Thomson v. Canyon

198 Cal. App. 4th 594, 129 Cal. Rptr. 3d 525, 2011 Cal. App. LEXIS 1082
CourtCalifornia Court of Appeal
DecidedJuly 22, 2011
DocketNo. A129396
StatusPublished
Cited by51 cases

This text of 198 Cal. App. 4th 594 (Thomson v. Canyon) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thomson v. Canyon, 198 Cal. App. 4th 594, 129 Cal. Rptr. 3d 525, 2011 Cal. App. LEXIS 1082 (Cal. Ct. App. 2011).

Opinion

Opinion

SEPULVEDA, J.

The seller of residential property sued her real estate agent and broker upon allegations that the agent failed to prepare proper documentation of the sale. The seller alleged that the sale was meant to “salvage” her home from foreclosure by conveying the property to an investor who would be paid $10,000 to clear the liens, then reconvey the home. The agent allegedly failed to memorialize the oral reconveyance agreement. The buyer purchased the property, refused the seller’s demand for [599]*599reconveyance, and sold the property to a third party. The seller sued the buyer for fraud but lost at trial. The seller then brought this lawsuit against her real estate agent and broker, alleging negligence and breach of fiduciary duty.

The trial court granted defendants’ motion for judgment on the pleadings (Code Civ. Proc., § 438) based on the statute of limitations (Code Civ. Proc., § 343) and the parol evidence rule (Code Civ. Proc., § 1856), and entered a judgment of dismissal. We reverse the judgment. We conclude that the breach of fiduciary duty cause of action is timely and that the parol evidence rule is inapplicable to the facts presented here. The parol evidence rule does not apply where, as here, extrinsic evidence is being offered not to reconstruct the parties’ contractual obligations but to establish a third party’s distinct obligations.

I. FACTS1

Plaintiff Regina M. Thomson owned a single-family home in San Francisco. Plaintiff experienced financial difficulties and, under threat of foreclosure, retained defendant real estate agent Lewis L. Canyon and his brokerage firm Keker Williams Realty around May 2004 to market and sell her property. At the time, plaintiff owed approximately $383,436 in principal on the mortgage. Defendant Canyon prepared a real estate advertisement listing plaintiff’s home for sale at $545,000, its market value.

An investor, Thomas Harris, approached plaintiff and offered to “salvage” her home from foreclosure. Harris promised plaintiff that if she provisionally sold her home to him, he “would then pay off the liens, and reconvey the home back to plaintiff within six (6) months after close of escrow on his purchase, in exchange for plaintiff’s promise to pay [Harris] the amount of the price [Harris] paid to pay down the liens” and an additional $10,000 fee. Plaintiff accepted the offer.

Plaintiff informed defendant Canyon and his brokerage firm of her arrangement with Harris “and instructed defendants in no uncertain terms to perform the necessary paperwork to implement, execute and broker this new arrangement with Thomas Harris.” Plaintiff “requested on a number of occasions that defendant Canyon reduce Harris’ promise to return the home to her into a writing. In response to each request, defendant Canyon repeatedly reassured her he would get something to her.” Despite plaintiff’s requests, “defendant [600]*600Canyon never provided a writing memorializing Thomas Harris’ promise to reconvey the home back to plaintiff.”

Defendant Canyon prepared a purchase agreement between plaintiff and Harris signed by the parties on May 17, 2004. The purchase price was $440,000, significantly less than the property’s $545,000 market value. Escrow closed on the sale of plaintiff’s house to Harris on June 22, 2004.

Harris did not reconvey the house to plaintiff and, in August 2004, “discontinued all communications with plaintiff.” In November 2004, just months after acquiring the house from plaintiff, Harris sold it to a third party. The house sold for $580,000. After just five months of ownership, Harris received $140,000 more for the house than he paid.

Plaintiff sued Harris for fraud and related claims in San Francisco Superior Court. Plaintiff did not sue her real estate agent, Canyon. Harris did cross-complain against Canyon for equitable indemnity and contribution but dismissed the cross-complaint before trial. The court entered judgment for Harris in June 2008 following a bench trial. The court rejected the alleged oral reconveyance agreement as inconsistent with the written purchase agreement, and thus barred by the parol evidence rule. (Code Civ. Proc., § 1856.) The court also found unreasonable plaintiff’s claimed reliance on an oral agreement that she sought, and failed, to have reduced to writing.

II. TRIAL COURT PROCEEDINGS

On July 29, 2008, plaintiff filed this lawsuit in Alameda County Superior Court against her real estate agent and broker. Plaintiff avers causes of action for breach of fiduciary duty and negligence upon the central allegation that defendant Canyon failed to memorialize Harris’s promise to reconvey the house. Plaintiff also initially alleged that Canyon refused to testify at trial in her action against the buyer, causing her to lose the lawsuit.

Defendants demurred to the original complaint in October 2008. Defendants argued that they did not owe a fiduciary duty to plaintiff to support her claims against the seller at the prior trial, as she alleged, and that the negligence cause of action was barred by the two-year statute of limitations (Code Civ. Proc., § 339, subd. 1). The court ruled that the two-year statute of limitations was inapplicable to the facts alleged in plaintiff’s complaint but sustained the demurrer with leave to amend with directions to clarify facts concerning the breach of duty asserted and the discovery of the breach.

Plaintiff filed a first amended complaint to which defendants also demurred, raising the statute of limitations and another defense. Defendants [601]*601argued that the causes of action accrued in June 2004, at the close of escrow, or in November 2004, when the buyer refused reconveyance and resold the property to a third party. Defendants maintained that plaintiff’s action, filed over three years later in July 2008, was time-barred. Defendants claimed that plaintiff’s breach of fiduciary duty cause of action was governed by the three-year statute of limitations for fraud (Code Civ. Proc., § 338, subd. (d)), and that the negligence cause of action was governed by a two-year statute of limitations (Code Civ. Proc., § 339, subd. 1).

In August 2009, the court ruled on the demurrer to the first amended complaint. The court sustained the demurrer to the first cause of action for breach of fiduciary duty, in part, with leave to amend. The court found that plaintiff had alleged sufficient facts regarding accrual of the cause of action in November 2004, when the buyer resold the property to a third party. The court applied the general four-year statute of limitations applicable to claims not governed by other statutes of limitations (Code Civ. Proc., § 343), rather than the three-year fraud statute of limitations advocated by defendants (Code Civ. Proc., § 338, subd. (d)). The court found that plaintiff’s breach of fiduciary duty cause of action, initiated in July 2008 within four years of accrual of the cause of action, was timely. The court did, however, note a mistake in the pleading and directed plaintiff to correct it. The court overruled the demurrer to the second cause of action for negligence. Plaintiff filed a second amended complaint in August 2009 reasserting her claims for breach of fiduciary duty and negligence. Defendants answered the pleading in August 2009.

In September 2009, defendants moved for judgment on the pleadings based on the doctrine of collateral estoppel. (Code Civ.

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Cite This Page — Counsel Stack

Bluebook (online)
198 Cal. App. 4th 594, 129 Cal. Rptr. 3d 525, 2011 Cal. App. LEXIS 1082, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomson-v-canyon-calctapp-2011.