Los Angeles Partner David Gorney Achieves Defense Victory in $5.2 Million Fraud Claim

Los Angeles Manning & Kass partner David Gorney achieved a defense verdict on behalf of real estate agent and broker clients, after a three month jury trial which consumed 49 actual trial days. The defendants were alleged to have represented as “brand new” an $8.25 million home that was technically a "remodel." (The prior house and pool had been completely demolished and rebuilt, retaining only a relatively small amount of the foundation and wood frame walls in the garage.) While the jury believed the representation was technically untrue, they unanimously found that the buyer knew the home was a "remodel" before closing escrow. The jury accepted Mr. Gorney’s argument that given this knowledge, coupled with buyer’s admission that his purchase contingencies were open through close of escrow, that the buyer had the absolute right to cancel the transaction for any or no reason but decided to close anyway. Mr. Gorney submitted printed e-mail from the escrow agent’s file in which the buyer admitted knowing the property was considered a remodel. Upon questioning by Mr. Gorney, the buyer admitted he received at least three written reports from his own inspectors pointing out that the property was a remodel. The plaintiff received nothing on a $5.2 million fraud claim against the firm's clients, and only $630,000 from the developer for a variety of construction defects—ironically, all part of the admittedly new construction—despite requesting the jury award more than $3.8 million.