Willemsen v. Mitrosilis

• Decision Date: 24 September 2014
• Docket Number: G050075
• Citation: 178 Cal.Rptr.3d 735,230 Cal.App.4th 622
• Court: California Court of Appeals Court of Appeals
• Parties: Ron WILLEMSEN, Plaintiff and Appellant, v. Andrew P. MITROSILIS et al., Defendants and Respondents.

230 Cal.App.4th 622

178 Cal.Rptr.3d 735

Ron WILLEMSEN, Plaintiff and Appellant

v.Andrew P. MITROSILIS et al., Defendants and Respondents.

G050075

Court of Appeal, Fourth District, Division 3, California.

Filed September 24, 2014

Law Offices of Eric Michael Papp and Eric Michael Papp, Corona, for Plaintiff and Appellant.

Garrett & Tully, Ryan C. Squire, Pasadena, and Scott B. Mahler for Defendants and Respondents.

OPINION

MOORE, J.

Plaintiff and appellant Ron Willemsen, a purchaser of vacant land, sued various parties involved in the sale of the land, including defendant and respondent AppraisalPacific, Inc., the appraisal company hired by Willemsen's lender. AppraisalPacific, Inc. and its individual appraisers, codefendants and respondents Andrew P. Mitrosilis and Kraig S. Takacs (collectively, the AppraisalPacific Defendants), filed a motion for summary judgment, in which they asserted that Willemsen's negligent misrepresentation cause of action against them failed as a matter of law. The court granted the motion and Willemsen appeals.

We affirm the summary judgment. Willemsen failed to raise a triable issue of material fact to show the AppraisalPacific Defendants intended to supply information to him to influence his decision whether to buy the property. We also hold the trial court did not abuse its discretion in denying Willemsen's request for leave to file an amended complaint to assert a cause of action for breach of third party beneficiary contract.

IFACTS

In his first amended complaint, Willemsen alleged as follows: On February 27, 2007, he entered into a written contract to purchase 4.83 acres of vacant land in San Bernardino County from Avista Development, LLC (Avista). Real estate broker Nicholas Quackenbos, his partner Richard Bell, and their partnership, Quackenbos–Bell Commercial Real Estate (collectively, the Quackenbos–Bell Defendants), were the dual agents of Willemsen and Avista with respect to the sale. Willemsen asserted that the Quackenbos–Bell Defendants failed to properly draft the purchase agreement so as to correctly articulate his contingencies, passed along material misstatements without investigation, and made material misstatements of their own. In so doing, he said, they breached their fiduciary duties to him and committed negligence, with the result that he was left with a piece of property that was not suitable for his intended purpose.¹

In addition to the foregoing, Willemsen asserted a cause of action for negligent misrepresentation against the AppraisalPacific Defendants. He alleged that: (1) his lender had hired them to perform an appraisal of the property; (2) they knew he, or the class of persons to which he belonged, would rely on the appraisal to determine the value of the property; and (3) they intended for him to rely on the valuation in obtaining financing from the bank. Willemsen further alleged that the property value stated in the appraisal was in excess of the true value of the property, that the AppraisalPacific Defendants had failed to account for either an earthquake fault line running across the property or the loss of land that would be suffered when a local government entity ran a planned road over the property, and that his reliance on the appraisal was a substantial factor in causing him monetary harm.

In response, the AppraisalPacific Defendants filed a motion for summary judgment. They asserted that: (1) by June 2007, Willemsen's contingencies under the purchase agreement had expired; (2) on July 3, 2007, his lender, Farmers and Merchants Bank (the bank), retained the AppraisalPacific Defendants to perform an appraisal of the property in connection with its underwriting of the loan; (3) on July 25, 2007, the appraisal was issued; and (4) on August 15, 2007, the escrow closed.

The AppraisalPacific Defendants claimed Willemsen's cause of action for negligent misrepresentation failed as a matter of law because: (1) Willemsen was not the intended beneficiary of their appraisal; (2) Willemsen could not establish that he justifiably relied on the appraisal; and (3) neither they nor the lender intended the appraisal to influence Willemsen's decision to buy the property.

The trial court granted the motion. The court's reasoning is reflected in the reporter's transcript. The court stated the evidence showed that the appraisal was prepared for the bank's underwriting purposes and that Willemsen was only an incidental beneficiary with respect to the appraisal. It further stated Willemsen had offered no evidence sufficient to raise a triable issue of material fact to the contrary. The court also acknowledged the AppraisalPacific Defendants' argument that Willemsen could not have relied on the appraisal, though the court did not specifically state whether it was basing its decision in any part on that argument.

II

DISCUSSION

A. SUMMARY JUDGMENT:

(1) Introduction—

“Under summary judgment law, any party to an action, whether plaintiff or defendant, ‘may move’ the court ‘for summary judgment’ in his [or her] favor on a cause of action ... or defense (Code Civ. Proc., § 437c, subd. (a) )—a plaintiff ‘contend[ing] ... that there is no defense to the action,’ a defendant ‘contend[ing] that the action has no merit’ (ibid. ). The court must ‘grant[ ]’ the ‘motion’ ‘if all the papers submitted show’ that ‘there is no triable issue as to any material fact’ (id., § 437c, subd. (c) )—that is, there is no issue requiring a trial as to any fact that is necessary under the pleadings and, ultimately, the law [citations]—and that the ‘moving party is entitled to a judgment as a matter of law’ (Code Civ. Proc., § 437c, subd. (c) ).” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843, 107 Cal.Rptr.2d 841, 24 P.3d 493 (Aguilar ).)

“[I]n moving for summary judgment, a ‘defendant ... has met’ his [or her] ‘burden of showing that a cause of action has no merit if’ he [or she] ‘has shown 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. Once the defendant ... has met that burden, 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 a defense thereto....’ (Code Civ. Proc., § 437c, subd. (o )(2).)”² (Aguilar, supra, 25 Cal.4th at p. 849, 107 Cal.Rptr.2d 841, 24 P.3d 493.)

On review of a summary judgment, we “examine the record de novo and independently determine whether [the] decision is correct. [Citation.]” (Colarossi v. Coty U.S. Inc. (2002) 97 Cal.App.4th 1142, 1149, 119 Cal.Rptr.2d 131.)

(2) Background—

(a) Contingency provisions

Willemsen's contingencies were set forth in sections 5 and 9 of the purchase agreement. They included a financing contingency and various contingencies designed to enable Willemsen to determine the suitability of the property for his intended purpose. He had the right, for example, to perform physical and soils inspections, to obtain a survey of the property, to review title, and to review certain government approvals and other documentation.

As stated in purchase agreement section 5.2, Willemsen had 60 days in which to obtain his financing. Section 9 provided contingency periods of varying lengths with respect to his inspection rights. For example, section 9.1, subdivision (b) provided Willemsen with a physical inspection contingency expiring 10 days after the later of the date of the purchase agreement or the date of his receipt of a property information sheet. Section 9.1, subdivision (e) allotted Willemsen 60 days to investigate applicable governmental approvals. Section 9.1, subdivision (d) provided a soils inspection period. The copy of the purchase agreement found in the record contained a typed in figure that appeared to originally read “60” days, but was lined out by hand. The figure “90” was written in by hand and also lined out. The figure “60” was also written in hand. It appeared to have been initialed by only one party. The initials appeared to be “RW.” At deposition, Willemsen testified, with respect to the lined out numbers, that the parties ultimately settled on a 60–day soils inspection period. In all, sections 5.2 and section 9.1, subdivisions (d) and (e), provided the longest contingency periods, of 60 days.

In support of their motion for summary judgment, the AppraisalPacific Defendants asserted that the contingency periods had expired no later than June 2007. Willemsen disputed this. In opposing the motion, he said that he had testified at deposition that the contingency periods and the closing date had been extended many times. In support of this assertion, he cited three things. First, he cited a portion of his deposition testimony wherein he stated it was very important that he obtain the approval of the City of San Bernardino to use the property as a recycling facility and that he thought he had disapproved of the property based on the governmental approvals contingency. He was uncertain whether he had put anything in writing, but believed he had communicated his disapproval to Bell, “because the closing date got extended several times[.]” Second, he cited a portion of the deposition transcript wherein he acknowledged signing amended escrow instructions that extended the date of close of escrow to August 10, 2007. Third, Willemsen cited the amended escrow instructions themselves, which stated that the close of escrow was extended to August 10, 2007 to permit him to complete loan processing requirements.

So, in his opposition, Willemsen showed that the governmental approvals contingency period and the financing contingency period may have been extended. He did not, however, show that his right to reject the property on any ground other than his inability to satisfy himself as to governmental approvals or his inability to obtain satisfactory financing had been extended.

(b) Appraisal documentation

In support of their motion for summary judgment, the AppraisalPacific Defendants...