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Hensley v. McSweeney

Court of Appeal of California, Fifth Appellate District

July 23, 2001, Decided

No. F029415.


 [*1082]  [**489]   CORNELL, J. 

Douglas F. Hensley (Hensley) obtained a judgment in the amount of $ 130,000 against Patricia E. McSweeney, doing business as Wyndfair Properties (McSweeney). On appeal, Hensley contends: (1) the trial court incorrectly construed the [**490]  special verdicts and the correct amount of the judgment should be $ 185,000; and (2) he is entitled to additional prejudgment interest. In her cross-appeal, McSweeney asserts the judgment  [*1083]  should be reversed on the basis of instructional error, ambiguous special verdicts, and misconduct by Hensley's trial attorney. We conclude that instructional error warrants reversal of the judgment.


On November 1, 1994, Hensley and Epifanio and Josefa Vargas (collectively Vargas) entered into a real estate purchase contract and receipt for deposit in which Vargas agreed to sell to Hensley real property located on North McCullough Road in Merced County. The standard form contract did not list any broker or agent as representing either [***3]  party to the contract.

An addendum to the contract specified, inter alia, that Hensley was to bring current various obligations owed by Vargas and secured by the real property. Pursuant to the terms of the contract, Hensley issued several checks payable to Vargas in the total amount of $ 8,950, a cashier's check payable to Transamerica in the amount of $ 7,740, and two cashier's checks in the total amount of $ 10,625 to Wyndfair Properties, as the escrow holder.

At some point, the holder of the first deed of trust against the real property noticed a nonjudicial foreclosure sale. By this time, Hensley was no longer interested in purchasing the real property, nor did he have the funds to purchase the real property at the foreclosure sale. McSweeney and Hensley talked; Hensley testified that he was interested in the return of the $ 10,650 being held by McSweeney as the escrow agent. Although McSweeney never indicated she would buy the property for him at the foreclosure sale, Hensley thought McSweeney was attending the sale on his behalf.

McSweeney attended the foreclosure sale and purchased the property with her own funds, after which she in turn offered to sell the property to [***4]  Hensley. He never accepted the offer of sale. McSweeney never returned the $ 10,650 to Hensley, as Vargas never signed a release to enable her to do so. McSweeney continued to hold the funds in a trust account.

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90 Cal. App. 4th 1081 *; 109 Cal. Rptr. 2d 489 **; 2001 Cal. App. LEXIS 561 ***; 2001 Cal. Daily Op. Service 6203; 2001 Daily Journal DAR 7581

DOUGLAS F. HENSLEY, Plaintiff and Appellant. v. PATRICIA E. McSWEENEY, Defendant and Appellant.

Notice:  [***1]  Opinion certified for partial publication. 1 

Subsequent History: Review Denied October 31, 2001, Reported at: 2001 Cal. LEXIS 7443.

Prior History: APPEAL from a judgment of the Superior Court of Stanislaus County. Super. Ct. No. 90545. Glenn A. Ritchey, Judge.

Disposition: The judgment is reversed and the matter is remanded for further proceedings consistent with this opinion, to the extent such proceedings may be conducted in state court in view of the bankruptcy court's July 17, 1998, order. Costs on appeal are awarded to McSweeney. By order dated March 30, 2000, this court deferred ruling on two motions pending resolution of the appeal and cross-appeal on the merits. Those motions, to "Strike Plaintiff, Respondent and Cross-Respondent's Request for Judicial Notice" and to "Strike Plaintiff, Appellant and Cross-Respondent's Argument in His Response/Reply Brief Regarding Prejudgment" are hereby denied.


measure of damages, fiduciary, benefit of the bargain, damages, out-of-pocket, cause of action, trial court, negligent misrepresentation, foreclosure sale, fiduciary duty, real property, cross-appeal

Civil Procedure, Jury Trials, Jury Instructions, General Overview, Torts, Business Torts, Fraud & Misrepresentation, Governments, Fiduciaries, Negligent Misrepresentation, Remedies, Contracts Law, Affirmative Defenses, Types of Damages, Compensatory Damages, Contract Interpretation, Fiduciary Responsibilities, Intentional Torts, Defenses, Intent, Elements