NC - Court Says Property Buyer May Sue for Fraud If Disclosure of Contaminants Incomplete

A property buyer may pursue a fraud claim against the seller for allegedly failing to disclose all of the hazardous substances present on the property, a federal district court held Dec. 6 (Metropolitan Group Inc. v. Meridian Industries, W.D.N.C., No. 3:09-CV-440, 12/6/10).

Here's a piece of the ruling:
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"Accepting as true the allegations in Plaintiff’s Amended Complaint, prior to and in the Agreement, Defendant disclosed the existence of a hazardous substance in the groundwater, and represented that there were no other hazardous substances on the Property. (Am. Compl., 7.) According to Defendant, these facts support a conclusion that it “acted dutifully and in good faith by informing Plaintiff about what it knew at the time of the sale.” (Def.’s Reply Memo. in Further Supp., 8.) But Plaintiff has further alleged that Defendant had knowledge of the other hazardous substances at the time of the Agreement and intentionally made false representations which were “reasonably calculated to deceive.” (Am. Compl., 7-8.) Contrary to Defendant’s argument, these allegations are sufficient – a complaint does not need to prove an intent to deceive to survive a Rule 12(b)(6) motion. See Food Lion, 382 F. Supp. 2d at 801; Becker v. Graber Builders, Inc., 561 S.E.2d 905, 910 (N.C. Ct. App. 2002) (concluding that dismissal under Rule 12(b)(6) was improper because the plaintiff had met her burden by alleging facts which, if proven, would demonstrate an intent to deceive). The Court is satisfied that Plaintiff’s claim of an intent to deceive “raise[s] a right to relief above the speculative level,” Twombly, 127 S. Ct. at 1965."

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Makes you wonder whether the Phase I "interviews" should have a copy of this ruling attached to it. Is it "Buyer beware".... or Seller beware?