• Fraudulent Concealment of Bad Soils Results in Entitlement to Jury Trial
  • February 18, 2015 | Author: Michael R. Bosse
  • Law Firm: Bernstein Shur - Portland Office
  • Fraudulent concealment claims can allow a claimant to escape the legal bar of a statute of limitations. They are difficult claims to prove in court because you have to prove the undisclosed facts, and sometimes the cover up. Yet, in a case decided by the California Court of Appeals on January 15, 2015, Stofer v. Shappell Industries, the appeals court found that there was a jury trial issue over whether the third owner of a house in San Ramon, California, could maintain a claim against the original contractor for fraudulent concealment. The alleged concealment related to the home being built on unstable and uncompacted “fill” soil with an inadequate foundation that caused numerous defects including cracked floors, walls, ceilings and problems in and around the pool area.

    Stofer, the third owner of the home, sued the original builder in 2010 alleging that the property contained 25 to 30 feet of highly differential fill, with high plasticity, which failed to meet minimum engineering compaction standards. Stofer alleged that she did not become aware the “dramatic changes” in the property until after she purchased the home. The evidence demonstrated that the builder had been informed of the irregular soil conditions on the property in 1992 and 1999 from a soil engineer and he did not take proper precautions into account when the house was constructed in 2002. In particular, the 1992 report stated that “a major area of concern regarding the project is the expansive nature of the native soil and bedrock.” This information was not communicated to the foundation contractor or the first owner of the home, who was having the home built specifically for he and his wife. Although the trial court concluded that Stofer did not have a claim, the appeals court said she had enough evidence to warrant a jury trial. The court focused on the fact that information about the poor soils was not communicated to the foundation contractor and the first owner was not told of the depths or quality of the fill. As a result, the foundation was not constructed with adequate precautions, and the house was damaged to the degree that it was.

    The lesson here is that even if you are past the relevant statute of limitations, all may not be lost. If there is enough evidence that someone knew about the deficiencies and didn’t communicate them, or kept the information hidden, you may still have a claim that can survive in a court action and reimburse you for fixing the damage. Always consult with a lawyer for issues like this, and the faster you do so, the more likely that you will have a claim that can get past a statute of limitations defense.