Real Estate Verdict: Well Status Fraudulently Misrepresented

well waterCramer & Anderson Partner Ryan Henry secured a Dec. 8 Superior Court verdict in favor of a plaintiff who purchased a Colebrook property with a well that ran out of water nine days after the closing – a condition the sellers had concealed by checking the “no” box on the property condition report asking if there were known problems with the well or the water quality, quantity, recovery, or pressure.

A Torrington Superior Court Judge’s decision found “the plaintiff has proven his damages by a preponderance of the evidence in the amount of $19,690.12,” which was the amount it cost the new owner to install a new well and water system.

The court also entered judgment for the plaintiff on two primary counts in the lawsuit, finding that the property sellers committed intentional misrepresentation/fraud, and fraudulent non-disclosure regarding the condition of the well.

Based on the finding of fraud, the court found that the plaintiff is also entitled to punitive damages to cover attorneys’ fees and costs. A hearing is to be scheduled on the amount of attorneys’ fees and costs the court will award.

“We’re gratified to deliver an optimal outcome in this case for our client,” Attorney Henry said. “Claims of fraud come with a higher burden of proof, requiring clear and convincing evidence, and this case is also a testament to how the firm’s litigators leave no stone unturned in uncovering otherwise concealed records of wrongdoing when preparing for trial to ensure our clients are properly compensated and made whole.”

Car Accident Personal Injury Attorney Ryan Henry Cramer & Anderson

Cramer & Anderson Partner Ryan Henry

According to Attorney Henry, “Clients must understand that real estate attorneys typically only handle the closing of the property. They are transactional lawyers and not trained or qualified to litigate a case such as this. In this case, we proceeded to trial because the defendants did not offer any money to settle this claim. We filed an offer of compromise to settle this claim for $25,000. Since the defendants did not accept our offer of compromise, the defendants will likely have to pay 8 percent interest on the total amount of the judgment dating back to when the lawsuit was filed in March 2022.”

Attorney Henry anticipates that the total judgment after attorneys’ fees and costs may exceed $50,000.

Partner John Tower noted another important aspect of the decisive verdict – how it highlights Cramer & Anderson’s depth of experience with real estate and property matters that goes far beyond transactional work surrounding the buying and selling of properties.

“We have a team of highly experienced Partners versed not only in Real Estate Law but also in Land Use & Environmental Law and Planning & Zoning Land Use,” Attorney Tower said. “Access to their decades of experience is often invaluable before, during, and after real estate transactions.”

The Colebrook well matter was tried in Torrington Superior Court on Aug. 24, 2023, and Oct. 19, 2023. The sale of the property closed in the summer of 2021 – and the compelling evidence Attorney Henry revealed during discovery to prove the defendants were untruthful in answering a question about the well on the residential property condition report required under state law goes back even earlier.

Here are highlights of the case narrative from the Judge’s decision:

  • In September 2020, while the defendants owned the property, a defendant contacted Grela Well Drilling Inc (the drilling company) regarding the property’s well. Specifically, the defendant discussed improving the well’s water recovery. [The defendant] told Larry Grela the property’s well was not keeping up to the defendants’ needs for everyday use and asked what Grela recommended. Because the property’s well had already been fracked once, Grela did not recommend fracking the well again, and told [the defendants] it was time to put in a new well. [The defendant] told Grela that he really did not want to do that. Grela told him they could frack the well again, but Grela was totally against it. Grela provided the defendants with an estimate to drill a new well on September 24, 2020. The estimated cost was $10,129.84. Rather than contract for a new well, the defendants told Grela to frack the existing well to open additional channels. Grela did not warranty the work because he recommended against it to improve water recovery and pressure.
  • Instead of paying the costs to install a new well, the sellers chose to hydro frack the well for $3,500. John MacDonald, an employee from the drilling company, hydro fracked the well on November 17, 2020. MacDonald said the water level was very low, so he had to add water to the well to get the pump out before fracking. Grela stated that this indicated that the property’s well was not making enough water. Grela did not believe that the fracking done in November 2020 was successful upon review of the pressures that were recorded after the fracking. Specifically, looking at the frack log, Grela opined that no new fissures in the rock were opened up by hydro fracking the well on the property.
  • The defendants claim that they fracked the well only for maintenance purposes. The court did not find this claim credible. Neither Grela nor MacDonald had ever heard of hydro fracking a well for maintenance purposes only. Rather, both testified that one hydro fracks a well to improve water pressure and/or a well’s water recovery. Moreover, [the defendant’s] testimony itself was inconsistent. On the one hand, [the defendant] claimed he fracked only for maintenance benefits. On the other hand, however, [the defendant] testified that it was “money well spent” to frack the well in November 2020 because the water recovery for the property’s well improved after fracking.
  • The defendants signed a property inclusions/exclusions rider and the residential condition report on May 21, 2021, for the property. On page 4 of the property condition report in section E, the question was asked, “If public water or private well: Are you aware of any problems with the well or with the water quality, quantity, recovery or pressure? If yes explain.” The defendants checked the “No” box in response to this question; however, [the defendant] admitted at trial that the defendants did see a reduction in water flow which could take an hour to an hour and a half for the water flow or pressure to improve after the well water was replenished. The plaintiff relied upon the representations made by the defendants in the property condition report.
  • Despite the well contingency and the Property Inspection Report, the plaintiff did not have the well inspected by a licensed well inspector because the sellers represented that there were no problems with the well.
  • On July 6, 2021, the plaintiff closed on the property and moved in with his family later that afternoon/evening. On July 15, 2021, when the plaintiff’s wife attempted to take a shower, no water came out of the shower head. The plaintiff called Grela and advised that the property had no water. The drilling company went to the property and confirmed that the property was totally out of water. The drilling company filled the plaintiffs’ well so they could remain in the home at a cost of $478.58. The drilling company gave the plaintiff an estimate to drill a new well at the cost of $10,720. The drilling company had to go deeper for the new well, approximately 725 feet, and therefore the old pump would not work. Thereafter, the water was tested at the new location and a new filtration system suggested. Additionally, a new pump was needed, and additional work suggested for a dry well. The cost for the additional work was completed at a total cost of $19,211.54.
About Cramer & Anderson

Cramer & Anderson provides sophisticated legal services, close to home, with regional offices in New Milford, Litchfield, Danbury, and Ridgefield. For more information, see the firm’s website or call the flagship office in New Milford at (860) 355-2631.

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