Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01042/USCOURTS-casd-3_13-cv-01042-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1391 Venue

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

9826 LFRCA, LLC,

Plaintiff,

v.

RORBERT A. HURWITZ, et al.,

Defendants.

Case No.: 3:13-cv-01042-L-JMA

ORDER DISMISSING THIRD 

PARTY DEFENDANT DONALD A. 

BURNS

ROBERT A HURWITZ, et al.,

Third Party Plaintiffs,

v.

DONALD A BURNS,

Third Party Defendant.

This case arises out of a dispute between a real estate purchaser and a selling real 

estate agent. Third Party Defendant Donald A. Burns (“Burns”) purchased a property 

offered for sale by real estate agent Robert A. Hurwitz (“Defendant”). After executing

the purchase contract, Burns assigned the contract to 9826 LFRCA, LLC (“Plaintiff”), an 

LLC whose sole member is a trust for which Burns is settlor and trustee. Plaintiff alleges 

that when Burns executed the purchase he reasonably relied on Defendant’s 

representations that the property featured private beach access. After the contingency 

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period ended and the contract became fully executed, Plaintiff alleges it discovered that 

these representations were false and that, in reliance upon them, Plaintiff overpaid for the 

property. 

Defendant filed a third party complaint against Burns, seeking indemnification 

from Burns in the event that Defendant is found liable to Plaintiff. The gist of the third 

party complaint is that any harm Plaintiff may have suffered stems from Burns’ alleged 

negligent failure to investigate the nature of the private beach access. Burns filed a 

motion to dismiss the third party complaint against him, arguing, inter alia, that it failed 

to state a claim because if Burns is found to have been negligent in performing due 

diligence, that finding would eliminate Defendant’s liability to Plaintiff in the first 

instance by way of Defendant’s defenses. By order dated July 31, 2014, the Court found 

this argument unpersuasive and denied Burns’ motion to dismiss the third party 

complaint as to him. (Doc. 32). 

On January 5, 2018, the Court indicated it was inclined to reconsider the denial of 

Burns’ motion to dismiss and ordered the parties to show cause as to why the Court 

should not dismiss Burns from this case. (Doc. 112.) Burns, Plaintiff, and Defendant 

have all filed responses to the Court’s order to show cause. (Docs. 113–15.) In his 

response, Defendant argues that “so long as the obligations and/or liabilities under the 

subject purchase agreement are retained by Burns individually, Mr. Burns must be 

included in this matter as an individual party, if not as a Third Party Defendant, than [sic] 

as an involuntary Plaintiff.” (Doc. 113 2:18–21.) 

Defendant’s argument is not persuasive. Defendant does not cite any supporting 

authority or present any explanation as to how the non-assignment of Burns’ alleged 

“obligations and / or liabilities” carries any relevance here given that Burns assigned to 

Plaintiff all of his rights in the subject transaction. Under the law of assignments, 

Plaintiff (as assignee) stands in Burns’ (the assignor’s) shoes with respect to any right it 

has to recover against Defendant for the alleged misrepresentation regarding private 

beach access. Cal. Civ. Code § 1459. Any defenses that Defendant would have had as to 

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Burns are therefore preserved as to Plaintiff. To illustrate, if a jury finds that Burns’ 

alleged negligence in conducting due diligence was the legal cause of any loss suffered 

by Plaintiff, such a finding would necessarily offset Defendant’s liability to Plaintiff in 

the first instance by way of Defendant’s defenses that (1) any reliance by Plaintiff

(standing in Burns’ shoes) on Defendant’s alleged misrepresentations was unreasonable 

and (2) Plaintiff did not conduct the required due diligence and thus failed to mitigate 

damages. 

Because any negligence on the part of Burns would thus offset liability in the first 

instance, there is no possibility of Defendant obtaining secondary relief from Burns. It 

follows that the only feasible purpose keeping Burns as a third party defendant could 

accomplish is to unnecessarily complicate the issues and confuse the jury. Accordingly, 

pursuant to Federal Rule of Civil Procedure 54(b), the Court hereby reconsiders its denial 

of Burns’ Fed. R. 12(b)(6) motion and dismisses Burns as third party defendant. 

IT IS SO ORDERED. 

Dated: January 23, 2018

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