while plaintiffs argue that
there are material facts in dispute regarding whether defendant knew of any latent defects at the
Property, they neither identify the facts allegedly in dispute, nor explain why these facts make
summary judgment inappropriate in this case. See generally id. Given this, the Court must also
GRANT defendant’s motion for summary judgment on plaintiff’s fraudulent inducement claim.
Fed. R. Civ. P. 56.
C.

The Court Denies Defendant’s Other Motions

As a final matter, defendant has moved to strike the affidavit of plaintiffs’ expert, Darin
Mann, upon the ground that Mr. Mann has not responded to her discovery requests in this
litigation. See Def. Reply at 6-8. Defendant has also moved to hold Mr. Mann in contempt,
because of these failings. See generally Def. Mot for Contempt. Because Mr. Mann’s affidavit
is probative of the issues that the Court must address to resolve defendant’s motion for summary
judgment, the Court declines to strike this affidavit. Defendant’s motion to hold Mr. Mann in
contempt is also rendered moot by the Court’s decision to enter summary judgment in her favor
on all claims in this case. And so, for these reasons, the Court DENIES defendant’s motion to
strike and DENIES-as-MOOT defendant’s motion for contempt.
V.

CONCLUSION
In sum, the undisputed material facts in this case show that plaintiffs cannot establish that

defendant had actual knowledge of the alleged latent defects at the Property when the parties
completed the Maryland Residential Property Disclaimer Statement and executed the Contract at
issue. In addition, the Court will consider the affidavit of Darin Mann for the limited purpose of
resolving defendant’s motion for summary judgment. And so, for the foregoing reasons, the
Court:
1. GRANTS defendant’s motion for summary judgment;
2. DENIES defendant’s motion to strike;
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3. DENIES-as-MOOT defendant’s motion for contempt; and
4. DISMISSES the complaint.
Judgment is entered accordingly.
Each party to bear its own costs.
IT IS SO ORDERED
s/Lydia Kay Griggsby
LYDIA KAY GRIGGSBY
United States District Judge

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