Ryan v. Real Estate of the Pac., Inc.

244 Cal. Rptr. 3d 129, 32 Cal. App. 5th 637
CourtCalifornia Court of Appeal, 5th District
DecidedFebruary 26, 2019
DocketD072724
StatusPublished
Cited by34 cases

This text of 244 Cal. Rptr. 3d 129 (Ryan v. Real Estate of the Pac., Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ryan v. Real Estate of the Pac., Inc., 244 Cal. Rptr. 3d 129, 32 Cal. App. 5th 637 (Cal. Ct. App. 2019).

Opinion

HUFFMAN, J.

*131*639Real Estate of the Pacific, Inc., doing business as Pacific Sotheby's International Realty (Sotheby's), David Schroedl, and David Schroedl & Associates (DSA) (Sotheby's, Schroedl, and DSA collectively Defendants) successfully moved for summary judgment against Daniel Ryan and Patricia Ryan, individually and as trustees of the Ryan Family Trust Dated August 25, 2006 (the Ryans). The crux of Defendants' argument was that the Ryans could not establish the existence of any cause of action without an expert witness. Because the Ryans did not designate an expert witness, Defendants argued summary judgment was warranted. The superior court agreed, granting Defendants' motion.

The Ryans appeal the judgment following Defendants' successful motion, contending they do not need an expert witness to establish the elements of their causes of action against Defendants. We agree and reverse the judgment.1

I

FACTUAL AND PROCEDURAL BACKGROUND

The Sale of Real Property and Subsequent Arbitration

In September 2013, the Ryans decided to sell their single family house located at 821 Havenhurst Point, La Jolla, California (the Property). To this end, the Ryans entered into a trust listing agreement with Defendants wherein the Ryans agreed to give Defendants the exclusive right to sell the Property. As such, Defendants undertook to list, market, and sell the Property and provided the Ryans with their "professional guidance and advice throughout all states and aspects of the listing, marketing, and sale of [the Property]."

During an open house hosted by Schroedl, the Ryans' next door neighbor, Hany Girgis, informed Schroedl that he intended to remodel his home, which would permanently obstruct the Property's westerly ocean view. Girgis also told Schroedl that the planned construction would have a significant impact on the Property. Specifically, the construction would: (1) move the footprint of Girgis's home to within five feet of the common boundary, (2) create a *640two-story wing with large windows overlooking the pool area of the Property, (3) take up to two years to complete, and (4) require extensive excavation and removal of several hundred yards of dirt. Schroedl never informed the Ryans regarding Girgis's plans.

On December 5, 2013, Ney and Luciana Marinho (the Marinhos) purchased the Property for $3.86 million. Defendants received $96,5000 at the close of escrow as their commission for the sale. At no time prior or during escrow, in the real estate disclosures, or in conversation, did Defendants disclose Girgis's extensive remodeling plans or their impact on the westerly ocean view and privacy of the Property.

*132The day after escrow closed, the Marinhos' interior decorator talked with Girgis, who told her of his extensive remodeling plans. After learning this information, the Marinhos immediately attempted to rescind the real estate sales contract for several reasons, including the magnitude and scope of the Girgis remodel, the proximity of the new structure to the property line, the loss of privacy, the elimination of any possibility of a westerly ocean view, and a potential two-year construction project.

The Ryans, based in part on Defendants' advice, refused to rescind the purchase real estate sales contract. The Marinhos then demanded arbitration per the terms of the real estate sales contract and sought rescission of the contract or, in the alternative, damages. The Marinhos alleged Defendants knew about Girgis's construction plans and failed to disclose this information.

The dispute proceeded to arbitration. After "extensive litigation, investigation and discovery" as well as an arbitration hearing, the arbitrator ruled in favor of the Marinhos. Accordingly, the arbitrator ordered that the real estate purchase contract be rescinded with the Ryans returning the $3.86 million purchase price to the Marinhos and title and possession of the Property transferred back to the Ryans. The arbitrator further ordered the Ryans to pay damages, prejudgment interest, costs and attorney fees in excess of $1 million.

In support of the award, the arbitrator made detailed written findings of fact and conclusions of law. As relevant here, the arbitrator concluded:

"The Girgis construction project was a material fact affecting the value or desirability of the subject property. [¶] ... [¶] [Schroedl] knew that Girgis had plans to construct a major remodel of his home. His failure to disclose this fact was a material breach of his duty to the [Marinhos], as well as conduct that fell below the standard of care. [¶] [Schroedl] failed to relate to [the Ryans] current information about the Girgis project. His failure to do so was a breach of his agency obligations." (fn. omitted.)

*641Further, the arbitrator noted that Schroedl "did not have a credible explanation" regarding why he did not inform the Ryans or the Marinhos' broker "what he learned from Girgis about his construction plans." The arbitrator also specifically questioned Schroedl's motivations for his actions: "One is left to speculate whether a 21-day, all cash escrow, involving buyers from thousands of miles away, that would garner a $95,500 commission, were considerations."2

The Complaint in the Instant Action

After arbitration, the Ryans filed this lawsuit against, among others, Defendants seeking to recover the money paid to the Marinhos and damages caused by Defendants' alleged negligence. The complaint alleged six causes of action against Defendants: (1) negligence, (2) breach of fiduciary duty, (3) breach of implied covenant of good faith and fair dealing, (4) equitable indemnity and apportionment, (5) common count-mistaken receipt, and (6) common count-money had and received. The foundation of the Ryans' claims against Defendants was that Defendants were aware of Girgis's construction plans and did not inform the Ryans or the Marinhos about those plans.

*133Motion for Summary Judgment

Defendants moved for summary judgment claiming the Ryans could not "prove an essential element of all causes of action against" Defendants, namely that they "breached a duty to" the Ryans. To this end, Defendants argued that all six of the Ryans' causes of action were premised on professional negligence, and, as such, "expert testimony is required to prove or disprove that the defendant performed in accordance with the prevailing standard of care. Kelley v. Trunk (1998) 66 Cal.App.4th 519, 523, 78 Cal.Rptr.2d 122 [ ( Kelley ) ], citing, Miller v. Los Angeles County Flood Control Dist. (1973) 8 Cal.3d 689

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Cite This Page — Counsel Stack

Bluebook (online)
244 Cal. Rptr. 3d 129, 32 Cal. App. 5th 637, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ryan-v-real-estate-of-the-pac-inc-calctapp5d-2019.