Nevin

In 1970, Robert B. Nevin and his wife (“Nevin”) purchased the Desert Animal Hospital in Palm Springs from Herman M. Salk and his wife (“Salk”) for $200,000, payable $25,000 down, with the $175,000 balance represented by a $146,000 secured note and a $29,000 unsecured note. After closing escrow, taking possession, and making payments totaling $8,000 on the secured note and $4,500 on the unsecured obligation, Nevin defaulted. Salk commenced foreclosure proceedings. Nevin then sued Salk for fraud in connection with the sale, seeking rescission, restitution of monies paid ($37,500) and damages. When the court denied Nevin’s application to enjoin the foreclosure proceedings, Nevin vacated the premises and took certain personal property with him. Salk countered by proceeding with foreclosure and by filing a cross-action to recover (1) the balance of principal and interest due on the unsecured note ($26,412) and (2) the value of the personal property converted by Nevin.

At the conclusion of the trial, the court made the following pertinent findings: (1) no fraud was perpetrated by the sellers in conveying the hospital; (2) the sale of the hospital constituted one transaction…