Filed 9/17/19 Dubasso v. LQR Resort Desert Real Estate CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

MICHAEL DUBASSO et al.,

Plaintiffs and Appellants,

v.

LQR RESORT DESERT REAL ESTATE, INC. et al.,

Defendants and Respondents.

E069952

(Super.Ct.No. PSC1602890)

OPINION

APPEAL from the Superior Court of Riverside County. David M. Chapman, Judge. Reversed.

John Sullivan for Plaintiffs and Appellants.

Harmeyer Law Group, Jeff G. Harmeyer and Lauren L. Walker for Defendants and Respondents.

I. INTRODUCTION

In January 2016, plaintiffs and appellants, Michael Dubasso and Jenny Dubasso, purchased a home in the Tradition community (Tradition) in LaQuinta. In connection with plaintiffs’ purchase of the home, defendants and respondents, LQR Resort Desert Real Estate, Inc. (LQR) and Kathleen O-Keefe (O-Keefe) (collectively, defendants), served as plaintiffs’ real estate broker and agent, respectively. Following the close of escrow on the purchase of their home, plaintiffs applied for membership in Tradition’s Golf Club (Club), a social and golf club in Tradition, but Tradition’s membership committee rejected plaintiffs’ application.

Plaintiffs brought this action for money damages against defendants for their alleged failure to disclose to plaintiffs—before plaintiffs entered into their contract to purchase their Tradition home—that Club membership was not “automatic” for Tradition homeowners, but was, instead, subject to a “vetting process” by Tradition’s membership committee. Plaintiffs allege defendants either intentionally or negligently breached their fiduciary duty to plaintiffs by failing to discover that plaintiffs did not wish to purchase their Tradition home unless they could be Club members, and to advise plaintiffs to make their purchase contract contingent on Tradition’s approval of plaintiffs’ Club membership application.

The court granted defendants’ motion for summary judgment on plaintiffs’ complaint and entered judgment in favor of defendants. In this appeal, plaintiffs claim they raised triable issues of material fact concerning whether defendants had a fiduciary duty to plaintiffs to discover—before plaintiffs entered into their contract to purchase their Tradition home—whether plaintiffs did not wish to purchase the home unless their Club membership application would be approved, and to advise plaintiffs to make their purchase contract contingent on their acceptance as Club members. We conclude that defendants’ motion for summary judgment was erroneously granted and reverse the judgment in favor of defendants.

II. FACTS AND PROCEDURAL HISTORY

A. The Allegations of Plaintiffs’ Complaint

In their operative fourth amended complaint, plaintiffs allege they were searching for a retirement home in LaQuinta in late 2015. In November 2015, O’Keefe showed plaintiffs several homes in Tradition, including the home that plaintiffs purchased in January 2016 for $2 million. During their visit to Tradition in November 2015, plaintiffs “shared” with O’Keefe their concern that living in a country club community might be “lonely and isolating.” O’Keefe told plaintiffs they should not be concerned because “the social club at the Tradition was amazing” and there “would be plenty of people around . . . .”

At O’Keefe’s suggestion, plaintiffs visited the Tradition clubhouse to see “what it had to offer” and to meet its general manager, Heidi Risk. On this occasion and on two subsequent occasions, plaintiffs “made it clear” to O’Keefe that plaintiffs “intended” to become members of the “Club” in addition to purchasing a Tradition home. At no time, however, did O’Keefe explain to plaintiffs that they would have to apply for membership “to the golf and social club, or undergo a vetting process, or suggest in any way that membership [in the golf and social club] was anything other than automatic upon purchasing” the Tradition home that plaintiffs later purchased.

When plaintiffs and O’Keefe first went to the Tradition clubhouse and met Risk, O’Keefe explained to Risk, in plaintiffs’ presence, that plaintiffs were considering purchasing a Tradition home and that plaintiffs, “intended, in addition, to become members of the social club and, eventually, the golf club.” Risk was “warm and welcoming,” gave plaintiffs a tour of the Club’s facilities, and “tout[ed] the many amenities” of Club membership. Jenny Dubasso told Risk how “excited” she was and how she “could not wait” to become a Club member. Risk met with plaintiffs on several subsequent occasions but, like O’Keefe, Risk never told plaintiffs that they would have to apply for Club membership, undergo a vetting process, or suggest to plaintiffs that Club membership was not “automatic” upon the purchase of a Tradition home. Following their meetings with Risk and their discussions with O’Keefe, plaintiffs understood they would “automatically” become Club members if they purchased a Tradition home. Plaintiffs were “looking forward to dining, working out, playing golf, and becoming part of the [Tradition] community.”

Around November 20, 2015, plaintiffs, represented by LQR and O’Keefe, made an initial offer to purchase their Tradition home. Plaintiffs and the seller ultimately agreed to a $2 million purchase price, an escrow was opened, and the escrow closed around January 28, 2016. Around one week later, plaintiffs “took a check to the clubhouse for their [Club] membership and presented it” to Risk. Risk then explained, for the first time, that “it ‘didn’t work like that,’” that plaintiffs had to “fill out an application,” and that plaintiffs’ Club membership was not “‘automatic’” but was “subject to a ‘vetting process.’” (Italics omitted.)

At that point, plaintiffs completed a Club membership application. After much delay, plaintiffs were “finally invited” to meet with the Tradition membership committee. The meeting lasted around one hour, and plaintiffs answered “many questions.” One or two weeks later, around April 18, 2016, Risk called plaintiffs and told them, to their “shock and disbelief,” that they were “‘not a fit’” for Club membership. (Italics omitted.) When asked for an explanation, Risk told plaintiffs that the membership committee’s reasons for rejecting plaintiffs’ application were “‘confidential’ and that no further explanation would be forthcoming.” (Italics omitted.)

Having purchased their Tradition home, plaintiffs were “devastated” and “felt like pariahs in their own neighborhood.” Jenny Dubasso became physically ill, and plaintiffs’ marriage suffered. Had plaintiffs known they would have to apply for membership in the Tradition golf and social clubs, they would have made their purchase of their Tradition home contingent on their acceptance in the Club. In July 2017, when they filed their operative complaint, plaintiffs estimated that the market value of their Tradition home had fallen by $200,000 since January 2016.

B. Defendants’ Motion for Summary Judgment or Summary Adjudication

Plaintiffs’ complaint alleges five causes of action against defendants, styled as: (1) fraudulent concealment, (2) negligence, (3) breach of fiduciary duty (based on fraud and deceit), (4) breach of fiduciary duty (based on negligence), and (5) willful failure to comply with Civil Code sections 2079.2, 2079.16, and 2079.24. Each cause of action is based on defendants’ alleged failure to advise plaintiffs, before they entered into their contract to purchase their Tradition home, that their Club membership would not be “automatic” upon their purchase of their Tradition home, but would, instead, be subject to a “vetting process” and the approval of Tradition’s membership committee.

Defendants moved for summary judgment, or summary adjudication of each cause of action, on the sole ground that the covenants, conditions, and restrictions (CC&R’s) of Tradition’s community association “disclosed” to plaintiffs that the purchase of a Tradition home did not “guarantee” membership in the Club. Defendants adduced undisputed evidence that plaintiffs were provided with a copy of the CC&R’s on December 21, 2015, during the escrow for the purchase of their Tradition home, and that plaintiffs signed a “Receipt for Documents” stating they “approve[d]” of the CC&R’s “in their entirety.” Defendants argued the CC&R’s “clearly state[d] that the right to use the Tradition Golf Club facilities arises only through an agreement with the golf club owner and is not automatic upon purchase of a property in the Tradition Development.” (Italics added.)

Defendants also adduced the CC&R’s, which provide, in pertinent part: “The Golf Club Facilities are not part of the Common Area and are not subject to this Declaration, and no provision of this Declaration gives, or shall give, any Owner or occupant of any Lot the right to use the Golf Club Facilities.[ ] Rights to use the Golf Club Facilities will be granted only to those persons, and on those terms and conditions, as may be determined from time to time by the Golf Club Owner.[ ] By way of example, but not limitation, the Golf Club Owner shall have the right to approve users and determine eligibility for use, to reserve use rights, to transfer any or all of the Golf Club Facilities or operation thereof to anyone and on any terms, to limit availability of use privileges, and to require the payment of a purchase price, a membership contribution, an initiation fee, a membership deposit, dues, and/or use charges. Each Owner and occupant of any Lot hereby acknowledges that no right to the use or enjoyment of the Golf Club Facilities arises from ownership or occupancy of a Lot but arises, if at all, only from a membership agreement or other similar agreement with the Golf Club Owner. The Golf Club Owner shall have the right, from time to time in its sole and absolute discretion and without notice, to amend or waive the terms and conditions of use of the Golf Club Facilities including, but not limited to, eligibility for and duration of use rights, categories or use, extent of use privileges, and number of users. The Golf Club Owner shall also have the right, in its sole and absolute discretion and without notice, to reserve use rights and to terminate use rights altogether, subject to the provisions of any outstanding membership documents.” (Italics added, underlining omitted.)

In opposition, plaintiffs did not dispute that they received a copy of the CC&R’s during the escrow. But, plaintiffs argued, the CC&R’s did not mention that Club membership was subject to a “vetting process,” or was “anything other than automatic upon submission of an application therefor.” Plaintiffs also argued that, “[a] reasonable person would conclude,” upon reading the CC&R’s, that “if they wanted to become a member, they simply needed to enter into a ‘membership agreement or other similar agreement with the Golf Club owner.’” (Italics omitted.)

Plaintiffs submitted their declarations, attesting to the facts alleged in their complaint, including that they “made it clear” to O’Keefe, during their first visit to Tradition and on two subsequent occasions, that they “intended” to become members of the Tradition “social club,” in addition to purchasing their Tradition home, but O’Keefe never told plaintiffs they would have to undergo a vetting process or that Club membership was “anything other than automatic upon submitting an application therefor.” Plaintiffs averred that, “[h]ad O’Keefe advised [them] that [they] would have to undergo a vetting process, or suggest[ed] in any way that [Club] membership was anything other than automatic upon submission of an application therefor, [then plaintiffs] would have insisted that O’Keefe condition [their] purchase . . . on [their] acceptance as members to the Club, and [they] would not, ultimately, have purchased [their Tradition home].”

Plaintiffs also adduced deposition testimony of O’Keefe and Risk. O’Keefe testified she took plaintiffs to see their Tradition home “at least five times”; that she and plaintiffs “[m]aybe . . . talked about joining the [C]lub a couple of times”; but plaintiffs told O’Keefe they were “unsure” whether they wanted to become Club members. O’Keefe and plaintiffs specifically discussed that, “for those [who] don’t play golf, . . . there would be the ability to have a social membership so that you could still dine in the club, have a workout facility and a spa.” Because plaintiffs were interested in a social club membership, O’Keefe took plaintiffs to see Risk and, at that time, told Risk that plaintiffs “‘may be interested in a social membership.’” O’Keefe believed Risk would tell plaintiffs, “all the information they need[ed] to know” about Club membership, or membership in the Tradition golf and social clubs. O’Keefe did not know, and never discussed with plaintiffs, what, if anything, Risk told plaintiffs about Club membership or the “vetting process” entailed in becoming a Club member, before plaintiffs entered into their purchase contract. Rather, O’Keefe assumed that Risk told plaintiffs what they needed to do in order to become Club members. For her part, Risk did not recall discussing the Club “membership process” with plaintiffs.

O’Keefe knew Club membership was “not automatic,” but she did not know what was entailed in the “vetting process” to become a Club member. For that reason, she “always” told her clients, “‘[f]or [C]lub information, you speak to the membership director, because they handle membership. I handle the real estate. I do not sell memberships.’ [¶] So I don’t know what their [vetting] practices are . . . . That’s why I tell . . . any client . . . ‘speak directly to membership, because I don’t have all of the information.’ And I don’t want to have all the information. My job is complicated enough.”

O’Keefe testified it was her practice to make Club membership a contingency to purchase contracts for clients who told her they did not want to buy the home unless they could be Club members. She testified: “If a client said to me, ‘I specifically want to be a member of this club, and I don’t want to buy this house if I can’t have a club membership,’ then I would have to write that into the contract that . . . the purchase of [the] home is contingent upon the club’s acceptance. So the property would not close until the club membership gave such notice that the clients were definitely to become members.” In October 2015, before O’Keefe wrote plaintiffs’ purchase offer, she wrote an offer for another Tradition buyer and made that offer contingent on that clients’ acceptance as a Club member.

But because plaintiffs “weren’t sure” whether they wanted a Club membership and plaintiffs did not tell O’Keefe they did not want to buy their home unless they could be Club members, O’Keefe testified that her “main concern was to make sure that the transaction closed . . . .” If plaintiffs had said to her, “‘I’m not that interested, we don’t really know [whether we want a Club membership],’ fine, I don’t care if you get a membership or you don’t get a membership. It doesn’t matter to me. It’s your decision, and . . . there’s no benefit to me to constantly pursue someone getting a membership. If they don’t want something, then I drop it.” O’Keefe admitted that, before plaintiffs entered into their purchase contract, O’Keefe did not know “one way or another” whether plaintiffs “intended to ever join the [C]lub.”

As noted, Risk did not recall discussing the Club membership process with plaintiffs. Risk also testified that the Club’s marketing procedure did not disclose that there was a vetting process for Club membership. Risk told real estate agents she dealt with, including O’Keefe, that if Club membership “is important to the person purchasing the home, they should make their offers contingent upon that.”

C. The Trial Court’s Ruling

Following a hearing, the court summarily adjudicated each cause of action in favor of defendants and, accordingly, granted defendants’ motion for summary judgment. In its tentative decision, which the court implicitly adopted in granting the motion, the court reasoned that the CC&R’s, which plaintiffs had received during the escrow, “clearly” advised plaintiffs that the Club “sets [its] own terms of membership.” On this basis, the court implicitly concluded that defendants met their initial burden of showing that plaintiffs could not establish that defendants “concealed or suppressed a material fact,” and, accordingly, that plaintiffs could not establish a critical element of each of their alleged causes of action.

The court also reasoned that, in their opposition, plaintiffs were offering “a new basis for an alleged breach of duty” which they did not allege in their complaint. This purported new theory was that defendants were negligent “in failing to make [plaintiff’s] purchase offer contingent upon membership in the [C]lub.” But this was not a new theory of liability. In their complaint, plaintiffs alleged they would have “insisted” that their purchase contract be made contingent upon their acceptance as Club members, had they known their acceptance as Club members would not be “automatic” upon their purchase of their Tradition home.

But even if plaintiffs were not advancing a new theory of liability, the court reasoned that, “the evidence [did] not support a breach of [fiduciary] duty” by defendants. The court pointed out that O’Keefe testified that her practice to include Club membership as a contingency in purchase offers “was based on when a buyer has expressed an intention to be a member and only desires to purchase in the Tradition community if they are accepted as members. Here, the facts reflect that [plaintiffs] were unsure whether they wanted to be a member and that uncertainty was expressed to O’Keefe. As a result, O’Keefe took them to tour the [C]lub and meet with Risk to discuss membership. At no time thereafter did [plaintiffs] tell O’Keefe that they definitely wanted to be members of the [C]lub. In addition, upon receipt of the CC&Rs prior to the close of escrow [plaintiffs] were advised that membership was not automatic and at the time could have addressed any concerns they had with O’Keefe, but failed to do so. Accordingly, [plaintiffs] cannot establish that there was a breach of any duty . . . .” (Italics added.) Plaintiffs timely appealed.

III. DISCUSSION

A. Standard of Review

A motion for summary judgment is to be granted “if 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 defendant moving for summary judgment bears the initial burden of showing that the plaintiff’s causes of action have no merit, and the defendant meets this burden by making a prima facie evidentiary showing that one or more elements of each cause of action cannot be established, or there is a complete defense to each cause of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849-851; Code Civ. Proc., § 437c, subd. (p)(2).) If the defendant meets this burden, the burden shifts to the plaintiff to produce evidence of a triable issue of material fact concerning the element or defense. (Aguilar v. Atlantic Richfield Co., supra, at pp. 849-851; Code Civ. Proc., § 437c, subd. (p)(2).)

We review an order granting summary judgment de novo, considering all of the evidence adduced on the motion (except evidence the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) “We liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party. [Citations.]” (Zubillaga v. Allstate Indemnity Co. (2017) 12 Cal.App.5th 1017, 1021.) The trial court’s stated reasons for granting the motion are not binding on us, because we review the court’s ruling, not its rationale. (Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878.) But in conducting our de novo review, we apply the same three-step process required of the trial court: We first identify the issues framed by the pleadings, because the motion must respond to these allegations by establishing a complete defense or otherwise showing there is no basis for relief on any theory reasonably contemplated by the pleadings. Second, we determine whether the moving party has established facts justifying a judgment in its favor. Third and finally, and if the moving party has met its initial burden, we determine whether the opposition has demonstrated the existence of a triable issue of material fact. (Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 848.)

B. Applicable Legal Principles

1. The Fiduciary Duties of Real Estate Brokers and Their Agents

A real estate broker is an agent for the broker’s client or principal; in contrast, a real estate salesperson is “strictly the agent of the broker” under whom the salesperson is licensed. (2 Miller & Starr, Cal. Real Estate (4th ed. 2018) § 3.5, p. 3-17 to 3-18.) A broker is a fiduciary to its principals, in the same way a trustee is a fiduciary to the trust’s beneficiaries. (Batson v. Strehlow (1968) 68 Cal.2d 662, 674 [“The law imposes on a real estate agent [i.e., broker] ‘the same obligation of undivided service and loyalty that it imposes on a trustee in favor of his beneficiary.’”]; Field v. Century 21 Klowden-Forness Realty (1998) 63 Cal.App.4th 18, 25 (Field) [“[A] broker’s fiduciary duty to his client requires the highest good faith and undivided service and loyalty.”].) And, as the broker’s agent, a real estate salesperson employed by a broker “owes the same fiduciary duties to the broker’s principal that are owed by the broker.” (2 Miller & Starr, Cal. Real Estate, supra, § 3:33, pp. 3-153 to 3-156, fn. omitted.)

As fiduciaries, a broker and its salespersons or agents have a duty to investigate and discover, and to advise the broker’s principal concerning, all material facts that may bear upon and allow the principal to make a well-informed decision in the real estate transaction in question. (Field, supra, 63 Cal.App.4th at pp. 25-26.) “A fiduciary’s failure to share material information with the principal is constructive fraud . . . .” (Michel v. Moore & Associates, Inc. (2007) 156 Cal.App.4th 756, 762.)

The Field court explained the scope of a broker’s fiduciary duty to its principal: “‘The broker as a fiduciary has a duty to learn the material facts that may affect the principal’s decision. He [the broker] is hired for his professional knowledge and skill; he is expected to perform the necessary research and investigation in order to know those important matters that will affect the principal’s decision, and he has a duty to counsel and advise the principal regarding the propriety and ramifications of the decision. The [broker’s or] agent’s duty to disclose material information to the principal includes the duty to disclose reasonably obtainable material information. [¶] . . . [¶] The facts that a broker must learn, and the advice and counsel required of the broker, depend on the facts of each transaction, the knowledge and the experience of the principal, the questions asked by the principal, and the nature of the property and the terms of sale. The broker must place himself in the position of the principal and ask himself the type of information required for the principal to make a well-informed decision. This obligation requires investigation of facts not known to the agent and disclosure of all material facts that might reasonably be discovered.’ [Citation.]” (Field, supra, 63 Cal.App.4th at pp. 25-26, quoting 2 Miller & Starr, Cal. Real Estate (2d ed. 1989) § 3.17, pp. 94, 96-97, 99, fn. omitted.)

2. Plaintiffs’ Causes of Action

Plaintiffs’ complaint alleges five causes of action against LCQ (plaintiffs’ broker) and O’Keefe (LCQ’s agent), styled as: (1) fraudulent concealment, (2) negligence, (3) breach of fiduciary duty (based on fraud and deceit), (4) breach of fiduciary duty (based on negligence), and (5) willful failure to comply with Civil Code sections 2079.2, 2079.16, and 2079.24. The factual basis of each cause of action is defendants’ alleged failure to advise plaintiffs, before plaintiffs entered into their contract to purchase their Tradition home, that plaintiffs’ Club membership would not be “automatic” based on their purchase of their Tradition home, but would instead be subject to a vetting process and the discretionary approval of the golf club owner, or the Club’s membership committee.

In moving for summary judgment, or summary adjudication of each cause of action, defendants claimed plaintiffs could not establish that defendants had a duty to disclose to plaintiffs that Tradition Club membership (including social club membership) was subject to a vetting and discretionary approval process, or that defendants breached their duty to disclose this alleged material fact to plaintiffs. In support of their motion, defendants relied solely on the CC&R’s, which plaintiffs acknowledged they received during the escrow, as discharging defendants’ alleged duty to inform plaintiffs about the vetting and discretionary approval process for Tradition golf and social club membership. The court granted summary judgment in part on this ground.

In interpreting CC&R’s, we apply the same rules that govern the interpretation of contracts. (Bear Creek Master Assn. v. Southern California Investors, Inc. (2018) 28 Cal.App.5th 809, 818.) The language of a contract governs its interpretation, if the language is clear and explicit. (Civ. Code, § 1638.) The relevant language of the CC&R’s is clear and explicit.

As noted, the CC&R’s state: “Rights to use the Golf Club Facilities will be granted only to those persons, and on those terms and conditions, as may be determined from time to time by the Golf Club Owner. By way of example, but not limitation, the Golf Club Owner shall have the right to approve users and determine eligibility for use, to reserve use rights, to transfer any or all of the Golf Club Facilities or operation thereof to anyone and on any terms, to limit availability of use privileges, and to require the payment of a purchase price, a membership contribution, an initiation fee, a membership deposit, dues, and/or use charges. Each Owner and occupant of any Lot hereby acknowledges that no right to the use or enjoyment of the Golf Club Facilities arises from ownership or occupancy of a Lot but arises, if at all, only from a membership agreement or other similar agreement with the Golf Club Owner. The Golf Club Owner shall have the right, from time to time in its sole and absolute discretion and without notice, to amend or waive the terms and conditions of use of the Golf Club Facilities including, but not limited to, eligibility for and duration of use rights, categories or use, extent of use privileges, and number of users. The Golf Club Owner shall also have the right, in its sole and absolute discretion and without notice, to reserve use rights and to terminate use rights altogether, subject to the provisions of any outstanding membership documents.” (Italics added, underlining omitted.)

The CC&R’s plainly notified plaintiffs that membership in the Tradition golf and social clubs was subject to the golf club owner’s discretion. But the CC&R’s did not expressly inform plaintiffs that golf and social club membership was subject to a vetting and discretionary approval process. We do not think that the general language used in the CC&R’s was sufficient to excuse, as a matter of law, defendants’ obligation to inform plaintiffs in some manner of a fact that defendants were actually aware of: that the golf club might reject plaintiffs’ membership application even if plaintiffs were willing to enter into the required membership agreement, pay the membership fees, and meet any articulated membership requirements.

Additionally, a reasonable person in plaintiffs’ position, knowing what plaintiffs aver they knew at the time they received the CC&R’s, reasonably could have concluded that the golf club owner would “automatically” approve any Tradition homeowner’s golf or social club membership application, if the applicant was willing to enter into a membership agreement on terms set by the golf club owner, pay the membership fees, and meet any articulated membership requirements. Plaintiffs’ evidence shows that, despite all of the discussions plaintiffs had with O’Keefe and all of the meetings plaintiffs had with Risk at the Tradition clubhouse, neither O’Keefe, Risk, nor anyone else gave plaintiffs any reason to believe that the golf club owner would not automatically approve plaintiffs’ application for golf or social club membership if plaintiffs were willing to sign the required membership agreement, pay the membership fees, and meet any articulated membership requirements.

The CC&R’s were entirely consistent with plaintiffs’ understanding that golf and social club membership was only contingent upon signing a membership agreement and paying the required fees. Given plaintiffs’ understanding, the CC&R’s reasonably could have indicated to plaintiffs that the golf club owner was merely reserving the right to set the terms of golf and social club membership based on space, availability, or other factors not personal to any applicant, and to revise the terms of membership from time to time, subject only to the terms of any outstanding membership agreements.

Defendants correctly point out that plaintiffs had the right, under Civil Code section 1102.3, to terminate their purchase contract within five days of the date the CC&R’s were mailed to plaintiffs during the escrow for the purchase of the property, after plaintiffs’ signed their purchase contract. But as explained, plaintiffs’ evidence shows plaintiffs had no reason to terminate their purchase contract based on the CC&R’s.

All of the evidence adduced on the motion shows there is a triable issue of material fact whether the vetting and discretionary approval process for Club membership was a material fact which may have affected plaintiffs’ decision to enter into their purchase contract. (Field, supra, 63 Cal.App.4th at p. 25.) On the one hand, plaintiffs’ evidence indicates that plaintiffs’ acceptance as Club or social club members was a material fact which would have affected their decision to enter into their purchase contract. Plaintiffs averred they would have “insisted” that their purchase contract be made contingent on their acceptance as Club or social club members, had they known, before they entered into their purchase contract, that there was a vetting and discretionary approval process for Club membership. Plaintiffs also averred they “made it clear” to O’Keefe—at the time they first met with Risk at the Tradition clubhouse, and on two subsequent occasions before they entered into their purchase contract—that they “intend[ed]” to become Club members.

O’Keefe’s testimony, on the other hand, indicates that plaintiffs’ acceptance as golf or social club members may not have been a material fact affecting plaintiffs’ decision to enter into their purchase contract. O’Keefe testified that plaintiffs “consistently” told her they were “unsure” whether they wanted to be Club members. O’Keefe’s testimony indicates that plaintiffs’ acceptance as Club or social club members may not have been important or material to plaintiffs, and that plaintiffs would not have made their purchase contract contingent on their acceptance as Club or social club members, had plaintiffs known about the vetting and discretionary approval process before plaintiffs entered into their purchase contract. These questions are for a trier of fact to determine.

We observe that, if plaintiffs’ evidence is credited by the trier of fact, that evidence and O’Keefe’s admissions indicate that O’Keefe negligently and perhaps even intentionally failed to discharge her and LQR’s fiduciary duty to plaintiffs as plaintiffs’ broker and agent in the purchase of plaintiffs’ Tradition home. O’Keefe admitted she knew that “Club” membership was “not automatic,” but she did not know, nor did she make any effort to discover or inform plaintiffs, what was entailed in the “vetting process” to become a Club or social member. Instead, O’Keefe took plaintiffs to the Tradition clubhouse to meet with Risk and assumed that Risk would tell plaintiffs “all the information they needed to know” about Club membership. But Risk never told plaintiffs there was a vetting process for golf or social club membership until after plaintiffs closed escrow on the purchase of their home, and O’Keefe did not, at any time, discuss with plaintiffs what, if anything, Risk told plaintiffs about the vetting process.

O’Keefe ostensibly believed she had no duty to advise plaintiffs that there was a vetting and discretionary approval process for Club and social club membership, or what that process entailed. O’Keefe even admitted she did not “want to have all the information” about the Golf Club Owner’s “vetting practices” because her “job is complicated enough.” To O’Keefe, it “did not matter” whether plaintiffs obtained a golf or social club membership; it was of “no benefit” to her to “constantly pursue someone getting a membership.” According to O’Keefe, because plaintiffs did not tell O’Keefe that they did not want to buy their home unless they could be Club members, O’Keefe did not concern herself with the vetting process, nor did she advise plaintiffs to make their purchase contract contingent on their becoming golf or social club members. Instead, O’Keefe’s “main concern was to make sure that the transaction closed.”

But plaintiffs’ evidence shows plaintiffs knew nothing about and had no reason to suspect that there was a vetting and discretionary approval process until, around one week after the escrow closed in January 2016, Risk told plaintiffs that there was a vetting process when plaintiffs “took a check to the clubhouse” and attempted to join the “Club.” If plaintiffs’ evidence is credited, O’Keefe’s admissions show that O’Keefe negligently and perhaps even intentionally breached her fiduciary duty to plaintiffs to ascertain whether plaintiffs’ Club or social club membership was an important matter affecting plaintiffs’ decision to purchase their home, before plaintiffs entered into the contract to purchase their Tradition home around November 2015. (See Field, supra, 63 Cal.App.4th at pp. 25-26 [discussing scope of buyers’ agent’s fiduciary duty].)

In sum, there are triable issues of material fact whether (1) plaintiffs’ acceptance as Club or social club members was a material fact affecting their decision to enter into their purchase contract for their Tradition home, and (2) whether defendants breached that duty by failing to inform plaintiffs that there was a vetting and discretionary approval process for Club membership before plaintiffs entered into the contract to purchase their Tradition home. These triable issues are relevant to each of plaintiffs’ causes of action, including the first cause of action for fraudulent concealment.

“Breach of a real estate agent’s fiduciary duty to his or her client may constitute negligence or fraud, depending on the circumstances of the case. [Citation.] Additionally, a real estate agent, as a fiduciary, is also ‘“. . . liable to his principal for constructive fraud even though his conduct is not actually fraudulent. Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship.” [Citation.] [¶] “[A]s a general principle constructive fraud comprises any act, omission or concealment involving a breach of legal or equitable duty, trust or confidence which results in damage to another even though the conduct is not otherwise fraudulent. Most acts by an agent in breach of his fiduciary duties constitute constructive fraud. The failure of the fiduciary to disclose a material fact to his principal which might affect the fiduciary’s motives or the principal’s decision, which is known (or should be known) to the fiduciary, may constitute constructive fraud. . . .”’” (Assilzadeh v. California Federal Bank (2000) 82 Cal.App.4th 399, 415.)

Thus, defendant’s motion for summary judgment, or summary adjudication of each cause of action, was erroneously granted.

IV. DISPOSITION

The judgment in favor of LQR and O’Keefe on plaintiffs’ operative fourth amended complaint is reversed. Plaintiffs shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278.)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

FIELDS

J.

We concur:

McKINSTER

Acting P. J.

RAPHAEL

J.