Vista Realty Advisors v. Tomio Nitta
Published: Oct. 19, 2000 | Result Date: Sep. 6, 2000 |Case number: 814987 Verdict – $35,000
Judge
Court
Orange Superior
Attorneys
Plaintiff
Defendant
Facts
On July 1, 1999, the parties entered into a written agreement for the defendant to sell and the plaintiff to buy
residential real property in Laguna Beach for $1.59 million. The agreement required the plaintiff to deliver to
the escrow holder a deposit of $85,000, along with the fully-executed agreement. However, the plaintiff did
not make the deposit, claiming that a deputy trustee for defendantÆs Japanese bankruptcy (defendant is a
Japanese citizen) told the plaintiff after the agreement was executed that it did not have to make the deposit in
exchange for a "quick close" of escrow (i.e., within approximately one week).
The plaintiff also entered into a "flip" sale agreement with others to sell the property to them for $1.975
million. A third party recorded a lis pendens as to the property on July 7, 1999, which delayed the closing of
escrow.
The plaintiff then sought to intervene in the third party action and move to expunge the lis pendens. In late
August 1999, the defendant claimed that it discovered that the plaintiff had not made the deposit, and on Sept.
8, 1999, he wrote a letter to the escrow holder terminating the escrow.
On Sept. 16, 1999, the plaintiffÆs motion to expunge the third party lis pendens was granted and the plaintiff
then notified the defendant that it wished to complete the transaction.
The defendant refused and, on Sept. 27, 1999, the plaintiff filed its complaint for breach of contract and
recorded its lis pendens as to the property.
The defendant subsequently filed a cross-complaint for breach of contract. On Dec. 22, 1999, the defendantÆs
motion to expunge the plaintiffÆs lis pendens was granted on the grounds of lack of probable validity.
At trial, four different valuations of the property were offered: $1.59 million (based on the partiesÆ agreement)
$1.975 million (the price in the flip sale); $2.45 million (the price for which the defendant sold the property
several months later) and $2.9 million (from the defendantÆs declaration in support of his motion to expunge
the lis pendens recorded by the plaintiff).
The plaintiff requested damages in the amount of $1.31 million, which was the difference between the price in
the agreement between the plaintiff and the defendant ($1.59 million) and the value stated in the defendantÆs
declaration ($2.9 million).
The defendant contended that the plaintiff breached the agreement by failing to make the required $85,000
deposit. The situation was exacerbated by the fact that the escrow holder wrote a letter to the parties on the day
escrow opened on July 5, 1999, recommending that the deposit be held in trust at a certain bank. Thus, the
defendant and the company handling his affairs in the United States were under the impression that the deposit
had been made, that the plaintiff was performing, and that the plaintiff was able to further perform pursuant to
the other terms of the agreement.
The defendant also contended that this evidence was barred by an integration clause and a provision in the
agreement requiring that all modifications be in writing. The defendant claimed that he did not waive the
deposit requirement by any delay in terminating the escrow on the basis of plaintiffÆs failure to make the
deposit. Also, by attempting to avoid making the deposit, plaintiff was planning on using money delivered to
the escrow holder by the buyers in the flip sale to pay defendant.
The defendant alleged the plaintiff was using other peopleÆs money to complete the transaction and turn a
quick $385,000 profit.
Other Information
The plaintiff's motion for a new trial on the grounds of inadequate damages is set for hearing on Oct. 23, 2000. The defendant's motion for an order determining defendant to be the prevailing party on the grounds that he recovered the "greater relief" under Civil Code Section 1717 and fixing an award of attorney fees in defendant's favor is set for hearing on Oct. 25, 2000.
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