$315,000 settlement with realtor, $146,000 partial summary judgment
granted against solvent seller, of misrepresented home
Our client purchased a home in 2006 which the Sellers claimed in the condition disclosure had not been remediated for any contamination such as amold, and had never had any prior roof leaks, water penetration, or wood rot. After closing, our client learned that the Seller was paid almost $40,000.00 by an insurer for repairs, including mold remediation, to chronic leaks in the roof and walls that caused etensive wood rot. We filed suit and prepared the client's case for trial. Our client settled with the seller's realtor for $315,000.00 on the eve of trial, but the Seller tried to stop the trial by filing for chapter 7 bankruptcy. Our client elected to proceed against the seller in the bankruptcy court, as it was advantageous to the do so. Our client objected to the discharge of the debtor due to fraud, and objected to the exemption from the client's claims of a $225,000 annuity and a homestead, both admittedly purcahsed with the proceeds ($360,000.00) received from our client at closing on the misrepresented home. In November, 2012, U.S. Judge Bankruptcy Judge Richard Schmidt, U.S. Bankruptcy Court, S.D., Texas, Corpus Christi Division, has recently granted our client's motion for summary judgment upon our client's claims for knowing violations of the Deceptive Trade Practices Act, and awarded actual damages of approximately $146,000.00 (costs of repair). Judge Schmidt has also found that the debt is non-dischargeable in bankruptcy. It has been stipulated that the annuity and the homestead were received with the proceeds of the conduct, which Judge Schmidt determined was the product of "fraud" under Section 523 (a) (2) of the Bankruptcy Code. Judge Schmidt has set for trial the issue of additional damages for the knowing/inentional conduct and attorneys' fees for the Plaintiff's counsel. The client has paid hourly fees. Therefore, all recovery will be received by the client. Total hourly fees for our firm have been approximately $135,000.00. The client will recover a total, before additional damages and attorneys' fees, of $461,000.00, and possibly more given that the seller remains exposed and has assets to pay part of the further awards that will be made.