Opinion
B227418
11-03-2011
KIMBERLY KEMPTON, Plaintiff and Appellant, v. PRUDENTIAL CALIFORNIA REALTY - JOHN AAROE DIVISION et al., Defendants and Respondents.
Charles G. Kinney for Plaintiff and Appellant. Gaglione, Dolan & Kaplan, Robert T. Dolan and Kaiulani S. Lie for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC374938)
APPEAL from a judgment of the Superior Court of Los Angeles County. Luis A. Lavin, Judge. Affirmed.
Charles G. Kinney for Plaintiff and Appellant.
Gaglione, Dolan & Kaplan, Robert T. Dolan and Kaiulani S. Lie for Defendants and Respondents.
Plaintiff and appellant Kimberly Kempton (plaintiff) appeals from the summary judgment entered in favor of defendants and respondents Prudential California Realty - John Aaroe Division (Prudential) and Lauren Walker (Walker) in plaintiff's action for nondisclosure and fraud relating to a residential real estate purchase. We affirm the judgment.
Prudential and Walker are referred to collectively herein as defendants.
BACKGROUND
1. The Parties
Plaintiff and Charles Kinney (Kinney) purchased from Michelle Clark (Clark) a single family residence built in 1933 and located on Fernwood Avenue in the City of Los Angeles (the Fernwood property). Walker and Prudential were the real estate agent and broker, respectively, for Clark in connection with the sale of the Fernwood property. Kinney acted as plaintiff's agent in connection with the purchase of the Fernwood property, in addition to acting on his own behalf. Plaintiff and Kinney were also represented by Sotheby's International Realty, Inc. and Carol Stewart (Stewart), who acted as their broker and real estate agent, respectively, in the purchase transaction.
2. Prepurchase Agreement Advisory and Purchase Agreement
Before entering into the agreement to purchase the Fernwood property, plaintiff and Kinney were given the following advisement:
"Buyer and Seller are advised that any structure on the Property, including the original structure and any addition, modification, remodel or improvement may have been built without permits, not according to building codes, or in violation of zoning laws. Further, even if such structure was built according to then-existing code or zoning requirement, it may not be in compliance with current building standards or local zoning . . . . Buyer is advised to check with appropriate governmental agencies or third party professionals to verify permits and legal requirements. If Buyer wants further information Broker recommends that Buyer discuss the issue with an appropriate professional during the Buyer's inspection contingency period. Brokers do not have expertise in this area."
Plaintiff and Kinney entered into an agreement to purchase the Fernwood property from Clark on September 7, 2005. The purchase agreement provided for a 10-day period (the contingency period) for the buyers to remove all contingencies or to cancel the agreement.
3. Plaintiff's Inspection of the Property
Plaintiff and Kinney conducted an independent investigation of the Fernwood property both before entering into the purchase agreement and during the contingency period following their execution of the purchase agreement.
A. Preagreement Investigation
Kinney visited the property at least two times before entering into the purchase agreement. During one of these preagreement visits, Kinney inspected the electrical system, the heating furnace, and the roof. He noted that the electrical system was not updated, the furnace looked old not updated, and the roof was missing vents.
When Kinney saw the garage for the Fernwood property, he suspected that use of the garage would require using someone else's property. Kinney then asked Walker for an assessor's parcel map that confirmed his suspicion regarding use of the garage. Walker informed Kinney that there was an easement for use of the garage that was up for renewal shortly. Kinney understood at the time that the garage easement might not be renewed.
During one of Kinney's initial visits to the Fernwood property, he also suspected that there was something wrong with the fences surrounding the property. He suspected that the fence separating the Fernwood property from a neighboring property owned by Carolyn Cooper (Cooper) was not on the property line. He also noticed that the fence appeared to exceed the height limits imposed by applicable zoning regulations and that the fence nearly touched the eaves of the Fernwood property's garage.
B. Contingency Period Investigation
In addition to conducting the two preagreement site inspections, plaintiff and Kinney retained a home inspector named Advanced Building, Inc. Inspections (Advanced) and a construction expert named Robert Meckauer (Meckauer) to inspect the property during the contingency period. Both Advanced and Meckauer conducted an inspection of the property on September 10, 2005.
Based on its inspection, Advanced informed plaintiff and Kinney about several areas of concern, including the electrical system, the heating furnace, the water pipes and water heater, the roof, and the garage. Advanced informed plaintiff and Kinney that the electrical system was an older system with missing twist-outs, unused breaker slots in the electrical panel, and outdated electrical wiring. Advanced also informed plaintiff and Kinney that the heating furnace dated back to 1993, and that some of the ducting was damaged. With regard to the water heater and plumbing, Advanced advised plaintiff and Kinney that the water heater was a 2001 unit that did not have a drip pan and drain line, and that the plumbing consisted of both copper and galvanized steel piping. Advanced also identified damage to the roof and the garage and recommended areas in both structures where repairs were needed.
Meckauer informed plaintiff and Kinney that surface drainage for the property appeared to be insufficient and that there was evidence of damage as a result of the inadequate drainage. Meckauer also informed plaintiff and Kinney about problems with the garage, which was deteriorated and showed evidence of water damage, dry rot, and termite damage.
Kinney was present during the September 10, 2005 inspections conducted by Advanced and Meckauer. At that time, Kinney measured the Fernwood property and noted that the fence and block wall separating the Fernwood property from the Cooper property appeared not to have been placed on the property line. On September 13, 2005, plaintiff and Kinney, though their real estate agent Stewart, inquired about the installation of the fence and block wall. Plaintiff and Kinney were informed that no survey had been done prior to the installation of the fence and block wall. Plaintiff and Kinney declined to have their own survey performed.
Also during the contingency period, plaintiff and Kinney requested further information regarding the garage easement. In response to this request, Clark provided additional information. Plaintiff and Kinney were also provided with a copy of the easement deed documenting the easement for use of the garage, as well as a real estate disclosure statement and a completed seller property questionnaire disclosing the existence of the garage easement. Plaintiff and Kinney believed they did not receive much information regarding the garage easement and they made attempts to investigate the matter further. At no time during the contingency period, however, did plaintiff or Kinney contact Jeffrey and Judy Harris (the Harrises), the grantors of the easement who owned the property adjacent to the garage.
On September 17, 2005, the last day of the contingency period, plaintiff and Kinney asked Clark to give them a credit in the amount of $21,367 for the estimated cost of replacing the heating and furnace system, replacing the water heater with a new one, replacing the galvanized steel main water line with copper piping, and for work on the electrical system and the drainage of the property. Clerk denied the request in its entirety. Plaintiff and Kinney nevertheless decided to go forward with the purchase of the Fernwood property, and escrow closed on October 5, 2005.
PROCEDURAL HISTORY
Plaintiff filed this action against defendants and Clark in 2007. As against defendants, plaintiff asserted causes of action for nondisclosure and fraud regarding various conditions affecting the Fernwood property. Plaintiff claimed to have been damaged as the result of alleged misrepresentations that the electrical system, plumbing, water heater, furnace, and roof were in an updated or new condition; alleged misrepresentations that there were architectural plans for additions to the Fernwood property; alleged misrepresentation that there is a deck present at the property; alleged nondisclosure of nuisances created by the fences and block wall on the Cooper property; alleged nondisclosure of nuisances created by the Harrises; alleged nondisclosures concerning the garage easement; alleged misrepresentations that all permits and approvals required by the city had been obtained for the Fernwood property; that there were no violations of zoning or building regulations for structures on the Fernwood property; and that there were no conditions of dry rot or water damage.
The action was initially filed by plaintiff and by Kinney. Kinney, who is plaintiff's attorney in this action, was declared a vexatious litigant in 2008 and was dismissed as a party to this action. In addition to this lawsuit, plaintiff has filed separate actions against Clark, her neighbors Cooper and the Harrises, and the City of Los Angeles. (Kempton v. Cooper, L.A. County Super. Ct. case No. BC354136; Kempton v. Harris, L.A. County Super. Ct. case No. BC354138; Kempton v. City of Los Angeles, L.A. County Super. Ct. case No. BC413357.) Kinney is plaintiff's lawyer in all of these actions.
Defendants filed and served a motion for summary judgment on April 26, 2010. In their motion, defendants argued that the undisputed evidence showed that plaintiff knew of the various conditions that are the basis of her complaint, and that she acquired that knowledge either before she made an offer to purchase the Fernwood property or in time to cancel the purchase transaction. Defendants' motion was supported by a separate statement setting forth 107 undisputed material facts, documents exchanged by the parties during the purchase transaction, and the deposition testimony of Kinney and plaintiff.
Plaintiff opposed the motion, arguing that what she knew about the Fernwood property before the close of escrow did not relieve defendants from liability for failing to disclose all facts materially affecting the value of the property. Plaintiff further argued that the motion was not timely served and that there were triable issues of fact as to what defendants knew and failed to disclose to plaintiff at the time she entered into the purchase agreement.
The hearing on the motion, initially scheduled for July 9, 2010, was rescheduled to July 22, 2010, and heard by the trial court on that date. The trial court granted defendants' motion, noting that plaintiff disputed only six of the 107 undisputed material facts set forth by defendants, and that as to the six disputed facts, the evidence cited by plaintiff did not controvert those facts. The trial court found that the motion had been timely served and that the undisputed material facts showed that plaintiff was aware, before the close of escrow, of all of the alleged nondisclosed or misrepresented issues concerning the Fernwood property and that she could not establish actual and reasonable reliance on any alleged misrepresentation, concealment, or nondisclosure by defendants. Judgment was subsequently entered in defendants' favor, and this appeal followed.
DISCUSSION
I. Standard of Review
Summary judgment is granted when a moving party establishes the right to entry of judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A defendant moving for summary judgment bears the initial burden of proving that there is no merit to a cause of action by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Cucuzza v. City of Santa Clara (2002) 104 Cal.App.4th 1031, 1037.) Once the defendant has made such a showing, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or as to a defense to the cause of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849.) If the plaintiff does not make such a showing, summary judgment in favor of the defendant is appropriate. In order to obtain a summary judgment, "all that the defendant need do is to show that the plaintiff cannot establish at least one element of the cause of action . . . . [T]he defendant need not himself conclusively negate any such element. . . ." (Id. at p. 853.)
We review the trial court's grant of summary judgment de novo and decide independently whether the facts not subject to triable dispute warrant judgment for the moving party as a matter of law. (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348; Code Civ. Proc., § 437c, subd. (c).)
II. Timeliness of Service
Plaintiff contends defendants' motion for summary judgment was not timely served because she did not receive it until 74 days before the hearing date initially scheduled for July 9, 2010. Code of Civil Procedure section 437c, subdivision (a) provides that a notice of motion and supporting papers for a summary judgment motion "shall be served on all other parties to the action at least 75 days before the time appointed for hearing." The required 75-day notice period is increased by two days if the notice is served by express mail or other form of overnight delivery. (Ibid.)
Defendants' motion was originally scheduled to be heard on July 9, 2010, and was served by overnight delivery on April 23, 2010, within the statutory notice period. The trial court did not err by concluding that the motion was timely served.
III. Nondisclosure and Fraud
To prevail on her causes of action for nondisclosure and fraud, plaintiff must establish the following elements: (1) nondisclosure of facts materially affecting the value or desirability of the property; (2) defendants' knowledge of such facts and of their being unknown to plaintiff; (3) defendants' intention to induce action by plaintiff; (4) justifiable reliance by plaintiff on the misrepresentation or nondisclosure; and (5) resulting damages. (Civ. Code, §§ 1572, 1709; County of Mariposa v. Yosemite West Associates (1988) 202 Cal.App.3d 791, 812.) The element of "[r]eliance exists when the misrepresentation or nondisclosure was an immediate cause of the plaintiff's conduct which altered his or her legal relations, and when without such misrepresentation or nondisclosure he or she would not, in all reasonable probability, have entered into the contract or other transaction. [Citations.]" (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.) Although the reasonableness of a plaintiff's reliance is normally a factual issue, there are cases in which the undisputed facts leave no room for a reasonable difference of opinion, and the issue may be decided as a matter of law. (Ibid.; Guido v. Koopman (1991) 1 Cal.App.4th 837, 843.) Such is the case here.
Defendants met their initial burden in the motion for summary judgment by showing that plaintiff could not establish reliance, an essential element in her causes of action for nondisclosure and fraud. Defendants presented evidence that plaintiff inspected the Fernwood property, both before entering into the purchase agreement and during the contingency period. Based on those inspections, plaintiff had knowledge, before the close of the escrow, of the following conditions affecting the Fernwood property: (a) the electrical system was an older system with outdated components that needed repair; (b) the heating furnace had not been updated and was in need of repair; (c) the water main line from the street to the home on the property was galvanized steel and not copper; (d) the roof was in need of repair; (e) there was no deck at the property; (f) the water heater dated back to 2001 and needed repairs; (f) a fence and block wall installed by Cooper to separate her property from the Fernwood property appeared to encroach on the Fernwood property; (g) a fence on a neighboring property owned by the Harrises appeared not to comply with building code height limits; (h) an easement existed to permit use of the garage that was set to expire soon; (i) surface drainage for the property was inadequate, causing water damage to the garage; and (j) dry rot was present on the rear wooden entry steps and in the garage.
Defendants also presented evidence that plaintiff and Kinney were expressly advised, before entering into the purchase agreement, to conduct their own investigation into permits, zoning, and other governmental restrictions and requirements affecting the use of the property. Plaintiff failed to raise any triable issue as to her purported reliance on any alleged misrepresentation or nondisclosure by defendants of any of the foregoing facts.
Plaintiff disputed only six of the 107 undisputed material facts set forth by defendants. Certain of the disputed facts are not material to the adjudication of defendants' motion. The balance are not controverted, either because the evidence cited by plaintiff fails to do so, or because plaintiff's evidence contradicts her own prior testimony or that of Kinney given during the course of discovery. It is well settled "that a plaintiff cannot create a triable issue of fact and thereby escape summary judgment by contradicting his own prior testimony." (Villanueva v. City of Colton (2008) 160 Cal.App.4th 1188, 1196.)
The facts disputed by plaintiff are (1) whether the initial offer for the property was $29,000 lower than the listing price because plaintiff and Kinney understood the garage easement might not be renewed; (2) whether plaintiff and Kinney were provided a copy of the plans for proposed additions to the property; (3) whether plaintiff and Kinney understood that the proposed plans could not be used to build out the property; (4) whether plaintiff is asserting a claim against defendants for nondisclosure of an alleged nuisance created by a neighbor; (5) whether prior to the close of escrow Clark was aware of any issues regarding the fence and block wall separating her property from her neighbor Cooper's property; and (6) whether a court has ruled that Cooper's fences are not nuisances. The record on appeal did not include plaintiff's separate statement of undisputed material facts filed in support of her opposition to defendants' motion for summary judgment. By our own motion, we augment the record to include plaintiff's separate statement. (Cal. Rules of Court, rule 8.155(a)(1)(A).)
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Plaintiff contends any knowledge she acquired concerning the Fernwood property is irrelevant and does not relieve defendants from liability for failing to make the disclosures required under Civil Code section 2079. That statute, plaintiff maintains, imposed on defendants a duty to disclose all facts materially affecting the value of the property, including all of the details concerning the garage easement, before she entered into the agreement to purchase the property.
Neither Civil Code section 2079 nor the statutory scheme governing real estate broker disclosures imposes the strict liability that plaintiff advocates. Civil Code section 2079 imposes on a broker who represents the seller in a residential real estate transaction a duty "to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to [a] prospective purchaser all facts materially affecting the value or desirability of the property that an investigation would reveal . . . ." The scope of the broker's inspection obligation is limited by Civil Code section 2079.3, which provides in part: "The inspection to be performed pursuant to this article does not include or involve an inspection of areas that are reasonably and normally inaccessible to such an inspection, nor an affirmative inspection of areas off the site of the subject property or public records or permits concerning the title or use of the property . . . ." Defendants disclosed to plaintiff the existence of the garage easement and that the easement would soon have to be renewed. They had no duty to investigate or disclose the details concerning that easement. (Pagano v. Krohn (1997) 60 Cal.App.4th 1, 9-10 [seller's broker, who disclosed general water intrusion problem in condominium complex, did not have duty to provide buyer with specific details regarding intrusion or allegations in condominium association's complaint against developer].)
The broker disclosure statutes do not relieve plaintiff of her own duty to exercise reasonable care, nor do they eliminate her obligation to establish justifiable reliance, an essential element in her causes of action for nondisclosure and fraud. Civil Code section 2079.5 provides: "Nothing in this article relieves a buyer or prospective buyer of the duty to exercise reasonable care to protect himself or herself, including those facts which are known to or within the diligent attention and observation of the buyer or prospective buyer." The record shows that the facts plaintiff claims defendants failed to disclose were either already known to her or within her own diligent attention. (See Pagano v. Krohn, supra, 60 Cal.App.4th at p. 10.)
The undisputed facts in this case leave no room for a reasonable difference of opinion as to whether plaintiff reasonably relied on any alleged nondisclosure by defendants as the basis for entering into the purchase transaction. The trial court accordingly did not err by granting summary judgment against her. (Guido v. Koopman, supra, 1 Cal.App.4th at p. 843.)
DISPOSITION
The judgment is affirmed. Defendants are awarded their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
CHAVEZ, J. We concur: BOREN, P. J. DOI TODD, J.