Court Opinion

ID: 2754372
Source: CourtListenerOpinion
Date Created: 2014-11-21 23:02:35.557272+00
Date Added: 2024-06-11T11:26:24.746728
License: Public Domain

Filed 11/21/14 Anderson v. Coldwell Residential Brokerage CA2/1
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION ONE

DAVID ANDERSON,                                                      B249615

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                     Super. Ct. No. SC114680)
         v.

COLDWELL BANKER RESIDENTIAL
BROKERAGE COMPANY et al.,

         Defendants and Respondents.

         APPEAL from an order of the Superior Court of California, County of Los
Angeles. Honorable Craig D. Karlan. Affirmed.
         Gotfredson & Associates, E. Jay Gotfredson and Seth Weinglass for Plaintiff and
Appellant.
         Klinedinst, Neil R. Gunny and Mark J. Goldsmith for Defendants and
Respondents.
                                ___________________________________
       David Anderson purchased an undeveloped lot in an unincorporated portion of the
coastal community of Malibu in 2008. When he applied for a permit to build a house, the
California Coastal Commission issued a conditional permit that required, among other
things, that Anderson purchase another coastal lot and retire it as open space. Anderson
consequently abandoned the development and, in February 2012, filed a suit against his
real estate broker, William Moss, alleging Moss failed to inform him of the possibility
that the commission would require him to purchase an additional lot to mitigate the
development’s impact on the coastal area.
       The trial court granted Moss summary judgment, finding no evidence supported
Anderson’s claims. Anderson appealed, arguing Moss breached his duty of professional
care and misrepresented the lot was suitable for Anderson’s intended purpose.
       We affirm.
                                       BACKGROUND
       In February 2007, Anderson executed an agreement with Maryanne Lataif to
purchase an undeveloped residential lot in an unincorporated area of Malibu (hereafter
the Malibu lot), with the intent to build a house there (hereafter Lataif-Anderson
purchase). At the time, Lataif was still in escrow to purchase the Malibu lot from the
estate of Diana Cap (hereafter Cap-Lataif purchase). After escrow closed on the Cap-
Lataif purchase, the Lataif-Anderson purchase was effected through two deed transfers.
       Moss, a real estate agent with Coldwell Banker Residential Brokerage Company,
represented all parties in the Cap-Lataif and Lataif-Anderson purchases.
       The Lataif-Anderson purchase agreement—a form agreement issued by the
California Association of Realtors—provided that “seller shall . . . disclose known
material facts and defects affecting the property . . . .” The agreement “strongly advised
[the buyer] to investigate the condition . . . suitability . . . and all matters affecting the
value or desirability of the property,” and stated that the broker does not “guarantee, and
in no way assume responsibility for, the condition of the Property.” The agreement
provided that the broker would not verify any “laws, ordinances . . . zoning . . . [or]
governmental permits” and advised the buyer to “investigate whether these matters affect

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Buyer’s intended use of the Property.” The agreement also included a provision giving
Anderson 70 days from acceptance to complete all investigations. Another section in the
agreement restated that the broker was not responsible for “identifying defects not
known” to the broker or inspecting public records, and that the buyer agrees to seek
assistance from appropriate professionals regarding the lot’s usability.
       Anderson also received and initialed documents entitled “Statewide Buyer and
Seller Advisory” and “Malibu/Topanga Disclosure Addendum.” The documents advised
that the lot may be within the jurisdiction of the California Coastal Commission, which
may restrict any new development on it, and advised the buyer “to consult a qualified
specialist regarding coastal development issues . . . [and] check with the City of Malibu
and the California Coastal Commission for further information.”
       Anderson began exploring the lot’s development potential and construction
financing shortly after executing the agreement. The only California Coastal
Commission document on record relating to the Malibu lot was a notice of violation the
commission had sent to Diana Cap in 2007 pertaining to grading activities that had
occurred on site. The notice contained an appendix that advised owners that applications
for development of any coastal lot would require one or more of 21 listed items, one
being a certificate of compliance to demonstrate parcel legality.
       Lataif closed escrow on her purchase from Cap’s estate, and in February 2008,
transferred half of her interest in the property to Anderson.
       Sometime later, Anderson and Moss terminated their broker agreement and
replaced it with a referral/finder’s fee agreement in exchange for a reduction in Moss’s
fee from $50,000 to $25,000. In March 2008, Anderson hired an architect to assist with
permit processing through the County of Los Angeles and the California Coastal
Commission.
       In June 2008, 16 months after execution of the February 2007 purchase agreement,
Anderson executed a revised agreement reflecting a purchase price of $440,000, down
from the original $500,000, and stating Anderson had “completed and approved all his

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investigation prior to entering into this agreement.” Lataif then transferred the remaining
half interest to Anderson, at which time he became the sole owner of the Malibu lot.
       In May 2010, the County of Los Angeles determined the Malibu lot had been
illegally subdivided in 1956. The county nevertheless issued a conditional certificate of
compliance that would legalize the lot if the California Coastal Commission approved
Anderson’s development. In February 2011, the commission confirmed the lot violated
the Subdivision Map Act of 1972 because the 1956 subdivision had been illegal. To
mitigate the impact of Anderson’s proposed development, the commission issued a
conditional development permit that required him to purchase another coastal lot and
permanently designate it as open space, a program known as Transfer of Development
Credit or TDC. Anderson determined he could not bear the additional TDC cost,
estimated to be in excess of $50,000, and abandoned the development.
       In October 2011, Anderson sued Moss and Coldwell Banker in the Los Angeles
Superior Court, alleging Moss failed to disclose unspecified “regulatory requirements . . .
affecting [his] Property’s owner’s rights regarding development of the Property . . . such
as . . . TDCs,” and that these requirements “would prevent [him] from building his
family’s residence on the Property.” Anderson alleged fraudulent concealment, negligent
nondisclosure of material facts, and breach of fiduciary duty. Moss answered with a
general denial and moved for summary judgment.
       Anderson filed a cross-motion for summary judgment or summary adjudication,
supported by declarations by two real estate professionals, Thomas Bates and Lawrence
Jacobson, who opined that Moss owed and breached a duty to discover and report that
Anderson’s proposed coastal development would run afoul of the California Coastal
Commission. Bates observed that on the county assessor’s map, the Malibu lot’s
boundary was marked with a dotted line. He opined any real estate broker would know
that this indicated there was a problem with the subdivision.
       For his part, Moss argued he owed no duty to research public records for possible
California Coastal Commission issues and declared he had no knowledge the Malibu lot
had been illegally subdivided in 1956, and had never heard of a TDC requirement being

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imposed on a single-family residential development. Moss objected that Bates’s and
Jacobson’s opinions constituted improper legal arguments.
        In April 2013, the trial court sustained Moss’s objections and granted his motion
and denied Anderson’s motion. Anderson filed a motion for new trial which was denied,
then appealed from the ensuing judgment.
                                       DISCUSSION
        A trial court may grant summary judgment or summary adjudication when “no
triable issue as to any material fact” exists and “the moving party is entitled to a judgment
as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) To obtain summary judgment,
a moving defendant must show one or more elements of each cause of action cannot be
established or there is a complete defense to each cause of action. (Code Civ. Proc., §
437c, subd. (p)(2).) Once the moving defendant has met its burden, the burden shifts to
the plaintiff to show a triable issue of material fact exists as to each cause of action or
asserted defense. (Ibid.) We review the trial court’s ruling on a motion for summary
judgment de novo, examining the evidence in a light most favorable to the opposing
party. (Code Civ. Proc., § 437c; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826,
843.)
        Anderson contends the evidence shows Moss was aware of the notice of violation
sent to Cap in 2007, including its provision that any development would require a
certificate of compliance to demonstrate parcel legality. Anderson argues this put Moss
on notice that the parcel might be illegal and that a TDC might be required, a fact he
concealed from Anderson. We disagree.
        To prove a fraud claim, a plaintiff must show the defendant intentionally
suppressed a known material fact the defendant was under a legal duty to disclose. (Civ.
Code, §§ 1709, 1710.) Moss argued he had no duty to predict what the California
Coastal Commission would do and declared he had no information suggesting the
commission would impose a TDC requirement on Anderson’s property. On the contrary,
in his experience TDC’s were rare, and he had never heard of one being imposed on a
single family residence development. The burden thus shifted to Anderson to

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demonstrate the existence of a triable issue of material fact. He failed to do so. The
notice of violation sent to Cap in 2007 concerned grading that had occurred on site, not
the legality of the parcel itself. The reference in the notice to a certificate of compliance
merely set forth generally applicable procedures by which a property owner must
demonstrate the legality of the parcel. It did not suggest the Malibu lot was illegal.
       Anderson contends Moss negligently breached his unwaivable duty to investigate
and disclose material facts affecting the Malibu lot, specifically to research the assessor’s
map, and had he done so he would have noticed the dotted line around the property’s
boundary, which would have put him on notice that the 1956 subdivision was illegal. We
disagree.
       To prevail on a claim for negligence, a plaintiff must show the defendant owed
plaintiff a legal duty of care, breached that duty, and the breach was the cause of
plaintiff’s damages. Whether a duty existed is a question of law to be determined by the
court. (Carleton v. Tortosa (1993) 14 Cal. App. 4th 745, 755.)
       A residential real estate agent owes statutory duties to conduct a reasonable visual
inspection of property and investigate all material facts affecting its value and
desirability. (Civ. Code, § 2079(a).) An agent has no duty to inspect public records or
permits concerning title or use of the property. (Civ. Code, § 2079.3.) An agent
representing both the buyer and seller in a transaction owes the same duty to both parties.
(Civ. Code, § 2079.16.) The agent’s duties do not relieve buyers and sellers from the
duty to protect their own interests by consulting professionals and “carefully read[ing] all
agreements to assure that they adequately express [the parties’] understanding of the
transaction.” (Civ. Code, § 2079.16, subd. (b).) The agent’s duty to inspect does not
extend beyond that set forth Civil Code section 2079.3, and does not include the duty to
search public records. (Padgett v. Phariss (1997) 54 Cal. App. 4th 1270, 1282.) A party
and agent may, however, expand the scope of the agent’s duties by agreement at any time
prior to performance of the contract. (Civ. Code, §§ 2079.20, 2079.23.)
       Moss owed no duty to investigate and thereby discover facts that might cause the
California Coastal Commission to impose a TDC requirement. He therefore owed no

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duty to research the assessor’s map of the Malibu lot or to disclose to Anderson that the
map indicated past subdivisions had been illegal. The parties did not expand the scope of
Moss’s duties in their agreement, on the contrary they confirmed the statutory limitations
on them.
       Anderson argues the trial court improperly disregarded the declarations of his
experts, who opined that every real estate agent knows subdivision in Malibu has
historically been problematic and that the assessor’s maps clearly demonstrate parcel
illegality by outlining boundaries with dotted lines. The argument is without merit.
       In ruling on a motion for summary judgment, a trial court may not weigh the
evidence, evaluate its credibility, or grant summary judgment based on its opinion on the
plausibility of the claim. (Binder v. Aetna Life Ins. Co. (1999) 75 Cal. App. 4th 832, 840.)
But whether a duty exists is a matter of law for the court to determine; it may not be
established by expert testimony. (Carleton v. Tortosa, supra, 14 Cal.App.4th at p. 755.)
In Carleton, an investor hired a real estate agent to represent him in the purchase of two
residential properties. The investor signed an agreement disclaiming the agent’s duty to
give tax advice. (Id. at p. 750.) The investor later incurred a tax liability and sued his
agent for negligence and breach of duty. (Ibid.) He offered the testimony of other real
estate professionals to support his allegation that the agent was under a legal duty to
investigate tax matters, but the trial court sustained the agents objections to the testimony.
(Id. at p. 755.) The Third Appellate District affirmed, holding that “expert testimony is
incompetent on the predicate question whether the duty exists” because whether a legal
duty exists is a question of law for the court to determine. (Ibid.)
       Similarly here, plaintiff’s experts opined that an experienced or even competent
real estate agent in the community would know that historically, subdivision in Malibu
was often illegal, a fact clearly reflected in current assessor maps. The point is irrelevant.
The issue concerns the extent of the agent’s legal duties, which derive from statute and
the parties’ agreement, not from best trade practices. The trial court therefore properly
sustained Anderson’s objections to the experts’ declarations.

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                                    DISPOSITION
      The judgment is affirmed. Respondents are to recover their costs on appeal.
      NOT TO BE PUBLISHED.

                                                       CHANEY, J.

We concur:

      ROTHSCHILD, P. J.

                   *
      MILLER, J.

      *
          Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.

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