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Hoffman v. 162 North Wolfe LLC

California Court of Appeals, Sixth District

July 15, 2014

STEVEN HOFFMAN et al., Cross-Complainants and Appellants,
v.
162 NORTH WOLFE LLC, et al., Cross-Defendants and Respondents.

[CERTIFIED FOR PARTIAL PUBLICATION[*]]

[As modified Aug. 13, 2014.]

Santa Clara County Super. Ct. No. 110CV172328

Page 1179

[Copyrighted Material Omitted]

Page 1180

COUNSEL

Terra Law, D. D. Hughmanick and Martin D. Dioli for Cross-complainants and Appellants.

Morgan, Franich. Fredkin & Marsh, Mark B. Fredkin, Anthony Marsh and Linda M. MacLeod for Cross-defendants and Respondents.

OPINION

MÁRQUEZ, J.

This case involves a dispute between the owners of adjacent commercial property located in Sunnyvale at 170 North Wolfe Road

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(170 Wolfe, or 170 Wolfe property) and 162 North Wolfe Road (162 Wolfe, or 162 Wolfe property). In March 2010, appellants Steven Hoffman (Hoffman) and Swee Lin Hoffman (collectively, the Hoffmans), purchased the 170 Wolfe property. After close of escrow, the owner of the 162 Wolfe property, respondent 162 North Wolfe LLC (162 LLC), claimed a landscape easement and prescriptive easement rights of ingress and egress over 170 Wolfe.

162 LLC sued to quiet title. The Hoffmans cross-complained, alleging (among other things) that 162 LLC and its members had defrauded them by falsely advising that they had no claims or interest with respect to the 170 Wolfe property. The Hoffmans alleged two fraud claims—concealment/suppression of facts, and intentional misrepresentation. The fraud claims were based upon an alleged conversation approximately eight months before close of escrow between Hoffman and Jonathon Owens, one of 162 LLC’s members. In response to Hoffman’s complaint that vehicles servicing the 162 Wolfe property were crossing over onto 170 Wolfe, Owens said he “would take care of it.” After this alleged conversation and for eight months before escrow closed, the vehicles servicing 162 Wolfe continued to cross onto 170 Wolfe. The Hoffmans observed these occurrences. But they neither raised the issue with the then-owner of 170 Wolfe, nor complained to 162 LLC.

162 LLC and related parties successfully moved for summary adjudication of the Hoffmans’ two fraud claims. The parties later settled their remaining claims, and a judgment was entered with the Hoffmans’ reserving their challenge to the propriety of the summary adjudication order. The Hoffmans appealed, arguing that there were triable issues of material fact as to both the concealment/suppression of facts and intentional misrepresentation claims.

We conclude there was no error. The concealment/suppression of facts claim fails because of the absence of evidence supporting all of the requisite elements of that claim. Two elements of the claim not present were (1) a duty on the part of 162 LLC to disclose that it claimed prescriptive easement rights; and (2) the Hoffmans’ justifiable reliance on the facts as they understood them without such disclosure (i.e., their understanding that there were no adverse claims against the 170 Wolfe property by the owners of the adjacent property). The intentional misrepresentation claim likewise fails because of the absence of evidence that the Hoffmans justifiably relied on 162 LLC’s alleged implicit representation that it did not claim any easement rights over the 170 Wolfe property. We will therefore affirm the judgment.

FACTUAL BACKGROUND

162 LLC, whose members are Jonathon Owens and Thomas Haverstock, is the owner of the 162 Wolfe property. Owens and Haverstock are both patent

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attorneys, and are partners of Haverstock & Owens, LLP (Law Firm), which is a tenant in the building located on 162 Wolfe. That building is next door to the building on 170 Wolfe.

At some time prior to June 2009, Owens and Haverstock had two conversations with Dean Chestnut, a real estate broker representing the then-owner of 170 Wolfe. Chestnut inquired about Owens’s and Haverstock’s potential interest in purchasing 170 Wolfe. After they received information about the asking price, Owens and Haverstock both indicated to Chestnut that they were not interested in purchasing 170 Wolfe. Chestnut never told the Hoffmans about his conversations with Owens and Haverstock, and neither Owens nor Haverstock ever had any contractual, transactional, or fiduciary relationship with Chestnut.

Hoffman is and has been a licensed real estate broker since 1994. He had in the past owned a residential real estate brokerage firm, CompuRealty, as well as a medical software company, Quicksilver Systems. The Hoffmans also own BackProject, Inc. (BackProject), a company that manufactures medical exercise devices intended to provide relief for back and neck pain; Hoffman is the chief executive officer of BackProject. The Hoffmans own real estate in addition to their residence, namely, a four-unit apartment building, and a townhouse or condominium.

The Hoffmans entered into a contract to purchase 170 Wolfe on April 29, 2009. Approximately two months later (on or about June 26, 2009), BackProject became a tenant in the building located at 170 Wolfe. The Hoffmans closed escrow on their purchase of 170 Wolfe on March 5, 2010.

Shortly after BackProject became a tenant at 170 Wolfe, Hoffman introduced himself to Owens and complained to him that the Law Firm’s employees were parking in spaces in front of 170 Wolfe. Owens indicated that the Law Firm employees would cease parking there.[1]

Hoffman had a second conversation with Owens—the one central to the Hoffmans’ fraud claims—that occurred “a couple of weeks” after the first conversation. The second conversation occurred in mid- to late-July 2009, nearly eight months before the Hoffmans closed escrow. Hoffman had observed various 162 Wolfe service vehicles—United Parcel Service, Federal Express, DHL, Costco, a shredding company, and a water delivery service—using 170 Wolfe. He had also observed the Law Firm’s employees backing out of parking spaces and crossing over onto 170 Wolfe. Hoffman testified in

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deposition that as a result of these observations, he spoke with Owens: “Q. Specifically, what did you say to Mr. Owens? [¶] A. I do not want your vehicles crossing the property line. I would appreciate it if you could take care of that. [¶] Q. And what did he say to you in this purported conversation? [¶] A. At this time, ‘No problem. We’ll take care of it.’ [¶] Q. When you said ‘your vehicles, ’ did you tell him what you meant by that? [¶] A. Yes. [¶] Q. What did you tell him? [¶] A. ‘Your vehicles that service your building and your employees.’ ”[2] Hoffman testified he had requested that the vehicles not cross over the property line because he did not want Owens to “get used to this.”

At the time of these two conversations in mid-2009, Owens believed, based upon long-standing use, that 162 LLC held by prescriptive easement a “right to drive through the paved area” between the two properties. He did not mention this prescriptive easement right in his conversations with Hoffman because he is “not a real property attorney.”

Both before BackProject’s occupancy and during its occupancy of 170 Wolfe, there were instances––before the Hoffmans closed escrow––in which the area in which 162 LLC claims a prescriptive easement was temporarily, partially obstructed by vehicles or pallets. 162 LLC did not complain about these temporary obstructions. Additionally, at no time did 162 LLC repair or maintain the disputed area involved in the prescriptive easement, offer to do so, or pay taxes on the area.

After the second conversation between Hoffman and Owens and up to the time escrow closed in March 2010, the Hoffmans continued to observe vehicles that were not servicing 170 Wolfe travel over that property. For Hoffman, this was a “common occurrence.” Hoffman did not complain to BackProject’s landlord (i.e., the then-owner of 170 Wolfe) about these vehicles’ traveling over 170 Wolfe. And the Hoffmans presented no evidence that they spoke to Owens or Haverstock about this issue after Hoffman’s second conversation with Owens in July 2009. In his declaration filed in opposition to the summary adjudication motion, Hoffman ...


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