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Real Property
Fraud
Failure to Disclose

Boyd O'Donnell, Doris O'Donnell and Edward O'Donnell v. Terry Ray Realty, Fritz Kelly, Ray Olds and Anna Olds

Published: Mar. 23, 1996 | Result Date: Jan. 18, 1996 | Filing Date: Jan. 1, 1900 |

Case number: N66544 –  $0

Judge

Michael B. Harris

Court

San Diego Superior


Attorneys

Plaintiff

Cynthia M. Harf


Defendant

Linda Sinclair

Jerry I. Schaefer


Facts

In 1994, plaintiff, Edward O'Donnell, entered into a lease with an option to purchase a home located in Lake San Marcos in San Diego County from the defendant sellers, Ray and Anna Olds. The defendants, the broker, and listing agent, were sued by the plaintiffs. The plaintiffs, Boyd O'Donnell and his alleged wife, Doris O'Donnell, were named as additional occupants and moved into the house. Option money in the amount of $10,000 was deposited into escrow by the plaintiff, Edward O'Donnell. The option money was released to the defendant sellers. A dispute arose over the suitability of the property and the return of the plaintiffs' payment. The escrow was canceled and the money was returned to the plaintiffs when they vacated the property. The plaintiffs alleged that they were either intentionally or negligently defrauded by the defendant sellers and their agents in entering into the transaction in that the house was not in the city of San Marcos but in the unincorporated area identified as Lake San Marcos; the house was not constructed pursuant to the building code in that it had no bedroom fire escape as required by law; the sellers failed to execute or deliver a disclosure statement that disclosed material aspects of the property, including that there was non-permitted construction in violation of the uniform building code; the house had defective appliances; and all of the plaintiffs suffered emotional distress (which claim was dismissed on the first day of trial). The defendants disputed all of the plaintiffs allegations and asserted that the plaintiffs had executed a written release in escrow and were motivated to get out of the agreement because they found another house, not because of any conduct by the defendant sellers or defendant agents. The plaintiffs also alleged that the release agreement only released the escrow company. The defendants also alleged that the plaintiffs, Boyd O'Donnell and his alleged wife, were not parties to any of the agreements. The defendant sellers filed a cross-complaint against the plaintiff, Edward O'Donnell, for breach of contract for failure to mediate and arbitrate the matter prior to filing a lawsuit. The plaintiffs alleged that they offered to arbitrate the claims on two occasions but the defendants refused. Approximately two months prior to the originally scheduled trial date, the defendant real estate agents settled with the plaintiffs for $6,250 (paid to the plaintiffs). The court approved the good faith settlement on November 9, 1995. The plaintiffs brought this action against the defendant sellers based on fraud, infliction of emotional distress and failure to provide a disclosure statement theories of recovery.

Settlement Discussions

The plaintiffs demanded $25,000 from each of the defendants. During an informal settlement conference two months before the originally scheduled trial date, the plaintiffs settled with the defendant agents for $6,250. The plaintiffs made a demand of $6,250 to the defendant sellers, which was rejected. On November 29,1995, the plaintiffs made an offer to settle by way of mutual dismissal. The defendant sellers rejected the offer. One month prior to trial, the plaintiffs made two C.C.P. º998 offers for $1.00 (on the complaint and cross-complaint) which the defendant sellers rejected.

Damages

The plaintiffs claimed actual damages as a result of three separate moves.

Injuries

The plaintiffs alleged that they suffered emotional distress requiring medical treatment and economic damages for moving expenses as a result of the defendants' actions. The plaintiffs dismissed the claims for emotional distress on the first day of trial.

Result

Per the plaintiffs, the plaintiffs are currently considering and formulating an appeal.

Other Information

The verdict was reached approximately one year after the case was filed. The defendant sellers, as cross-complainants, sued the plaintiffs for failure to arbitrate, received a 12-0 verdict and was awarded $28,000 costs and attorney's fees.

Deliberation

3 to 5 hours

Poll

12-0

Length

3+ days


#119505

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