Fragale

SUMMARY

The measure of damages for a real estate broker’s intentional misrepresentation to a buyer for whom he acts as agent is not limited to the out-of-pocket losses suffered by the buyer. Because the broker is a fiduciary, damages for intentional fraud may be measured by the broader benefit-of-the-bargain rule.

FACTUAL AND PROCEDURAL BACKGROUND

Tim and Dinora Fragale purchased a home in Long Beach in 1998, and several months later filed this lawsuit against the seller, Earlene L. Faulkner. The complaint alleged two fraud causes of action, for intentional and negligent misrepresentation, in connection with the sale. The real estate broker, Vince Messing, who represented both parties in the transaction was subsequently added as a defendant.

The Fragales’ complaint alleged defendants falsely represented that no structural defects or safety problems existed with respect to a laundry room and bonus room addition to the house which had been constructed without permits from the city. In fact, there were material construction defects in the addition, including defective interior walls, electrical wiring and other problems, which were hidden from view behind paneling…