I was trial counsel in a case of first impression in which the court of appeals upheld a trial court judgment which I obtained, holding that a lessor's consequential damages under California Civil Code... section 1951.2, subdivision (a) must be offset by any increase in rent obtained by a lessor upon reletting of premises following termination of the original lease.
The trial court resolved this issue in favor of the lessee-defendant, Soda Shoppes of California, Inc., allowing the setoff. The court of appeals affirmed that decision.
Real estate
Virgil Burch v. Argus Properties, Inc.
Sep 11, 1979
OUTCOME: Plaintiff verdict after trial affirmed on appeal
My client sued to recover damages for misuse of an advance fee paid to a real estate agent in connection with a real estate transaction. In a case of first impression, the court of appeals upheld a tr...ial court award of treble damages in favor of my client and against the defendant for illegal mishandling of the advance fee.
CASE FACTS: A real estate broker signed a written contract with the borrower to obtain a $2,545,000 loan. The contract called for a $7,500 deposit, of which $5,000 was non-refundable and $2,500 was to be credited against a 1% commission due on the funding of the loan.
No loan commitment was ever made. The broker transferred the deposit from one trust account to another. The borrower requested the return of his deposit. The broker repaid the borrower from the second trust account.
The borrower sued the broker for $7,500 based on the broker's violation of the duty of loyalty and good faith in that there was no accounting for the borrowers' funds, while the broker was in possession of the funds. The trial court found in favor of the borrower. The broker appealed.
RULE: Appeal denied. Any broker who collects an advance fee from any person deemed to be his principal shall deposit the funds in a trust account. Such funds are trust funds and not funds of the agent.
Where advance fees actually paid by or on behalf of the principal are not handled in this matter, it is presumed that the funds had been embezzled by the agent according to Section 10176(a).
While there were no charges by the borrower that there was an actual diversion of the funds, where no accounting is made, absent other evidence, the funds have been misappropriated.
