RSB Vineyards, LLC v. Orsi

223 Cal. Rptr. 3d 458, 15 Cal. App. 5th 1089, 2017 Cal. App. LEXIS 852
CourtCalifornia Court of Appeal, 5th District
DecidedSeptember 29, 2017
DocketA143781; A145029
StatusPublished
Cited by18 cases

This text of 223 Cal. Rptr. 3d 458 (RSB Vineyards, LLC v. Orsi) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RSB Vineyards, LLC v. Orsi, 223 Cal. Rptr. 3d 458, 15 Cal. App. 5th 1089, 2017 Cal. App. LEXIS 852 (Cal. Ct. App. 2017).

Opinion

Jenkins, J.

*461*1092This is a breach of warranty action in the absence of a warranty. Plaintiff RSB Vineyards, LLC (RSB) purchased a vineyard jointly owned by the four defendants, including a residence that defendants had renovated and converted into a wine tasting room. RSB later learned that the renovated residence was structurally unsound for commercial use and was forced to demolish it.

In response to RSB's lawsuit claiming misrepresentations and omissions in connection with the sale of the residence, defendants moved for summary judgment, offering evidence they had no knowledge of the various deficiencies in the building. While RSB provided no evidence to suggest defendants had actual knowledge of the problems, it did demonstrate that the deficiencies were so severe that defendants' construction professionals should have been *1093aware of them and argued that this knowledge was imputed to defendants. The trial court granted summary judgment, reasoning that defendants could not be held liable for nondisclosure in the absence of evidence they had actual knowledge of the facts to be disclosed. We agree and affirm.1

BACKGROUND

This action grows out of RSB's August 2011 purchase from defendants of a vineyard and building located in Healdsburg. Following the purchase, RSB discovered structural and other problems with the building that were not disclosed by defendants at the time of the sale. RSB's complaint (complaint), filed in September 2013, contains causes of action for breach of contract, intentional misrepresentation, negligent misrepresentation, fraud, and negligence.

Barely seven months after the filing of the complaint, defendants moved for summary judgment, arguing RSB's claims failed because RSB could not demonstrate defendants had actual knowledge of the building's flaws or made false representations. The motion was supported by declarations from each of the four defendants and excerpts from the deposition testimony of Robin Black, designated by RSB as its person most knowledgeable.

According to the evidence submitted in support of the motion, the four defendants, members of two families engaged in the business of viticulture and wine-making, purchased the real property in 2009. At the time, the main building on the property was a single family home, and defendants planned to convert it into a commercial wine tasting room. They also considered building a winery. Following the purchase, defendants hired an architect to design a remodel of the home and applied for a commercial use permit, which issued in April 2010 for a winery and tasting room. Once the use permit issued, defendants submitted the architect's plans to the County of Sonoma (county), which approved the plans after requiring some changes. Defendants, none of whom is a construction professional or possesses the skills of such a person, relied on their architect and county officials to insure the plans conformed to applicable building codes, and they had no reason to believe the plans were non-conforming.

The construction work was performed by a licensed contractor, in consultation with a structural engineering firm, and *462entailed, among other projects, tearing down an addition to the home, new framing and exterior work, *1094replacing windows, renovating bathrooms, reinforcing the floor above the basement, installing new sewage disposal, plumbing, and electrical systems, repairing dry rot, and creating a parking lot. The work was inspected and approved by county officials, and a final certificate of occupancy for a "winery/tasting room" was eventually issued. Defendants began to conduct business in the tasting room upon issuance of a temporary occupancy permit in September 2010.

Soon after commencing business, the four defendants "decided that operating a joint tasting room was not to our liking so we decided to sell the property." During the sales process, they continued to conduct business. By August 2011, they had listed the property with a licensed real estate broker, who prepared an offering memorandum and placed an ad in a local paper. The offering memorandum stated that the property had a "vineyard-vested winery permit" and an "active tasting room" and attached a table describing the various permits issued for the property. The ad described the parcel as "[e]xceptional 19 acre vineyard parcel with operating tasting room, vested 20,000 case winery permit and 12 acres planted to vineyard." RSB submitted a proposed purchase agreement soon after, which defendants accepted subject to a counter-offer. Defendants provided to RSB a termite addendum, buyer's and seller's advisories, and other disclosures and documents, and they gave RSB the names of their architect, general contractor, and structural engineer. RSB waived all contingencies and inspection rights, and the sale closed the following month.

Each of the declarations submitted by defendants contained essentially the same affirmation. As two of the declarations stated, "[a]t no time before the sale to plaintiff did any person connected to the County or any of our own professionals ever inform me that the finished construction did not comply with any building codes or standards, that the plans or work were substandard or deficient in any regard, or not to code, or even just to the level of good construction practices, or that the building was in any way unsuitable or unsafe for use as a tasting room, nor did I have any such knowledge from any other source, including my own observations." All declarants believed the work "met all applicable codes and standards." Each defendant specifically denied any knowledge, at the time of the sale to RSB, of the defects in the property alleged in the complaint and claimed no knowledge of any material defects in the property, either from personal observation or on information by others.

In her deposition, Black stated that RSB had no information to suggest that any of the defendants had actual knowledge of the deficiencies in the property cited in the complaint. She also could not recall any false representations made to her by defendants in connection with the property.

*1095RSB's opposition to the summary judgment motion was supported by the declaration of Larry Miyano, a civil engineer familiar with the property, and excerpts from several depositions. According to Miyano, he was retained by RSB to evaluate a leaking deck on the renovated residence. Miyano concluded that the deck was not properly built and did not meet "live load requirements" for its intended use. This deficiency led him to investigate the building further. Miyano found the floor structure "insufficient" to support the required load. When he prepared an analysis of the work necessary properly to engineer the floor, the expense was found to be more than the cost of demolition and construction *463of a new building. Miyano also found the plans prepared by defendants' architect to be "unclear and substandard" and decided to inspect the building during the process of demolition.

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Cite This Page — Counsel Stack

Bluebook (online)
223 Cal. Rptr. 3d 458, 15 Cal. App. 5th 1089, 2017 Cal. App. LEXIS 852, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rsb-vineyards-llc-v-orsi-calctapp5d-2017.