Facts

Plaintiff Jerome H. Turk purchased a home on a large lot in the upscale, beach community of Del Mar for $3.3 million where he was represented by non-party Prudential California agent Joanne Petrelli. The lot was listed as 23,900 square feet by the county assessor's office and was only partially enclosed by fences. The plaintiff's intention was to scrape the home and build another single family home. In this part of "Olde Del Mar" the city requires that the new build not exceed 25 percent of the entire lot.

The seller, Vilma Malmberg was represented in the sale by Judith Coker of Century 21 Carole Realty who is also a licensed attorney. Unbeknownst to Malmberg and Coker, during the subject property's escrow period, Turk also purchased the adjoining property to the west, which had not been listed for sale. That second property was purchased secretly through an LLC of which plaintiff Turk owned all assets. The plaintiff alleged that four months after his purchase of the subject property, he discovered that the southern boundary line was not where he believed, and in fact was approximately 35 feet to the north, depriving him of approximately 2,900 square feet of land.

Four months post-escrow, as soon as the plaintiff learned of the lot time discrepancy, the plaintiff and buyer's agent alleged that seller's agent told her during the escrow period that the boundary was "the fence behind the large Eucalyptus tree." The seller's agent/defendant Coker denied that she ever made any representations regarding boundaries, and claimed that this correspondence four months post-escrow was the first she had heard of it. Upon inquiry, seller stated she was aware that her neighbor's fence, which had been erected as a dog run, was not a boundary fence but the subject never arose during the escrow so it was not discussed. The plaintiff asked seller to intercede on his behalf with the rear neighbor as plaintiff thought the large Eucalyptus tree greatly impacted his view of the ocean. The defendant seller refused.

The plaintiff continued with his home building plans for a 9,000 square foot home, combining both lots. Approximately 10 months after the purchase, the plaintiff's architects informed him that the lot purchased from Malmberg was not 23,900 square as stated in the tax assessor records, but rather only approximately 20,500 feet.

PLAINTIFF'S CONTENTIONS:
Turk claimed that Malmberg and Coker concealed and misrepresented the true property line location on the Malmberg residence amounting to actual or constructive fraud and negligent misrepresentation. The plaintiff alleged that Malmberg knew of the lot's true size and the mistaken description by the tax assessor.

DEFENDANTS' CONTENTIONS:
The defendants contended that they were unaware of Turk's mistaken belief that the neighbor's dog run fence was the property line. The property was not fully fenced, the vegetation was overgrown and it was approximately half an acre in size. Malmberg had an appraisal that stated the lot was 23,900 square and both she and Coker reasonably relied on the tax assessor's records of the size of the lot.

Furthermore, defendants contended that plaintiff was responsible for his own investigation pursuant to multiple written disclosures in the standard CAR contract.

Damages

Turk sought rescission of the sale and damages of over $4 million.

Result

After five days of arbitration, Hon. Herbert B. Hoffman, retired, entered an award in favor of Coker and Malmberg on all causes of action in the complaint, specifically finding there was no misrepresentation or fraud of any kind. The arbitrator found there "was an abundance of evidence to corroborate Coker's position that no such statements were made by her," including Coker's contemporaneous, detailed notes of the events during escrow. In contrast, Petrelli had no such written notes of her version of the events in her file. Furthermore, the arbitrator found that the bad faith post-sale tactics used by Turk and Petrelli weighed against their positions. Judge Hoffman also found that the defendant's disclosure regarding lot lines was sufficient and it was plaintiff's failure to appropriately review the provided documentation that led to their mistaken belief regarding the same. The arbitrator specifically found that neither Malmberg nor Coker misrepresented the square footage of the lot. The arbitrator further concluded the defendants would have had a duty to disclose the true property line if they had known of plaintiff's plan to build on the lower part of the property, but found insufficient evidence to show that they knew of his plan.