Sonoma Jury Awards Buyer $18.7M Arising Out of Seller’s Fraud

In a case entitled Cardoza v. Reed, a Sonoma jury awarded a married couple $18.7 million for the loss of rent and consequential damages relating to the sale of a commercial property. In Cardoza, plaintiffs purchased a commercial property from David Reed. Thereafter, Reed’s company moved out of the building, decreasing the monthly rent from $30,000 to $8,000. The Cardozas claimed that Reed and his real estate agent conspired to inflate the value of the property by raising rents before the close of escrow and Reed reneged on the commercial property deal, which stated he would fulfill his 10-year lease. Reed claimed he had to file bankruptcy due to lawsuits that arose after the close of escrow. The claims against the real estate agents were ultimately dismissed as being time barred. The jury found in favor of the plaintiffs and awarded $18.7 million. The case is currently on appeal.

Shannon B. Jones, Partner, sbj@sbj-law.com