Trial Court Erred In Not Granting Rescission To Buyer Or Real Property.

Plaintiffs bought a multimillion-dollar hillside home, and several months later, they discovered they were not connected to the City’s sewer system. Believing they were deceived, they brought an action against the sellers and the real estate agents who brokered the sale alleging various causes of action, including rescission. After the real estate agents settled for $200,000, a court trial was held on the rescission claim only. Although the court found that the sellers, with reckless disregard, made negligent misrepresentations to the buyers, it declined to effectuate a rescission of the contract. Instead, it ordered the sellers to be, for a limited time, indemnifiers to the buyers for sewer maintenance and repair costs exceeding the $200,000 they obtained in their settlement with the agents. On appeal, the buyers contend that the trial court erred in denying rescission, ordering the alternative relief, and denying them attorney fees. The sellers contend in a cross-appeal that the trial court erred in denying them attorney fees. The appellate court reversed, concluding the trial court declined to effectuate a rescission of the contract based on incorrect justifications and that its alternative remedy failed to provide the buyers with the complete relief to which they were entitled. (Wong v. Stoler (Cal. App. First Dist., Div. 1; June 23, 2015) 237 Cal.App.4th 1375 [188 Cal.Rptr.3d 674].)