North Beach Partners v. Sollner CA1/4

Filed 12/19/14 North Beach Partners v. Sollner CA1/4 NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

NORTH BEACH PARTNERS, LLC, Plaintiff and Appellant, A136514 v. JOHN SOLLNER, (San Francisco City & County Super. Ct. No. CGC-11-509179) Defendant and Respondent.

In this action for rescission, North Beach Partners, LLC (NBP) appeals from a judgment in favor of respondent John Sollner. NBP contends that the sale of unit 4 of 3300 Clay Street violated the Subdivided Lands Act (Bus. and Prof. Code,1 § 11000 et seq.) because Sollner failed to obtain a public report approved by the Department of Real Estate. NBP also argues that the trial court erred in denying its motion to reopen the evidence at trial. We affirm. I. FACTS In 2004, NBP, together with an investment group which included Sollner, purchased the six-unit building located at 3300 Clay Street (the property).2 The property was comprised of six units. At the time of the purchase, the buyers entered into a tenancy in common agreement. Pursuant to the agreement, the buyers were assigned exclusive

1 Unless otherwise indicated, all further statutory references are to the Business and Professions Code. 2 WB Coyle is the managing member of NBP.

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occupancy rights to particular units. Sollner had the exclusive rights to units 1 and 4. NBP, however, also retained an interest in unit 4, in addition to management rights, under a profit-sharing agreement with Sollner. They intended to renovate the unit and resell it. NBP planned to obtain a public report for the property.3 In February 2008, Sollner sought to obtain confirmation that a public report was not necessary to sell unit 4 of the property. The Assistant Commissioner of the Department of Real Estate confirmed that a public report was not required assuming, among other factors, that Sollner owned the undivided interest for at least six months and did not purchase it with the purpose of reselling it.4 Sollner also invested in another tenancy in common property with NBP at 744 Union Street in San Francisco. By 2008, NBP and Sollner were engaged in a series of legal disputes concerning both unit 4 of 3300 Clay Street and the property at 744 Union Street. On June 17, 2008, they entered into a settlement agreement under which Sollner relinquished his ownership interests in both unit 4 of 3330 Clay Street and in 744 Union Street and the parties mutually released each other from any claims they may have had against each other. NBP agreed to purchase Sollner’s interest in the properties under the agreement. NBP subsequently sold the Union Street unit previously owned by Sollner. There was no public report provided for the Clay Street property. NBP had begun the application process, but there was an encroachment on the property adjacent to 3330 Clay Street which required it to obtain a lot line adjustment prior to the issuance of the public report. On March 14, 2011, NBP sued to rescind that part of the settlement agreement under which it purchased unit 4 of the 3300 Clay Street property, alleging that Sollner failed to comply with the Subdivided Lands Act. The case proceeded to a trial on May 21, 2012. The court found in favor of Sollner, finding that (1) section 11000 did not