Sale unwound, about $3.2 million recovered
Background
In fall 2024, C, a business owner, bought a two-story commercial building in the San Gabriel Valley for about $3 million, planning to use half as his wholesale warehouse and lease the rest. On the seller's disclosure form, the box for underground tanks or soil contamination was marked "unknown." In March 2025, while digging foundations for renovation, workers uncovered an old, rusted-through fuel tank, and the surrounding soil smelled of gasoline. Environmental regulators inspected and required cleanup before any construction. Cleanup alone would cost $800,000 to $900,000 and take at least a year. The building could not be used, but the mortgage still had to be paid.
Strategy
We started with the building's old records. City permit files showed it had been a gas station in the 1980s, and we found that the seller had commissioned an environmental test in 2016. The seller had known all along.
In May 2025 we sued the seller for concealing a material defect, asking to rescind the sale, refund the price, and pay loan interest, testing costs and losses from the work stoppage. The seller said the building was sold "as is." Our answer was simple: selling as is does not allow a seller to lie about problems it knows about.
Pleadings and discovery took about six months. In November the seller's former environmental consultant produced the original test report and emails, including one in which the seller wrote, "Don't mention the tank for now." Trial was more than a year away, so the parties agreed to mediate; the earliest date was in August.
Case Timeline
| Date | Milestone |
|---|---|
| October 2024 | C closed on the purchase |
| March 2025 | Old fuel tank found during renovation; regulators ordered cleanup before work |
| May 2025 | Retained Lingtu Law; sued the seller for concealment |
| November 2025 | Seller's former environmental consultant produced the old report and emails |
| August 2026 | Settlement at mediation; seller took back the building and paid damages |
| Late September 2026 | About $3.2 million received in full |
Outcome
At mediation in August 2026, the seller agreed to take the building back, refund the purchase price and pay damages, about $3.2 million in total, all received by late September. C found another warehouse, and his business was not held up for long.