Facts

Keith and Valerie Marks came into contact with Kathy Mendes, a realtor with RE/MAX Gold Coast Realtors. Mendes was to assist them in finding a suitable property in Oxnard. Over four years, Mendes showed them in excess of 25 properties before locating a residence for them. The first offer was made on July 13, 2009. Through negotiations, the sale price of the property was reduced and the Marks agreed with the seller. An escrow was opened and signed. The fifth counter-offer made on July 28, 2009 contained a short sale addendum where the Marks acknowledged that the proposed sale would be a short sale and that there was no assurance of lender approval.

The escrow was ultimately cancelled after three lien holders would not reduce their liens. The Marks were refunded their deposit. The Marks sued Evans/Sipes Inc., which was doing business as RE/MAX Gold Coast Realtors.

PLAINTIFFS' CONTENTIONS:
Plaintiffs claimed that the defendants' actions constituted negligence, breach of fiduciary duty, and intentional interference with contractual relations. They argued that the defendants' conduct fell below the applicable standard of care for a real estate broker and that the short sale addendum did not appear in the escrow until July 28, 2009. They claimed that the seller had told them that that two of the liens on the property were not a factor. Thus, the plaintiffs claimed that the real estate agent had assured them that the only remaining lien would be a construction loan from the Santa Clara Bank which would have been paid in full at the close of escrow.

The plaintiffs also argued that their agent and broker were incompetent, and that the seller's agent misrepresented facts regarding the liens. If the truth had been disclosed to them, the plaintiffs claimed they would not have entered into escrow.

DEFENDANTS' CONTENTIONS:
Evans/Sipes argued that the Marks were aware of the liens on the property because they reviewed a preliminary title report. Thus, the plaintiffs had no viable contention that they were unaware of the short sale nature of the transaction or the resulting need to obtain approval from the lien holders.

Damages

The Marks sought recovery of $468,000 in total economic damages for their loss of potential future profits.

Result

The court ruled in favor of the defendants.