Facts

Roland and Jane Stone contacted real estate agent J.R. Moreno regarding property at 2999 Hilltop Drive in Napa, which was owned by Moreno's principal, John Mitchell. The listing indicated that tenants were responsible for natural gas and electric payments. The Stones agreed to purchase the property for $1,225,000, with $75,000 deducted for repairs, and entered an agreement on Aug. 31, 2006.

While repairs were being completed in January 2007, the county planning commission rejected the Stones' application, stating that the property only had nine, not 10, legal units.

The Stones filed suit against Mitchell and Moreno alleging negligent misrepresentation and breach of contract.

PLAINTIFFS' CONTENTIONS:
The Stones claimed that the property was advertised as a 10-unit apartment building with monthly rentals of $8,050 and an asking price of $1,225,000. After the Stones and Moreno inspected the property, the Stones contended that they were assured again the property contained 10 legal rental units. They further contended they would not have purchased the property for the same price had they known it contained one less unit.

DEFENDANT'S CONTENTIONS:
Mitchell argued that he did not know of the unpermitted tenth unit and that Stone, as a real estate broker, failed to perform due diligence.

Damages

The Stones sought loss of rental income plus expenses of $25,000, as well as economic damages, attorney fees and costs.

Result

The jury found Mitchell was negligent, and awarded the Stones $111,400. The jury also found the Stones negligent, assigning them 60 percent liability, and reducing the award to $44,560. The Stones previously settled with Moreno for $12,000.

Deliberation

one day

Poll

9-3 (in favor of plaintiff on negligence), 12-0 (in favor of defendant on breach of contract and negligent misrepresentation)

Length

six days