Zarwin Baum Defense Victory in New Jersey Real Estate Fraud Case

December 2024 • Source: Zarwin Baum

In a high-stakes, nearly three-week trial, Zarwin Baum attorneys Bryan Werley and Breana Barker secured a decisive defense victory in a New Jersey real estate fraud case. Representing a real estate broker and agent involved in the sale of a Haddonfield, New Jersey duplex, the legal team adeptly navigated through a web of complex legal issues to obtain a full defense verdict.

Although the duplex had existed for decades, unbeknownst to the Sellers, the zoning in the borough had changed to disallow duplexes. Following settlement on the property, the Plaintiff claimed they began to discover electrical, plumbing, and structural issues within the building that were undetectable during their inspections. To address these issues, the Plaintiff removed walls, ceilings, and other parts of the duplex to commence renovations and was subsequently advised by the Borough that they required a permit for the work. They applied for a permit for minor repairs, not the more significant repairs that were underway. Subsequently, they claimed they were informed that the property could no longer be restored to a duplex due to the intervening change in the Borough’s laws and would instead have to be rebuilt as a single-family home. They brought claims against the Sellers for misrepresentation, fraud, and breach of contract and against the broker/agent for violations of New Jersey’s Consumer Fraud Act, Common Law Fraud, and Negligence. The operative statute included the potential for treble damages and fee shifting, and Common Law Fraud included the potential for punitive damages. Plaintiff claimed that the repair of their property would have cost approximately four times the price they paid to purchase the duplex.

At trial, Werley and Barker demonstrated that the duplex was accurately marketed based on public records and that the agent was under no obligation to perform legal or zoning research—a responsibility that rested with the Plaintiff's real estate lawyer during due diligence. They meticulously contested each element of the fraud and consumer protection claims and effectively dismantled the Plaintiff’s asserted damages.

The jury returned a unanimous verdict, finding in favor of the defense on all claims.