Sweat v. Hollister

Decision Date28 July 1995
Docket NumberNo. D018807,D018807
Citation43 Cal.Rptr.2d 399,37 Cal.App.4th 603
CourtCalifornia Court of Appeals Court of Appeals
Parties, 95 Cal. Daily Op. Serv. 5961, 95 Daily Journal D.A.R. 10,185 Tommie H. SWEAT et al., Plaintiffs and Appellants, v. Allen HOLLISTER et al., Defendants and Respondents.

Goria & Weber and Charles F. Goria, San Diego, for plaintiffs and appellants.

Kinkle, Rodiger and Spriggs, Charles S. Haughey, Jr., San Diego and William P. Buranich, San Francisco, for defendants and respondents Century 21 Tres Ranchos, Inc., Juanita Harmon and Peggy Calhoun.

Keithly & Keithly and Sandra L. Keithly, San Diego, for defendants and respondents Hollister.

FROEHLICH, Associate Justice.

This appeal is brought by the plaintiffs from a summary judgment in favor of all defendants. Plaintiffs, purchasers of a residence in the City of Poway, sued defendant sellers as well as the sellers' real estate representatives. The trial court ruled that no triable issues of fact existed as to certain crucial issues upon which the plaintiffs' complaint depended, that as a matter of law the facts adjudicated did not support a cause of action, and hence granted judgment for the defendants. The court also awarded costs and substantial attorney fees to all defendants. Plaintiffs appeal the granting of summary judgment as to all defendants and also the awards of attorney fees.

The plaintiffs raise several grounds of appeal. The grounds are generally separate and independent, but they build on one another factually. We will therefore progress from one issue to another, layering the facts as we go.

1. Summary Judgment in Favor of Brokers

Plaintiffs were represented in this real estate purchase transaction by their own real estate broker, who was not named as a defendant. Although joined by cross-complaints, the plaintiffs' broker is not a party to the appeal. Plaintiffs directly sued the real estate professionals representing the sellers. These were Century 21 Tres Ranchos, Inc. (the brokerage firm), Juanita Harmon (the owner of the firm and its broker), and Peggy Calhoun (the listing agent). Since the grounds upon which liability of these three parties might be based appear to be identical, we will treat the parties as if one party and refer to them collectively as "brokers."

The complaint alleges that the brokers participated in misrepresentations or failures to disclose material information in their representations concerning the property, and particularly in their preparation and delivery of the Real Estate Transfer Disclosure Statement. 1 The specific false statement alleged to have been contained in the disclosure document was that there existed no "nonconforming use" relative to the property. The disclosure statement revealed that the property was in a designated flood plain. The defect or nonconforming use which allegedly was not revealed was that because of the status of location in a flood plain the provisions of the Poway Municipal Code prevented the property from being altered or enlarged in the event of destruction by fire or other calamity. Plaintiffs alleged that this concealed defect caused the value of the house to be reduced by $215,000.

In approaching our review of this ruling we find it helpful to refer to the analysis of scope of review contained in AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064-1065, 225 Cal.Rptr. 203, which we quote:

"Since a summary judgment motion raises only questions of law regarding the construction and effect of the supporting and opposing papers, we independently review them on appeal, applying the same three-step analysis required of the trial court. [Citations omitted.] First, we identify the issues framed by the pleadings since it is these allegations to which the motion must respond by establishing a complete defense or otherwise showing there is no factual basis for relief on any theory reasonably contemplated by the opponent's pleading. [Citations omitted.]

"Secondly, we determine whether the moving party's showing has established facts which negate the opponent's claim and justify a judgment in movant's favor. [Citations omitted.] The motion must stand self-sufficient and cannot succeed because the opposition is weak. [Citations omitted.]

"When a summary judgment motion prima facie justifies a judgment, the third and final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue. [Citations omitted.] A sufficient motion cannot be successfully resisted by counterdeclarations which create immaterial factual conflicts outside the scope of the pleadings; counterdeclarations are no substitute for amended pleadings."

Our first step in analyzing the summary judgment, therefore, is to examine the pleadings--in this case the original complaint. Although the complaint is framed in several alternative causes of action (failure to make written disclosures, deceit, negligent misrepresentation, suppression of fact), all counts are based on the sole factual contention mentioned above: that in their disclosure statement the sellers and their brokers failed to mention that the property was subject to a "nonconforming use." It is important that we focus on this singular contention. In the court below, as well as on appeal, plaintiffs refer to evidence they claim would show that the structure did not meet current building code requirements. They mentioned as another undisclosed detriment the fact that the house had been moved onto the lot from another location. These assertions are, however, irrelevant to the summary judgment motion. The sole failure of disclosure set forth in the complaint is inability to repair the home under certain circumstances because of building restrictions applicable to flood plain areas in Poway. Other misrepresentations or failures to disclose may indeed have been contained in the disclosure statement. They were not, however, pleaded. The issues at summary judgment cannot be expanded by affidavit; if the plaintiff's claim is to be extended it must be done by amendment. (580 Folsom Associates v. Prometheus Development Co. (1990) 223 Cal.App.3d 1, 18, 272 Cal.Rptr. 227.) No amendment was sought here, and hence the plaintiffs were limited to their one specific allegation of misrepresentation.

We therefore look to the moving parties' affidavits. They presented to the court excerpts from the Poway Municipal Code which defined "nonconforming use" to mean "a use lawful when established but which does not conform to the provisions of this title." They also provided evidence in the form of communications with officials of the City of Poway which established that the property, while subject to restrictions on improvement or alteration because of its location in a flood plain, was not a "nonconforming" land use.

The plaintiffs' opposition documents do not undermine the factual premises of the moving papers. Plaintiffs' position was based on the concept that the house was the victim of "locational obsolescence" because since its erection on (or move onto) its lot the City of Poway had adopted a "flood reduction ordinance" which made improvement or rebuilding of the structure, in the event of partial destruction, economically unfeasible. It is the failure to point out this defect in the property which plaintiffs claim to have been deceit, misrepresentation, or at least a material omission from the disclosure statement.

Our independent consideration of this claim leads us to agree with the trial court: that there is no material issue of fact and the facts admitted do not support liability on the part of the defendants. The factual matter leading to the alleged defect in the house--that it was in a flood plain--was revealed to the plaintiffs. The legal and practical effects of this state of affairs do not rise to the status of a fact--they are conclusions as to value resulting from the fact of situs in a flood plain. The existence and effect of city ordinances regulating rebuilding or improvement of a house in a flood plain constitute information as readily available to the plaintiffs as to the defendants. Actionable nondisclosure relates to facts not discoverable by the plaintiffs. (Continental Airlines, Inc. v. McDonnell Douglas Corp. (1989) 216 Cal.App.3d 388, 404, 264 Cal.Rptr. 779.)

To summarize our conclusions: We believe that the common law disclosure requirements imposed upon the seller of real estate and his broker, as well as the more recent statutory disclosure requirements (Civ.Code, § 1102 et seq.) 2 require revelation of all factual matters bearing upon the quality of the property being sold which might be detrimental to value. Such factual matters would include, for instance, that the property was constructed on filled land, that the structure was in violation of building codes or zoning ordinances, that the structure had been condemned, and that it was termite ridden. (See citation of examples contained in Reed v. King (1983) 145 Cal.App.3d 261, 266, fn. 5, 193 Cal.Rptr. 130.) In a recent decision by our court we found that failure to warn of the existence of noisy and troublesome neighbors constituted a violation of the obligation of full disclosure. (Alexander v. McKnight (1992) 7 Cal.App.4th 973, 9 Cal.Rptr.2d 453.)

The legal ramifications of the factual nature of realty, however, and a conclusion as to how they may adversely impact value, is not a "fact" subject to required disclosure. If the buyer of property is accurately informed as to the zoning, for instance, we believe it is not necessary for the seller also to advise concerning the detrimental aspects of any specific zoning. We think that this principle applies as well to the disabilities associated with owning a house located in a flood plain. That disabilities may exist should be obvious to any buyer. It...

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