Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. EC045756, David Milton, Judge. Affirmed.
Escandari & Michon and Alexander H. Escandari for Plaintiffs and Appellants.
Law Office of Lisa MacCarley and Lisa MacCarley for Defendant and Respondent Coldwell Banker Residential Brokerage Company.
Law Office of Jerry K. Staub and Jerry K. Staub for Defendant and Respondent Geraldine Kreger.
RUBIN, J.
INTRODUCTION
Appellants Rafi Khardalian and Maggie Jansezian bought a house from respondent Geraldine Kreger, whose listing agent for the sale was respondent Coldwell Banker Residential Brokerage Company (Coldwell). Claiming respondents misrepresented the square footage of the house, appellants sued respondents for breach of contract and fraud-related causes of action. At the close of appellants’ case, the court granted respondent Coldwell’s motion for nonsuit. The case went to the jury solely on appellants’ claims against respondent Kreger. By special verdict, the jury found Kreger had not misrepresented her home’s square footage to appellants. The trial court entered judgment for respondents. We affirm.
FACTS AND PROCEDURAL HISTORY
1. The sale of the Property to Appellants
In 1972, Kreger and her husband (who passed away in 1997) bought a home in Glendale. In 1989, they added a second story to the house. Sometime after her husband’s death, Kreger obtained an appraisal for the property that measured the living area as 4, 042 square feet.
In 2004, Kreger decided to sell the property and listed the property with Coldwell. In its marketing brochure for the house, Coldwell stated the home was 4, 056 square feet “per assessor.” It is undisputed the brochure accurately reported what the county assessor’s records showed. On January 6, 2005, appellants submitted an offer to buy the home that was accompanied by a “Statewide Buyer and Seller Advisory.” The advisory stated, “Buyer [is] advised that only an appraiser or surveyor as applicable, can reliably confirm square footage.... Representations regarding these items that are made in a Multiple Listing Service, advertisements, and from property tax assessor’s records are often approximations, or based upon inaccurate or incomplete records.... If Buyer wants further information, Broker recommends that Buyer hire an appraiser or licensed surveyor to investigate these matters during Buyer’s inspection contingency period.” Additionally, when Kreger and appellants settled on the final terms of sale, appellants signed a “California Residential Purchase Agreement, ” which contained a “Buyer’s Inspection Advisory” that advised appellants to investigate the entire property and cautioned that square footage was an “approximation[] only and [has] not been verified by Seller and cannot be verified by Brokers.” Two weeks after appellants made their initial offer, appellants received an appraisal that measured the home’s square footage at 4, 021. Appellants testified at trial that based on the two appraisals, they went through with the purchase of the property.
The appraiser, Paul Ivanov, was hired by a lending institution appellants consulted in connection with the purchase. Ivanov was a defendant in the case but settled prior to trial.
Two years later in February 2007, appellants obtained while refinancing the property a new appraisal and learned the house was only 3, 326 square feet. Following their discovery of the home’s actual square footage, appellants sued, among others, respondents Coldwell and Kreger, alleging multiple causes of action arising from respondents’ allegedly intentional or negligent misrepresentation of the square footage.
The home has been appraised five times with no consistent measurement of its square footage: (1) February 1997 – 4, 042 square feet, (2) January 2005 – 4, 021 square feet, (3) February 2007 - 3, 326 square feet, (4) September 2008 – 3, 488 square feet, (5) September 2008 – 3, 875 square feet An appraiser appellants hired in 2008 testified the discrepancy seemingly arose from some appraisers erroneously including the open air space above the two-story living room as additional living space.
None of the other defendants is a party to this appeal.
The case proceeded to trial in May 2009 against Coldwell and Kreger on causes of action for breach of contract, failure to disclose material facts, and negligence. Asserting they had not read the documentary disclosures exchanged between the parties during the sale, which stated information about the home’s square footage was an approximation, appellants testified Coldwell’s marketing brochure and the appraisals misled them because no one told them the square footage listed was an approximation. Appellants further testified they would not have bought the home had they known it was less than 4, 000 square feet.
In her defense, Kreger testified she never told Coldwell her home was 4, 056 square feet, although she did acknowledge she must have shared with Coldwell the county’s assessment of her footage used to calculate her property tax liability. Kreger also testified she had reviewed Coldwell’s marketing brochure and believed all of its representations were accurate. According to Coldwell, it obtained the brochure’s information about the home’s square footage from the county assessor, which the brochure disclosed by stating the reported footage was “per assessor.”
At the close of appellants’ case-in-chief, the trial court granted Coldwell’s motion for nonsuit on every cause of action. The case thereafter went to the jury on appellants’ claims against Kreger. By special verdict, the jury found Kreger: (1) did not intentionally fail to disclose an important fact appellants did not know or could not have reasonably discovered; (2) was not negligent; and (3) did not fail to do something required of her in any contract. The court entered judgment for Coldwell and Kreger. This appeal followed.
DISCUSSION
A. Court Did Not Err Granting Nonsuit for Coldwell
At the close of appellants’ presentation of evidence in their case-in-chief, the court granted Coldwell’s motion for nonsuit. The court found appellants’ causes of action for Coldwell’s purported failure to disclose material facts involving the house’s square footage were time-barred under the two-year statute of limitation for a broker’s negligent visual inspection of property. (Civ. Code, § 2079.4.) The court further found appellants’ breach of contract cause of action failed because they offered no evidence that Coldwell breached its listing agreement with Kreger or that appellants were third party beneficiaries of that agreement.
In reviewing a judgment of nonsuit, we review the entire record of the trial court, viewing the evidence in the light most favorable to the appellant. (Alpert v. Villa Romano Homeowners Assn. (2000) 81 Cal.App.4th 1320, 1327.) A trial court may not grant a motion for nonsuit if the evidence presented by the plaintiff would support a jury verdict in the plaintiff’s favor. (Carson v. Facilities Development Co. (1984) 36 Cal.3d 830, 838.) “[A] judgment of nonsuit must not be reversed if plaintiff’s proof raises nothing more than speculation, suspicion, or conjecture.” (Id. at p. 839.) The record here shows the court ruled correctly.
The court concluded the two-year statute of limitations of Civil Code section 2079.4 barred appellants’ causes of action against Coldwell for purported negligence and failing to disclose material facts. Both of those causes of action rested on the duty section 2079 imposed on Coldwell as a broker to visually inspect the home and disclose what a reasonable visual inspection would have discovered. According to appellants, Coldwell violated that duty by not seeing “red flags” that would have alerted a competent broker performing a reasonable visual inspection that the home was less than 4, 000 square feet.
Civil Code section 2079, subdivision (a) reads: “It is the duty of a real estate broker or salesperson, licensed under Division 4 (commencing with Section 10000) of the Business and Professions Code, to a prospective purchaser of residential real property comprising one to four dwelling units, or a manufactured home as defined in Section 18007 of the Health and Safety Code, to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to that prospective purchaser all facts materially affecting the value or desirability of the property that an investigation would reveal, if that broker has a written contract with the seller to find or obtain a buyer or is a broker who acts in cooperation with that broker to find and obtain a buyer.”
In Loken v. Century 21-Award Properties, the court concluded the two-year statute contained in Civil Code section 2079.4 applied to claims of both ordinary negligence and negligent misrepresentation arising from a broker’s duty to inspect. (Loken v. Century 21-Award Properties (1995) 36 Cal.App.4th 263, 271.) The court stated section 2079 imposes a two-pronged duty on the broker: “first, to conduct a reasonably competent and diligent visual inspection; and second, to disclose all material facts such an inspection would reveal.” (Loken, at p. 271, italics in original.) The court went on to say the dual nature of the duty is not exclusively grounded in negligence. “While the first prong of the obligation (inspection) embodies traditional negligence concepts, breach of the second prong (disclosure of material facts) encompasses actionable conduct associated with both negligence and negligent misrepresentation.” (Ibid.) The sale of the house took place in January 2005. Appellants filed their complaint in October 2007. Because appellants’ failure to disclose and negligence claims arose, if at all, from Coldwell’s duty to inspect the house and discover the square footage represented by the assessor was incorrect, the trial court correctly applied the two-year statute of limitations contained in section 2079.4.
2. Third Party Beneficiary
Appellants contend the court erred in nonsuiting their breach of contract cause of action because (1) they were third party beneficiaries of Kreger’s listing agreement with Coldwell, and (2) Coldwell breached that agreement when it misstated the home’s square footage. Appellants’ contention fails because they were not third party beneficiaries of Kreger’s contract with Coldwell. “A third party beneficiary may enforce a contract made for its benefit. [Citation.] However, ‘[a] putative third party’s rights under a contract are predicated upon the contracting parties’ intent to benefit’ it. [Citation.]” (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524.) Here, the listing agreement was a contract entered into between a real estate broker (Coldwell) and a seller (Kreger) giving Coldwell the right to sell the property, for which Coldwell received a commission upon closing a sale. Appellants stood at arm’s length on the opposite side of the sales transaction as a prospective buyer of the home for which appellants and Kreger held adverse interests: broadly stated, in appellants’ case to buy the house at the lowest feasible price, and for Kreger to sell it at the highest feasible price. By presumably aiming to get the best possible price for Kreger – and thus the highest commission for itself – Coldwell’s listing agreement did not intend to benefit appellants beyond giving them an opportunity to buy a home under negotiated terms. Nothing in the language of the listing agreement suggests appellants were intended to be third party beneficiaries, and appellants cite no authority recognizing such a relationship in an arms-length commercial transaction between a buyer and seller of real estate.
B. Substantial Evidence Supports the Jury’s Verdict for Kreger
By special verdict, the jury found (1) Kreger did not intentionally fail to disclose a fact that could not reasonably be discovered by plaintiffs, (2) Kreger was not negligent, and (3) Kreger did not fail to perform under the purchase agreement. Posed the following questions by the verdict form, the jury answered them as follows:
“Did [] Kreger intentionally fail to disclose an important fact that [appellants] did not know and could not reasonably have discovered?
“Answer: No. [¶]... [¶]
“... Was [] Kreger negligent?
“Answer: No. [¶]... [¶]
“... Did all the conditions occur that were required for [] Kreger of performance?
“Answer: Yes. [¶]... [¶]
“... Did [] Kreger fail to do something that the contract required her to do?
“Answer: No.”
Appellants argue substantial evidence did not support the jury’s verdict for Kreger. In support of their contention, appellants cite evidence favorable to their claims against Kreger. They do not, however, cite contrary evidence, which the jury presumably believed in delivering its verdict for Kreger. For example, Kreger testified her only representation to appellants about her home’s square footage was contained in Coldwell’s marketing brochure, which stated the home was 4, 056 square feet “per assessor”; this figure was an accurate statement of the county tax assessor’s records at that time. Also, Kreger testified she paid property taxes based on the assessor’s determination of her home’s square footage and nothing indicated she questioned the assessment or had any reason to believe it was inaccurate. Moreover, appellants were advised in writing on at least two occasions that the county tax assessor’s information might not be accurate and, if they believed it important to their decision to buy the house, they should confirm the square footage of the home for themselves. By ignoring the evidence in support of the jury’s verdict, appellants violate a fundamental rule of appellate practice obligating them to completely and fairly summarize the evidence supporting the court’s findings and judgment. (Brockey v. Moore (2003) 107 Cal.App.4th 86, 96-97; see also Jhaveri v. Teitelbaum (2009) 176 Cal.App.4th 740, 748-749.) Their violation of a fundamental rule of appellate practice excuses us from any need to address their contention of insufficient evidence, and we therefore deem the contention abandoned. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881; Ajaxo Inc. v. E*Trade Group Inc. (2005) 135 Cal.App.4th 21, 50; see also Brockey, at p.97.)
C. Court’s Error, if any, in Extending Demurrer to Kreger Was Harmless
Before trial, the court sustained without leave to amend Coldwell’s demurrer to one of appellants’ causes of action for fraud. Although Kreger did not join in Coldwell’s demurrer and did not file a demurrer of her own, the court on the eve of trial held that its dismissal of the fraud cause of action applied to Kreger, too, because appellants’ fraud allegations did not materially distinguish between Kreger and Coldwell in that their alleged fraud was the same – namely, misrepresenting the square footage of the house.
Appellants contend the trial court erred in bestowing on Kreger the benefit of Coldwell’s successful demurrer to appellants’ fraud cause of action. We review de novo a trial court’s sustaining of a demurrer. (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) On appeal, our “ ‘only task in reviewing a ruling on a demurrer is to determine whether the complaint states a cause of action.’ [Citations.]” (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300.) Generally, we will uphold a ruling that is correct on any legal basis, even if that basis was not invoked by the trial court. (In re Marriage of Burgess (1996) 13 Cal.4th 25, 32.) There can be no prejudicial error from erroneous logic or reasoning if the decision itself is correct. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980-981.)
Here, the fraud cause of action to which Coldwell successfully demurred rested on Coldwell and Kreger’s alleged representation that the home had 4, 021 square feet of living space per the appraisal of Paul Ivanov, a one-time defendant in the case who settled before trial. In their complaint, appellants alleged they entered into the purchase agreement for the house on January 6, 2005, at which time the purchase price and terms of the sale were established. They additionally alleged the Ivanov appraisal was not prepared until almost two weeks later on January 18, 2005. To prove fraud, appellants needed to show reliance on Coldwell’s and Kreger’s representations about the Ivanov appraisal. Their allegations about the dates of the signing of the purchase agreement (January 6) and the appraisal (January 18) prevented them from alleging they had relied on Coldwell’s and Kreger’s representations about the appraisal because they decided to buy the house before the appraisal existed. (See Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271; California Dental Assn. v. California Dental Hygienists’ Assn. (1990) 222 Cal.App.3d 49, 53, fn. 1 [“plaintiff may not discard factual allegations of a prior complaint, or avoid them by contradictory averments, in a superseding, amended pleading”].) And because appellant’s allegations did not distinguish between Coldwell and Kreger as to the Ivanov appraisal, the court’s error, if any, in dismissing the fraud cause of action against Kreger based on Coldwell’s demurrer was harmless.
In any case, appellants presented through their failure to disclose and negligence claims at trial the evidence they had relating to fraud, but the jury necessarily rejected appellants’ claim of intentional fraud when it rejected the claim of failure to disclose. The court instructed the jury that appellants’ claim required appellants to prove: (1) “Kreger represented to [appellants] an important fact as true”; (2) “Kreger’s representation was not true”; (3) “Kreger had no reasonable grounds for believing the representation was true when she made it”; and (4) “Kreger intended that [appellants] rely on this representation.” With those instructions, the jury found in Kreger’s favor. Presumably, proving negligent misrepresentation ought to be easier than the intentional misrepresentation of fraud because one need not prove a defendant’s subjective intent to demonstrate negligence. It follows, therefore, if one cannot prove a purported misrepresentation occurred negligently, one likewise cannot prove it occurred intentionally. Thus, even if the court had permitted the jury to consider a cause of action for fraud relating to the Ivanov appraisal, the jury without question would have rejected the claim.
The jury also found Kreger did not “intentionally fail to disclose an important fact that appellants did not know and could not have reasonably discovered.” Such a finding would be fatal to a cause of action for actual fraud against Kreger.
D. Court Did Not Abuse its Discretion by Striking Expert’s Testimony
Max Factor III testified for plaintiffs as an expert on standards of care for real estate brokers. Factor opined, (1) Coldwell did not perform a reasonably diligent and competent visual inspection of the house; (2) Coldwell and/or Kreger acted below the standard of care by failing to disclose documents which contained material facts that adversely affected the value of the property; and (3) a licensed real estate broker of reasonable experience would have recognized the house was not 4, 000 square feet. After hearing Factor’s testimony, the court found his opinions were legally irrelevant because appellants were offering them to establish a standard of care for a real estate broker in performing a competent visual inspection of a property which was barred by the two-year statute of limitations period contained in Civil Code section 2079.4. Appellants contend the court erred because Factor’s opinions were relevant to Kreger’s failure to disclose material facts.
We review a trial court’s ruling on admissibility of expert testimony for abuse of discretion. (Lockheed Litigation Cases (2004) 115 Cal.App.4th 558, 564; see also Evid. Code, § 801, subd. (b).) We find no abuse of discretion. Section 801, subdivision (a) limits expert testimony to subjects that are “sufficiently beyond common experience that the opinion of an expert would assist the trier of fact.” Kreger contends the duties of a seller of residential property are primarily set forth in the contract with the buyer, in a type of transaction that is commonly engaged in by people with no specialized training or expertise. As a result, Factor’s testimony about documentation he thought Kreger would have showing the second story addition was less than 2, 000 square feet was merely speculation and would not have qualified as something open to expert opinion because it would not add anything to the jury’s common knowledge. The court therefore did not err in striking Factor’s opinion testimony as to Kreger.
Evidence Code section 801 states: “If a witness is testifying as an expert, his testimony in the form of an opinion is limited to such an opinion as is: [¶] (a) Related to a subject that is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact; and [¶] (b) Based on matter (including his special knowledge, skill, experience, training, and education) perceived by or personally known to the witness or made known to him at or before the hearing, whether or not admissible, that is of a type that reasonably may be relied upon by an expert in forming an opinion upon the subject to which his testimony relates, unless an expert is precluded by law from suing such matter as a basis for his opinion.”
E. No Error in Court’s Refusal to Recuse
Before being elevated to the bench, the trial judge had worked as a real estate broker and had himself bought a home for which the square-footage was overstated. Asserting the judge’s background made him biased against appellants in Coldwell’s favor, appellants contend the court violated their right to have an impartial judge preside over their case. We disagree.
The fact the judge had a broker’s license does not suggest or imply he would be partial towards brokers and sellers. There is no indication the judge in this case was deriving income as a real estate broker, had ever worked for Coldwell, or had any interest in the outcome of this case. Moreover, statutory mechanisms exist for a party to replace a judge the party deems to be biased. (See Code Civ. Proc., § 170 et seq.) Because appellants did not avail themselves of those mechanisms, they forfeited any right to relief that may have existed under them. (See § 170.3, subd. (d) [appellate review from motion to disqualify judge is limited to petition for writ of mandate filed 10 days after order denying disqualification].)
DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal.
WE CONCUR: BIGELOW, P. J., FLIER, J.
Civil Code section 2079.4 states: “In no event shall the time for commencement of legal action for breach of duty imposed by this article exceed two years from the date of possession, which means the date of recordation, the date of close of escrow, or the date of occupancy, whichever occurs first.”