Dombalian v. Fox

California Court of Appeal Jan 25, 1979 No. Civ. 44429Published

Before: Halvonik

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Holding. The court held that a series of fraudulent acts committed by a real estate broker under a single listing agreement constitutes a single transaction for the purposes of recovery from the Real Estate Fund under Business and Professions Code section 10471.

Issues

Whether multiple fraudulent acts by a real estate broker under one listing agreement constitute one or two transactions for purposes of the Real Estate Fund recovery limit.

Disposition. reversed

Quotations verified verbatim against the opinion

“Respondent had a listing agreement with Powers regarding a particular piece of property—that agreement was the transaction between them. His fraudulent acts were part of that single transaction.”

“The constant theme is that the word is employed, usually, not to describe any particular event but the relationship among events.”

Opinion

HALVONIK, J.

Edward T. Powers, a licensed real estate broker, bilked respondent and her late husband. There were two stages to this operation,

[765]

both involving one listing agreement for the same piece of real estate. The question is whether this fraud occurred in one transaction or two. Where there is an uncollectable judgment against a licensed real estate broker based on a fraudulent transaction, Business and Professions Code section 10471 permits recovery from the Real Estate Fund of up to $10,000 for each transaction.

In August of 1964 the late Henry Dombalian and respondent Agnes Dombalian listed improved real estate with Powers at a price of $50,000, its fair market value. Instead of exposing the property to the market, as his professional obligations required him to do, Powers cheated his clients. In May of 1965 he submitted the only offer he was ever to submit and it was a fraudulent one. The offer, for $42,500, was submitted in the names of Raymond and Cora Chrystal but Powers himself was the actual and undisclosed principal. Relying on Powers’ representation that this was the best they could do, the Dombalians accepted. Powers not only got the property, at a savings of $7,500, but pocketed a $1,300 commission fee. Unsatisfied by the first dip of his beak, Powers then forged the Dombalians’ initials on some escrow instructions, enabling him to convert $28,731.51 of their money to his use.

Respondent vigorously contends, and the court below held, that Powers defrauded them in the course of two separate transactions. But if a transaction can encompass more than one occurrence in the course of a relationship, and we think that it can, then these occurrences, involving the same parties and the same listing agreement for the same piece of real estate, are not necessarily two transactions.

The word “transaction” bobs up throughout the law from civil pleading through criminal punishment. Definitions in one area so rarely have utility in another that the Supreme Court, in

Wachs

Dombalian v. Fox

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HALVONIK, J.

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