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ORLANDO v. PALOS VERDES REALTY, INC., B218963. (2011)

Court: Court of Appeals of California Number: incaco20110615028 Visitors: 4
Filed: Jun. 15, 2011
Latest Update: Jun. 15, 2011
Summary: NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS RUBIN, ACTING P. J. This case arises out of a real estate transaction in which plaintiffs and respondents Silvio and Adriana Orlando (referred to individually as Silvio or Adriana and collectively as respondents) were the buyers and defendants and appellants Palos Verdes Real Estate, Inc., dba Remax Palos Verde Realty and agent George Wong (collectively appellants) represented the seller. Appealing from a judgment in favor of respondents, appellants
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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

RUBIN, ACTING P. J.

This case arises out of a real estate transaction in which plaintiffs and respondents Silvio and Adriana Orlando (referred to individually as Silvio or Adriana and collectively as respondents) were the buyers and defendants and appellants Palos Verdes Real Estate, Inc., dba Remax Palos Verde Realty and agent George Wong (collectively appellants) represented the seller. Appealing from a judgment in favor of respondents, appellants contend: (1) there was insufficient evidence that Wong, the sellers' real estate agent, made any intentional misrepresentation; and (2) appellants are entitled to an offset against the judgment in the amount of a pretrial settlement respondents received from co-defendant Lincoln Termite.1 We affirm.

FACTUAL AND PROCEDURAL BACKGROUND2

In February 2004, appellants represented Gay and Donald Durward (sellers) in the sale of their Palos Verde home to respondents. The Durwards are not parties to this appeal. During escrow, respondent buyers asked for a mold inspection. At sellers' direction, their agent, Wong, told respondents that there would be no mold inspection until after escrow closed. An amendment to the escrow agreement provided that respondents would arrange for a mold inspection and that any necessary repairs would be completed by the sellers after escrow closed. After escrow closed, respondents provided sellers with the mold report and remediation recommendations. As a service to his clients, Wong hired Lincoln Termite to perform the repairs and he oversaw the work. Respondents subsequently discovered problems with a deck that were worse than they thought when they agreed to purchase the property and that a wall had not been properly repaired.

The record does not include a copy of the operative pleadings. However, based on the special verdict forms, it appears that respondents filed an action naming as defendants the sellers and their brokers (appellants); the complaint alleged causes of action for breach of contract against the sellers only, fraud (intentional misrepresentation and intentional concealment) against the sellers and appellants, and negligence against appellants only. Lincoln Termite, the settling co-defendant, was also named in the negligence cause of action, which was based on "mold repairs."

At trial, the sellers testified that they were not aware of any problems with the property that they did not disclose or that respondents did not discover. They also testified that the representations Wong made to respondents were consistent with what the sellers told Wong.

Silvio and Adriana testified to various representations Wong made to them while they were viewing the house. For example, Silvio testified that, during escrow, respondents went to the house with Wong a few days after it rained. Although most of the furniture had been moved out, a ceiling fan in the family room was turned on. Concerned that the fan had been turned on to dry something, Silvio asked Wong why it was on. Wong said he did not know and suggested it had been on for several days. Silvio saw a dark mark on the ceiling which he wanted to touch to see if the ceiling was wet. When Silvio could not reach the spot, he asked Wong to touch it. Wong did so and said there was "absolutely no wetness there." Respondents returned to the house several days later, once again accompanied by Wong. The dark spot Silvio saw on the wall during his previous visit was now clearly a stain. Silvio noticed that an "entertainment center" had been moved and that there seemed to be water damage on the wall, which respondents attributed to a leak from the deck. Silvio also noticed apparent water damage to the carpet in the family room. Respondents were concerned that there were leaks. Wong explained that what Silvio thought was water damage on the carpet was just higher pile in a spot that had been underneath a couch. Wong told Adriana that depressions she saw in the ceiling were from drywall nails, not leaks. Wong also told Adriana that, contrary to what their deck expert said, certain little cracks in the deck could not possibly be leaks. Also disagreeing with the deck expert, Wong told respondents that stains inside French doors were from sun damage, not water damage. Wong said that discoloration on the garage floor was not from excess moisture.

By special verdict the jury found in favor of the sellers and against respondents on the fraud and breach of contract counts;3 in favor of respondents and against appellants on the fraud (intentional misrepresentation) count; and in favor of respondents and against appellants on the negligence count. The jury assessed damages for fraud in the amount of $15,000 and damages for negligence in the amount of $22,500. The trial court entered judgment in favor of respondents and against appellants for $15,000 on the fraud cause of action only.

DISCUSSION

A. There Was Substantial Evidence That Wong Made Intentional Misrepresentations

Appellants contend "it is impossible for the realtors to have made intentional misrepresentations." As we understand their argument, it is a challenge to the sufficiency of the evidence. According to appellants, there was "undisputed" evidence that all of the representations Wong made to appellants were consistent with what he was told by the sellers; the jury found the sellers did not make any false representations; since Wong only repeated what he was told by the sellers, Wong did not make any false misrepresentations. We disagree.

"It is fraud to suppress a fact with intent to induce a person to enter a contract to acquire realty. (Civ. Code, §§ 1572, subd. 3; 1710, subd. 3; [citations].)" (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1383.)

We presume that the record contains sufficient evidence to support the judgment and it is appellants' burden to `demonstrate' that there is not. "A recitation of only [appellant's] evidence is not the demonstration contemplated under the above rule. [Citations.] Accordingly, if, as [appellants] contends, `some particular issue of fact is not sustained, they are required to set forth in their brief all the material evidence on the point and not merely their own evidence. Unless this is done the error is deemed to be waived.' (Italics added). [Citations]." (Foreman v. Clark Corp. v. Fallon, supra, 3 Cal.3d at p. 880.)

Here, appellants neglect to set forth the substantial evidence that Wong made material representations to respondents that were not simply reiterations of what he had been told by the sellers. These include that the ceiling in the family room, which Silvio could not touch because of the fan, was dry; that depressions in the ceiling were from drywall nails, not leaks; that certain little cracks in the deck were not leaks; that discoloration in the carpeting was natural wear and tear and not water damage; that a soft area in the carpet was the result of the pile having been protected by a sofa and not water damage; that stains inside French doors were from sun damage and not water damage; and that discoloration on the garage floor was not from excess moisture. These representations constitute substantial evidence that Wong made material representations to respondents that went beyond reiterating what he was told by sellers.

B. It Was Not an Abuse of Discretion to Deny Appellants an Offset of the Settlement From Lincoln Termite Against the Damage Award

Appellants contend they are entitled to offset the $30,000 settlement respondents received from Lincoln Termite, which was sued for negligence only, against the $15,000 judgment the jury awarded against respondents for fraud. They argue "it is clear" that the damage award was intended to compensate respondents for the improper repair to the wall, which was the basis of the suit against Lincoln Termite. We find no error.

We review a ruling granting or denying a settlement credit to a non-settling defendant for abuse of discretion. (Wade v. Schrader (2008) 168 Cal.App.4th 1039, 1044.)

A pre-verdict settlement with one of a number of co-defendants "claimed to be liable for the same tort shall . . . [¶]. . . reduce the claims against the others in the amount . . . of the consideration paid for it . . . ." (Code Civ. Proc., § 877, subd. (a).) Regardless of the theory of liability, Code of Civil Procedure section 877 applies where the plaintiff suffers one indivisible injury. (Kohn v. Superior Court (1983) 142 Cal.App.3d 323, 329 (Kohn).) The purpose of the statute, which works to prevent double recoveries, is to "provide for the equitable sharing of costs among the parties at fault and to encourage out-of-court settlements. [Citations.]" (Carr v. Cove (1973) 33 Cal.App.3d 851, 854-855.) The prevention of double recovery is a matter of "sorting out" injuries, which is a question of fact for the trial court. (Id. at p. 857 [injuries suffered in two separate car accidents were not indivisible].)

In Kohn, during escrow the defendant real estate broker ordered a termite inspection. After escrow closed, the plaintiffs discovered moisture problems which led to the discovery that there had been a fire and repairs made several months before the sale which had not been disclosed. The plaintiffs sued the real estate broker for fraud, the construction company that repaired the damage after the fire for negligence, the company that prepared the termite report for negligence, and all of the defendants for conspiracy to conceal the fire damage. (Kohn, supra, 142 Cal.App.3d at pp. 325-326.) Prior to trial, the plaintiffs settled with the construction company and the termite inspection company. The real estate broker challenged dismissal of its cross-complaints for indemnity against the two settling defendants, arguing that Code of Civil Procedure section 877, subdivision (b) [settlement with one joint tortfeaser discharges that party from liability for contribution to any other party]) did not apply because the broker and the settling defendants were not "claimed to be liable for the same tort" inasmuch as the broker was sued for fraud whereas the construction company and pest control company were sued for negligence. (Kohn, at p. 328.) The court concluded that Code of Civil Procedure section 877 applied because "there was but one injury, purchase of a house which was worth less than plaintiffs believed. [Citation.] The alleged tortious activities by the contractor, pest control inspector and seller were not independent, but combined to create one indivisible injury which took place when the sale was consummated." (Kohn, at p. 329.)

While Kohn has some factual similarities to this case, it is distinguishable in one essential aspect. In Kohn the court held that Code of Civil Procedure section 877 applied because the fraud and negligence, which all occurred before escrow closed, caused one indivisible injury — purchase of a house which was worth less than the plaintiffs believed. Here, by contrast, there were separate injuries, not one. First, there was Wong's fraud, which took place before escrow closed, and which caused respondents to purchase a house that was worth less than respondents believed. (See Civ. Code, § 3343 [damages for fraud in the purchase of property is the difference between the actual value of that with which the defrauded person parted and the actual value of that which he received].) Second, there was the negligent performance of the repair and remediation work by Lincoln Termite that had been arranged by Wong and which took place after escrow closed, causing respondents to incur expenses to properly repair the work. (See Civ. Code, § 3333 [measure of damages for breach of an obligation not arising from contract is amount which would compensate for all detriment proximately caused by such negligence.].) In this respect, this case is more similar to the two car accidents in Cove, supra, than to the indivisible injuries suffered by the plaintiff in Kohn, supra.

Our conclusion is further supported by the fact that respondents sought different damages for fraud and for negligence. During closing argument, respondents' counsel argued that all of the defendants (sellers and appellants) were liable for fraud damages in the amount of $71,000 plus a "hassle factor."4 Regarding appellants' negligence, he argued that respondents were asking for just $15,000, the amount to repair the wall.

Under these circumstances, we find no abuse of discretion in the trial court's conclusion that Code of Civil Procedure section 877 does not apply.

DISPOSITION

The judgment is affirmed. Respondents shall recover their costs on appeal.

WE CONCUR:

FLIER, J.

GRIMES, J.

FootNotes


1. Appellants' third contention is that the judgment is generally not supported by admissible evidence. But this contention lacks any record references or citations to legal authority. Failure to cite all material evidence in the record waives a claim of insufficiency of evidence. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881; Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246.)
2. We note that appellants' statement of facts does not include a single record reference to the nine volume Reporter's Transcript in this case. We get no further assistance from respondent's brief, which merely adopts appellant's statement of facts. It is a party's duty to support arguments with appropriate reference to the record, including exact page citations. The appellate court may disregard any factual contention not supported by a proper citation to the record. (Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1379.)
3. The sellers recovered from respondents attorneys fees in the amount of $66,185 and costs in the amount of $3,324.81.
4. To calculate the fraud damages, respondents' expert witness computed the fair market value of the house by subtracting the estimated $71,000 cost of repairing all of the problems, plus an additional 25-50 percent of that amount ($17,000-$35,000) which he called "the hassle factor," from the purchase price. (See Civ. Code, § 3343 [damages for fraud in the purchase of property]; Nece v. Bennett (1963) 212 Cal.App.2d 494, 497, citing Bagdasarian v. Gragnon (1948) 31 Cal.2d 744, 753 [actual value for purposes of Civ. Code, § 3343 means market value]; Central Mut. Ins. Co. v. Schmidt (1957) 152 Cal.App.2d 671, 676-677 ["While cost of repairs has some probative worth on the issue of value, it is not of itself the proper measure of damages."].)
Source:  Leagle

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