Shirai v. Karpe

Opinion

DRAPER, P. J.

California has provided a fund for limited reimbursement of parties defrauded by licensed real estate brokers or salesmen performing acts for which a license is required. (Bus. & Prof. Code, '§§ 10470-10483.) Reimbursement is granted only to one who has obtained final judgment against the licensee (§ 10471) and has been unable to satisfy the judgment. (§ 10472.) Recovery from the fund is limited to $10,000 for any one defrauded person (§ 10471) and to $20,000 ($40,000 if “the cause of action occurred on or after January 1, 1975”) for acts of any one licensee. (§ 10474.)

Here, plaintiffs had judgment for $9,333.33 against D’Orazi in an action based upon his fraud as a real estate broker. They sought unsuccessfully to recover upon the judgment, and then applied for an order directing the Real Estate Commissioner to pay that amount from the above fund. The application was filed in the action brought against D’Orazi, and under the same heading, save that the commissioner was added as a named defendant. The commissioner answered by mere

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denials. At noticed hearing, plaintiffs made the showing required. (§ 10472.) After an interlocutory order dated July 22, 1974, the trial court on August 28, 1974, signed “judgment” ordering the commissioner to pay $9,333.33 from the fund. Notice of entry of judgment was served by mail September 20, 1974. The commissioner filed notice of appeal November 18.

On November 26, the commissioner filed a petition alleging that he had learned of other persons asserting claims against the fund on account of D’Orazi’s actions. The commissioner sought 1) an order vacating the order for full payment to plaintiffs from the fund, 2) grant of his petition to pro rate, 3) an order directing claimants against the fund under D’Orazi’s license to file their claims with the court, 4) an order for publication of notice to file claims. The petition named as defendants in the action three new sets of claimants. The trial judge denied the motion to vacate his earlier order, but did order publication of notice to all claimants to file by January 31, 1975. Some five claims, totalling well over $20,000, were filed. Hearing upon the pro rate issue was held February 13. The trial judge ordered that the claim of plaintiffs Shirai be paid in full from the fund and that the remaining claims, if properly established, participate pro rata in the remaining $10,666 available for the clients of D’Orazi. The commissioner dismissed his appeal from the original order on December 6, 1974. He did appear, by counsel, at the hearing of February 13, but does not appeal from the ensuing judgment. Only the several claimants later than the Shirais appeal.