Holt v. Brock

• Decision Date: 21 November 2022
• Docket Number: C091636
• Parties: DARRELL L. HOLT, Plaintiff and Appellant, v. CHARLES BROCK et al., Defendants and Respondents
• Court: California Court of Appeals Court of Appeals

DARRELL L. HOLT, Plaintiff and Appellant, v. CHARLES BROCK et al., Defendants and Respondents

C091636

California Court of Appeals, Third District, Nevada

November 21, 2022

APPEAL from a judgment of the Superior Court of Nevada County, No CU18-082951 Thomas M. Anderson and S. Robert Tice-Raskin Judges. Affirmed.

Gavrilov & Brooks, Ognian Gavrilov, Sheila Wirkus Pendergast, and Eliezer M. Cohen for Plaintiff and Appellant.

Carlson Law Group, Mark C. Carlson, Anne M. Watson, Nathan M. Kelfer, and Steven T. Knuppel for Defendants and Respondents.

HULL ACTING P. J.

The trial court in an action to partition real property appointed defendant Charles Brock, a real estate broker, to determine the listing price and sell the property. Plaintiff Darrell L. Holt, one of the real property's owners, brought this action contending Brock violated fiduciary duties and committed other torts in the performance of his court-appointed role. The trial court granted summary judgment in favor of Brock, concluding he was protected under quasi-judicial immunity.

We affirm the judgment.

UNDISPUTED FACTS AND HISTORY OF THE PROCEEDINGS

In 2003, Plaintiff and his sister, Darice Harlan each inherited a 50 percent share of real property in Nevada City. Plaintiff created the Holt Family Trust naming himself as trustee, and in 2013 transferred ownership of his share of the property into the trust.

Darice and her husband, Duane Harlan (collectively the Harlans) filed an action in 2014 to partition the property. (Harlan v. Holt (Super. Ct. Nevada County, 2016, No. CU14-080702).) The parties were unable to agree to terms of partition. In 2016, the trial court ordered that the property be sold and the proceeds divided equally. The court directed the parties to select a licensed real estate broker to list the property.

After the parties could not agree on a broker, the court ordered defendant Brock, a licensed broker with defendant Coldwell Banker Grass Roots Realty (collectively Brock), to list the property. The court ordered the parties to sign all listing agreements and other documents needed to list the property.

The terms of the listing were to include an exclusive listing for a period of no less than six months with a broker commission of six percent. The property was to be sold "as is" with a listing price of at least $882,500, the actual listing price to be determined by the broker's assessment of current market value.

The court ordered the parties to complete and submit all documentation the broker deemed necessary to effectuate the sale. The parties were to cooperate and not interfere with the broker's performance of his duties.

The court ordered the broker to provide a summary of the listing and marketing activity to the court and the parties each month. The broker could make recommendations regarding adjustments in the listing terms through the parties' stipulated agreement or upon a court order.

Any sale was subject to confirmation by the court. If any issue arose during the listing which the parties could not resolve, the court would determine the matter through ex parte procedures.

The parties signed the listing agreement, with plaintiff signing for the trust on May 4, 2016. The agreement set a listing price of $925,000 cash to the sellers.

Before or at the time of signing, plaintiff offered to purchase the property for $1 million and to represent himself if Brock agreed to reduce the commission to three percent or not charge plaintiff the three percent. Brock initially agreed, but on May 5 or 6, and the details are disputed, he informed plaintiff either he could not or would not change the listing agreement.

Plaintiff filed an ex parte motion to have Brock removed as the listing agent and broker. The trial court denied the motion. By separate order, the trial court reconfirmed that Brock was authorized and ordered by the court to market and sell the property "in accordance with the terms and for the price he deems appropriate" and as set forth in the court's original listing order.

On July 29, 2016, the trial court appointed a receiver, attorney Stephen Haas, to manage and approve the sale. The court stated, "Due, in part, to the nature of the relationship between the parties and the expressed desire of one party to purchase the property, the appointed broker has been placed in a difficult situation." The court instructed the receiver "to assume management of the property at issue in order to facilitate the sale of the property. Mr. Haas will be the sole and final authority on management of the property pending sale and the sole authority [f]or approval and sale of the property." The court specifically authorized the receiver to execute all documents necessary to convey the Holt Family Trust's interest in the property to a buyer.

On August 16, 2016, plaintiff submitted a formal offer to purchase Darice's 50 percent share of the property for $462,500 (one-half of the listed $925,000 sale price). The offer's terms were $100 down with the remainder of the purchase price to be financed.

About one week later, the Harlans submitted a formal offer to purchase the Holt Family Trust's interest in the property and certain personal property for $475,000. The offer was an all-cash offer, with a $10,000 deposit and the remainder to be paid into escrow.

The receiver accepted the Harlans' offer. In his opinion, plaintiff's offer was not commercially reasonable, but the Harlans' offer exceeded the property's fair market value and was commercially reasonable. Brock obtained a back-up offer for the entire property in the amount of $1 million. The receiver used this later offer to enhance his negotiating position with the Harlans. Escrow closed on September 27, 2016.

Plaintiff filed this action against Brock on May 31, 2018. The trial court granted in part a motion by Brock for judgment on the pleadings with leave to amend. Plaintiff filed a first amended complaint, which is the operative pleading. He alleged causes of action for breach of fiduciary duty, breach of contract, negligence, and intentional infliction of emotional distress. He contended that Brock, among other things, breached his agreement to sell the property to plaintiff at a discounted commission, undervalued the property, and unreasonably sold the property for a price lower than plaintiff had offered.

Brock filed a motion for summary judgment or alternatively summary adjudication. The trial court granted summary judgment. The court ruled that Brock was entitled to quasi-judicial immunity against plaintiff's claims for damages. Acting under court appointment, Brock was fulfilling quasi-judicial functions integral to the judicial process in the underlying partition action and as an arm of the court. His role was indispensable in bringing the partition action to an equitable conclusion. The court noted that at least one federal district court in an unreported decision had granted quasi-judicial immunity to a real estate broker appointed by the court to dispose of the litigants' property. (See Kramer v. Dane (E.D.N.Y., Sept. 19, 2018, No. 17-CV-5253 (JFB) (SIL)) 2018 U.S. Dist. Lexis 160240, at *9-10; 2018 WL 4489284, at *4.)

The trial court also relied on policy reasons to support its decision. Qualified persons might not ever agree to judicial appointments if their exposure to liability would be greater than the fee they would receive for accepting the appointment. Sufficient accountability was imposed on court-appointed brokers by limiting immunity to acts within the scope of the broker's authority, subjecting the broker to trial court supervision, and subjecting the trial court's decision to appellate review.

DISCUSSION

Plaintiff contends the trial court erred in granting summary judgment. He claims that Brock (1) in violation of the Rules of Court did not identify quasi-judicial immunity as an affirmative defense in his notice of motion or his separate statement of undisputed facts; and (2) was not entitled to quasi-judicial immunity because that immunity is available only to persons who function in a judicial role or as neutrals in an attempt to resolve disputes, not Brock who acted as an advocate and fiduciary for plaintiff. Plaintiff further contends (3) we should not affirm the judgment on the grounds Brock raised for summary adjudication, as material issues of disputed fact exist concerning each cause of action.

I Standard of Review

"We review an order granting summary judgment de novo 'considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained.' (Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 334 [].)

"A defendant moving for summary judgment must show 'that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.' (Code Civ. Proc., § 437c, subd. (p)(2).) 'In performing our de novo review, we must view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [his or] her evidentiary submission while strictly scrutinizing defendants' own showing, and resolving any evidentiary doubts or ambiguities in plaintiff's favor.' (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768 [].) We accept as true both the facts shown by the losing party's evidence and reasonable inferences from that evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 856 [].)

"Summary judgment is appropriate only when 'all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' (Code Civ. Proc., § 437c, subd. (c).) A triable issue of material fact exists...