Maya, et al. v. Centex Corp., et al.; Martinez, et al. v. D.R. Horton, Inc., et al.; Lumalu, et al. v. MDC Holdings, Inc., et al.; Stephens, et al. v. Lennar Corp., et al.; Kelly, et al. v. Beazer Homes USA, Inc., et al.; Nielson, et al. v. Shea Homes In, No. 10-55658 (9th Cir. 2011)
Annotate this CasePlaintiffs, individual homeowners, sued defendants, some of the nation's largest housing developers, seeking damages, attorneys fees and costs, and the option to rescind their home purchases due to defendants' fraud, negligent misrepresentation, breach of implied covenant of good faith and fair dealing, and violations of California law. At issue was whether plaintiffs, who purchased homes in new developments, had standing to sue defendants for injuries allegedly caused by defendants' practice of marketing neighboring homes to individuals who presented a high risk of foreclosure and abandonment of their homes, financing those high-risk buyers, concealing that information, and misrepresenting the character of the neighborhoods. The court held that the district court erred in dismissing plaintiffs' overpayment and rescission claims for lack of Article III standing. The court also held that plaintiffs' decreased economic value and desirability were cognizable injuries. While the court agreed with the district court that, on the current record, plaintiffs have not established a sufficient causal connection between any decreased value and desirability and defendants' actions, plaintiffs should be permitted to amend their complaint and attach expert testimony on causation. Accordingly, the court reversed and remanded for further proceedings.
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