Bryan Knight (left) and Sherri Buda, Atlanta.

After eight years of litigation—a trial, an appeal and a second trial—a Gwinnett County State Court jury has awarded $4.2 million to the RM Kids investment group for a title insurance dispute over land contaminated by an oil spill.

The winning lead counsel, Bryan Knight of Knight Johnson, was quick to acknowledge that “real estate cases are not very sexy.” But, he added Wednesday, “any verdict of this size is a little sexy.” Knight tried the case both times with Sherri Buda, representing RM Kids.

Judge Tom Davis, who heard the case for the first two-week trial, had a conflicting criminal case. So Magistrate Judge Robert Walker presided over the second trial. “He came in with a smile on his face every day,” Knight said. “He brought a lot of positive energy.”

The retrial wrapped up in half the time, one week, on Friday, according to Knight.

On the other side was William Brown of Heyman & Sizemore, who represented Old Republic in both trials. For the second one, Brown was joined by Ed Wasmuch Jr. and Ed Burch Jr., both of Smith, Gambrell & Russell.

The defense attorneys declined to comment without first obtaining authorization from the client.

The first trial in 2015, by Knight's measure, was a little more sexy: The verdict then was $7.1 million.

But Old Republic appealed and won on one important point. Georgia Court of Appeals Chief Judge Stephen Dillard ruled that the amount of the loss from a title defect should be calculated based on the value of the land at the time of foreclosure, not at the time of purchase.

That difference was dramatic in this case, since the purchase came in 2007, just before the real estate crash and Great Recession, and the foreclosure came four years after prices plunged, in 2012.

Knight said he has heard the case is being taught in real estate law classes. “I'm always happy to make new law, just not when it goes against my client,” he added.

At the heart of the case was an oil spill from the 1990s that contaminated the land and groundwater in the area off Ga. 316 near Sugarloaf Parkway in Gwinnett County—which in that era had become known as the fastest growing suburb in the country.

Fast-forward to 2007, when a deal was made by a developer to buy 151 acres there for $11.4 million, with plans for a residential subdivision. Peachtree Bank provided the loan, then later sold the loan to Knight's client, lender and real estate investment group RM Kids.

“After they bought the note, it became apparent there was a title defect,” Knight said. “The defect became known in the years of litigation that followed as Exhibit C, which was a document disclosing the oil spill. It required 'notice to all subsequent landowners' of petroleum contamination from an underground pipeline affecting groundwater and surface water. The damage has been mediated and monitored since, and will require continued monitoring, according to the document. Restrictions include but are not limited to 'drinking, bathing, cleaning, irrigation or installation of wells.'”

The original lender's real estate closing attorney left Exhibit C out of the paperwork. He later blamed the omission on his paralegal. But they were not the defendants. The defendant was Old Republic National Title Insurance Co., which declined to cover the defect.

To prove the value of the land was diminished by the oil contamination, Knight's team hired an expert who appraised the land with and without Exhibit C. The difference was the amount of the verdict.

Knight said he picked mothers and fathers for the jury because he knew “they're going to be worried about water and what contamination means.” Knight added, “I think that resonated with them, that a homebuyer would be scared off. The property would be devalued.”

Old Republic argued that it had no liability to the plaintiff for several reasons, according to the defense summary provided to the court. The defendant said RM Kids had no standing to sue because employees of Peachtree Bank knew about the oil spill. The defense further argued that the plaintiff had “suffered no loss or damage” as a result of the later-uncovered deed restrictions and that the land was not devalued.

But, according to Knight, after his cross-examination of the defense expert—who testified that the title defect didn't make a dollar of difference—eye rolls and disbelieving looks could be seen in the jury box.

The case is RM Kids v. Old Republic, No. 10-A-09956-9.