Opinion ID: 1192010
Heading Depth: 1
Heading Rank: 21

Heading: Why This Gross Result?

Text: A reader of this Court's opinion would conclude that this Court believes for some unstated reason that Hudson is not entitled to be compensated for his tremendous monetary loss in this case  all caused by the gross negligence of Cobbs and Kennevick  even when his additional out-of-pocket expenses for attorney's fees and costs are in the hundreds of thousands of dollars, all of which have been paid. The same reader would also conclude that this Court must have overlooked or completely disregarded firmly established precedent of this Court  the settled law covering negligent nondisclosure, constructive fraud and joint tort-feasors. One must respectfully ask, how can the above result be reached if this Court did apply such settled law to the facts of this case and the gross misconduct of Cobbs and Kennevick? Perhaps this Court believes that since Hudson had already paid his $250,000.00 down payment on the purchase of the office building prior to the execution and delivery of the lease by Cobbs/Kennevick and The Professionals, Inc., he was not relying on those leases in deciding to complete the purchase of the office building. Cobbs and Kennevick so argued in their Responsive Brief and in oral argument on appeal. This argument has no merit. What amounted to an interest free loan to Webster # 3 was part of the quid pro quo in the transaction. It was not until Hudson had checked into the financial capacity of Cobbs and Kennevick and had been advised of the financial capacity of The Professionals, Inc. that he decided to complete the purchase of the office building by entering into the June 24, 1981, implementing agreement. These facts were before the jury, which decided the issue. The foregoing is discussed in detail at pp. 19-21, and 35 of Appellant's Brief. In addition, Hudson proved at trial that if he had brought a rescission action on July 1, 1981, as he testified he would have done, but for the loans to Cobbs/Kennevick and The Professionals, Inc., he would have prevailed in the action and been restored to his original position. The jury found, after having been properly instructed on the issues of proximate cause and reliance, that the grossly negligent misconduct of Cobbs/Kennevick was the proximate cause of all of the damages caused to Hudson as enumerated in Question No. 14 of the jury's Special Verdict. There was ample evidence addressed at trial from which the jury could properly so conclude. This issue is discussed in detail at pp. 8-9 of Appellant's Reply Brief. Or, perhaps, as indicated by the Court's statement that Webster # 3 agreed to pay rent on any preleased space not actually occupied by lessees or sublessees, the Court misconceived the facts and believes that Hudson was looking solely to Webster # 3 to pay the rent payments due under the leases to Cobbs and Kennevick. That Hudson relied on the leases to Cobbs and Kennevick in making his decision to complete the purchase of the office building on June 24, 1981, is beyond question, and the jury so found. As pointed out at p. 2 hereof, prior to the delivery of the Cobbs/Kennevick leases, Hudson had refused Webster # 3's offer to lease the 12,200 square feet of office space the Bank had required to be pre-leased, and he had refused Webster's $50,000.00 cash offer if he would assume the leasing requirements. While Webster # 3 agreed to guarantee the rent payments of nonoccupying lessees, in the June 21, 1981, implementing agreement, Hudson assumed and relied on the fact that Cobbs and Kennevick were primarily responsible for the payment of approximately $4,034.00 per month for their two leases. This sum alone represented 61% of Hudson's monthly debt service requirement!