Real Estate Contract Litigation at USC Law

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I was a guest speaker today in Professor George Lefcoe’s Real Estate and Business Law class at USC Law School.  The topic was “Escrows and Real Estate Contract Litigation” and the speakers in addition to me were Robert Minsky and Danielle Graf Kitzes from Commerce Escrow and Robert J. Odson of Shumener, Odson & Oh, LLP.  Robert is also a real estate litigation attorney in downtown Los Angeles and graduated a year before me at USC Law.

As a bit of background, I took this class when I was a student at USC Law in 1992.  And I was amazed to find that Professor George Lefcoe has been teaching at USC Law since 1962!  Professor Lefcoe has written many books and articles, including his well-known Real Estate Transactions, Finance and Development.  He is a giant in the world of real estate law, especially in Los Angeles.

Robert and Danielle from Commerce Escrow ran us through the escrow process and touched on specific issues such as fraud in the escrow and scenarios involving double escrows.

I related the story of one of my cases to the class.  The story involves real estate litigation over the rehab and sale of a Studio City home by our client, a home rehabber in Los Angeles.  The story involved issues of fraud and non-disclosure relating to the square footage of the property, vague escrow instructions relating to a Request for Repairs during escrow and what to do when litigating with a crazy attorney.  The escrow instruction was based on the “Buyer’s satisfaction”.  This is never a good way to draft an escrow instruction because it does not provide an objective standard upon which the parties can agree.  In other words it is an instruction likely to lead to litigation.  The fraud aspect of the case had issues of justifiable reliance, an incorrect measure of damages and the fact that there was no misrepresentation.  Professor Lefcoe was happy that I could present an actual case to the students that involved a number of thorny legal issues.

Robert Odson and I then spoke about liquidated damages, specific performance and the lis pendens–all real estate litigation issues that we deal with frequently.  We dealt with these issues in both residential and commercial purchase and sale agreements.  Being a law class we addressed questions such as why the contract does not limit the breaching seller to liquidated damages, would a liquidated damages provision equal to the full purchase price be enforceable, would the seller care if it was enforceable if the buyer was willing to put up the full purchase price in escrow prior to close, and how does a commercial buyer prove that the property at issue is unique when he is just in it for profit.  Both Robert and I were able to share stories about lawsuits we had handled involving lis pendens, the potential for abuse of the lis pendens and how to expunge a lis pendens in the Los Angeles courts.  Robert discussed an interesting case he was involved with where the lis pendens was expunged, a motion for summary judgment was granted, a third party buyer purchased the property and then the summary judgment was overturned on appeal.  Is the third party buyer a bona fide purchaser entitled to keep the property?

It was fun to talk about my experience as a real estate trial attorney with Los Angeles’ future real estate lawyers.  It was also to share stories with Robert and Professor Lefcoe and to get their take on cutting-edge real estate law issues.

Real estate litigation attorney Laine T. Wagenseller is the founder of Wagenseller Law Firm, where he specializes in real estate and business litigation in Los Angeles and throughout Southern California.  He is a graduate of USC Law.

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