Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Tulare County, Super. Ct. No. VCU212590. Lloyd L. Hicks, Judge.
Shawn M. Kennedy, for Defendant and Appellant.
Greg R. Helms, for Plaintiff and Respondent.
OPINION
Ardaiz, P.J.
INTRODUCTION
Dennis Gary Asbury (“Asbury” or “appellant”) appeals from a judgment, after a bench trial, that he was guilty of negligent misrepresentation and that he breached his duties as a real estate broker. Asbury contends that the trial court erred when it concluded that James Arthur Grammer, Sr. (“Grammer”) invested and lost money on an incomplete real estate transaction (the Shoshone Inn purchase) because of negligent misrepresentations by Asbury. For the following reasons, we affirm.
STATEMENT OF THE CASE
On December 14, 2004, Grammer filed a complaint against Asbury and Asbury Brokerage Services, stating 12 causes of action:
(1) Fraud as a licensed real estate broker;
(2) Breach of duty to disclose as a real estate broker;
(3) Breach of duty to be honest and truthful as a licensed real estate broker;
(4) Negligence;
(5) Negligent misrepresentation;
(6) Negligent performance of contract;
(7) Intentional infliction of emotional distress;
(8) Negligent infliction of emotional distress;
(9) Breach of joint venture agreement;
(10) Breach of fiduciary duty as joint venturers;
(11) Fraudulent breach of joint venture agreement; and
(12) Constructive trust.
In the complaint, Grammer sought $443,950 of actual damages, lost profits, punitive, and exemplary damages, costs and other damages to be determined at trial.
The complaint alleged that “[o]n or about May 30, 2003, in the County of Tulare, California, plaintiff employed defendant [Asbury], pursuant to an oral agreement, to act as plaintiff’s agent to obtain financing and negotiate the purchase of real property.” The complaint further alleged that Grammer deposited the sum of $250,000 into escrow based upon misrepresentations by Asbury.
The complaint further alleged that Grammer deposited an additional $100,000 into escrow and incurred approximately $93,950 for the business plan, appraisal, maintenance and repairs, and other expenses based upon further representations by Asbury relating to the requirements of Granite Investments (“Granite”) who would provide the necessary financing.
Asbury demurred to the complaint.
On March 23, 2005, the trial court overruled the demurrer as to the 5th and 11th causes of action with a change of the heading of the 11th cause of action to “Rescission.” The trial court sustained the demurrer without leave to amend as to the Sixth, Seventh, and Eighth Causes of Action.
On December 19, 2005, after a bench trial, the trial court issued a tentative decision, which found Asbury liable on the Second and Third causes of action (breaches of duties of a real estate broker) and the Fifth cause of action (negligent misrepresentation).
The trial court found that Grammer and Asbury had diametrically opposed versions of the events. According to the trial court,
“Grammer alleges that he was induced to invest … by Asbury who, acting as his real estate broker and joint venture partner, represented that he had investors willing and able to put up the balance of the purchase price for the [Shoshone] Inn, but needed Grammer, who had just received from Asbury, his broker in the sale of a house, a check for over $377,000, to put up the initial deposit, which was required in mere days. Grammer alleges that he was told by Asbury that based on Asbury’s preexisting relationships with persons with money looking for real estate investments there would be no problem raising the balance of the purchase price during the 40 day escrow period. In fact, Asbury was not able to raise the money, as a result of which Grammer lost his $250,000 escrow deposit.
“Asbury, on the other hand, testified that he made no such representation; that he only told Grammer that he would attempt to raise the money; that he warned Grammer that the project was risky, but Grammer was enamored with the property that he insisted on putting the money in with full knowledge of the risks.”
The trial court noted that “[e]ither Grammer or Asbury is not telling the truth.” It found that “[n]either party was a sterling witness.” However, the trial court determined that “Asbury is the less credible witness.” According to the trial court, “[t]he whole character of Asbury’s testimony does not ring true.” Although Asbury denied that he was acting as a broker and denied any request for a commission during the escrow period, the trial court found that Asbury was a broker and sought a commission.
The trial court concluded:
“Based on all the evidence, and Asbury’s demeanor (including a remarkable change from direct exam to cross), the court finds that Grammer did pay $250,00 into an escrow for the purchase of the [Shoshone] Inn, with knowledge that it would all be non-refundable after 10 days, in reasonable reliance on a representation by Asbury to the effect that Asbury had contacts with wealthy investors such that he could and would raise the balance of the purchase price for the [Shoshone] Inn during the original escrow period. The reliance by Grammer was reasonable because Asbury was a long time real estate broker, and Asbury did not disclose that he had limited experience raising money from investors and had never before raised amounts equivalent to that needed to purchase the [Shoshone] Inn. Asbury’s representations were not true, and were made with no reasonable grounds for believing them to be true when made, and were made intending that Grammer rely on them.
“Asbury made such representations to induce Grammer to place funds Asbury knew to be in Grammer’s possession into escrow in order to enable Asbury to benefit from an ownership interest as well as a commission, without Asbury having to risk any money. In so doing, Asbury was acting as a real estate broker. Asbury’s acts constitute negligent misrepresentation and a violation of his duties as a real estate broker.”
The trial court held that Grammer could recover his $250,000 deposit, plus interest from July 10, 2003. However, the trial court also concluded that Grammer was not entitled to recover the $100,000 that he deposited on July 29, 2003, because “it was not reasonable for Grammer to continue to rely on any representations of Asbury” by that date. According to the trial court, after a July 28, 2003 meeting, Grammer was well aware that Granite’s decision to provide the necessary financing was not a certainty. The court also determined that it was a mutual decision by Grammer and Asbury to drop Granite from the deal.
The trial court ruled that Grammer could recover some of the expenses that he incurred in cleaning up the Shoshone Inn property. The trial court held that Grammer could recover $10,521.26, which was the amount that Grammer had spent as of July 11, 2003, plus interest from July 11, 2003. The trial court held that Grammer could not recover any of his expenses after July 11, 2003. The trial court also held that Grammer was not entitled to punitive damages.
The trial court did not address the remaining causes of action. For example, the trial court did not hold that Asbury had committed fraud or general negligence (the First and Fourth causes of action). The trial court also did not rule on the joint venture claims (the Ninth, 10th, and 11th causes of action) or the constructive trust claim (the 12th cause of action).
Neither party filed any objection to the tentative ruling, and the tentative ruling became the final order of the court. Judgment was entered on February 3, 2006, in the amount of $336,680.
Asbury timely appealed.
FACTS
I.
Prior Relationship Between Grammer and Asbury
In late 2002, Grammer’s mother died and left him a home in San Clemente (Orange County), California. Grammer was residing in Tulare County so he called his second cousin’s wife, who is a licensed real estate agent, to see if she could sell the San Clemente property. She told him that she would refer the matter to her father, Asbury, who is a real estate broker in Orange County. At the time of trial, Asbury had been a real estate broker for 31 years.
Asbury later called Grammer and represented to him that he could sell the San Clemente property. Escrow closed on May 12, 2003, and Grammer received about $377,000 as his portion of the sales proceeds. Asbury received a $25,000 real estate commission.
No written agreement was ever executed by Grammer authorizing Asbury’s agency to sell the San Clemente property or to receive a real estate commission because, according to Asbury, it “wasn’t necessary.”
After escrow closed on the San Clemente property, Asbury personally delivered Grammer’s check for the sale proceeds. During this visit, Asbury persuaded Grammer to associate his real estate license with Asbury Brokerage Services so that Grammer could “bird dog” (be on the look-out for) commercial real properties in the Central Valley and report back to Asbury. Asbury represented to Grammer that he had investors in Orange County, that real property costs were too expensive in Southern California, and that his investors were looking for commercial investments in other areas of California.
II.
Relationship Between Grammer and Asbury During Shoshone Inn Purchase
A. Shoshone Inn
On behalf of Asbury, Grammer located about 20 commercial properties for sale, one of which was the Shoshone Inn in Tulare County. Preliminary ownership information was obtained by Grammer for the Shoshone Inn, and he gave the information to Asbury. Asbury then requested that Grammer set up a meeting with John Webley (“Webley”), the owner of the Shoshone Inn.
Grammer, Asbury and Pete DiGiambattista (“Pete”), an employee of Asbury, attended an initial meeting with Webley at the Shoshone Inn but neither a purchase price was discussed nor was any offers to purchase made at that time.
During the initial meeting at the Shoshone Inn, Asbury ascertained that Webley had invested approximately $6 to $7 million into the property and that it was in jeopardy of foreclosure. It was also during this meeting that Asbury was given 50 to 60 pages of confidential information prepared by Webley concerning the amounts invested and possible returns on investment from various build-out scenarios.
After the initial meeting, Grammer, Asbury and Pete agreed that the Shoshone Inn showed promise as an investment opportunity but the topic of a purchase price never came up. According to Grammer, Asbury said that “he had lots of investors in Southern California that were just chomping at the bit to own commercial real estate and raising whatever money it would take to take this thing out was not a problem.”
B. Offer to Purchase Shoshone Inn
A short time after the initial meeting, Asbury telephoned Webley and made an offer to purchase the Shoshone Inn. Webley then relayed Asbury’s offer to purchase to his attorney, Jim Johnson (“Johnson”), to prepare a draft purchase and sale agreement.
On May 30, 2003, Asbury, as buyer in escrow executed the Purchase and Sale Agreement with an agreed upon purchase price of $2.643 million. Additionally, Asbury negotiated a $1 million note to be paid to Webley outside of escrow from profits after the Shoshone Inn was developed. The terms of the purchase of the Shoshone Inn, as negotiated by Asbury, included a $250,000 escrow, $50,000 of which became immediately non-refundable with the remaining $200,000 becoming non-refundable in 10 days. Escrow was to close in 40 days, on July 10, 2003.
Johnson had no discussions or negotiations with Grammer on any issue regarding the terms of purchase and sale of Shoshone Inn.
C. Investment by Grammer in Shoshone Inn Purchase
A short time before escrow opened for the Shoshone Inn, Asbury asked Grammer if he would like to invest in the Shoshone Inn. According to Grammer, Asbury informed him of the proposed terms of escrow (the amount of the deposit, non-refundability, hard trigger dates and a 40-day escrow) and represented to Grammer that his investors did not have the down payment of $250,000 at that time. Grammer testified that Asbury represented that he had the investors “tied up”, and they “just waiting at the table, waiting to sign” and it would only be a few days before the investors would fund escrow. Grammer also testified that Asbury represented that the non-refundability of the monies to be deposited into escrow “wasn’t a problem, … it was no big deal because escrow would be closed before it ever got there.”
Grammer gave Asbury $250,000 from the funds he had just received 18 days previously from the sale of the San Clemente property to deposit into the Shoshone Inn escrow. In return for Grammer’s $250,000 deposit, he would receive a dollar-for-dollar pro rata interest along with the other private investors brought in by Asbury. But that percentage interest would depend upon the numbers of investors Asbury brought to the table.
Prior to accepting Grammer’s money, Asbury never obtained written disclosures defining the precise relationship between the parties. For example, Asbury never asked Grammer “to sign any document evidencing any relationship whatsoever between [him and Grammer] one way or the other, whether he’s going to represent [Grammer] as a broker or he’s not.” Asbury also never obtained “a written disclosure stating that he would only attempt to raise the 2.3 million.”
Asbury additionally made no disclosure to Grammer, prior to the $250,000 deposit, that he had very little experience raising investment capital from private investors, that he had never raised the amount of money needed to close escrow ($2.3 million), that he did not raise private investment capital on a general basis and that he had no experience with financing hotel/restaurant investments in Tulare County.
D. Efforts by Asbury to Solicit Capital for Shoshone Inn Purchase
After opening escrow, Mr. Asbury immediately set-about soliciting capital through his real estate brokerage firm, including the preparation of a prospectus. He asked Pete and Tim Falloyat (“Tim”), two of his employees to assist in raising the funds. In exchange for his brokerage services to raise the necessary funds to close escrow, Asbury wanted an equity interest, cash commission, or both.
E. Granite Investments
Shortly before the expiration of the initial 40-day escrow, Asbury told Pete and Tim to stop raising funds because Asbury intended to partner with and seek funding only from Granite.
Asbury was introduced to Granite through his friend and business associate John Head (“Head”). Grammer had never met Head nor did he know of Granite. Asbury wanted to involve Granite because Granite “would provide some stability to the transaction” and could “develop the property.”
Three days prior to the original escrow closing date, Asbury and representatives from Granite chartered a private plane and flew to Visalia to inspect the Shoshone Inn and attended a meeting with the Bank of Visalia to discuss an extension of escrow. It was during this time that Asbury suggested to Grammer that he commence the clean up of the Shoshone Inn before Granite’s inspection and meeting with the Bank of Visalia. According to Grammer, Asbury told him that “[h]e felt that if we get the place cleaned up a bit, it would show better for when he brought his investors down.”
After the meeting in Tulare County, Grammer drove down to Irvine, California, to meet with Granite Investments. At this July 28, 2003 meeting, Granite requested an appraisal and feasibility study be completed before they would commit to the project. According to the trial court, at this meeting, Granite made it clear that its participation in the transaction was not a certainty.
Because of Granite’s involvement, further extensions of the escrow period were necessary. Escrow was first extended to July 28, 2003 and, on July 29, 2003, Grammer deposited an additional $100,000 into escrow to obtain another extension until September 11, 2003.
F. Unraveling of Shoshone Inn Purchase
According to the trial court, Asbury and Grammer mutually came to the decision to exclude Granite from the Shoshone Inn purchase. After Granite was excluded, in December 2003, Asbury turned to Pete and Tim to obtain commercial financing. Pete and Tim also personally invested in the Shoshone Inn and deposited additional money to further extend the escrow period.
On February 27, 2004, when it appeared that Pete and Tim had obtained financing to close escrow, Asbury assigned his interest in escrow as buyer to Pete and Tim. Asbury also submitted a request to be paid a $30,000 real estate commission.
Unfortunately, Pete and Tim were unable to obtain commercial funding in the amount necessary to close escrow and the escrow for the sale of the Shoshone Inn was cancelled on April 26, 2004.
DISCUSSION
I.
Standard of Review
“Generally, appellate courts independently review questions of law and apply the substantial evidence standard to a superior court’s findings of fact.” (SFPP, L.P. v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 461-462.) “The substantial evidence standard applies to both express and implied findings of fact made by the superior court in its statement of decision rendered after a nonjury trial. [Citation.]” (Id. at p. 462.) The doctrine of implied findings “(1) directs the appellate court to presume that the trial court made all factual findings necessary to support the judgment so long as substantial evidence supports those findings and (2) applies unless the omissions and ambiguities in the statement of decision are brought to the attention of the superior court in a timely manner.” (Ibid.) In this case, we apply the doctrine of implied findings to presume certain necessary factual findings because Asbury did not bring to the attention of the superior court any omissions or ambiguities in the statement of decision.
II.
Asbury appeals from the trial court’s determinations that he was liable for: (1) negligent misrepresentation, (2) breaching his duties as a real estate broker, and (3) for the expenses incurred by Grammer prior to July 11, 2003. We address each issue in turn.
A.
Negligent Misrepresentation
“‘Negligent misrepresentation is a form of deceit, the elements of which consist of (1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed, and (5) damages.’” (B.L.M. v. Sabo & Deitsch (1997) 55 Cal.App.4th 823, 834, quoting Fox v. Pollack (1986) 181 Cal.App.3d 954, 962).
On appeal, Asbury argues that the trial court erred in ruling that he was liable for negligent misrepresentation because the trial court’s findings only supported a ruling that Asbury was liable for making a negligent false promise. According to Asbury, the trial court’s finding that Asbury negligently misrepresented that he “could and would” find sufficient investors to complete the purchase of the Shoshone Inn within the original escrow period was a negligent misrepresentation of a future fact or future promise and not a misrepresentation of a past or existing fact. In Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153 (Tarmann), the court held that a misrepresentation that the insurer “would pay for [the insured’s] repairs immediately upon their completion” was not actionable negligent misrepresentation because it was a promise of future performance. (Id. at p. 158.) According to the Tarmann court, there was actionable deceit only if the insurer never intended, at the time it made the representations, to follow through on its promise. (Ibid.)
Asbury contends that there was insufficient evidence to support the trial court’s implied finding that Asbury never intended to find investors willing to invest in the Shoshone Inn. For example, Asbury was able to locate Granite as a possible investor. Thus, according to Asbury, there was insufficient evidence to support the trial court’s ruling that Asbury was liable for negligent misrepresentation. We disagree.
As an initial matter, we reject Asbury’s contention that, as a reviewing court, we “are limited to the evidence cited in the trial court’s statement of decision.” (In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 49.) Rather, it is well-established that “[o]ur review is not limited to only those facts the trial court mentions in its statement of decision but, like any appellate review, extends to the entire record.” (Ibid.) This is particularly true because “[a] judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.” (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.)
Our review of the trial court’s order convinces us that the trial court found, or impliedly found, that Asbury made a misrepresentation about a past or existing fact – chiefly, that Asbury had willing and sufficient investors lined up to pay the remaining balance of the purchase price such that he “could and would” raise the balance of the required funds within the original escrow period. The trial court also found that “Asbury’s representations [to Grammer] were not true, and were made with no reasonable grounds for believing them to be true when made, and were made intending that Grammer rely on them.” These findings were sufficient for the trial court to conclude that Asbury was guilty of negligent misrepresentation.
This conclusion is supported by substantial evidence in the record. For example, the testimony of Grammer supports the finding that Asbury made a representation about a past or existing fact. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614 [the testimony of a single witness may constitute substantial evidence in support of the judgment].) Grammer testified that Asbury represented that he had the investors “tied up”, and “they just waiting at the table, waiting to sign” and it would only be a few days before the investors would fund escrow. The record also provides substantial evidence that Asbury did not have reasonable grounds to believe that the representations were true because Asbury had very little experience raising investment capital from private investors, had never raised the amount of money needed to close escrow, did not raise private investment capital on a general basis, and had no experience with financing hotel/restaurant investments in Tulare County.
We also reject Asbury’s contention that the trial court’s statement of decision showed that the trial court rejected Grammer’s version of events. The trial court stated that either Grammer’s version of events or Asbury’s version of events was the truth. Based upon credibility determinations and other evidence at trial, the court concluded that Asbury’s version was not true. According to the trial court, “[t]he whole character of Asbury’s testimony did not ring true.” Thus, the only logical inference from the statement of decision is that the trial court found that Grammer’s version of the events was true. This inference is supported by the trial court’s citations to Grammer’s testimony in support of its analysis of Asbury’s testimony.
Moreover, the trial court’s finding that Asbury made a representation “to the effect that Asbury had contacts with wealthy investors such that he could and would raise the balance of the purchase price for the [Shoshone] Inn during the original escrow period” is not inconsistent with Grammer’s testimony that Asbury represented that he had the investors “tied up”, and “they just waiting at the table, waiting to sign” and it would only be a few days before the investors would fund escrow. Asbury’s representation that he had investors “tied up” “waiting to sign” supports his representation which was to the effect that he had contacts with wealthy investors such that he could and would raise the remaining escrow funds within the original escrow period.
Thus, we affirm the judgment because it is supported by substantial evidence. (SFPP, L.P. v. Burlington Northern & Santa Fe Ry. Co., supra, 121 Cal.App.4th at p. 462 [noting that the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, to support the judgment].)
B.
Breach of Duties as a Real Estate Broker
“[A]gency is generally a question of fact. [Citations] Where conflicting evidence of agency are presented, we review the trial court’s determination for substantial evidence. [Citation.]” (Van’t Rood v. County of Santa Clara (2003) 113 Cal.App.4th 549, 562) However, “‘[w]hen the essential facts are not in conflict and the evidence is susceptible to a single inference, the agency determination is a matter of law for the court.’” (Ibid.) According to Asbury, we should review the trial court’s determination that Asbury was acting as a real estate broker for Grammer de novo because the essential facts are not in dispute. We disagree because the essential facts are in dispute. For example, Pete and Tim disputed whether Asbury represented at the initial office meeting that he was Grammer’s broker. Thus, we review the trial court’s findings on agency for substantial evidence.
Asbury, however, has conceded that he acted as a real estate broker during the Shoshone Inn transaction. While Asbury contends that his relationship with Grammer was a limited agency or a joint venture, he also concedes that, regardless of the exact relationship, he owed to Grammer “the duty to act in good faith, with honesty, and to make full disclosures.” Although Asbury contends that “[t]he trial court did not find that Mr. Asbury breached any duty by failing to act in good faith, being dishonest, or failing to disclose latent facts,” we disagree because the trial court’s determination that Asbury made negligent representations necessarily results in a finding that Asbury breached his duty to act in good faith, with honesty, and to make full disclosures.
Asbury, however, is insistent that he did not owe the full range of fiduciary duties to Grammer because he was never the real estate broker for Grammer. According to Asbury, he was acting as a principal or as a real estate broker for an ill-defined group of investors, and thus did not owe the full range of fiduciary duties to Grammer. In support of this argument, Asbury cited testimony by Pete that the initial plan was for Asbury Brokerage to divide a $150,000 brokerage commission equally between Grammer, Pete, and Asbury. Asbury also cites Foote v. Posey (1958) 164 Cal.App.2d 210, 213-214 and 217 (Foote) for the proposition that, in that case, a court found that “a real estate broker was acting as a joint venturer, not an agent, when negotiating and purchasing a property on behalf of the plaintiff and a group of co-investors because the broker was one of the investors and thus was acting as a ‘principal along with [the plaintiff] in the transaction.’”
We conclude that neither Pete’s testimony nor the Foote case supports Asbury’s argument that he did not owe the full range of fiduciary duties to Grammer. First, Pete’s testimony is inconsistent with the testimony of other witnesses about the commission that Asbury would receive. Moreover, Pete’s testimony does not preclude a finding that Asbury was acting as Grammer’s broker as well as the broker for a group of investors.
Second, the Foote opinion is inapposite. In Foote, the trial court held that the rights of innocent third parties were not affected by the failure of a real estate broker to indicate that he was signing on behalf of a principal. (Foote, supra, 164 Cal.App.2d at pp. 216-217.) Thus, it never reached a determination on whether the duties of a joint venturer is more limited than the duty of a real estate broker. In fact, the law is that joint venturers and real estate brokers both owe fiduciary duties.
“‘The law imposes on a real estate agent “the same obligation of undivided service and loyalty that it imposes on a trustee in favor of his beneficiary.” [Citations.] This relationship not only imposes upon him the duty of acting in the highest good faith towards his principal but precludes the agent from obtaining any advantage over the principal in any transaction had by virtue of his agency. [Citation.] “Such an agent is charged with the duty of fullest disclosure of all material facts concerning the transaction that might affect the principal’s decision.” [Citations.]’ [Citations.]” (Roberts v. Lomanto (2003) 112 Cal.App.4th 1553, 1562-1563.) “A real estate agent who has undertaken to represent a principal in a transaction does not cease to be his fiduciary merely because she enters the transaction as a principal in her own right.” (Id. at p. 1566.)
Similarly, “[t]he fiduciary duty between partners and joint adventurers is a rule of ethics and fairness and is essentially similar to the duty owed by an agent to his principal or by a trustee to his cestui que trust. Thus, under the law each partner must act in the highest good faith toward the other, and one must not take any advantage over the other by the slightest misrepresentation or concealment [citation].” (Skone v. Quanco Farms (1968) 261 Cal.App.2d 237, 241.)
Thus, Asbury would have owed the same fiduciary duties to Grammer whether he was Grammer’s broker or Grammer’s joint venturer. Moreover, a person who solicits a loan on behalf of a partnership and joint venture does not forfeit his status as a real estate broker solely because he became a member of those entities. (Stickel v. Harris (1987) 196 Cal.App.3d 575, 585.) Thus, Asbury could owe fiduciary duties both to Grammer and to the investor group.
Here, there is substantial evidence in the record to support the trial court’s findings that Asbury was acting as a real estate broker for Grammer in the Shoshone Inn transaction. First, there was a prior broker-client relationship between Asbury and Grammer that supports an inference that there was a broker-client relationship in the Shoshone Inn transaction despite the lack of written agreements or disclosures. Asbury had sold Grammer’s San Clemente property and received a commission from Grammer without any written broker agreement. Second, in the Shoshone Inn transaction, Tim testified that Asbury represented that he was Grammer’s broker. Finally, there was no written agreement limiting the scope of Asbury’s agency or fiduciary duties to Grammer.
Because Asbury made negligent misrepresentations to Grammer, Asbury breached his duties as a real estate broker because he failed to act in the highest good faith and to provide the fullest disclosure of all material facts. Therefore, the trial court did not err in concluding that Asbury breached his duties as a real estate broker.
C.
Damages
Finally, Asbury contends that the trial court erred by finding him liable for Grammer’s expenditures after the escrow had opened for the appraisal and maintenance of the Shoshone Inn property because, according to Asbury, the evidence unequivocally shows that Grammer made those expenditures on his own initiative and not at the direction of Asbury. We disagree.
The trial court found, or impliedly found, that Grammer had expended those funds at the direction of Asbury. This finding is supported by substantial evidence. According to Grammer, Asbury suggested to him that he commence the clean up of the Shoshone Inn before Granite’s inspection and meeting with the Bank of Visalia. Grammer also testified that Asbury told him that “[h]e felt that if we get the place cleaned up a bit, it would show better for when he brought the investors down.”
Therefore, the trial court did not err in concluding that Asbury was liable for Grammer’s expenditures prior to July 11, 2003.
DISPOSITION
The judgment is affirmed. Costs to Respondent.
WE CONCUR: Gomes, J., Kane, J.