Confidential
Settlement – $201,500Court
L.A. Superior Torrance
Attorneys
Plaintiff
Gregory B. Gershuni
(Gershuni Law Firm)
Defendant
Douglas M. Campbell
(Smith LLC)
Facts
On March 17, 2000, the defendant and cross-complainant seller listed his property for sale with cross-defendant
listing agent at real estate brokerage office in Palos Verdes. The listing price was $750,000 and the listing
agreement included an additional term stating that the sale of the property was contingent on the seller
purchasing replacement property.
On March 26, 2000, the plaintiffs submitted an offer to purchase the property through their real estate agent of
another Palos Verdes real estate brokerage office. Their offer proposed a purchase price of $725,000 on a
standard C.A.R. form, "Residential Purchase Agreement (and Receipt for Deposit)." Along with their offer,
they tendered the $10,000 called for therein. Nothing in the offer stated that the closing was contingent on the
seller purchasing a replacement property.
On March 30, 2000, the defendant seller responded to the offer with a counter-offer, where he accepted the
terms of the offer subject to five additional provisions, including the provision that the purchase price will be
$750,000 (the full amount of the listing price). The plaintiffs were given until April 3, 2000 to accept the
counter-offer. Nothing in the offer or counteroffer stated that the closing was contingent on the seller
purchasing a replacement property. In her deposition, the defendantÆs real estate agent stated that it was her
understanding that the defendant had, in fact, waived the contingency, which statement was disputed by the
defendant.
On March 31, 2000, the plaintiffs signed the acceptance section of the counter-offer, whereby they agreed to
pay the full listing price for the property to the defendant and their $10,000 check was deposited with the
escrow holder. Nothing in the offer or counter-offer stated that the closing was contingent on the seller
purchasing a replacement property.
On April 3, 2000, in actual and justifiable reliance on the defendantÆs counter-offer and the plaintiffsÆ timely
acceptance of the counter-offer, the plaintiffs sold their house in Solana Beach. Furthermore, the plaintiffs
scheduled the close of escrow on the sale of the Solana Beach home so as to facilitate the intended close of
escrow on their purchase of the defendantÆs property.
On the morning of April 4, 2000, the defendant attempted to repudiate the purchase and sale agreement by way
of e-mailing his real estate agent. The e-mail read, "Thank you for your professional help. Unfortunately, I did
not see anything available in my price range that would keep my standard of living to what I am accustom [sic]
to. So sorry to waste your time, but the rest of my life has to be carefully planned. Their [sic] had to be
something better available in the future, in the interim I will stay at my residence. Thanks and so sorry to
disappoint the prospective owners. [DefendantÆs name]."
The plaintiff buyers sued the defendant seller for specific performance to compel him to convey title to them.
The defendant seller sued cross-defendant selling agent claiming that she was negligent
and breached her fiduciary duty in failing to make sure that the counteroffer reflected the "seller
to find replacement property" contingency.
Other Information
The plaintiffs sued for specific performance to compel the defendant seller to convey title to the plaintiffs. Alternatively, the plaintiffs offered to settle in exchange for a payment of $201,500. The listing brokerÆs insurer paid this sum to the plaintiffs. This action was dismissed and mutual general releases were executed. Mediation was conducted twice in this matter, one time pursuant to the requirements of the partiesÆ written agreement and the second time pursuant to order of the court.
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