Confidential

Facts

Plaintiff purchased residential property located in San Clemente, California on or about January 11, 2012 for the sale price of $1.1 million from the seller defendant.

Not long after the buyer and his family moved into the subject property after the close of escrow, water began leaking into their home during normal rain conditions. Nothing was disclosed to the buyer prior to the sale of subject property which would indicate that the house would leak like a sieve when it rained. The buyer would not have purchased the subject property if he had known the history of water permeation into the home and the improper repairs built over a defective rooftop deck and other areas of the structure. The dispute between the buyer and the sellers was submitted to arbitration.

CLAIMANT'S CONTENTIONS: The buyer/claimant contended that the sellers/respondents failed to disclose all material facts affecting the value of subject property at the time of the sale. The sellers failed to disclose that the subject property had a history of water permeation into the home due to a defective rooftop deck, windows, and balconies. Furthermore, the sellers hired a contractor, whom they believed may have been unlicensed, to defectively re-build the rooftop deck without obtaining permits in 2009/2010. The sellers breached both common law and statutory duties in failing to disclose all facts materially affecting the value of the subject property at the time of the sale. As a result of the seller's failure to fully disclose these facts, the buyer incurred damages in having to repair a leaking rooftop deck, windows, mold abatement, and balconies, and the resulting damages from the water permeating into the subject property from these locations.

RESPONDENT'S CONTENTIONS: The sellers contended that prior water permeation from a wind-driven rain was disclosed in the sale disclosure documents. However, the disclosure documents indicated that the problem had been repaired. The sellers contended that they performed a water test on the rooftop deck after hiring a contractor to re-build portions and that it didn't leak. The sellers further contended that the rooftop deck did not leak during the time they resided at the subject property prior to the sale.

Settlement Discussions

Respondents served a 998 Offer for $20,012 early in the litigation, which was rejected by Claimant.

Result

After Claimant put on his case for liability at the arbitration, Respondents stipulated to liability and a case for damages was presented to the arbitrator. The arbitrator awarded a total of $901,875 in a final arbitration award in favor of Claimant, consisting of damages, loss of use, and attorney's fees and and investigative or "Stearman Costs." Claimant submitted the arbitration award to the Orange County Superior Court and the arbitration award was confirmed with additional attorney's fees and costs for enforcement of the arbitration award and post-arbitration, prejudgment interest, totaling the judgment to $1,067,586.

Length

four days of arbitration