Facts

Defendants Robert and Lynn Angela were the original purchasers of a residence in Laguna Niguel. Thereafter, the Angleas undertook improvements to the residence, including the addition of one bedroom, a storage, area, and drainage improvements along the north side of the residence. The construction was performed by Walt Badouin Construction.

In or about 2001, the Angleas sold the residence to the Lunas with defects, problems and conditions, and did so without notice to the Lunas. The Lunas then resided at the residence for approximately one year.

In and around August 2002, the Starks inquired about the residence, and walked through the residence. The Lunas had sealed the affected improvement, and represented that their son was ill and making it impossible for the Starks to view that area of the home. On Aug. 19, 2002, the Starks made an offer on the residence of $826,000 to which the Lunas agreed.

Karan Masters of Prudential California Realty acted as the Lunas' selling agent. Pursuant to statute, the Lunas completed a Real Estate Transfer Disclosure Statement (hereinafter "RETDS"). Item one of the disclosure section requires a seller to identify the presence of mold, and the Lunas answered "no." Further the Lunas disclosed that a chandelier was not going to be part of the sale, evidencing a understanding of a fixture in the sales process. A water filtration system was taken however, and was not designated as such. The property inspection was conducted by Amerispec.

Upon taking possession of the home, the Starks noted that the floor of the addition was uneven, and that there was a foul odor emanating from the area adjacent to the window in the addition as well as a new noticeable stain in the right middle hand side of the floor. The plaintiffs inquired of the Lunas regarding the water filtration system throughout their dual agent, Karan Masters. Over the course of four months, the plaintiffs began to feel ill. Plaintiffs Casey, Colin and Kaillee Stark suffered repeated bouts of sinusitis, rhinitis, bloody discharge from the sinuses, upper respiratory infections and gastrointestinal illnesses.

In April 2003, to rule out an environmental factor in the problems, the plaintiffs contacted Envirocheck, Inc. a certified industrial hygiene company. Envirocheck came out and performed an inspection of the residence and discovered levels of toxic mold including Aspergillus/Penicillium Ascospores, and Cladosporium throughout the home at levels hundreds of times than that of the exterior.

After this inspection, remediation was conducted by Gregory Restoration under the guidance of the Envirocheck protocol. During remediation, the parties discovered water intrusion marks and other issues which clearly indicated the leaks were emanating from the side of the home. These conditions were photographed as well as the severe flooding next to the home.

On Sept. 7, 2004 Envirocheck came back out to the residence to conduct clearance testing at the residence after the remediation had been completed. The residence did not pass on that date and the residence was not cleared until Sept. 10, 2004.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended the defendants negligently repaired a toilet overflow and contended the sellers knew of the water intrusion in the home.

DEFENDANT'S CONTENTIONS:
The defendants denied all liability.

Settlement Discussions

The plaintiffs demanded $240,000 at trial; the defendants offered $25,000.

Specials in Evidence

$116,438; $200,000.

Result

The court ruled in favor of plaintiffs Casey and Kevin Stark and their minor children, and awarded $209,016 for negligence.

Other Information

The plaintiffs previously settled with the Angelas, Walt Badouin Construction, Amerispec, Prudential California Realty and agent Karan Masters for a confidential amount. Litigation commences and a mediation was held over two days with Alex Polsky, Esq. of JAMS which ultimately led to resolution of all parties except the sellers. Trial with the sellers commenced May 22, 2006 and concluded May 31, 2006.