In Tacoma, Washington, a state appeals court recently affirmed damages and court costs on against a real estate agent and brokerage firm for selling real property contaminated by the operation of an illegal meth lab without disclosing that fact to an unwitting home-buying couple, but reduced the award to damages assigned to the home seller for the cost of the mortgage.
A husband and wife purchased an area home and moved in with their family. Unbeknownst to them, the home had recently been the site of a police enforcement action, in which both a meth lab operation and marijuana grow house operation were broken up. The occupants in the house, tenants who were renting the home, were arrested. The owner (home seller) and the real estate agent who eventually sold the home to the home-buying couple were aware of the incident prior to the sale.
Subsequent to moving into the home, the couple's son informed his parents that he learned from someone in the community that the home had been a known drug house. After confirming this fact with police, the couple contacted the local health department, which apparently had no record of any report that the home had been used to manufacture methamphetamine.
Upon determining that the home was contaminated, the health department prohibited use of the property, stated that the couple was financially responsible for the cost of remediation, directed that a certified decontamination contractor would have to perform the remediation, and that use of the property was subject to criminal charges. The couple ultimately sued the home seller, real estate agent, and the real estate brokerage employing the agent.
At the end of the lawsuit, which spanned about two years, the home seller was required to take back ownership of the home, refund the purchase price, pay the accumulated unpaid interest on the couple's unpaid mortgage, late fees and related foreclosure costs incurred by them, who were unable to keep up the mortgage payments after the health department declared the home uninhabitable and ordered the family to vacate the premises. They were also awarded actual and punitive damages.
Among the actual damages incurred by the couple was the loss of all of their personal belongings, including clothing, bedding, furniture, keepsakes, and other necessities as the health department told them they could not remove their personal property from the house because of the risk of cross-contamination. They were also awarded damages for loss of income, damage to credit rating, emotional distress, and litigation expenses.
In addition, the couple's attorney, who represented them on a contingency fee basis, was awarded a legal fee of approximately $140,000, a charge to be imposed on the losing defendants (ie. the home seller, real estate agent, and real estate brokerage firm) in the lawsuit. The fee was based on 800+ hours logged in by the attorney in litigating the case over a 24 month period, and reflected the application of a contingency fee risk multiplier of 1.2.
For all the facts in the case, as set forth in the court decision, see Bloor v. Fritz, et al., No. 35740-2, Wash. App. Ct., Div. II; April 1, 2008
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In a related story, see The National Law Journal
: Meth Lab Residue in Homes Triggers Litigation (Lawsuits over contaminated homes focus on failure to disclose issue)
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