Facts

In February 2006, the plaintiffs purchased a one-acre ranch home in Fillmore from the defendants for $1.1 million. Within two weeks of their sale to plaintiffs, the defendants, who also owned two adjacent vacant parcels, sold the adjacent lots to different buyers. Those buyers eventually placed manufactured homes on the adjacent lots.

PLAINTIFF'S CONTENTIONS:
The plaintiffs contended that prior to their offer, the plaintiffs asked the defendants' listing agent whether the adjacent vacant lots were for sale. The plaintiffs were told that those lots were not for sale; that the defendants planned to move out of state but might want to move back; and that for tax reasons, the defendants did not want to sell the adjacent land at that time. Had the lots been for sale, the plaintiffs would have purchased them because the plaintiffs wanted to maintain open space around their home.

During plaintiffs' escrow, the defendants concealed from plaintiffs their plan to sell the adjacent lots to a friend and an acquaintance. Within two weeks of the closing of plaintiffs' escrow, the buyers of the adjacent lots opened their respective escrows.

The placement of manufactured homes on the adjacent lots decreased the value of plaintiffs' home by 10 percent or $100,000 according to plaintiff's appraiser.

DEFENDANT'S CONTENTIONS:
The defendants contended that prior to making an offer, the plaintiffs inquired about the adjacent lots. The defendants, through their agent, offered to sell the lots to plaintiffs for $500,000 each. The plaintiffs, through their agent, stated they were not interested. The plaintiffs' offer to buy the ranch house did not include a right of first refusal as to any future sale of the adjacent lots. The defendants did discuss the possible sale of the adjacent lots to other persons prior to the close of plaintiffs' escrow but had no agreement to sell. After plaintiffs' escrow closed, the defendants sold the adjacent lots to others. The defendants were not aware that the vacant lot buyers planned to place manufactured homes on the lots.

The defendants further contended that the manufactured homes eventually placed on the adjacent lots did not decrease the value of plaintiffs' property.

Settlement Discussions

The plaintiffs demanded rescission or $350,000. The defendants offered $35,000.

Damages

The plaintiffs' closing brief sought both rescission and damages of $1.2 million.

Result

Judgment for defendants Steve and Leana Smith. Steve and Leana Smith were awarded attorney fees of $184,000 and costs of $19,000.

Other Information

FILING DATE: Aug. 22, 2006.