BLW 201 Final: Reed vs. King
26 May 2018
School
Department
Course
Professor
CASE #3
Eddie Toma
Professor Staruck
Business Law 201
25 January 2016
Case 11-4
REED vs KING
California Court of Appeals, 1983
145 Cal.App.3d 261, 193 Cal.Rptr. 130
FACTS: Doris Reed purchased a house from Robert King under the notion that premises
were in good condition and fit for a woman her age. King and his real estate agents
did not inform Reed about a gruesome murder of four that happened in the house
ten years. Doris found out about the murders after being informed by her
neighbors. Also, the neighbors were asked not to inform her about the murders as
it will decrease the value of the house because of its past. Reed paid $76,000, but
due to the tragic events it is only worth $65,000. Reed is suing and seeking
recession and damages.
ISSUE: Does Reed’s pleading state a cause of action.
DECISION: The trial court perceived the defect in Reed’s complaint to be a failure to allege
concealment of a material fact.
REASON: In general, a seller of real property has a duty to disclose: "where the seller knows
of facts materially affecting the value or desirability of the property which are
known or accessible only to him and also knows that such facts are not known to,
or within the reach of the diligent attention and observation of the buyer, the seller
is under a duty to disclose them to the buyer.
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