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LOS ANGELES DAILY JOURNAL January 9, 1998 ___________________________________ REAL PROPERTY Contract Reformation Unilateral Mistake VERDICT: Defense (plus $300,000 on cross-complaint for negligent misrepresentation). CASE/NUMBER: Leisure Industries, Inc. v. Leopold Hlavacek and Vera Hlavacek, as Trustees for VESA 1 Trust/ 229478 COURT/DATE: Kern Superior / Dec. 18, 1997. JUDGE: Hon. Raul Rosado, Dept. E. ATTORNEYS: Plaintiff - Rhonda Nelson, Brian Simms (Lofton, DeLancie & Nelson, San Francisco). Defendant - Gayle L. Eskridge (Eskridge Law, Torrance); Nicholas W. Hornberger (Hornberger, Ghazarians & Brewer, L.A.). TECHNICAL EXPERTS: Defendant - Ken Byrum, real estate/transactional law, Bakersfield; Donald Ward, surveyor, Tehachapi; Dan Ingram, real estate/transactional law, Tehachapi. FACTS & CONTENTION: Leisure Industries, Inc. (a company under the control of the RTC and FDIC) sued defendants Leopold and Vera Hlavacek for the return of 2,000 acres near Tehachapi, which Leisure had previously conveyed to the Hlavaceks. The land was valued at $275,000, and the Hlavaceks had spent $380,000 building a house on it. The Hlavaceks filed a cross-complaint alleging fraud and misrepresentation. The plaintiff contended that it had meant to convey only 9,200 acres, rather than 11,200 acres which were actually conveyed to the Hlavaceks. They contended the Hlavaceks and their agents' written offers were for 9,200 acres. The plaintiff further contended it had mistakenly conveyed 2,000 extra acres and that the Hlavaceks had known or suspected the mistake. The defendants contended that they always intended to purchase the property described in the legal description (which happened to be 11,200), that they did not know or suspect plaintiff's confusion, and that any mistake made by plaintiff was the result of plaintiff's gross negligence. The defendants cross-complained for fraud and negligent misrepresentation, relating to a promise Leisure made during the transaction when Leisure removed 185 acres from the deal (with no reduction in price) and assured the defendants that Leisure had thoroughly reviewed the title report and that there would be no more changes. The plaintiff brought this action against the defendants based on a unilateral mistake theory of recovery. The plaintiff sought reformation of the contract and grant deed. JURY TRIAL: Length 8-1/2 days; Poll 12-0 (defense), 12-0 (cross-complaint); Deliberation three hours. SETTLEMENT DISCUSSIONS: The plaintiff demanded $350,000. The defendants offered $150,000. No settlement discussions took place regarding the cross-complaint. SETTLEMENT CONFERENCE: A settlement conference was held on Nov. 1, 1996, before Judge Arthur E. Wallace of the Kern Superior Court. It did not resolve the matter. OTHER INFORMATION: The verdict was reached approximately two years and three months after the case was filed. reprinted with permission of the Los Angeles Daily Journal
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