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Horiike v. Coldwell Banker Residential Brokerage Co.

California Court of Appeals, Second District, Fifth Division

April 9, 2014

HIROSHI HORIIKE, Plaintiff and Appellant,
v.
COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY et al., Defendants and Respondents.

[REVIEW GRANTED BY CAL. SUPREME COURT]

APPEAL from a judgment of the Superior Court of Los Angeles County No. SC110477, John H. Reid, Judge.

Page 428

[Copyrighted Material Omitted]

Page 429

COUNSEL

Victor N. Pippins and David W. Macey for Plaintiff and Appellant.

Klinedinst PC and Neil Gunny for Defendants and Respondents.

OPINION

KRIEGLER, J.

A broker represented both the buyer and the seller in a real property transaction through two different salespersons. The buyer brought several claims against the broker and the salesperson who listed the property for sale, including breach of fiduciary duty. The trial court granted a nonsuit on the claim for breach of fiduciary duty against the salesperson on the ground that the salesperson who listed the property did not have a fiduciary

Page 430

duty to the buyer. The court also instructed the jury that the broker had no liability for breach of fiduciary duty based on the salesperson’s acts. The jury returned a verdict in favor of the defense on the remaining causes of action.

The buyer contends that the salesperson had a fiduciary duty equivalent to the duty owed by the broker, and the trial court incorrectly granted the nonsuit and erroneously instructed the jury. We agree. When a broker is the dual agent of both the buyer and the seller in a real property transaction, the salespersons acting under the broker have the same fiduciary duty to the buyer and the seller as the broker. The buyer was prejudiced by the erroneous rulings, because the jury’s findings of fact did not resolve the omitted issues concerning breach of fiduciary duty. Therefore, we reverse the judgment and remand for a new trial.

FACTS

Defendant Chris Cortazzo is a salesperson for defendant Coldwell Banker Residential Brokerage Company (CB). In 2006, the owners of a residential property in Malibu engaged Cortazzo to sell their property. The building permit lists the total square footage of the property as 11, 050 square feet, including a single family residence of 9, 224 square feet, a guest house of 746 square feet, a garage of 1, 080 square feet, and a basement of unspecified area.

Cortazzo listed the property for sale on a multiple listing service (MLS) in September 2006. The listing service provided Cortazzo with public record information for reference, which stated that the living area of the property was 9, 434 square feet. The listing that Cortazzo created, however, stated the home “offers approximately 15, 000 square feet of living areas.” Cortazzo prepared a flier for the property which stated it “offers approximately 15, 000 square feet of living areas.”

In March 2007, a couple made an offer to purchase the property. They asked Cortazzo for verification of the living area square footage. Cortazzo provided a letter from the architect stating the size of the house under a current Malibu building department ordinance was approximately 15, 000 square feet. Cortazzo suggested the couple hire a qualified specialist to verify the square footage. The couple requested the certificate of occupancy and the architectural plans, but no architectural plans were available. In the real estate transfer disclosure statement, Cortazzo noted from his visual inspection that adjacent parcels were vacant and subject to ...


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