Suit Alleges Realtors Withheld Flaws in Quake Victim’s House : Courts: Family of man killed when home collapsed says a Fred Sands agent failed to disclose an engineer’s report calling the structure unstable.


The family of a Northridge earthquake victim, who was killed when his hillside home collapsed, filed suit Thursday against Fred Sands Realtors and two of its agents, alleging they withheld information questioning the house’s stability that had already scared away another buyer.

According to the suit, pre-sale inspections of the Sherman Oaks house found numerous problems, including “inadequate structural integrity to protect against reasonably foreseeable earthquake activity,” and prompted one couple to cancel escrow in December, 1991.

One week later, the property at 3855 Sherwood Place was purchased for $400,000 by Marc Yobs, who was crushed to death with his girlfriend, Karen Osterholt, when the house slid downhill in the Northridge quake.

The findings that aborted the earlier sale--made by an engineer hired by the other prospective purchasers--were never revealed to Yobs, according to the suit, despite a state law requiring property sellers and their agents to disclose known defects.


The suit also claims that when Yobs’ real estate agent--his older brother--asked why the other sale did not go through, the sellers’ agent, James L. Pearson of Fred Sands, told him only that the other buyer’s wife “did not want to live on a hill.”

“This is, without a doubt, the worst case, with the worst consequences, of failure to disclose that we’ve ever encountered,” said the Yobs family’s lawyer, Alexander Robertson IV, whose firm specializes in construction-defect claims.

“Usually it involves property damage,” Robertson continued at a news conference outside Van Nuys Superior Court, where the wrongful death case was filed.

“Here, two people lost their lives--not because of an act of God, not because of a natural disaster, but because of human greed.”


As the lawyer spoke, Yobs’ parents, brother and sister huddled together nearby, each wearing a tiny, gold angel pin in memory of Marc, a rising film company manager who grew up in the West Valley, graduated from Cal State Northridge and was 32 when he died.

“Marc never had an opportunity to know the facts and make a decision,” said his mother, Margaret, choking back tears. “I just want justice.”

The suit names as defendants Pearson, the Fred Sands corporation, and the former manager of its Studio City office, Judith Christy.

A written statement issued Thursday by Fred Sands’ corporate headquarters in Brentwood said that “While Fred Sands Realtors deeply regrets the tragic circumstances of this accident, its conduct was not a contributing cause to that accident and Fred Sands intends to vigorously defend this lawsuit.”


The statement also says that Yobs was given a geological engineering report that “warned of a hazard to the hillside property in the event of a 5.0 earthquake,” and recommended retaining a structural engineer for further information.

But Robertson said the Fred Sands statement was “not an accurate reflection” of the report, which he described as so “glowing” that it actually dissuaded Yobs from hiring his own expert.

Margaret Yobs, her husband, Henry, and their grown children Dave, 35, and Amy, 23, also called on the county district attorney’s office to launch a criminal investigation into the sale of the house, saying they believed Yobs was a victim of fraud.

Robertson referred the case to the Los Angeles Police Department’s bunco-forgery division last fall, but says he was told that it would be difficult to pursue a case of “theft by false pretenses” without Yobs himself available to testify.


The state Department of Real Estate has opened its own probe of the fateful transaction, according to Robertson.

A department official declined to comment, saying its investigations were confidential. “I really can’t confirm anything until we take some sort of formal action,” said Steve Brendia, a regional manager for the department.

Meanwhile, the Yobses’ lawsuit against Fred Sands--one of Southern California’s most prominent real-estate firms--will be joined with another wrongful death suit the family has filed against the sellers of the house, a group of investors led by lawyer Lawrence R. Gordon.

The first suit, filed last year, alleges that Gordon and his partners also withheld damaging information that caused an earlier escrow to be canceled.


That sale fell through in October, 1991, after an engineer hired by the buyer noted that the house’s foundation was bulging--indicating possible structural or geological flaws. “I couldn’t in good conscience recommend that he buy the piece of property,” the engineer said later, in an interview.

Instead of attending to the problems, Gordon and his partners simply switched real-estate agents, hiring Fred Sands, and put the house on the market again, the first suit says. The defendants in that suit include Gordon’s longtime legal secretary, Marguerette Robinson, and her husband, Richard; businesses Properties du Monde Inc. and Danat Investment, and Gordon’s clients, Daniel J. Eget and Nathan J. Reese.

Robertson said Thursday he discovered the second aborted escrow during a routine review of Fred Sands’ files on the property for the original lawsuit. The files included a letter from the second set of buyers, explaining why they no longer wanted the house and citing their own engineer’s warnings.

Robertson said he interviewed Pearson for three hours in the presence of Fred Sands lawyers, and Pearson acknowledged phoning Dave Yobs the same day the couple canceled the escrow to tell him the house was again available.