Facts

The action involves a three-unit condominium and the sale of one of those units at 34333 Avenue of the Green Lantern in Dana Point.

The property was built in the 1980s. Respondent purchased one unit of August of 1982. Respondent sold the unit to claimants in June 2000. During the time respondent owned the unit, he completed a build out of an area approximately 1,400 square feet in 1984 and enclosed the patio of his unit in 1991. Finally, respondent remodeled the kitchen in approximately 1993 to 1994 by installing new cabinets, kitchen counter and new appliances. The improvements performed in 1984 and 1991 were permitted, inspected and approved by building officials.

At the time the property was sold to claimants, according to respondent's counsel, a realtor represented the claimants but respondent was not represented. According to claimants' counsel, both claimant and respondent were represented in the transaction. Respondent submitted a disclosure statement and claimants' realtor advised claimants to have a physical inspection of the property by licensed contractors. Claimants elected not to have an inspection by a contractor of their choosing.

On May 31, 2003, the property was damaged when claimants' car caught fire. A contractor was hired to perform reconstruction to the property. During the restoration effort, certain defects with the property were discovered which were repaired. Claimants sought recovery against respondent.

The claimant brought this action against the respondent based on intentional misrepresentation, fraud, negligent misrepresentation, breach of implied warranty and construction defect.

CLAIMANTS' CONTENTIONS:
The claimants alleged that respondent was involved with the original construction of the building in addition to the improvements performed in 1984 and 1991; that there was a murder (a fire in an attempt to cover up the murder) in the late 1980s, that respondent failed to disclose; and that respondent interfered with the termite inspection during the sale of the property.

The claimants also contended that respondent failed to disclose substantial termite infestation, roof leaks, broken drains and other faulty plumbing, faulty electrical wiring, improper closure of fire sprinklers, failure to install fire sprinklers, failure to install and improper installation of insulation, unsound framing that requires retrofitting with steel beams throughout the structure, improper installation of drywall, faulty deck construction, failure to install proper sheeting, lack of interior and exterior shear, failure to properly install cinderblock foundation and burying of electrical juncture boxes.

The claimants alleged that though they were aware of certain defects before the fire, they were unaware of the majority of defects until the fire occurred at the complex in May 2003 and that during the process of reconstruction, they discovered the majority above referenced conditions.

RESPONDENT'S CONTENTIONS:
The respondent contended that he fully disclosed all conditions, which affected the value of the property, that all improvements performed were properly permitted and that licensed professionals were hired to conduct all improvements to the property. Furthermore, all improvements by claimants were upgrades required by current building codes that claimants voluntarily undertook as part of the restoration process.

Settlement Discussions

The claimants demanded $600,000. The respondent offered $20,000.

Damages

According to respondent's counsel, claimants alleged approximately $1 million in special damages. According to claimants' counsel, damages sought were in the range of $600,000.

Result

Award in favor of respondent as to all causes of action. Respondent was not responsible for the defects.