Cases

A flood damaged a home while it was in escrow.  The real estate agent, representing both the buyer and the sellers, drafted an addendum to the purchase agreement to address how repairs would be made and paid for by the sellers’ insurance carrier.  After the parties signed the addendum and closed escrow, the sellers refused to allow the repairs to commence or to release the insurance proceeds.  Eventually the buyers obtained an arbitration award against the sellers for the repairs, carrying costs, interest, and fees, based on a finding that the sellers had engaged in self-dealing and breached the addendum.  The sellers then sued their real estate agent and broker alleging that they unlawfully practiced law, were professionally negligent, and breached their fiduciary duty by drafting the addendum.

The Court of Appeal affirmed summary judgment for GMSR’s clients, the broker and agent, holding that the sellers could not show causation because the sellers’ own misconduct, not the addendum or the broker or agent, caused the adverse arbitration award.

Court of Appeal Opinion – View Document