Facts

In October 2000, Plaintiff Jan Shadoff purchased rental property in Berkeley from cross-defendant Behrouz Mazandarani and his wife. The property consisted of a four-plex plus a separate single-family residence. During escrow, leases were obtained for the units and rents were confirmed.

Earlier that year, in the summer, plaintiff had met defendant Geri Murphy at defendant's real estate broker's office. Defendant had never sold any residential or commercial property in Berkeley until she made the sale to plaintiff. She knew that Berkeley was a rent-controlled jurisdiction, but had no practical experience with the rent control there. Defendant falsely represented to plaintiff that she had experience with real property sales in Berkeley.

Plaintiff saw the property without her agent, defendant. An offer was prepared by one of defendant's colleagues and taken to cross-defendant. The offer was a full price "as is" offer. Defendant led plaintiff to believe that this would help ensure acceptance of the offer. The full price offer was for $795,000. Defendant did not negotiate any terms, the offer was accepted and escrow opened. Leases were then obtained and rents were confirmed. By the time escrow closed, defendant had not warned plaintiff of any pitfalls regarding rent control in Berkeley.

Plaintiff received a notice from the Berkeley Rent Board several months following the close of escrow. The notice stated that the rent for one of the units would be rolled back. At the proceedings held before the Rent Board, it was determined that plaintiff would have to provide her current tenants rent credit totaling approximately $25,000. This was due to the excess rent collected since August 2000, when the rent was raised.

PLAINTIFF'S CONTENTIONS:
Plaintiff claimed that defendant and defendant's broker owed her several duties, which they failed to perform. Plaintiff alleged that they failed to research the property. Further, they failed to properly advise her about buying rental property in Berkeley and the Rent Board. Plaintiff also claimed that defendant and the broker owed her a fiduciary duty to the highest care, but they failed to protect her.

Result

The parties settled for $115,000 after six days of trial.