Hall v. Aurora Loan Servs. LLC

• Decision Date: 26 April 2013
• Docket Number: A134180,A133045
• Citation: 155 Cal.Rptr.3d 739,215 Cal.App.4th 1134
• Court: California Court of Appeals Court of Appeals
• Parties: Pinda HALL et al., Plaintiffs and Appellants, v. AURORA LOAN SERVICES LLC et al., Defendants and Respondents.

215 Cal.App.4th 1134

155 Cal.Rptr.3d 739

Pinda HALL et al., Plaintiffs and Appellants,

v.AURORA LOAN SERVICES LLC et al., Defendants and Respondents.

A133045, A134180

Court of Appeal, First District, Division 4, California.

Filed April 26, 2013

Reversed.

See 6 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 1119 et seq.

Contra Costa County Superior Court, Honorable Judith S. Craddick. (Contra Costa County Super. Ct. No. C10–00053)

Counsel for Appellant: Paoli & Geerhart, Thomas Alan Paoli

Counsel for Respondent Aurora Loan Services LLC: Manning & Kass Ellrod Ramirez Trest, San Francisco, Scott David Long, Thomas Anthony Trapani

Counsel for Respondent Rockcliff Realtors: Gilbert Kelly Crowley & Jennett, Daniel Charles Taylor, Paul Andrew Bigley, San Francisco, Peter James Godfrey, Los Angeles

Humes, J.

Appellant Pinda Hall is a real estate agent who was injured while showing prospective buyers a house for sale at 5 Greene Place, Lafayette. She and her husband sued the owner and the listing agents for negligence, premises liability, and loss of consortium. The trial court entered summary judgment in defendants' favor. We reverse. We conclude that there are triable issues whether defendants had actual or constructive knowledge of a concealed dangerous condition and satisfied their duty to notify Hall of it.

I. FACTS AND PROCEDURAL BACKGROUND

At the time Hall was injured, the house was owned by respondent Aurora Loan Services LLC (Aurora) after having been foreclosed upon. In early May 2009, Aurora listed the property for sale through respondents Rockcliff Realty, with Jon Wood and Holly Sibley as the listing agents (collectively, the “listing agents”). Between the time the property was listed and the date Hall was injured, the house was visited by scores of real estate agents and potential buyers, perhaps more than 100.

One of the features of the house was an attic that had been converted into a “bonus room” by a previous owner. This room was accessed by using a pull-down stairway ladder, which was hinged and braced with metal brackets. When raised, it folded, retracted, and recessed into the attic's opening. Wood had used the stairway ladder once to climb into the attic room before he listed the house and had not observed anything wrong with it. Although he could not remember if he pulled down or retracted the stairway ladder on that visit, he recalled operating it on subsequent visits without incident.

In late May 2009, the house was inspected by a licensed contractor, Christopher Trent, who prepared a report titled “Estimate for Repairs.” This report appears to have been prepared to show the estimated cost of repairing a number of basic aesthetic and safety shortcomings. Trent sent copies of the report to Wood, Sibley, and a bank loan officer.

In the report, Trent listed more than 50 items needing repair under a heading entitled “Health and Safety Required Repairs–Group 1.” This list commingled cosmetic or minor items (e.g., “Minor Drywall patch and touchup paint,” “Remove and Replace Carpet,” “Install shower head”) with health and safety items (e.g., “Mold Abatement and Air test,” “Repair deck at edge-trip hazard,” “Install smoke detector”). One of the listed items was “Stair–Remove and replace attic stair.” Other than the report, the listing agents received no information or complaints about a potential defect in the stairway ladder.

Hall showed the home to two of her clients on August 1, 2009. She knew there was an attic bonus room before she arrived, and a copy of Trent's report was on the kitchen counter. When Hall and her clients came upon the stairway ladder, it was in the down position. She visually inspected the ladder and thought it looked safe, but she was nonetheless reluctant to climb it. She told her clients to be careful as they used the ladder. Hall followed her clients up the ladder, but as she reached the point where she could look into the attic, a hinge broke, the ladder failed, and she fell. The fall fractured her right leg and injured her knees.

Hall and her husband filed a complaint that included three causes of action: (1) general negligence; (2) premises liability; and (3) loss of consortium. They named as defendants Aurora and the listing agents. The listing agents moved for summary judgment first. They argued that the undisputed facts showed they had no notice or knowledge of a defect in the stairway ladder and were therefore entitled to judgment as a matter of law. The trial court agreed and entered summary judgment in their favor.

Aurora then filed a separate motion for summary judgment on the same ground. Hall and her husband made a slightly different evidentiary showing in opposing Aurora's motion. Nonetheless, the trial court granted Aurora's motion for the same reasons it granted the listing agents' motion.

Hall and her husband filed separate appeals from the two orders. In a prior order, we deemed their appeal of the summary judgment granted in favor of Aurora timely even though it was filed before judgment was formally entered. (See Cal. Rules of Court, rule 8.104(d)(2).) We also consolidated the appeals.

II. DISCUSSION

A. The Standard of Review.

“A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) We review the trial court's decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports.” ( Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476, 110 Cal.Rptr.2d 370, 28 P.3d 116.)

A defendant meets his or her burden of showing a cause of action has no merit by showing one or more element 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).) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material fact exists as to that cause of action or defense. ( Merrill v. Navegar, Inc., supra, 26 Cal.4th at pp. 476–477, 110 Cal.Rptr.2d 370, 28 P.3d 116; see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854–855, 107 Cal.Rptr.2d 841, 24 P.3d 493.)

B. The Duty of Aurora and the Listing Agents to Disclose to Visitors Known but Concealed Dangerous Conditions.

We begin by discussing the duties of property owners and real estate agents to notify people viewing their marketed property of known but concealed dangerous conditions. These duties arise partly as a result of the legal responsibilities imposed on property owners and agents, and partly because of the legal relationship between them.

Under Civil Code section 1714, all people, including property owners, are required to use ordinary care to prevent injury to others. “[T]he basic policy of this state set forth by the Legislature in section 1714... is that everyone is responsible for an injury caused to another by his want of ordinary care or skill in the management of his property.” ( Rowland v. Christian (1968) 69 Cal.2d 108, 118–119, 70 Cal.Rptr. 97, 443 P.2d 561.) As a consequence, property owners are required to “maintain land in their possession and control in a reasonably safe condition.” ( Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 674, 25 Cal.Rptr.2d 137, 863 P.2d 207, disapproved on another point in Reid v. Google, Inc. (2010) 50 Cal.4th 512, 527, fn. 5, 113 Cal.Rptr.3d 327, 235 P.3d 988.)

To establish liability on a negligence theory against an owner for injuries caused by a dangerous condition of the property, a plaintiff must prove duty, breach, causation, and damages. ( Ortega v. K m art Corp. (2001) 26 Cal.4th 1200, 1205, 114 Cal.Rptr.2d 470, 36 P.3d 11.) The same concepts of duty applicable to general negligence claims apply to premises liability claims. ( Melton v. Boustred (2010) 183 Cal.App.4th 521, 530, 107 Cal.Rptr.3d 481.) The scope of an owner's duty to visitors regarding dangerous conditions of the property was explained by our Supreme Court. “Because the owner is not the insurer of the visitor's personal safety ..., the owner's actual or constructive knowledge of the dangerous condition is a key to establishing its liability. Although the owner's lack of knowledge is not a defense, ‘[t]o impose liability for injuries suffered by an invitee due to [a] defective condition of the premises, the owner or occupier “must have either actual or constructive knowledge of the dangerous condition or have been able by the exercise of ordinary care to discover the condition, which if known to him, he should realize as involving an unreasonable risk to invitees on his premises....” ’ ” ( Id. at p. 1206, 114 Cal.Rptr.2d 470, 36 P.3d 11, quoting Hatfield v. Levy Brothers (1941) 18 Cal.2d 798, 806, 117 P.2d 841.)

A property owner's legal relationship with an agent hired to help market a property is created and defined by the listing agreement. In addition to the contractual terms of the agreement, “an entirely different set of legal rules is brought into play. The law of agency is not a substitute for the law of contracts, but an additional and overlapping legal framework” that governs the relationship. (2 Miller & Starr, Cal. Real Estate (3d ed.2011) § 3:1, p. 3 (Miller); see also R.J. Kuhl Corp. v. Sullivan (1993) 13 Cal.App.4th 1589, 1599, 17 Cal.Rptr.2d 425 [“ ‘[t]he broker-principal relationship is governed by both agency and contract law.’ ... [Citation.]”] )

Under the law of agency, real estate agents owe a duty of care to all persons, including third persons, within the area of foreseeable risk. ( Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 42–43, 269 Cal.Rptr. 228.) “One who assumes to act as an agent is responsible to third persons as a principal for his acts in the...