Appellants, the real estate broker and agent for the seller in a real estate transaction, challenged a decision by the Superior Court of the City and County of San Francisco (California), which awarded compensatory and punitive damages against appellants in respondent purchaser’s fraud action.
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Overview
Respondent purchaser entered into a contract for the purchase of an undeveloped lot. In fact, a state agency had repeatedly expressed an interest in the property, as well as a willingness to institute eminent domain proceedings, if necessary. Respondent filed a claim against appellants, the real estate broker and agent for the seller, for fraud in connection with the transaction. The trial court entered an award of compensatory and punitive damages against appellants, and appellants noted an appeal. On review, the court reversed the awards of punitive damages against both appellants, but affirmed the judgment in all other respects. The court explained that an important consideration in assessing punitive damages is the wealth of the defendant. The court concluded that the award of punitive damages against appellant real estate agent was excessive in relation to his income. The court found that the punitive damages award against appellant real estate broker was erroneous, because there was no evidence of the broker’s worth.
Outcome
The court reversed the trial court’s award of punitive damages against appellants, a real estate broker and agent for the seller in a real estate transaction, in fraud action by respondent purchaser and remanded the case with instructions. The court held that the award against appellant real estate broker was unsupported by evidence, and the award against appellant real estate agent was excessive. Otherwise, the court affirmed the judgment.