The Ryan Firm Secures Victory in Real Estate Non-Disclosure Case at the Pleadings Stage

This month, The Ryan Firm achieved a significant victory for our client in a potentially multi-million-dollar non-disclosure case at the pleadings stage. Our client, having foreclosed on a property valued at nearly $5 million in San Diego County, sold the property “as-is, where-is, with all faults.” The plaintiffs alleged that our client breached the purchase agreement by misrepresenting the property’s condition, failing to address a “punch list” of repairs, and negligently supervising prior construction work, posing substantial potential financial liability to our client.

Our legal team, led by Michael W. Stoltzman Jr. and Steven L. Rader, collaborated to dismantle the plaintiffs’ claims. For the breach of contract claim, we argued that the plaintiffs failed to identify any specific provision of the purchase agreement that was breached. We further demonstrated that the Seller Property Questionnaire and Real Estate Transfer Disclosure Statement, which the plaintiffs claimed to rely upon, were not part of the contract. Additionally, we highlighted that the alleged “punch list” agreement lacked enforceable consideration, rendering it invalid. On the negligence claim, we leveraged California’s “economic loss rule” to argue that the plaintiffs’ claims for financial damages without physical injury were barred. We also asserted that our client, as a lender and foreclosure sale purchaser, had no duty to supervise construction work performed by a prior borrower’s contractors.

Despite good-faith efforts to resolve the issues through meet-and-confer discussions, the plaintiffs’ refusal to address the flaws in their complaint necessitated our motion for judgment on the pleadings. The court granted the motion without leave to amend, affirming the strength of our arguments. We are now preparing a memorandum of costs and a motion for attorney’s fees to recover all fees and costs incurred by our client in this matter.

We congratulate our client on this outstanding outcome and commend Mike and Steve for their exceptional work!