Judge: Armen Tamzarian, Case: 22STCV05747, Date: 2024-09-24 Tentative Ruling

Case Number: 22STCV05747    Hearing Date: September 24, 2024    Dept: 52

Tentative Ruling:

Defendants Kate Blackwood and Home as Art, Inc. dba Deasy Penner Podley’s Motion for Summary Judgment

Defendants Kate Blackwood and Home as Art, Inc. dba Deasy Penner Podley move for summary judgment of this action by plaintiffs David Williamson and Magdalena Williamson.

Legal Standard

Summary judgment should be granted where no triable issues of fact exist and the moving party is entitled to judgment as a matter of law.  (Code Civ. Proc., § 437c, subd. (c); Villa v. McFerren (1995) 35 Cal.App.4th 733, 741.)  Courts use a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

A defendant “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established.”  (Code Civ. Proc., § 437c, subd. (p)(2).)  If the defendant meets its burden of showing plaintiff cannot establish one element of the cause of action, the plaintiff “need only present evidence establishing a triable issue on the specific element the [defendant] challenges.”  (Swanson v. Morongo Unified School Dist. (2014) 232 Cal.App.4th 954, 968.) 

Summary of Allegations

            Plaintiffs’ claims against defendants arise from a sale of real property.  Plaintiffs hired defendants to represent them as real estate brokers in selling a residence in Los Angeles.  (FAC, ¶¶ 10-16.)  In April 2019, plaintiffs sold the property to non-party Jason F. Brown.  (¶¶ 19-28.) 

Plaintiffs allege, “In preparing the necessary paperwork to execute the sale of the Property between Plaintiffs and the Buyer, however, Defendants failed to obtain all signatures necessary to complete the sale in its intended totality.  Specifically, Defendants failed to follow up with the Buyer to get a required signature on the Request for Repair No. 1 form (‘RR1’), which included an attached Contingency Removal form (‘CR’).”  (FAC, ¶ 21.)  They further allege, “The omitted signature was to be provided” when removing the buyer’s “physical inspection contingencies” and a “release that was listed above the provision on the RR1 Form.”  (¶ 23.)   

Plaintiffs allege Brown later “discovered structural damage within the Property and has come after Plaintiffs seeking to recover damages.”  (FAC, ¶ 27.)  Plaintiffs allege, “Such damages would have otherwise specifically been waived, should Defendants have obtained the missing signature.  Plaintiffs are therefore now suffering damages of their own, given the mistakes of Defendants.”  (¶ 28.)  Defendants’ “fail[ure] to obtain all the signatures necessary” allegedly “opened Plaintiffs up to liability that they believed they were protected from, and otherwise should have been protected from, under the RR1 and CR.”  (¶ 30.)

Based on these factual allegations, plaintiffs assert three causes of action: (1) breach of contract, (2) breach of fiduciary duty, and (3) professional negligence.         

Evidentiary Objections

            Defendants object to paragraphs 8, 9, 13, 14, 15, and 17 of David Williamson’s declaration.  The objections to paragraphs 15 and 17 are sustained.  The objections to paragraphs 8, 9, 13, and 14 are overruled.

Discussion

            Defendants argue plaintiffs cannot establish an element common to all three causes of action: proximate cause.  Proximate cause requires both “cause in fact” and “legal cause.”  (State Dept. of State Hospitals v. Superior Court (2015) 61 Cal.4th 339, 352-353.)  “ ‘ “An act is a cause in fact if it is a necessary antecedent of an event.” ’ ”  (Id. at p. 352.)  Legal cause concerns “ ‘ “ ‘the various considerations of policy that limit an actor’s responsibility for the consequences of his conduct.’ ” ’ ”  (Id. at p. 353.)  “ ‘ “[C]ausation ... is ordinarily a question of fact which cannot be resolved by summary judgment.  The issue of causation may be decided as a question of law only if, under undisputed facts, there is no room for a reasonable difference of opinion.” ’ ”  (Kaney v. Custance (2022) 74 Cal.App.5th 201, 212.)

Plaintiffs’ claims rely on the allegation that defendants failed to ensure the buyer, Brown, signed a release of liability.  The release provision in the “Request for Repair No. 1” provides, “Buyer releases Seller and Brokers from any loss, liability, expense, claim or cause of action regarding the disclosed condition of the Property.”  (FAC, Ex. B, p. 1.)  Brown did not sign on the line under the following text: “If Seller agrees to all of Buyer’s request, Buyer hereby removes the physical inspection contingencies and those identified on the attached CR form signed by Buyer and agrees to the above Release.”  (Ibid., italics added.) 

Defendants contend signing this release would not have released the claims Brown asserts against plaintiffs.  If so, not having Brown sign the release could not have caused any damage to plaintiffs.  “[C]onduct is not a substantial factor in causing harm if the same harm would have occurred without that conduct.”  (Yanez v. Plummer (2013) 221 Cal.App.4th 180, 187.)  The issue depends primarily on whether Brown’s arbitration demand against plaintiffs asserts “any loss, liability, expense, claim or cause of action regarding the disclosed condition of the Property.”  (FAC, Ex. B, p. 1.) 

The “disclosed condition of the Property” in connection with the Request for Repair includes the disclosures made in the Seller Property Questionnaire.  (Motion, Ex. 4.)  The questionnaire asks plaintiffs whether they are “aware of” numerous issues.  (Id., pp. 1-4.)  Plaintiffs answered “Yes” to several questions. 

For “B. Repairs and Alterations,” plaintiffs stated they were aware of: “Any alterations, modifications, replacements, improvements, remodeling or material repairs on the Property”, “Ongoing or recurring maintenance on the Property”, “Any part of the Property being painted within the past 12 months”, and “Whether the Property was built before 1978.”  (Motion, Ex. 4, p. 2.)  In the “Explanation” section, plaintiffs wrote, “French doors installed in first floor bedroom, engineered hardwood flooring installed throughout, footing replaced on most of extended room, house painted interior & exterior, garage painted, new drywall most area.”  (Ibid.)

For “C. Structural, Systems, and Appliances,” plaintiffs stated they were aware of “Defects in any of the following, (including past defects that have been repaired): heating, air conditioning, electrical, plumbing (including the presence of polybutylene pipes), water, sewer, waste disposal or septic system, sump pumps, well, roof, gutters, chimney, fireplace, foundation, crawl space, attic, soil, grading, drainage, retaining walls, interior or exterior doors, windows, walls, ceilings, floors or appliances.”  (Motion, Ex. 4, p. 2.)  They also stated they were aware of “an alternative septic system on or serving the Property.”  (Ibid.)  In the “Explanation” section, plaintiffs wrote, “AC/exhaust vent installed, sewage line/pipe replaced where exposed by removal of walls or floor.  Decommissioned septic tank on property from when area was on septic in past.”  (Ibid.)

For “E. Water-Related and Mold Issues,” plaintiffs stated they were aware of “Water intrusion into any part of any physical structure on the Property; leaks from or in any appliance, pipe, slab or roof; standing water, drainage, flooding, underground water, moisture, water-related soil settling or slippage, on or affecting the Property.”  (Motion, Ex. 4, p. 2.)  In the “Explanation” section, plaintiffs wrote, “Leaky washer and moisture intrusion in laundry room.  Removed/replaced drywall and washing machine/dryer.  Installed moisture barrier.  Est. completion 4/20/19.”  (Ibid.)

Finally, for “M. Other,” plaintiffs disclosed they were aware of “Reports, inspections, disclosures, warranties, maintenance recommendations, estimates, studies, surveys or other documents, pertaining to (i) the condition or repair of the Property or any improvement on this Property in the past, now or proposed; or (ii) easements, encroachments or boundary disputes affecting the Property whether oral or in writing and whether or not provided to the Seller.”  (Motion, Ex. 4, p. 4.)  In the “Explanation” section, plaintiffs wrote, “Moisture intrusion in laundry room.”  (Ibid.)

These items disclosed in the Seller Property Questionnaire constitute the “disclosed condition[s] of the Property” (FAC, Ex. B, p. 1) for which Brown did not sign a release.  Defendants therefore must show that, as a matter of law, Brown is not asserting “any loss, liability, expense, claim or cause of action regarding” (ibid.) those conditions.  Defendants do not meet their burden of doing so.

In February 2022, Brown served a demand for arbitration on plaintiffs.  (D. Williamson Decl., ¶ 13, Ex. J, enclosure 2.)  The demand asserts causes of action for: (1) intentional misrepresentation (id., p. 8), (2) negligent misrepresentation (p. 9), (3) breach of contract (pp. 9-10), and (4) fraudulent concealment (pp. 10-11).  The demand recites two of the disclosures from the Seller Property Questionnaire discussed above.  First, it provides the explanation in section C beginning, “AC/exhaust vent installed… .”  (Id., ¶ 15.)  Second, it recites the explanation in section E beginning, “Leaky washer and moisture intrusion in laundry room… .”  (Id., ¶ 16.)

Brown’s demand asserts claims based on numerous purported defective conditions at the property.  Among those, it alleges some defects connected to the disclosed condition of the “leaky washer and moisture intrusion in [the] laundry room.”  (Motion, Ex. 4, p. 2.)  The demand alleges, “Shortly after the close of escrow, Brown discovered cracking and evidence of water leaks in the shared wall and ceiling area between the laundry room and kitchen on the first floor.  Brown immediately hired contractors to fix the problem.  The contractors identified and fixed a leak from the upper-level front deck into the shared wall area between the kitchen and laundry room.”  (D. Williamson Decl., Ex. J, enclosure 2, ¶ 24.) 

The demand continues: “After a few months, the cracks and leaks reappeared.  Brown again consulted contractors, who thought that perhaps the problem was related to root systems from the yard putting pressure on the ceilings and shared wall between the kitchen and laundry room.”  (D. Williamson Decl., Ex. J, enclosure 2, ¶ 25.)  “Another few months went by, and the cracks and leaks reappeared yet again.  This time, the contractors proposed more significant work on the entry way and the concrete deck, both of which were on the second story, directly above the kitchen and laundry room.”  (Id., ¶ 26.)  “[T]he contractors opened up part of the shared wall between the kitchen and laundry room and discovered significant electrical work that had not been done per Code.”  (Id., ¶ 27.)

Brown’s demand also alleges a defect related to the “French doors” plaintiffs disclosed were installed in section B of the Seller Property Questionnaire.  Brown alleges, “[T]he French doors on the first level would not close or lock properly, and cracks began to appear throughout the first level.”  (D. Williamson Decl., Ex. J, enclosure 2, ¶ 29.) 

Defendants argue, “[T]he Release would have only prevented Mr. Brown from seeking damages for the disclosed condition of the Subject Property,” and “[n]one of the disclosed conditions … all of which are contained in the disclosures attached hereto as Exhibits 3-8, include any reference to the structural damage discovered by Mr. Brown after the close of escrow.”  (Memo, pp. 7-8.)  But the disclosed conditions included the moisture intrusion in the laundry room and the installation of French doors.  Brown’s demand for arbitration alleges claims based, in part, on those conditions.  Based on this record, a reasonable trier of fact could conclude defendants’ failure to obtain Brown’s signature on the release proximately caused damages to plaintiffs. 

In their reply, defendants argue plaintiffs cannot rely on Brown’s demand for arbitration because doing so improperly expands the scope of their claims beyond what they alleged in the pleadings.  The first amended complaint alleges defendants breached their duties because failing to have Brown sign the release exposed plaintiff to liability.  (FAC, ¶¶ 21-27.)  The basis of this action is that the alleged “error has opened Plaintiffs up to liability that they believed they were protected from, and otherwise should have been protected from, under the RR1 and CR.”  (¶ 30.)  Brown’s demand for arbitration is evidence supporting that allegation.  It constitutes the liability plaintiffs allege they should have been protected from.  The demand for arbitration falls squarely within the scope of the first amended complaint.

Disposition

            Defendants Kate Blackwood and Home as Art, Inc. dba Deasy Penner Podley’s motion for summary judgment is denied.