Court Opinion

ID: 9749578
Source: CourtListenerOpinion
Date Created: 2023-08-27 16:51:46.749093+00
Date Added: 2024-06-11T15:06:53.799107
License: Public Domain

YEGAN, J.
I respectfully dissent. Justine Larson, a real estate broker, was retained by Leendert P. Huijers to find a nursery which would qualify for a tax deferred exchange for his existing nursery in Huntington Park. Larson located a property, owned by Gordon and George Anne DeMarrais, which had both a nursery and a residence. Larson expressly told the DeMarraises that she had a “client” who was interested in buying their property. The DeMarraises alone set the listing price at $325,000. Larson told them that if she brought them a buyer at that price, she would earn a 6 percent commission. The DeMarraises did not object and signed a written contract listing the property on these terms. Larson, however, did not provide a written dual agency disclosure statement.1
Thereafter, Larson advised the DeMarraises that her “client” would be making an offer. Thus, she had already begun to perform her contract with the DeMarraises. Thereafter, the DeMarraises indicated that they wanted to raise the listing price to $375,000. Larson did not agree to modify the written contract that she had with them. (Civ. Code, § 2381.)2 When Larson told Huijers that the DeMarraises wanted to raise the price, Huijers, who had *688planned to offer $275,000, told Larson to prepare a full price offer of $325,000.
When Huijers, Larson, and the Demarraises met, Huijers expressly told the DeMarraises that if they did not want to hear his $325,000 offer, he would leave. The Demarraises told Huijers to stay and the $325,000 full price offer was presented. An eight-hour bargaining session ensued. The DeMarraises asked why they couldn’t raise the price. Huijers said that it was his understanding of California law that once a broker brought a willing and able buyer at the listing price, the seller was obligated to pay a commission whether the sale was consummated or not.
The DeMarraises abandoned the $375,000 price and accepted Huijers’s offer. In doing so, Mr. Demarráis said, “. . . I have to pay the commission anyway.” Larson then provided the DeMarraises with the written dual agency disclosure statement.
Long before the written agency disclosure statutes were enacted (Civ. Code, § 2373 et seq.), the California Supreme Court indicated: “ ‘[Wjhere an agent has assumed to act in a double capacity, a principal who has no knowledge of such dual representation . . . may avoid the transaction. . . . Such conduct is a fraud upon his [the agent’s] principal. . . .” (McConnell v. Cowan (1955) 44 Cal.2d 805, 809 [285 P.2d 261].)
Relying on McConnell v. Cowan, supra, the majority hold that failure to provide the written disclosure statement relieves the seller from the obligation to pay the commission. The effect of this holding, in the majority of cases, works an unnecessary modification of the Statute of Frauds. (Civ. Code, § 1624, subds. (c) and (d).)
The salutory rule announced in McConnell v. Cowan, supra, does not compel reversal in this case. Here, Larson disclosed her dual agency relationship to the DeMarraises, albeit not in the written form required. On at least two occasions, she referred to her “client” who wanted to purchase the property.
The trial court expressly found that Larson committed no fraud and that she represented “. . . the interests of both plaintiff and defendants in a fair and neutral manner.” The DeMarraises, experienced in real estate transactions, knew that Larson was not their exclusive agent. The trial court expressly found that “. . . her role as a dual agent was fully disclosed to Defendants.” Substantial evidence supports this determination.
*689There is a causation problem in the majority’s analysis. The majority indicate that the failure to make the written disclosure relieved the DeMarraises of the duty to pay the commission and Huijers’s opinion to the contrary may have been the cause of the DeMarraises entering into the contract. Not so. The trial court expressly found that the DeMarraises knew of the dual agency, alone set the initial price of $325,000, and after an eight-hour bargaining session, agreed to this price as well as other terms and conditions.3 Huijers initially indicated he would leave if the DeMarraises wanted him to do so. After the marathon bargaining session, Huijers suggested that they sleep on it and consult an attorney. In signing the real estate contract, Mr. DeMarrais said that he had planned to sell the property and “. . . that it was basically a fairly good deal.”
The trial court impliedly, if not expressly, found that the failure to provide the written disclosure did not cause the DeMarraises to sell for the $325,000 price. This finding is supported by substantial evidence and the reasonable inferences which can and should be drawn therefrom. The DeMarraises have not demonstrated to the contrary as a matter of law. It is a question of fact whether failure to disclose is the proximate cause of damages. (Montoya v. McLeod (1985) 176 Cal.App.3d 57, 65 [221 Cal.Rptr. 353].)
If a broker fails to make a written disclosure of dual agency, the seller must still prove that he would not have entered into the transaction but for the failure to make the written disclosure. Where, as here, he does not do so, he must sell the property.
Inherent in this analysis is my disagreement with the majority that failure to provide the written disclosure of dual agency discharges the seller’s duty to pay a real estate commission. No one coerced the DeMarraises into signing the listing agreement at the $325,000 price and it is speculative whether they would have conducted themselves differently had the written disclosure been made. The DeMarraises could not unilaterally change the listing agreement. (Civ. Code, § 2381.)
“[I]f a broker produces a buyer on terms set out in his listing agreement, and the seller refuses to perform, the broker may recover his commission on his contract with the seller.” (Seek v. Foulks (1972) 25 Cal.App.3d 556, 569 [102 Cal.Rptr. 170].) In the absence of fraud, failure to provide written disclosure of dual agency should not change the rule announced in Seek, supra. Not every violation of a statute creates a private cause of action.
*690(Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287, 204 [250 Cal.Rptr. 116, 758 P.2d 58].) A fortiori, violation of a statute does not inexorably create a defense to a civil action.4
[[]] *
This case was bitterly contested from the outset and the attorney fees spent thereon are a testament to the fact that an early settlement would have been in everyone’s best interest. The trial court issued a 29-page statement of decision which exhaustively and fairly decided the dispute. The judgment should be affirmed in its entirety.
Respondent’s petition for review by the Supreme Court was denied March 11, 1993. Lucas, C. J., Mosk, J. and Panelli, J., were of the opinion that the petition should be granted.

The majority opinion is initially premised on the theoretical application of Civil Code section 2373 et seq. This section applies to transactions for the sale of real property “. . . improved with one to four dwelling units . . . .” (§ 2373, subd. (j).) Here the property had one dwelling but there is little doubt that the true object of the sale was the nursery. In Smith v. Rickard (1988) 205 Cal.App.3d 1354 [254 CaI.Rptr. 633], we previously held that “. . . the presence of a residence on the commercial property does not transform the property into residential property” {id. at p. 1363) for purposes of the rule announced in Easton v. Strassburger (1984) 152 Cal.App.3d 90 [199 CaI.Rptr. 383, 46 A.L.R.4th 521], (See also Civ. Code, § 2079.) A strong argument can be made that Civil Code section 2373 et seq., does not apply here at all.

Civil Code section 2381 provides: “A contract between the principal and agent may be modified or altered to change the agency relationship at any time before the performance of *688the act which is the object of the agency with the written consent of the parties to the agency relationship.”

The price was reduced to $315,000 because of a $10,000 lien on the property.

The remedy for violation of the instant statute is not written in invisible ink. The failure of the real estate broker to comply with the requirements of Civil Code section 2373 et seq. may subject the broker to discipline by the Commissioner of Real Estate. (Bus. & Prof. Code, §§ 10175, 10176, subd. (d).)

See footnote, ante, page 676.