Karen is a young professional looking to purchase her first home.  Michelle is the Trustee of the Ballard Trust which was formed by her late uncle, and the Trust holds a parcel of real property which is up for sale.  Karen and Michelle decide to negotiate the purchase and sale of the parcel of property without using a broker in an effort to keep their costs low.  As part of the sale, Karen waived the right to an inspection and initialed next to this waiver in writing.  Michelle never lived in the property and was unsure what defects, if any actually existed with the nearly 80 year-old house.  

After purchasing the home, Karen discovers that there is toxic mold in the walls, which was not mentioned in the purchase and sale agreement by Michelle when selling the property.  Karen (Plaintiff) sues Michelle (Defendant) for monetary damages in California Superior Court for failing to disclose a material defect with the property.  Who wins, and why?