Rubin v. Douglas Elliman of Cal., B341122

Plaintiffs sued Moore, SCCCD, and Elliman over alleged fraudulent overbilling tied to construction and sale of their Pacific Palisades property. ¹
Moore was both a licensed real estate broker and contractor, and he worked for Elliman as an independent associate-licensee beginning in 2018. ²
Plaintiffs' construction contracts were with SCCCD, while the listing agreements were with Moore and later modified to name Elliman as broker of record. ³
Plaintiffs alleged Elliman knew of and participated in Moore's Buy, Build, Sell program and used Elliman office space and branding for related activities. ⁴
The trial court sustained demurrer on breach of fiduciary duty, granted summary judgment on negligent supervision and fraud, and denied leave to amend to add joint venture claims. ⁵

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did Elliman owe fiduciary duties over construction work? ⁶	Elliman had to oversee Moore, subcontractors, and invoices.	Elliman's fiduciary duty was limited to brokerage and sale.	No; broker duties did not extend to construction oversight. ⁷
Was summary judgment proper on negligent supervision? ⁸	Elliman knew of BBS and should have supervised Moore's construction.	No duty to supervise Moore's construction activities.	Yes; plaintiffs showed no legal duty to supervise construction. ⁹
Was summary judgment proper on fraud liability? ¹⁰	Moore acted within Elliman's scope through BBS and office use.	Moore's fraud occurred in construction, outside his Elliman role.	Yes; no triable issue that Moore acted for Elliman in committing fraud. ¹¹
Did the court abuse discretion denying leave to amend? ¹²	They should have been allowed to add joint venture claims.	The request was untimely and futile.	No; denial was proper because the request came after summary judgment. ¹³

California Logistics, Inc. v. State of California, 161 Cal.App.4th 242 (Cal. Ct. App. 2008) (de novo review of demurrer; complaint controlled by incorporated documents ¹⁴)
Blank v. Kirwan, 39 Cal.3d 311 (Cal. 1985) (demurrer without leave to amend is proper when no cure is possible ¹⁵)
Securitas Security Services USA, Inc. v. Superior Court, 197 Cal.App.4th 115 (Cal. Ct. App. 2011) (summary judgment de novo; affirmed on any correct ground ¹⁶)
Oasis West Realty, LLC v. Goldman, 51 Cal.4th 811 (Cal. 2011) (elements of breach of fiduciary duty ¹⁷)
City of Hope National Medical Center v. Genentech, Inc., 43 Cal.4th 375 (Cal. 2008) (fiduciary duty requires knowingly undertaking to act for another ¹⁸)
Horiike v. Coldwell Banker Residential Brokerage Co., 1 Cal.5th 1024 (Cal. 2016) (brokers must supervise salespersons within brokerage duties ¹⁹)
Field v. Century 21 Klowden-Forness Realty, 63 Cal.App.4th 18 (Cal. Ct. App. 1998) (real estate broker fiduciary duty in property transactions ²⁰)
Kaplan v. Coldwell Banker Residential Affiliates, Inc., 59 Cal.App.4th 741 (Cal. Ct. App. 1997) (ostensible agency and franchise liability in real estate context ²¹)
Alhino v. Starr, 112 Cal.App.3d 158 (Cal. Ct. App. 1980) (agent's fraudulent sale representations and employer liability ²²)
Emerald Bay Community Assn. v. Golden Eagle Ins. Corp., 130 Cal.App.4th 1078 (Cal. Ct. App. 2005) (undue delay supports denial of leave to amend after summary judgment ²³)