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

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

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3:13-cv-01042-L-JMA

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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 GRANTING IN PART AND 

DENYING IN PART PLAINTIFF’S 

MOTION [Doc. 107] IN LIMINE

ROBERT A HURWITZ, et al.,

Third Party Plaintiffs,

v.

DONALD A BURNS,

Third Party Defendant.

Pending before the Court is Plaintiff 9826 LFRCA, LLC’s motion in limine. At 

the final pretrial conference, the Court established a two round schedule for motions in 

limine. In the first round, the Court granted Plaintiff leave to file a motion in limine on 

the issue of whether Jue v. Smiser, 23 Cal. App. 4th 312 (1994) precludes Defendants

from offering evidence regarding post contract execution activity for the purpose of 

establishing justifiable reliance. The Court ordered that all other issues shall wait until 

the second round, which is not set for briefing and hearing until February 2018. In their 

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briefing on the first round, the parties discuss a number of issues the Court did not grant 

them leave to raise at this time. For purposes of efficiency, the Court reaches only two 

issues with this order: (1) whether Defendants may offer evidence regarding post contract 

execution activity for the purpose of negating the element of justifiable reliance and (2)

whether Defendants’ proffered evidence that Plaintiff failed to mitigate damages is 

relevant.

Regarding the first issue, there appears to be no disagreement between the parties 

as to the fact that the temporal focus for justifiable reliance is time of contract execution. 

Jue, 23 Cal. App. 4th at 313 (holding “a purchaser of real property who learns of 

potential material misrepresentations about the property after execution of a purchase 

agreement-but before consummation of the sale-[may] close escrow and sue for 

damages.”) From this, it clearly follows that evidence of anything Mr. Burns learned

after contract execution has no relevance as to the issue of reasonable reliance and 

therefore cannot be offered for this specific purpose. This holding does not, however, 

prevent Defendants from offering otherwise admissible evidence of post contract 

execution activity for other purposes.

As to the second issue, it is hornbook law that a plaintiff cannot recover damages 

in tort or for breach of contract to the extent a defendant proves the plaintiff could have 

mitigated damages by undertaking reasonable avoidance measures. Shaffer v. Debbas, 17 

Cal. App. 4th 33, 41 (1993). At trial Defendants will contend that, even if Plaintiff 

prevails on its claims, it is not entitled to a recovery (or entitled to less of a recovery)

because Hurwitz offered Burns an opportunity to quickly flip the property at a near $1

million profit. More specifically, Defendants have submitted an email Hurwitz sent

shortly after close of escrow to Burns’ attorney in which Hurwitz offered to connect 

Burns to a Saudi Arabian buyer who appeared eager to pay up to $15 million in cash for 

the property. (Dec. 30 Email [Doc. 108-3 Ex. L].) It seems that Burns ignored the offer. 

In its reply brief, Plaintiff argues in rather conclusory fashion that any damage 

mitigation evidence is irrelevant because there was no practical way for Plaintiff to 

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mitigate its damages. The Court disagrees. Plaintiff alleges it sustained damages of 

about $1 million by overpaying for the property under the false belief that it featured

private beach access. (Compl. [Doc. 1].) Defendant’s proffered evidence is therefore 

highly relevant because it tends to show that Plaintiff may have failed to take advantage 

of an opportunity to easily recover nearly the entire amount of alleged overpayment. 

Accordingly, the Court will not exclude this evidence on the grounds of it not being 

relevant. 

For the foregoing reason, the Court GRANTS IN PART and DENIES IN PART

Plaintiff’s motion as follows:

 Defendant may not introduce evidence of post contract execution activity for the 

specific purpose of negating Plaintiff’s claim of justifiable reliance. 

 Defendant’s proffered evidence regarding Plaintiff’s alleged failure to mitigate 

damages is relevant.

IT IS SO ORDERED.

Dated: October 20, 2017

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