Monthly Archives: April 2014

Horiike v. Coldwell Banker- Dual Agents Are Fiduciaries Of All

In Horiike, two agents of the same broker represented the parties to a transaction.  As Professor Shaun Martin noted in his article (California Appellate Report: Horiike v. Coldwell Banker Cal. Ct. App. – April 9, 2014), it is hard to see how the trial court missed the fundamental rule of real estate agency by concluding that the agent of one side did not have duties to the other.   The court of appeal, however, figured it out.

A dual agency relationship requires all agents to treat all parties as fiduciaries.  This may mean that neither side gets a zealous advocate.  Since the commission stays the same in most real estate transactions regardless of the identity of the buyer’s agent, the parties might be better served if they each have independent representation.  


McCaffrey Group- More Right To Repair- More Fees!

Click here for McCaffrey Group v. Superior Court.

The Right To Repair Act returns with another avalanche of writs and fees.

The homeowner had a leak and called Allstate, his insurance company.  Allstate promptly repaired the home and sued KB Home, the developer, for subrogation to recover just over $80,000.00.

KB Home demurred to the complaint because it did not allege compliance with the Right To Repair Act.  The trial court eventually concluded that the prelitigation procedures of the Act did not apply to a subrogation action.  On writ number one, the court of appeals ordered the trial court to reconsider, which it did, sustaining the demurrer with leave to amend.

After the first writ, KB Home demurred to the amended complaint.  The trial court again concluded the the Act did not apply to subrogation matters.  On writ number two, the court of appeals ordered the trial court to sustain the demurrer on negligence and strict liability and to overrule the demurrer for noncompliance with the Act.

KB Home and Allstate both moved for summary judgment.  The trial court granted Allstate’s motion and denied KB Home’s, holding that two letter constituted sufficient notice.  On writ number three, the court of appeals ordered the trial court to reverse itself on both motions.  The trial court declined, resulting in this motion.

Unsurprisingly, the court of appeals reversed the trial court, ordering the trial court to enter judgment in favor of KB Home.  The Act applies to require a meaningful opportunity to inspect and to repair a home, even when an insurance company believes it is fulfilling its obligations to its insured by acting promptly to address a covered loss.

The attorney’s fees for three writs and an appeal for two sides almost certainly eclipsed the amount in controversy, making the Right To Repair Act a tremendous billing opportunity for attorneys when its purpose was to reduce the time spent in court for contractors, developers, and home owners.

Richman v. Hartley — When In Doubt, Disclose And Then Disclose Some More

Richman v. Hartley, Cal: Court of Appeal, 2nd Appellate Dist., 6th Div. 2014 – Google Scholar.

This is a simple case.  California law requires a statutory Transfer Disclosure Statement for sales of 1-4 unit residential properties.  This case involved a mixed use property consisting of a commercial building and a duplex.  The seller did not provide a Transfer Disclosure Statement then sued the buyer for failure to close even though the buyer failed to close because the seller did not provide the necessary disclosures.

The trial court granted summary judgment to the buyer based on the lack of a statutory disclosure.  The Court of Appeals affirmed.

California Civil Code § 1102(a) provides that “any transfer . . . of real property . . . improved with or consisting of not less than one nor more than four dwelling units.”  The subject property had two dwelling units, making the statutory obligation “clear and unambiguous.”  

The peculiar elements of this case include (i) how the attorney for the seller could argue with a straight face that his client did not need to provide a disclosure statement; (ii) how it was a good idea to sue the buyer; or (iii) how there was any chance of success on appeal. 

When in doubt, disclose.  If you are uncertain about whether to comply with a statute that does not impose an overwhelming burden on a seller, then play it safe and comply.