Hess v. Canberra

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Appellees Mark and Marilyn Hesse purchased an undeveloped subdivision of land owned by Canberra Development Company (CDC) in February 2004. Appellees constructed their home on the lot. After moving into their new home, Appellees noticed several structural problems including the presence of large cracks in the floor. Appellees later learned that these problems were caused by unstable soil beneath the foundation of their home. Subsequently, Appellees discovered that CDC had failed to inform them of soil analysis assessment reports which had been ordered seven years prior to the selling of their lot. These test reports indicated the presence of expansive and collapsible soils most notably in the Appelleesâ back yard. Appellees filed suit against CDC seeking compensatory and punitive damages for fraudulent nondisclosure and misrepresentation. After a jury trial, Appellees were awarded over $3 million in economic damages including pain and suffering. No punitive damages were awarded. After the trial, CDC filed several post-verdict motions including a motion for judgment notwithstanding the verdict. The District Court ultimately denied these motions. The Supreme Court held that the jury had sufficient evidence to conclude CDC was liable to Appellees for fraudulent nondisclosure and misrepresentation. The Supreme Court found later, however, that the district court had erred in denying CDCâs motion for a new trial to assess damages. As a result, the Supreme Court reduced Appelleesâ economic damages award.