Baltimore City, MD
Circuit Court

Fraud - Real Estate Contract - Flipping

Verdict: $148,250. Breakdown: $100,000 in punitive damages; $15,000 for fraud; $13,200 for payments made under the contract; $6,300 for negligent misrepresentation; and $13,750 for unfair and deceptive trade practices.

Judge: William D. Quarles Date of Verdict: 9/26/01 Plaintiff's Attorney(s): Peter A. Holland, Annapolis Defendant's Attorney(s): Robert Taylor, Jr., Baltimore

Facts: Defendant John Edwards, as the personal representative of a decedent's estate, sold a house from the estate to himself and his wife for the appraised value of $8,500. Six months later, plaintiffs and defendants entered into a Rental Agreement to Buy. The Agreement listed the purchase price of the property as $49,500. Plaintiffs pursued this lawsuit after learning through a separate case that defendants did not have clear title to the property. (See Editor's Note.)

Plaintiffs alleged that: (1) the nature of the Rental Agreement to Buy was that of a Land Installment Contract, entitling them to recover payments made under the contract; (2) defendants fraudulently induced them to enter into the contract by failing to disclose that they did not have good title to the house and inflating the value of the property, ('flipping'); and (3) defendants failed to disclose sewer line problems, which they failed to repair as promised under the contract.

Defendants contended that: (1) plaintiffs entered into a rental agreement, not a land installment contract; (2) defendants did not commit fraud; and (3) repairs were made to the sewer line as agreed under the contract.

Alleged Injury: Breach of contract, fraud and misrepresentation as to the ownership, value and condition of real estate ("flipping').

Jury Deliberations: 1 hour

Case Caption: Marvin Farley and Margaret Farley v. Pauline Edwards and John Edwards

Case Number: 241-C-00-000716

Editor's Note: It was discovered that the original owner had arranged in her will that the house be transferred to a local domestic abuse organization (the House of Ruth). A lawsuit filed by the House of Ruth was settled. Defendants paid $10,000 to the House of Ruth in exchange for a quitclaim deed. Pursuant to the Maryland Attorney General's office, a "flipper" is someone who buys a house cheap and then sells it to an unsuspecting home buyer for a price that far exceeds its real value.