Unity Corporation v. Jack Elliott; Patricia Elliott; Prudential California Realty; Andrea Dougherty
Published: Mar. 5, 1998 | Result Date: Dec. 7, 1997 |Case number: 660623 Verdict – $0
Judge
Court
San Diego Superior
Attorneys
Plaintiff
Defendant
Facts
In November 1992, plaintiff Lawrence Kourie, purchased, for $1.8 million, a single family residence at 6233 Avenida Floresta in Fairbanks Ranch from defendants Jack and Patricia Elliott. Defendant Prudential California Realty through its agent, Andrea Dougherty, was the listing broker. Plaintiff was represented by Myrna Martin of Willis Allen Realty. Title in the property was taken by Unity Corporation. Kourie subsequently moved into the house with his wife and three children in May 1993, after leasing it back to the Elliotts for six months. The 8,500 square-foot house had been newly built when purchased by the Elliotts in 1989, and had extensive dual pane windows and French doors, especially along the windward side of the house, facing the pool. Shortly after the house was built, and while it was owned by the Elliotts, the window manufacturer reprimed and repainted the window frames on the windward side of the house due to primer problems, replaced the dual panes of glass on 90 windows allegedly due to the appearance of the black insulation material between the glass, and replaced 26 French doors due to warpage and delamination. Per defendant, these paint and window problems never recurred. Also during the Elliott ownership, the developer repaired a window leak by chipping away stucco and adding caulking around the window framing on all the windows and French doors the same side of the house. Per defendant, the leak never recurred. The developer also repaired a moisture intrusion problem in the wet bar area by applying a thorough seal to the foundation. Per defendant, the moisture never recurred during the residency of the Elliotts. The Elliotts also experienced a leak in the bidet in the master bedroom causing $30,000 flood damage, (per plaintiffs) which was also fixed. The developer organized and paid for most of the repairs, which were performed by either the original general contractor or product manufacturer. The Elliots testified that they believed all these problems had been fixed. It was undisputed that from all outward appearances, the house was in immaculate condition when purchased by the Kouries. The transfer disclosure statement signed by the Elliotts and their agent, Andrea Dougherty, indicated they were unaware of any significant defects. No disclosure was made of the prior repairs. Dougherty testified that she had knowledge only of the dual pane window replacement and bidet problem. She understood these problems never recurred. Prior to close of escrow, plaintiffs hired William DeBerry of General Analytical Laboratories, a professional house inspector, to inspect the property. DeBerry found no significant problems with the house. Kourie claimed that two years after purchasing the property, he began experiencing water intruding into the house through the window frames and the French doors during rainstorms. He also had roof leaks, burst pipes and moisture intrusion at the sunken wet bar, among other things. Upon learning from the Elliotts and the developer of these prior repairs, plaintiffs brought this action against defendants based on fraud, concealment, conspiracy, breach of contract, rescission, negligence, intentional and negligent misrepresentation, intentional and negligent infliction of emotional distress and personal injury theories of recovery.
Settlement Discussions
The plaintiffs made a C.C.P. º998 settlement demand for $1.5 million to the Elliotts. Plaintiffs made a C.C.P. º998 settlement demand of $1.5 million to defendant Prudential/Dougherty. According to defendants, during early settlement conferences with Special Master Michael Duckor, the Elliotts offered $25,000 and Prudential/Dougherty offered $50,000. Per plaintiffs, during early settlement conferences the collective defense offer was approximately $600,000. Also per plaintiffs, after settling with the construction parties for approximately $800,000, plaintiffs submitted a collective demand to the Elliotts and Prudential of $1.3 million. The Elliotts subsequently made C.C.P. º998 offers of $15,000 to the minors, which were accepted, and $5,000 to Kourie and Unity, which were rejected. During the second week of trial, defendants made a combined offer of $100,000 which was rejected.
Specials in Evidence
$25,000 $100,000
Damages
The plaintiffs claimed defectively installed windows and doors, missing flashing, inadequate waterproofing, defective roof, deficient stucco, improper surface drainage, structural deficiencies, buried weep-screed, deteriorating marble, cracked slab, and plumbing defects. The plaintiffs also claimed $90,000 costs for temporary relocation; $125,000 for temporary repairs; $140,000 for investigative costs; ($225,000 per defendant) and $1.3 million to repair the house or, alternatively, $940,000 diminution in market value. Plaintiffs were also seeking reimbursement of attorney fees and costs against the Elliotts under the prevailing party attorney fee provision of the real estate purchase contract. Plaintiffs also sought punitive damages for alleged intentional concealment by the defendants. Defendants argued that complete repairs of all problems could be made for $168,000. Per plaintiffs, defendants also contended diminution in value would be $540,000.
Injuries
The plaintiffs claimed they suffered from asthma, allergies and various respiratory illnesses.
Other Information
The verdict was reached approximately two years after the case was filed. Prior to trial, plaintiffs settled with the developer, general contractor and subcontractors for approximately $800,000. Plaintiffs also settled at trial with the window supplier for the supply of replacement windows and doors for the entire house. Prior to trial, the Elliotts dismissed their cross-complaint for indemnity against Prudential/Dougherty, and Prudential/Dougherty dismissed its cross-complaint against Unity/Kourie for negligently causing injury to the other plaintiffs. All causes of action were then pursued against the Elliotts, Prudential and Dougherty. Nonsuits were granted to defendants, after plaintiffs' case in chief, as to intentional and negligent misrepresentation, intentional and negligent infliction of emotional distress. Nonsuits were granted to Prudential and Dougherty as to personal injury and broker negligence based upon C.C.P. º2079.4, the two-year broker statute of limitations. The case went to the jury on the remaining causes of action of fraud, conspiracy, breach of contract, rescission and negligence against the Elliotts, and fraud and conspiracy against Prudential and Dougherty. As the prevailing party under the fee provision in the contract of sale, the Elliotts now seek recovery of attorney fees and costs in excess of $500,000 from Kourie and Unity.
Deliberation
2 1/2 days
Poll
10-2 Elliots (fraud/conspiracy); 11-1 Elliots (breach of contract); 12-0 (negligence); 12-0 Prudential (fraud/conspiracy); 12-0 Dougherty (fraud/conspiracy)
Length
six weeks
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