Facts

Defendants Lewis L. Canyon and Keller Williams Realty operated as the real estate agent and broker in a real estate sales transaction for both the buyer and seller, in which Plaintiff Regina M. Thomson, as the seller, lost her equity.

In 2003, the Plaintiff inherited real property in San Francisco, and obtained a loan to make repairs and purchase the interests of her siblings. The Plaintiff fell into foreclosure on this loan in 2004.

Defendant Canyon, having personally known the Plaintiff, contacted her to help her through the foreclosure. The Plaintiff made it known that she wanted to keep the home. Defendant Canyon instructed her that she had to sell to take care of the foreclosing lien. The Plaintiff retained the Defendants' services. The Defendants created a flyer listing the property at $545,000 and held an open house.

At the open house, the Defendants received a verbal offer to purchase at about $565,000. The Plaintiff then met Thomas Harris who told her that if she passed the property to him, he would take care of the foreclosing liens and return the property back to her. No further discussions were made on any terms of the "buy-back" agreement. The Plaintiff instructed the Defendants to do this deal and make this happen. Defendant Canyon himself spoke directly with Harris, and confirmed that Harris was to return the property back to the Plaintiff after close of escrow.

The Defendants, however, put together the sale agreement, which only memorialized the sale of the property to Harris. Nothing was mentioned about the buy back agreement. The Defendants instructed the Plaintiff to sign this document, and she would get her property back. She did so in reliance on the Defendants' instructions. The sale price was either $400,000 or $440,000 (conflicting escrow closing statements.)

After escrow closed, the Plaintiff requested return of her property from Harris. Harris reneged, and disavowed any promise to return the property. Harris then sold the property to a third party for $580,000. The Plaintiff then sued Harris in a separate earlier lawsuit.

Although Defendant Canyon admitted in his deposition in that case that he confirmed with Harris the promise to return the property to the Plaintiff, Defendant Canyon refused to testify at that trial against Harris. The Plaintiff lost her action against Harris. The Plaintiff then commenced this action against Canyon and his real estate brokerage, Keller Williams Realty.

PLAINTIFF'S CONTENTIONS:
The Plaintiff claimed that the Defendants breached their fiduciary duty by failing to memorialize the buy back agreement.

DEFENDANT'S CONTENTIONS:
The Defendants claimed that they did not breach their fiduciary duty because, among other things, the Plaintiff was in foreclosure and was forced to sell the property at a distressed price.

Settlement Discussions

The parties engaged in at least three settlement conferences. The Defendants never offered any amount more than $12,000.

Result

Judgment for the Plaintiff for $141,135.

Other Information

FILING DATE: July 29, 2008.