107 Cal.App.5th 668
Cal. Ct. App.2024Background
- Laura Lazar sued real estate brokers Lynette Bishop, Shen Shulz, and entities related to Sotheby’s over the sale of her father Daniel Gottlieb’s Malibu house.
- Gottlieb allegedly assigned Lazar his rights to sue for breaches arising from the house's listing and sale.
- The core allegation was that the defendant brokers breached their fiduciary duty by failing to disclose dual agency and not seeking the best sale price, resulting in substantial pecuniary losses.
- The trial court granted summary judgment for defendants, holding that such fiduciary duty claims are unassignable and that Lazar lacked standing.
- On appeal, the court addressed, for the first time in California, whether breach of a real estate broker’s fiduciary duty is assignable when it seeks only pecuniary damages.
- The appellate court reversed, holding the cause of action was assignable and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is a breach of real estate broker fiduciary duty assignable? | Yes: Claim for property & pecuniary losses is assignable | No: Such breach is highly personal, like legal malpractice | Assignable if damages sought are property/pecuniary only |
| Is the broker-principal relationship analogous to attorney-client? | No: Broker relationship is transactional and commercial | Yes: Involves highest loyalty, should be treated the same | No: Differences preclude analogy and exception treatment |
| Did Lazar have standing as assignee to maintain this action? | Yes, as assignee of a validly assignable claim | No, assignment was barred and thus Lazar had no standing | Yes, standing exists due to assignability |
| Was the appeal timely despite e-filing technicalities? | Yes: Submitted before deadline, technical issue should excuse | No: Error not a system issue so appeal is untimely | Yes, timely due to prompt corrective filing |
Key Cases Cited
- Essex Ins. Co. v. Five Star Dye House, Inc., 38 Cal.4th 1252 (Cal. 2006) (general rule is that property or pecuniary claims are assignable)
- Field v. Century 21 Klowden-Forness Realty, 63 Cal.App.4th 18 (Cal. Ct. App. 1998) (real estate brokers owe the highest fiduciary duty to their clients)
- Murphy v. Allstate Ins. Co., 17 Cal.3d 937 (Cal. 1976) (assignability turns on whether damages sought are property/pecuniary or personal)
- Assilzadeh v. California Federal Bank, 82 Cal.App.4th 399 (Cal. Ct. App. 2000) (constructive fraud based on fiduciary duty breach is a unique species of fraud)