Developments of Interest

New Cases of Interest - July 19, 2012

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Cullen v. Corwin (2012) 206 Cal.App.4th 1074.  Sellers were successful in a lawsuit brought by the buyers which contended that sellers failed to disclose a defective garage roof when they sold a vacation home.  There was a contract which included an attorney's fees provision benefiting the prevailing party, and also a provision in the contract which required mediation as a condition precedent to the attorney's fees clause.  Buyer's attorney indicated he had twice requested mediation of the litigation and seller's counsel had rejected those requests.  Sellers' counsel argued that mediation was inappropriate until the buyers provided responses to discovery requests and that it was therefore proper for the buyers to refuse mediation.

The court of appeal upheld the judgment in favor of the sellers, but did not award sellers' attorney's fees finding that their failure to proceed with mediation precluded such an award, and the lack of discovery responses did not excuse that contractual requirement.

Daniell v. Riverside Partners I, LP (2012) 206 Cal.App.4th 1292.  This was a malicious prosecution action brought after an unlawful detainer action had been voluntarily dismissed, and a SLAPP motion was brought with respect to the malicious prosecution action.  The court grants the SLAPP motion, and holds in connection with that determination in the published portion of the opinion that every claim of malicious prosecution is a cause of action which arises from protected activity within the meaning of the SLAPP statute.

Cinel v. Birna (2012) 206 Cal.App.4th 1383.  This was a petition to compel arbitration of security fraud claims pursuant to an arbitration agreement contained in a private placement memorandum.  The trial court had granted the petition to compel arbitration but the defendants failed to pay their share of the initial arbitration fee deposit, and plaintiffs failed to make the payment which was required by the arbitration agency when the defendants failed to make the required payment.  As a result, the arbitration was terminated.  One of the defendants then brought a second petition to compel arbitration arguing that he had paid his fees, and therefore the arbitration should be compelled.  The court of appeal found that the second petition to compel arbitration was properly denied, in that unless all of the arbitration fees were paid as required, there could be no arbitration.

Sandler v. Sanchez (2012) 206 Cal.App.4th 1431.  The court holds that a broker of a real estate brokerage does not have a duty to third parties to supervise employees' representations.  In this case a sales person who was a corporate employee of the brokerage committed tortious acts relating to a loan transaction.  The duty imposed under Business and Professions Code §§10159.2 and 10177 is imposed on the officer who is the designated broker but is owed to the corporation, not to third parties.  The officer was therefore successful in filing a demurrer to an action brought by investors against the officer on the basis of an alleged breach of fiduciary duty owed to the investors. 

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