The fourth appellate district court of appeal has found Eric Zapf, husband of District 6 councilmember Lorie Zapf, liable for professional negligence in a real-estate deal. Zapf and his associates will pay more than $1 million for their role in the transaction.
According to the appellate court, Eric Zapf was the real-estate agent for sellers of a residential property. After the purchase, the buyer discovered that the property was encumbered by a loan that had not been paid off.
"It was ultimately determined that someone had signed and recorded fraudulent documents that made it appear that the seller's loan had been satisfied and that the trust deed in favor of the lender had been reconveyed to a third party," said the court. "It appeared that the only lien on the property was for an amount substantially less than the amount truly owed by the sellers."
The buyer alleged that Eric Zapf had participated in the fraud but also asserted a claim for professional negligence. The trial court found the sellers liable for the fraud and Zapf liable for negligence. Zapf complained to the appellate court that he was not negligent; he also protested the court's damage awards and awards for legal expenses.
The trial court ruled, and the appellate court agreed, that Eric Zapf failed to disclose material information to the buyer at the time the fraud was being consummated. The appeals court also agreed that the damage awards and fees were proper.