One agreement, two complaints, one bench trial and three appeals later, the ownership of 10 acres of undeveloped Rancho Mirage land has been settled.
Mark “Randy” Greif found his father’s $330,000 sale of undeveloped property final, after an appellate panel affirmed three of San Bernardino Superior Judge James Latting’s rulings.
Sold for $330,000
Earl Greif sold the land to Yardley Protective Limited Partnership in 2012, but claimed soon after that he believed the selling price to be $3 million, not $330,000, according to the panel.
He claimed his loss of hearing, poor eyesight, speech impediment and cognitive issues confused the price negotiations, and the sellers took advantage of his communication issues to push the sale through under fair market value.
The Yardley Protective Limited Partnership sued for the enforcement of the sale after Greif attempted to renege on the deal in November, 2014, according to the panel.
Greif filed a cross-complaint, alleging that Yardley’s real estate broker breached a common law duty to disclose that the purchase price was below fair market value.
Fair market value for the property was around $4 million, according to the ruling, and Greif bought the properties at $2.3 million, according to the panel.
The trial court dismissed Greif’s cross-complaint for failing to state any cause of action as a matter of law.
After a bench trial concluded in favor of Yardley, Greif filed a motion for a new trial, arguing that the court erred in dismissing his negligence cross-claim against Yardley’s broker, according to the panel.
Appeals
Greif died in 2016, and his son Randy continued in the litigation as Earl’s representative and successor in interest.
The younger Greif’s first appeal challenged the court’s dismissal of the cross-complaint, according to the panel. His second appeal challenged the trial judgment. His third appeal objected to the court order awarding Yardley attorney fees.
The appellate panel ruled against all three appeals.
Dismissal of cross-complaint challenged
For the first appeal, the panel found that under Biakanja duty factors, the broker could not foresee that Greif did not know the value of his property, or that he did not see the price on the first page of the purchase agreement.
It would be inappropriate to place the burden on the broker to inform Earl of the purchase price’s relation to fair market value, because Earl could research the value and retain a real estate agent, but chose not to do so, the panel ruled.
“We thus conclude that, even under the facts alleged in this case, where the seller is elderly and physically infirm, public policy does not favor holding the buyer’s agent responsible for informing the seller that the agreed upon purchase price is below FMV,” the panel ruled.
Thus, the trial court was correct in granting judgment for the broker against Greif’s negligence cause of action.
Trial judgment challenged
Greif challenged the trial judgment, claiming that the trial court erred in rejecting his father’s unilateral mistake defense, which states a party may rescind a contract if the consent was given by mistake.
The trial judgment used the wrong framework, interpreting the defense through Brookwood and Bunnet instead of a later ruling, Donovan, Greif argued.
The difference between the frameworks, however, is the same, the appellate ruling found. Donovan expanded contract rescissions under the defense to include circumstances where the mistake was not known to either party, but the step-by-step process to determine the defense was the same.
Latting ruled that there was insufficient evidence of a material mistake made by Greif, that there was insufficient evidence the buyer did anything to encourage any mistake, and that any alleged mistake was made by Greif’s neglect or his representatives, according to the panel.
These findings call for the rejection of the defense under both Brookwood and Donovan, the panel found.
Attorney fees
Greif argued Yardley should not be awarded $778,000 in attorney fees the court granted them, due to the purchase agreement’s mediation clause. The clause disentitles involved parties from claiming attorney fees if they file suit before undergoing mediation. The appellate panel found an exclusion in the mediation clause which entitled Yardley to attorney fees.
Parties
Associate Justice Carol Codrington wrote the opinion, which Associate Justice Art McKinster joined. Associate Justice Michael Raphael wrote a minority opinion disagreeing with Section III.E of the majority opinion, regarding additional damages awarded to Yardley due to the specific performance remedy.
Raymond A. Cardozo, David J. de Jesus and Kasey J. Curtis of Reed Smith LLP; and G. Henry Welles and Gregg W. Kettles of Best Best & Krieger LLP, represented appellants Mark Randall Greif and Gabriel Nicholas.
Raul L. Martinez and Esther P. Holm of Lewis Brisbois Bisgaard & Smith represented cross-defendants and respondents, Eddie Sanin and Desert Gate Real Estate.
Richard K. Howell and Proud Usahacharoenporn of Rutan & Tucker LLP represented plaintiff-cross-defendant and respondent, The Yardley Protective Limited Partnership and cross-defendant and respondent, Sohail Ahmad.
Read the ruling here.
