2013-00156547-CU-BT

Carole L. Clarke vs. NRT West, Inc.

Nature of Proceeding: Motion for Summary Judgment and/or Adjudication

Filed By: Koss, Charles A.

Defendants NRT West, Inc. dba Coldwell Banker Residential Brokerage, Teresa M. Laine, erroneously sued herein as Teresa M. Laine individually and dba Coldwell Banker Residential Brokerage, and Alison Warren, erroneously sued herein as Alison Warren, individually and dba Coldwell Banker Residential Brokerage’s (collectively, “Defendants”) Motion for Summary Judgment Or In The Alternative Summary Adjudication is DENIED.

This action arises from a real estate transaction. Pro per Plaintiff Carole Clarke (“Plaintiff”), and her husband Brian Clarke (a realtor), sought to do a “short sale” of her residential real property. Clarke’s real estate agent, Teresa M. Laine, was to handle the transaction for Clarke. Clarke claims that Laine’s wrongdoing in connection with the transaction caused Clarke to incur damages. Clarke’s Complaint alleges causes of action for Fraud, Civil Conspiracy, Unfair Business Practices, Negligent Misrepresentation, Negligence, Negligent Interference with Prospective Economic Advantage, Breach of Fiduciary Duty, and Breach of Written Contract.

Factual Background

The facts are extensive and the Court will not recount them all here. However, some of the central facts as framed by Defendants are as follows.

In 2004, Carole Clarke (“Carole”) purchased a home at 6709 Ponta Do Sol Way in Elk Grove California (hereafter “the Subject Property.”) (Defendant’s Undisputed Fact (“UF”) 1.) Carole lived in the subject property with her husband of 25 years, Brian

Clarke (“Brian”). (UF 2.) Brian has been a realtor since 2004. (UF 3.)

Carole refinanced the home in 2005 with First Magnus Financial, which loan was then acquired by Countrywide and later taken over by Bank of America. (UF 4.) Carole defaulted on the loan, with Carole owing substantially more than the home was worth. (UF 5.)

In 2008, Carole applied to Bank of America for a loan modification and that same year, she stopped making her mortgage payments. (UF 6.) In early 2011, with Carole’s loan modification still unapproved, Brian and Carole decided they wanted to move out of the home. (UF 7.) Brian and Carole moved out of the Subject Property and to a home in Wilton, California. (UFs 8-11.)

In early 2011, they decided to rent out the Subject Property, and on March 1, 2011, Brian entered into a one year lease with Rashawn Fulcher, wherein Mr. Fulcher would pay $2250 a month directly to Brian through lease end on February 28, 2012. (UFs 12 -13.)

Although the Clarkes were no longer making mortgage payments on the house, Brian accepted rent payments from Mr. Fulcher through March of 2012. (UF 14.)

In early February, 2012, Carole was served with a foreclosure notice on the subject property by Bank of America, with the foreclosure sale scheduled for February 27, 2012. (UF 16.)

The Clarkes determined the time had come to list the subject property as a short sale, and Carole told Brian “Let’s just short sale this and get it over with.” (UF 17.) Carole believed Brian to be just as experienced in short sales as Theresa Laine, but believed he could not represent her in the sale because it would constitute a conflict of interest. (UF 18.)

In early February, Brian contacted Coldwell Banker agent Theresa Laine and asked her to represent them in the sale. (UF 19.) Brian spoke with his tenant, Rashawn Fulcher, who indicated he wanted to purchase the home. (UF 20.)

On February 4, 2012, Brian sent an email to Bank of America that “due to health issues” Carole has decided to short sale the home. (UF 24.) Carole sent a follow-up letter to Bank of America several days later that she no longer wanted to do the loan modification, and would be short selling the home instead. (UF 25.)

On February 5, 2012, Carole signed a residential real estate listing agreement with Ms. Laine, and Ms. Laine placed a listing in the Sacramento Multiple listing system advertising the property for $265,000. (UF 26.)

Ms. Laine successfully delayed the foreclosure sale, getting the date postponed to March 28, 2012. (UF 27.)

On February 7, 2012, Carole signed a Residential Purchase Agreement to sell the subject property to Mr. Fulcher for $250,000. (UF 29.) Fulcher was represented by defendant Alison Warren, an agent with Coldwell Banker, in the transaction. (UF 30.)

On February 7, 2012, Carole signed a “short sale addendum,” which modified the, terms of the residential purchase agreement to comport with the short sale process,

and altered the RPA time periods so that they would be triggered by the lender’s approval of the short sale instead of the buyer’s acceptance of the seller’s offer. (UF 34.)

Brian handled all the paperwork for his wife involving the short sale and handled all communications with Ms. Laine. (UF 39.)

On March 13, 2012, Bank of America sent a letter to Carole offering to modify her loan with a permanent principal reduction of $274,136.52 and an interest rate reduction to 3.194 percent. (UF 42.)

Brian did not request that Ms. Laine obtain a written statement of loan approval from Summit Funding, did not instruct Ms. Laine to cancel the transaction if the letter was not received, and made no reference to canceling the short sale to allow Carole to pursue the loan modification. (UF 50.) Brian had never advised Ms. Laine in writing to cancel the contract. (UF 54.)

The short sale was ultimately completed and Plaintiff’s home was sold to Fulcher.

Discussion

Defendants’ motion for summary judgment and for adjudication of issues is DENIED since Defendants failed to comply with the mandatory provisions of CRC Rule 3.1350

(b) and (h), requiring that the issues presented for summary adjudication be stated in the notice of motion and then repeated verbatim in the Separate Statement. Here, Defendants’ Separate Statement makes no attempt to frame any particular “Issues” for adjudication. Instead, the Separate Statement includes bare bones headings like “First Cause of Action – Fraud” and “Second Cause of Action: Civil Conspiracy.” The Separate Statement’s failure to frame specific issues for adjudication (see the example given in CRC Rule 3.1350(h)), and failure to repeat the Notice of Motion’s framing of the issues verbatim, warrants denial of the motion.

Moreover, the motion is also DENIED on the separate and independent ground that Plaintiff has identified evidence giving rise to a dispute of material fact. Plaintiffs’ evidence reveals a material factual dispute regarding UF 50.

UF 50 asserts that Brian did not request that Ms. Laine obtain a written statement of loan approval from Summit Funding, did not instruct Ms. Laine to cancel the transaction if the letter was not received, and made no reference to canceling the short sale to allow Carole to pursue the loan modification. (UF 50.) Paragraph 14 of Laine’s Declaration is the sole support offered for UF 50. Laine declares that: “Mr. Clarke did not request that I obtain a written statement of loan approval from Summit Funding, nor did he instruct me to cancel the transaction if the letter from Belinda Cadena was not received.” (Declaration of Teresa Laine (“Laine Decl.”) ¶ 14 (emphasis added).)

Plaintiffs’ Opposition directly disputes Laine’s assertion and UF 50. The Opposition (supported by Brian Clarke’s Declaration) asserts that near the outset of the short sale transaction, the Clarkes wanted to get out of the short sale and instead wanted to pursue the loan modification with Bank of America. Brian Clarke purportedly contacted the California Association of Realtors Legal Department for advice on how to do this, and he came to believe that there was no way for the Clarkes to get out of the short

sale contract simply by invoking their desire to pursue the loan modification with Bank of America. Brian Clarke believed that in order to cancel the transaction and avoid breaching the contract, the Clarkes would have to hope for Fulcher (the buyer) to default on his contractual obligations. Based on that belief (and the Court need not and does not make any determination regarding the correctness of such belief here, given the framing of UF 50), Brian Clarke purportedly directed Plaintiff’s agent, Teresa Laine, to take steps to try to prompt Fulcher’s default in connection with securing financing by the contractual deadline for doing so.

Clarke declares that he repeatedly directed Laine to request written confirmation from Rashawn’s lender, Summit Funding, confirming that Fulcher’s financing request was indeed approved. Brian Clarke believed that in the likely event Summit Funding responded “in the negative” regarding Fulcher’s financing, this “would have required a Notice to Perform on Fulcher by Laine,” which, if Fulcher could not secure the financing within the period required in the Notice to Perform, the Clarkes would have been able to cite as a valid contractual reason for exiting the short sale transaction (i.e., they could have properly cited Fulcher’s lack of financing – his default – as the reason the deal was cancelled, rather than their own desire to cancel the transaction). (Declaration of Brian Clarke (“Brian Clarke Decl.”) ¶ 15.) However, Brian Clarke declares, even though he repeatedly directed Laine both verbally and in writing to demand written confirmation about Fulcher’s financing from Summit Funding, Laine repeatedly failed to make the demand. (Brian Clarke Decl. ¶ 15, 17, 18, 19, 20.) Brian Clarke implies that Laine simply wanted the short sale transaction to be completed so she could collect her commission, such that she ignored her clients’ repeated directives to seek written confirmation from their buyer’s lender. (Id.)

Plaintiff also filed a copy of an email dated 3/13/12 (referred to in Brian Clarke’s Declaration as Exh. 6A) wherein Clarke wrote, “Teresa, I am done with Rashawn! Please read my email to him as shown below. Since it is now 6 weeks since he made the Offer I would like him to be sent a Notice to Perform in relation to his Financing. I am not going to waste my time with him. Brian.” (Exh. 6A to Brian Clarke Decl. (emphasis added).) Clarke again declares that Laine never demanded written confirmation from Summit Funding, and as a result, never sent Fulcher a Notice to Perform. (Brian Clarke Decl. ¶ 15, 17, 18, 19, 20.)

On Reply, Defendants argue that “while Plaintiff states this UMF is disputed, Plaintiff sets forth no facts to dispute this UMF, and indeed the critical point is Plaintiff does not deny that there is no reference to canceling the short sale to allow Carole to pursue the loan modification.” (Reply Sep. Statement at 20.) However, the Court cannot disregard the first portion of UF 50 and instead focus solely on what Defendants frame as the “critical point” of the UF. Contrary to the first clause of UF 50, Plaintiff has identified evidence that Laine was, in fact, directed to request written confirmation of Fulcher’s financing from Summit Funding. (Brian Clarke Decl. ¶ 15, 17, 18, 19, 20.)

There is a material factual dispute regarding UF 50. The evidence before the Court is squarely in conflict with regard to whether Brian Clarke ever directed real estate agent Teresa Laine to request written confirmation of Fulcher’s financing from Summit Funding. The Court cannot weigh evidence or make credibility determinations on a summary adjudication motion. This material factual dispute prevents summary adjudication here.

Accordingly, even assuming the moving papers were sufficient to satisfy Defendants’

initial burden of production under Code of Civil Procedure § 437c(p)(2), Plaintiff has met her burden of producing evidence sufficient to establish the existence of at least one triable issue of material fact – especially in light of California law requiring that the evidence offered in opposition to be construed liberally while the evidence in support of the motion is construed narrowly. (See, e.g., DiLoreto v. Bd. of Education (1999) 74 Cal.App.4th 267; Alvarez v. State of California (1999) 75 Cal.App.4th 903.) And because each separate “issue” in Defendants’ Separate Statement is supported by the same UFs (each subsequent “issue” incorporates by reference the UFs listed in support of all prior “issues” in the Separate Statement), evidence revealing a factual dispute with respect to a single UF mandates denial of the entire motion. (See, Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252 (citing Weil & Brown, Civil Procedure Before Trial, Ch.10:95.1) [moving party’s inclusion of facts in separate statement effectively concedes each fact’s “materiality,” whether intended or not, and if there is a triable dispute relating to any one, the motion must be denied].)

Objections to Evidence

No properly formatted evidentiary objections were filed. Evidentiary objections must comply with Rule of Court 3.1354.

To the extent Plaintiff’s filing bearing the caption “Suppression of Evidence” was intended as an evidentiary objection, it is OVERRULED in both form and substance.

To the extent Defendants intended pates 7-8 of their Reply to constitute evidentiary objections, the objections are OVERRULED in both form and substance.

Conclusion

For the reasons set forth above, Defendants’ motion for summary judgment/adjudication must be and hereby is DENIED. Further, even if Defendants had complied with the specific requirements of CRC Rule 3.1350(b) and (h) and had filed a conforming notice of motion and Separate Statement, summary adjudication would still be denied because there are triable issues of material fact with respect to UF 50, and because UF 50 is a fact listed in support of each and every separate “issue” in the Separate Statement.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; CRC Rule 3.1312.)