Roche

I.

INTRODUCTION

Appellant Ram’s Gate Winery, LLC (Ram’s Gate), bought a property in Sonoma County from respondents Joseph G. and Genevieve Roche (the Roches) upon which it intended to build a new winery. The sellers had agreed in the “Purchase and Sale Agreement” (Purchase Agreement) to disclose facts having a “material effect on the value of the ownership or use of the Property,” including geological hazards. After escrow closed, Ram’s Gate discovered an active fault trace on the property that substantially increased the cost of development, and it sued the Roches for, among other things, breach of contract. The trial court granted summary adjudication on that cause of action, finding the warranties in the Purchase Agreement merged with the recording of the deed and thus, did not survive the close of escrow. Ram’s Gate voluntarily dismissed its other causes of action, and the court awarded the Roches costs and attorney fees. Ram’s Gate then appealed both the judgment and the subsequent award of attorney fees and costs.

We conclude the court erred in granting summary adjudication. First, the trial court relied on the wrong legal standard in determining the doctrine of…