Facts

Plaintiffs, husband and wife Victor Kasik and Teresa Saldivar, purchased a single family residence in Saratoga from David and Darryll Neubauer in November, 2003. Sellers represented that the property experienced no flooding or unusual drainage conditions except, "twice in 20 years water seeped under the garage door from back patio."

In the first three months after purchase, Buyers experienced two situations where their patio and back yard flooded, bring with it mud and silt from the neighboring orchard to the rear. The mud and silt filled the swimming pool and spa.

Plaintiffs sued for non-disclosure and misrepresentation.

PLAINTIFF'S CONTENTIONS:
Plaintiffs contended that the sellers knew of the propensity of heavy rains to carry mud and silt from the neighboring orchard onto and across the subject property, and to deposit mud and silt in the swimming pool and spa. Plaintiffs estimated that installation of a proper drainage system to divert surface and sub-surface water would cost $60,000. Plaintiffs further asked for diminution in value of $100,000.

DEFENDANT'S CONTENTIONS:
Defendants contended that the disclosure that, "twice in 20 years water seeped under garage door from the back patio" was adequate to put the buyers on notice that the patio could become inundated. The cost to clean the pool of mud on each occasion was less than $160. The sellers were not to blame because it was an act of God.

Settlement Discussions

At mediation plaintiffs offered to accept $45,000. Defendants offered $5,000 with an indication of $10,000 max. Before adjournment defendant was asked if plaintiffs were willing to accept $25,000 would defendants offer it, which was answered in the negative.

Result

Binding Arbitration decision in favor of claimants in the amount of $134,400 plus attorney fees and costs.

Length

two days.