A lawsuit has been commenced in Maryland alleging that two net zero homes are not.
The facts are gleaned from a review of the court pleadings and are instructive for everyone buying or selling a green building. The complaint alleges the defendant home builder and subcontractors represented “that their new homes would be “net zero” energy efficient however neither of the homes has been close to net-zero as represented.” The two homes
have solar panels installed in addition to the geothermal HVAC systems, .. Despite this, both homes’ BGE energy reports show the .. [homes] are using more kWh’s than their neighbors without energy efficient technology.”
The complaint avers multiple causes of action from breach of contract to fraudulent misrepresentation and negligent misrepresentation to violation of the Maryland Consumer Protection Act. However, maybe tellingly, no contracts are attached to the complaint?
The two newly built in 2016 homes are neighboring and two of the husband and wife plaintiffs are sisters.
The defendant home builder is registered with the Maryland Home Builder Registration Unit. Members of the LLC homebuilder are also sued as are subcontractor and vendor entities and their members. Again, no contracts are appended to the complaint nor expressly cited in the averments, so it is worthy of note that subcontractors and vendors do not have to register under the Maryland homebuilder act. And there does not appear to be a valid legal theory even articulated to pierce the corporate veil and find liability in individual LLC members.
The complaint says, “after Plaintiffs moved into their respective homes and had their families living in the homes, in or around, June 2016 it was discovered that the HVAC systems for both homes were deficient and defective and not installed or performing in the manner represented.”
It is difficult to evaluate the breach of contract claims without the contracts, but the cause of action that appears most spurious is the fraud claim, “Defendants’ representations that they were experts in net-zero” energy efficient home and that following their specifications and utilizing their preferred contractors and suppliers would result in Plaintiffs’ homes being “net-zero” energy efficient were false representations of material facts.”
The only claim that appears it could have legs based on the four corners of the pleadings is the Maryland Consumer Protection Act count because that law has such a low burden of proof where a plaintiff does not have to prove a breach of contract or fraud or even negligent misrepresentation, but only that there was a “.. misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers ..”
All of that observed from the complaint, the defendant homebuilder website clearly advertises, according to the U.S. Department of Energy “As a Zero Energy Ready Home Partner, High Performance Homes offers homes that are so energy efficient, most of their annual energy consumption can be offset with renewable energy.”
Its website makes clear that the builder is selling certain homes as U.S. Department of Energy of Energy, Zero Energy Ready Home certified, others as National Green Building Standard certified, and others as having achieved Energy Star certification; .. and there is no allegation in the lawsuit that the homes do not so qualify or are not otherwise so certified ..
The website goes on puffing, “every homeowner can have the home of their dreams without the dread of colossal energy bills.”
The initial pleadings may not tell the whole story, and although that the case is scheduled for a jury trial in January 2020, the complaint appears to fail to state a claim upon which relief can be granted which cries out for a preliminary motion to dismiss.
Despite that this is not a Captain Marvel versus Captain America moment, in large measure because there is so little green building litigation, these disputes and differences are instructive in that a consumer is displeased with a “net zero” home and apparently confused about what it purchased. It is lacking that nothing in the pleadings discusses how the consumer is occupying or using the home. However, the very low burden of proof in state consumer protection laws across the country (i.e., a statement by a merchant that had the effect of misleading a consumer) makes net zero home building particularly vulnerable to claims, otherwise valid or not; and has concomitantly triggered renewed discussion about the high risk of making green building claims to consumers (i.e., residential home buyers).
The case is Jeremy Simons et ux, et al v. High Performance Homes, LLC, et al in the Circuit Court for Carroll County, Maryland case no C-06-CV-19-00162. Watch this blog for how the case resolves, .. Note, this firm does not represent any of the parties nor did the parties or counsel participate in this blog post.