Italian Cowboy Partners, Ltd. v. Prudential Ins. Co.

Francesco and Jane Secchi, owners of Italian Cowboy Partners, Ltd. (plaintiff), leased a building from Prudential Insurance Co. through its property manager Prizm Partners (codefendants). Property management director Fran Powell told the Secchis the building never had any problems. The Secchis claimed Powell told them “I was here from the first day when they put the first brick until they put the last one. The size—it’s in perfect condition. There is no problem whatsoever. . . . [It is] a perfect building.” But when the Secchis began renovations and unplugged a solidified grease trap, sewer gas odor pervaded the building. When the Secchis learned that the prior restaurant tenant experienced the same problem, they confronted Powell. Powell reiterated that there had never been a problem and that it was the first time she heard something was wrong. Attempts to remedy the problem for months failed. Powell ordered a smoke test to determine the odor’s source, but reported it found nothing. However, the testers told the Secchis they found three old smoke bombs from a previous test. Meanwhile, the manager of the restaurant that previously leased the space told the Secchis that the odor had always been a problem and that Powell knew. The Secchis closed the restaurant and sued Prudential and Prizm for fraud in the inducement of the lease and later misrepresentations. The trial court found for the Secchis, but the appellate court reversed, reasoning the lease disclaimed any reliance. The Secchis appealed.