This case was last updated from Los Angeles County Superior Courts on 04/14/2022 at 13:52:42 (UTC).

CBRE, INC., A DELAWARE CORPORATION VS ARROWTAIL LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ET AL.

Case Summary

On 03/11/2020 CBRE, INC , A DELAWARE CORPORATION filed a Contract - Other Contract lawsuit against ARROWTAIL LLC, A CALIFORNIA LIMITED LIABILITY COMPANY. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******0042

  • Filing Date:

    03/11/2020

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiffs

CBRE INC. A DELAWARE CORPORATION

CBRE INC.

Defendants

THOMPSON CHRISTOPHER KJEL

ZIPP STEVEN LOREN

EVERITT WILLIAM L.

MENLO AS CO-TRUSTEE OF THE MENLO TRUST U/T/I OF VERA

KRIKORIAN INVESTMENT SERVICES INC. A CALIFORNIA CORPORATION DBA IREA

MENLO AS CO-TRUSTEE OF THE MENLO TRUST U/T/I OF FRANK

ARROWTAIL LLC A CALIFORNIA LIMITED LIABILITY COMPANY

MENLO FRANK

ARROWTAIL LLC

MENLO VERA

KRIKORIAN INVESTMENT SERVICES INC.

Attorney/Law Firm Details

Plaintiff Attorney

KARIC STEVEN S.

Defendant Attorneys

KLIER-ERLICH RINAT

MURPHY MICHAEL D.

 

Court Documents

Stipulation - No Order - STIPULATION - NO ORDER STIPULATION EXTENDING TIME TO FILE MOTION (OR SHORTENING TIME TO OPPOSE MOTION)

2/10/2022: Stipulation - No Order - STIPULATION - NO ORDER STIPULATION EXTENDING TIME TO FILE MOTION (OR SHORTENING TIME TO OPPOSE MOTION)

Notice of Case Reassignment and Order for Plaintiff to Give Notice

2/23/2022: Notice of Case Reassignment and Order for Plaintiff to Give Notice

Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE); INDEPENDENT DISCOVERY CONFER...)

2/23/2022: Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE); INDEPENDENT DISCOVERY CONFER...)

Notice - NOTICE NOTICE OF CASE REASSIGNMENT

3/1/2022: Notice - NOTICE NOTICE OF CASE REASSIGNMENT

Separate Statement

3/4/2022: Separate Statement

Notice - NOTICE COMPENDIUM OF EVIDENCE IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

3/4/2022: Notice - NOTICE COMPENDIUM OF EVIDENCE IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

Motion for Summary Judgment

3/4/2022: Motion for Summary Judgment

Notice of Ruling

11/2/2021: Notice of Ruling

Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE))

11/2/2021: Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE))

Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE; OSC RE STRIKE DEFENDANT'S ANS...)

8/2/2021: Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE; OSC RE STRIKE DEFENDANT'S ANS...)

Declaration - DECLARATION DECLARATION OF MICHAEL MURPHY IN RESPONSE TO ORDER TO SHOW CAUSE

7/27/2021: Declaration - DECLARATION DECLARATION OF MICHAEL MURPHY IN RESPONSE TO ORDER TO SHOW CAUSE

Notice - NOTICE OF RULING AND HEARING

7/6/2021: Notice - NOTICE OF RULING AND HEARING

Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE; OSC RE APPOINTMENT OF DISCOVE...)

7/2/2021: Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE; OSC RE APPOINTMENT OF DISCOVE...)

Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

5/20/2021: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE; MSC SETTING CONFERENCE; OSC R...)

5/20/2021: Minute Order - MINUTE ORDER (STATUS CONFERENCE (ALL-PURPOSE; MSC SETTING CONFERENCE; OSC R...)

Declaration - DECLARATION DECLARATION OF STEVEN LOREN ZIPP IN SUPPORT OF DEFENDANTS ARROWTAIL LLC, VERA MENLO, FRANK MENLO AND STEVEN LOREN ZIPPS RESPONSE TO PLAINTIFFS BRIEF IN RESPONSE TO ORDER TO

5/6/2021: Declaration - DECLARATION DECLARATION OF STEVEN LOREN ZIPP IN SUPPORT OF DEFENDANTS ARROWTAIL LLC, VERA MENLO, FRANK MENLO AND STEVEN LOREN ZIPPS RESPONSE TO PLAINTIFFS BRIEF IN RESPONSE TO ORDER TO

Response - RESPONSE DEFENDANTS ARROWTAIL LLC, VERA MENLO, FRANK MENLO AND STEVEN LOREN ZIPPS RESPONSE TO PLAINTIFFS BRIEF IN RESPONSE TO ORDER TO SHOW CAUSE

5/6/2021: Response - RESPONSE DEFENDANTS ARROWTAIL LLC, VERA MENLO, FRANK MENLO AND STEVEN LOREN ZIPPS RESPONSE TO PLAINTIFFS BRIEF IN RESPONSE TO ORDER TO SHOW CAUSE

Declaration - DECLARATION DECLARATION OF MICHAEL D. MURPHY IN SUPPORT OF DEFENDANTS ARROWTAIL, LLC, VERA MENLO, FRANK MENLO AND STEVEN LOREN ZIPPS RESPONSE TO PLAINTIFFS BRIEF IN RESPONSE TO ORDER T

5/6/2021: Declaration - DECLARATION DECLARATION OF MICHAEL D. MURPHY IN SUPPORT OF DEFENDANTS ARROWTAIL, LLC, VERA MENLO, FRANK MENLO AND STEVEN LOREN ZIPPS RESPONSE TO PLAINTIFFS BRIEF IN RESPONSE TO ORDER T

83 More Documents Available

 

Docket Entries

  • 06/27/2022
  • Hearing06/27/2022 at 09:00 AM in Department 58 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 06/21/2022
  • Hearing06/21/2022 at 09:00 AM in Department 58 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 05/12/2022
  • Hearing05/12/2022 at 10:00 AM in Department 58 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion for Summary Judgment

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  • 05/12/2022
  • Hearing05/12/2022 at 10:00 AM in Department 58 at 111 North Hill Street, Los Angeles, CA 90012; Status Conference

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  • 03/15/2022
  • Docketat 09:00 AM in Department 58; Jury Trial - Not Held - Advanced and Continued - by Court

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  • 03/09/2022
  • Docketat 09:00 AM in Department 58; Final Status Conference - Not Held - Advanced and Continued - by Court

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  • 03/04/2022
  • DocketMotion for Summary Judgment; Filed by CBRE, Inc. (Plaintiff)

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  • 03/04/2022
  • DocketNotice (Compendium of Evidence in Support of Plaintiffs Motion for Summary Judgment or, in the Alternative, Summary Adjudication); Filed by CBRE, Inc. (Plaintiff)

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  • 03/04/2022
  • DocketSeparate Statement; Filed by CBRE, Inc. (Plaintiff)

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  • 03/01/2022
  • DocketNotice (NOTICE OF CASE REASSIGNMENT); Filed by CBRE, Inc. (Plaintiff)

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108 More Docket Entries
  • 03/30/2020
  • DocketNotice and Acknowledgment of Receipt; Filed by CBRE, Inc. (Plaintiff)

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  • 03/30/2020
  • DocketNotice and Acknowledgment of Receipt; Filed by CBRE, Inc. (Plaintiff)

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  • 03/30/2020
  • DocketNotice and Acknowledgment of Receipt; Filed by CBRE, Inc. (Plaintiff)

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  • 03/30/2020
  • DocketNotice and Acknowledgment of Receipt; Filed by CBRE, Inc. (Plaintiff)

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  • 03/27/2020
  • DocketOrder to Show Cause Failure to File Proof of Service; Filed by Clerk

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  • 03/27/2020
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 03/11/2020
  • DocketComplaint; Filed by CBRE, Inc. (Plaintiff)

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  • 03/11/2020
  • DocketCivil Case Cover Sheet; Filed by CBRE, Inc. (Plaintiff)

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  • 03/11/2020
  • DocketSummons (on Complaint); Filed by CBRE, Inc. (Plaintiff)

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  • 03/11/2020
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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Tentative Rulings

Case Number: *******0042    Hearing Date: July 24, 2020    Dept: 58

Judge John P. Doyle

Department 58


Hearing Date: July 24, 2020

Case Name: CBRE, Inc. v. Arrowtail, LLC, et al.

Case No.: *******0042

Matter: Demurrer

Moving Party: Defendants Arrowtail, LLC, Steven Loren Zipp, Frank Menlo and Vera

Menlo

Responding Party: Plaintiff CBRE, Inc.


Tentative Ruling: The Demurrer is overruled.


This is an action in which Plaintiff alleges that it was not paid commission as broker in connection with the sale of real property. On April 1, 2020, Plaintiff filed the operative First Amended Complaint (“FAC”) for (1) breach of contract, (2) intentional interference with contractual relations, (3) intentional interference with prospective economic advantage, (4) negligent interference with prospective economic advantage, (5) violation of Bus. & Prof. Code ; 17200, et seq., and (6) common law unfair competition.

Defendants Arrowtail, LLC, Steven Loren Zipp, Frank Menlo and Vera Menlo demur to the first cause of action for breach of contract for uncertainty and failure to state sufficient facts. Defendants argue (1) the material terms of the subject contract are not pled such that it is unclear whether the contract at issue is written or oral, and (2) the statute of frauds applies.

These contentions lack merit. The legal effect of the subject listing agreement is adequately pled: Plaintiff was to procure a buyer for Defendants’ real property by September 15, 2016, and Defendants were to pay Plaintiff 3% of the purchase price plus 12% interest from the time of sale. (FAC ¶¶ 14, 36-37; Miles v. Deutsche Bank Nat'l Trust Co. (2015) 236 Cal. App. 4th 394, 402.) Further, the listing agreement is explicitly alleged to be written. (FAC ¶ 14.)

Defendants argue the FAC pleads modification of the listing agreement’s expiration date, but it is unclear whether the modification complied with both (1) the listing agreement’s modification provision, and (2) the statute of frauds.

But, even if such modification was invalid, the FAC adequately pleads waiver of expiration date for the initial listing agreement through encouragement (FAC ¶¶ 16-34), and the statute of frauds does not prohibit waiver (Baker v. Curtis (1951) 105 Cal.App.2d 663, 668.)

Defendants argue the statute of frauds still applies because the FAC pleads the exclusive listing agreement was converted to a non-exclusive agreement. However, even if this modification was invalid, Defendants fail to indicate why a commission would not be due under the initial listing agreement (with the waived expiration date). Further, this matter is distinguishable from Augustine v. Trucco (1954) 124 Cal.App.2d 229, 232 in which a modification was found ineffective for lack of consideration—specifically, while waiver of the expiration date was acknowledged, the court found there was no consideration for a decreased sale price and that the offer-price did not meet the requirements of the initial listing agreement. Here, even with no modification, there is nothing indicating that Plaintiff failed to perform under the initial agreement when he found a buyer offering $32 million for the subject property.

Further, Defendants’ contentions as to uncertainty are best addressed through discovery. (See Khoury v. Maly's of California Inc. (1993) 14 Cal.App.4th 612, 616.)

While the true facts of the case may differ, the FAC currently pleads a claim for breach of contract. Accordingly, the Demurrer is overruled.


Case Number: *******0042    Hearing Date: September 10, 2020    Dept: 58

Judge John P. Doyle

Department 58

Hearing Date: September 10, 2020

Case Name: CBRE Inc. v. Arrowtail LLC, et al.

Case No.: *******0042

Motion: (1) Demurrer

(2) Motion to Strike

Moving Party: (1) Defendants Krikorian Investment Services, Inc.; William Everett; Christopher Kjel Thompson

(2) Defendants Krikorian Investment Services, Inc.; William Everett; Christopher Kjel Thompson

Opposing Party: Plaintiff CBRE Inc.

Tentative Ruling: The Demurrer is OVERRULED.

The Motion to Strike is GRANTED in part with leave to amend, and DENIED in part.

This is an action in which it is alleged that Frank and Vera Menlo (“Owners”), owners of real property commonly known as 11630 Indian Hills Road, Mission Hills, California (the “Property), breached a an Exclusive Licensing Agreement, and refused to pay Plaintiff CBRE Inc. (“Plaintiff”) an commission owed thereunder. Plaintiff alleges that Defendants Krikorian Investment Services, Inc. (“Krikorian”), William Everett, and Christopher Kjel Thompson (collectively “Broker Defendants”) interfered so as to inform Owners that Plaintiff had no right to a commission, and that any commission should be paid to Krikorian.

The operative First Amended Complaint (“FAC”) alleges causes of action for:

1. breach of contract;

2. intentional interference with contractual relations;

3. intentional interference with prospective economic advantage;

4. negligent interference with prospective economic advantage;

5. unfair competition under Business & Professions Code ; 17200; and

6. common law unfair competition.

As a preliminary matter, Broker Defendants filed this demurrer to the Complaint on June 10, 2020, despite Plaintiff filing a First Amended Complaint on April 1, 2020. This would render Broker Defendants’ demurrer moot. However, as the pleadings are substantially similar, the court considers the arguments raised as against the FAC.

Demurrer

The Broker Defendants demur to the Complaint on the grounds that Plaintiff fails to allege the existence of a valid contract for purposes of the contractual claims, and for purposes of alleging harm under its unfair competition claims. Broker Defendants’ motion to strike seeks to strike allegations pertaining to Plaintiff’s request for punitive damages.

Pursuant to Civil Code ; 1624(a), “[t]he following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent: . . . (4) [a]n agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission.”

Broker Defendants contend that Plaintiff cannot allege the existence of a valid contract because there is no copy of a written contract attached to the Complaint or the FAC, and it is not sufficiently alleged verbatim within the body of the pleading. However, the court has already disposed of this argument. On July 24, 2020, the court ruled on Owners’ demurrer to the FAC, and ruled that

[t]he legal effect of the subject listing agreement is adequately pled: Plaintiff was to procure a buyer for Defendants’ real property by September 15, 2016, and Defendants were to pay Plaintiff 3% of the purchase price plus 12% interest from the time of sale. (FAC ¶¶ 14, 36-37; Miles v. Deutsche Bank Nat'l Trust Co. (2015) 236 Cal. App. 4th 394, 402.) Further, the listing agreement is explicitly alleged to be written.  (FAC ¶ 14.)

. . .

[T]he FAC currently pleads a claim for breach of contract.

(7/24/2020 Minute Order.)

Broker Defendants further argue that if there was a valid waiver of the contract, it does not apply to them. It is not immediately apparent how this argument relates to the claims. Plaintiff is not alleging that Broker Defendants are party to the contract, nor that the terms apply to them. Rather, the FAC alleges that the Broker Defendants interfered with Plaintiff’s contractual relationship with Owners. Broker Defendants’ argument pertaining to “waiver” sets forth no grounds to sustain a demurrer to the FAC.

As to the unfair competition claims, Broker Defendants argue that the causes of action fail “for the same reasons that the contractual causes of action fail: the underlying 'wrong' here does not exist, in the absence of a valid contract.” (Demurrer 8:10-11.) Indeed, pursuant to Bus. & Prof. Code ; 17204, a person must have “suffered injury in fact and has lost money or property as a result of the unfair competition” to prosecute a claim therefor. However, the FAC clearly alleges that Broker Defendants’ harmed Plaintiff “in the amount of $960,000, which is the amount of the commission unfairly and fraudulently obtained by these defendants that rightfully belongs to CBRE.” (FAC ¶ 68.) Thus, Broker Defendants arguments that Plaintiff has failed to allege any entitlement to a commission, and that “[b]ecause the contractual claims fail, so does the dependent unfair business practices claim” are unavailing. (Demurrer 8:23-24.)

Finally, the notice of the demurrer indicates that Broker Defendants demur to the interference with contractual relations and prospective economic advantage claims. However, no substantive argument is raised in the memorandum. It is presumed that the demurrer relies again on a failure to allege a contractual basis for the claims. As such, the demurrer fails. In their one paragraph reply memorandum, Broker Defendants argue that the intentional interference with contractual relations claim is not properly alleged because “[i]t does not sufficiently allege intentional acts designed to induce a breach or disruption of the contractual relationship between it and the property owners.” The court disagrees. The FAC alleges that “[o]n August 29, 2018, the Owners notified CBRE by email that IREA had informed them that CBRE had no right to any commission, and that IREA expected to get a commission, even if the Property was sold to PMB or SCI.” (FAC ¶ 32.) Plaintiff alleges that

[d]espite the Owners’ acknowledgment of their contractual obligation to CBRE, and at least in part as a result of the wrongful inducement by Everitt, Thompson and IREA to cause the Owners to breach their agreement with CBRE, the Owners wrongfully determined not to pay any commission to CBRE, even if the Property were sold to a buyer that CBRE had procured, which in fact it was. This was set forth in a September 3, 2018 letter from the Owners’ attorney to CBRE, which concluded, “Therefore, regardless of what [the Owners] may have told you, you will not be able earn a commission from the property owners - even if the Property is ultimately sold to PMB or SCI, because [the Owners are] bound to [the] IREA Listing Agreement.

(Id. ¶ 34.)

Based on the foregoing, the demurrer to the FAC is OVERRULED.

Motion to Strike

Broker Defendants move to strike Plaintiff’s request and allegations pertaining to punitive damages, arguing that the only allegations of bad faith, oppression or malice are conclusory.

The FAC alleges, as an example, that “defendants Everitt, Thompson, IREA and Does 11-20 committed acts designed to interfere with and disrupt CBRE’s economic relationship with the Owners.” (FAC ¶ 56.) The FAC alleges that Broker Defendants intentionally took action to interfere with Plaintiff’s contractual rights. The FAC further alleges that Broker Defendants “intentionally engaged in the above described acts and omissions with the intention of depriving CBRE of its lawful rights and otherwise causing CBRE to be injured.” (Id. ¶ 58.) “When the plaintiff alleges an intentional wrong, a prayer for exemplary damage may be supported by pleading that the wrong was committed willfully or with a design to injure.” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal. App. 3d 22, 29.) “A general allegation of [that] intent is sufficient . . .” (Cyrus v. Haveson (1976) 65 Cal. App. 3d 306, 317.)

However, the court agrees that punitive damages are not sufficiently alleged against Defendant Krikorian. Pursuant to Civil Code ; 3294(b), “[w]ith respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.” There are no allegations in the FAC to state that any such person had advance knowledge, authorized, or ratified the interference. Everitt and Thompson are alleged to be employees of Krikorian, but such allegation does not meet the requirements of Civil Code ; 3294(b).

Here, the allegations of action taken with the intent to interfere with Plaintiff’s contractual rights so as to cause Plaintiff harm suffice to maintain a request for punitive damages.

The motion to strike is GRANTED with leave to amend as against Defendant Krikorian, and is DENIED as against Defendants Everitt and Thompson.


Case Number: *******0042    Hearing Date: February 11, 2021    Dept: 58

Judge John P. Doyle

Department 58


Hearing Date: February 11, 2021

Case Name: CBRE, Inc. v. Arrowtail, LLC, et al.

Case No.: *******0042

Matter: (1) Motion for Determination of Good Faith Settlement

(2) Motion to Compel Further Responses

Moving Party: (1) Defendants Krikorian Investment Services, Inc. dba IREA, William L.

Everitt, and Christopher Kjel Thompson

(2) Plaintiff CBRE, Inc.

Responding Party: (1) Unopposed

(2) Defendant Arrowtail LLC


Tentative Ruling: The Motion for Determination of Good Faith Settlement is granted.

The Motion to Compel Further Responses is granted in part.


This is an action in which Plaintiff alleges that it was not paid commission as broker in connection with the sale of real property. On September 21, 2020, Plaintiff filed the operative Second Amended Complaint (“SAC”) for (1) breach of contract, (2) intentional interference with contractual relations, (3) intentional interference with prospective economic advantage, (4) negligent interference with prospective economic advantage, (5) violation of Bus. & Prof. Code ; 17200, et seq., and (6) common law unfair competition.

  1. Good Faith Settlement

Defendants Krikorian Investment Services, Inc. dba IREA, William L. Everitt, and Christopher Kjel Thompson seek a determination that their settlement with Plaintiff CBRE, Inc. for $100,000 was made in good faith pursuant to Code Civ. Proc. ; 877.6.

Because no oppositions were filed, the Motion may be granted without consideration of the Tech-Bilt factors and on the basis of setting forth the ground for good faith determination and a brief background of the case. (See City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261 [“[W]e . . . conclude that only when the good faith nature of a settlement is disputed, it is incumbent upon the trial court to consider and weigh the Tech-Bilt factors. That is to say, when no one objects, the barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient.”)

The moving Defendants became brokers/agents for the seller after it was said that the relationship with Plaintiff would be terminated. Defendants provide they “relied on information from the owners that the owners' listing agreement with CBRE had terminated, as well as the owners' multiple requests that IREA now act as their new listing broker. The owners' representative, Gene Paleno, told the IREA Defendants that CBRE's list of potential buyers was tardy. Furthermore, the owners' attorney got involved and clearly advised, in writing, that CBRE had no right to commission on any sale of the subject property, affirming IREA's impression that CBRE's role had concluded. The IREA defendants relied on these statements, and therefore, based on the information available at the time of settlement, their liability, if any, is believed to be low.”

Under the circumstances, the Court cannot find that “the settlement is so far ‘out of the ballpark’ in relation to [the Tech-Bilt] factors as to be inconsistent with the equitable objectives of the statute.” (Tech-Bilt, Inc., supra, 38 Cal.3d at pp. 499–500.) Accordingly, the Court finds that the settlement was made in good faith. The Motion is granted.

  1. Motion to Compel

Plaintiff CBRE, Inc. seeks to compel further responses to its requests for production, set one, propounded upon Defendant Arrowtail LLC.

Among other things, Defendant argues that Plaintiff failed to show good cause for the discovery at issue and that most of the requests improperly relate to Defendant’s contentions.

The Motion is granted as to requests nos. 3, 4, 7, 18, 19, 20, 21, 24-75. Further responses are to be provided within thirty days. To the extent applicable, Defendant is to provide a privilege log.

The Motion is denied as to requests nos. 22 and 23 which are overbroad.

Given the mixed result, the Court respectfully declines to award sanctions.


Case Number: *******0042 Hearing Date: May 12, 2022 Dept: 58

Judge Bruce G. Iwasaki

Department 58


Hearing Date: May 12, 2022

Case Name: CBRE, Inc. v. Arrowtail, LLC, et al.

Case No.: *******0042

Matter: Motion for summary judgment

Calendar No.: 12

Moving Party: Plaintiff CBRE, Inc.

Responding Party: Defendants Arrowtail LLC; Vera Menlo; Frank Menlo; Steven Loren Zipp

Tentative Ruling: The motion for summary judgment or, in the alternative, summary adjudication is denied.

Background and procedural history

Plaintiff CBRE, Inc. alleges that it was not paid commission as a broker in connection with the sale of real property located at 11630 Indian Hills Road in Mission Hills. CBRE filed the operative Second Amended Complaint (SAC) against the owners of the Property, Arrowtail LLC, Frank and Vera Menlo as co-trustees of the Menlo Trust, and Steven Loren Zipp (collectively “Owners”), for breach of contract.

The SAC also named Krikorian Investment Services, William L. Everitt, and Christopher Kjel Thompson (collectively “Brokers”) for intentional and negligent interference with contractual relations and prospective economic advantage, and unfair competition. CBRE asserted that the Brokers were subsequently retained by the Owners for the sale of the Property. The Brokers settled with Plaintiff and were dismissed. The only outstanding claim is for breach of contract against the Owners.

The breach of contract claim is predicated on a written Exclusive Sales Listing Agreement that was entered into between CBRE and the Owners on January 11, 2016. The Listing Agreement had an expiration of September 15, 2016, but was extended in writing to March 15, 2017, and then to December 31, 2017 (“Term”). Plaintiff contends that the Owners’ behaviors after December encouraged it to continue marketing the Property for sale, including providing updates and marketing efforts on potential buyers to the Owners between January and May 2018.

On May 30, 2018, Plaintiff received an e-mail from Defendant Everitt that the Owners retained his firm, IREA (Krikorian Investment Services), as the new brokers. The Owners allegedly informed CBRE that they would nevertheless retain its services to sell the Property as to any registered buyers on its list. In July 2018, the Owners informed CBRE that “any deals that were brought to [CBRE] and registered with [CBRE]” would entitle it to a commission.

The Listing Agreement designated CBRE as the exclusive agent to sell the Property. The agreement provided a commission to CBRE if the Property sold during the term or 120 days after expiration of the term. This is the clause at issue in the case.

On July 12, 2019, the Property sold to SCI California Funeral Service, Inc. for $32 million. CBRE argues that this entitles them to a 3% listing fee, or $960,000. The Owners have not paid the commission.

CBRE filed a motion for summary judgment, arguing that the owners waived the termination date of the Listing Agreement, that the Owners breached the Listing Agreement by refusing to pay the commission, and that CBRE fully performed under the contract.

Defendant Owners opposed the motion, contending that they were the ones who submitted the Property to the ultimate buyer, CBRE did not have the right to “register” the ultimate buyer during the contract term because there were no negotiations, that there was a 120-day “Post-Term” period that did not function as a waiver of the termination date, and Plaintiff did not fully perform under the contract.

Plaintiff filed its Reply on May 6, arguing that it properly registered and submitted SCI on three separate occasions (October 2016, April 2017, and June 2018) as a potential buyer and asserts that Defendants have waived the contract’s termination date.

The Court finds that there is a material dispute of fact as to whether Plaintiff CBRE has performed its obligations under the Listing Agreement to trigger Defendant Owners obligations to pay the commission. Plaintiff has not shown that the Owners waived the Listing Agreement’s termination date or that it has otherwise performed under the contract.

Objections:

Defendants’ objections to the admissibility of the Kamran Paydar and Laurie Lustig-Bower declarations based on an alleged invalid signature are overruled.

Defendants’ Objection no. 1 to Plaintiff’s Compendium of Evidence is overruled.

Defendants’ Objections to the Laurie Lustig-Bower Declaration:

Sustained: 1, 4, 6, 7, 14, 18,19, 21, 22, 30, 55-57, 60, 61, 63,65

Overruled: 2, 3, 5, 8-13, 15-17, 20, 23-29, 31-54, 58, 59, 62, 64, 66

Defendants’ Objections to Kamran Paydar Declaration:

Sustained: 5, 6, 13-15, 19, 25-27, 29, 35

Overruled: 1-4, 7-12, 16-18, 20-24, 28, 30-34

Plaintiff’s Objections to Steven Loren Zipp’s Declaration:

Sustained: 1, 3-4, 38, 49, 56,72

Overruled: 2, 5-37, 39-48, 50-55, 57-71, 73-89

Plaintiff’s Objections to Gene Paleno’s Declaration:

Sustained: 1, 10-12

Overruled: 2-9, 13-22

Plaintiff’s Objections to Frank Menlo’s Declaration:

Sustained: 1, 4-5, 8, 33-34, 37, 40,

Overruled: 2-3, 6-7, 9-32, 35-36, 38-39. 41-49

Plaintiff’s Objections to Dann Narveson’s Declaration:

Overruled: 1-6

Plaintiff’s Objections to Michael D. Murphy’s Declaration are moot because the Court did not sustain any of Defendants’ objections to the admissibility of the declarations of Laurie Lustig-Bower and Kamran Paydar.

Legal Standard

“The party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A triable issue of material fact exists if the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. (Ibid.)

When a plaintiff seeks summary judgment or adjudication, he or she must show “that there is no defense to a cause of action if [he or she] has proved each element of the cause of action entitling [him] to judgment on the action.” (Code Civ. Proc., 437c, subd. (p)(1). Once the plaintiff meets this burden, “the burden shifts to the defendant…to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal. App. 4th 463, 467; Code Civ. Proc., 437c, subd. (c).)

Discussion

The elements of an action for breach of contract are “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty LLC v. Goldman (2011) 51 Cal.4th 811, 821.) With respect to property sales agreements, “[a]n exclusive authorization to sell agreement may provide for compensation to the initial listing agent if the property is sold to anyone before termination of the authorization agreement, regardless of who effected the sale.” (Century 21 Butler Realty, Inc. v. Vasquez (1995) 41 Cal.App.4th 888, 891.) “Whether the broker may recover compensation depends on the terms of the particular listing contract.” (Ibid.)

The first and fourth elements are not in dispute. The parties entered into the valid Listing Agreement on January 11, 2016. (Defendants’ Appendix of Evidence (Appendix), Ex. 5.) Damages are also specified: The Listing Agreement provided CBRE with a 3% commission, subject to performance under Section 9 of the contract, and the interest calculations of Section 14. In addition, the third element of breach by the Owners is contingent upon whether Plaintiff performed its obligations such that payment of the commission became due and owing. Therefore, the analysis focuses on the second element on whether Plaintiff performed its obligations.

The Listing Agreement provides two alternative methods for Plaintiff to obtain commission, neither of which facially apply.

The commission clause at issue is specified under Section 9 of the agreement, which provides:

9. We will earn (and you agree to pay) a commission in accordance with this Agreement and the attached Commission Schedule (Exhibit "A") if either of the following occur:

  1. during the Term, you sell the Property to a purchaser, whether procured by us, you or anyone else; or

  2. within one hundred twenty (120) days after the expiration of the Term or after the Agreement otherwise terminates (the "Post-Term"), the Property is sold to, or negotiations continue, resume or commence and thereafter continue leading to a sale of the Property to any person or entity (including his/her/its successors, assigns or affiliates) with whom, during the Term, CBRE either negotiated (either directly or through another broker or agent) or to whom the Property was submitted during the Term ("Existing Prospect"). You agree that CBRE is authorized to continue negotiations with Existing Prospects, and we will submit to you a list of such Existing Prospects no later than fifteen (15) business days following the expiration or termination of the Term; provided, however, that if a written offer has been submitted prior to said expiration or termination date, then it shall not be necessary to include the offeror's name on the list. (Appendix, Ex. 5.)

The parties do not dispute that the Property sold to SCI on July 12, 2019. (Plaintiff Compendium of Evidence (Compendium), Ex. 146, Menlo Depo. pp. 16:24-17:7.) The parties also agree that the final, extended expiration of the Term was on December 31, 2017. However, the parties disagree as to who procured SCI as buyer, whether CBRE properly registered SCI during the term, and whether there was waiver of the term expiration.

Plaintiff has not shown that it sufficiently performed its obligations under the Listing Agreement

Plaintiff does not address the provisions of Section 9 in the Listing Agreement in its moving papers. Instead, its principal argument relies on Baker v. Curtis (1951) 105 Cal.App.2d 663, 664 (Baker) for the proposition that the Owners waived the December 31, 2017 termination date.

In Baker, a property owner entered into a listing agreement with a broker that was in effect for 30 days to sell the property. When the broker was unable to do so, the owner informed the broker to keep the property on the market; the broker continued in his efforts to sell the property for the rest of the year, eventually finding a buyer almost a year later. (Baker, supra, 105 Cal.App.2d at p. 665.) The appellate court affirmed the jury’s finding that the “time limitation stated in such a contract may be waived and where, as here, the owner, after the time limit provided in the contract had expired, urged and encouraged the broker to continue his efforts to find a purchaser for the property, and the broker did so continue with the knowledge, approval and encouragement of the owner, and, as a result of the broker's efforts, a purchaser to whom the owner sold the property was produced, under such circumstances the time limit in the written contract must be considered as having been waived and the broker is entitled to his commission.” (Id. at pp. 669-670.)

Plaintiff’s reliance on Baker is misplaced. Notwithstanding the fact that Baker was an appeal from a jury verdict, the appellate court recognized that the sale must have been consummated “as a result of the broker’s efforts.” (Baker, supra, 105 Cal.App.2d at p. 670.) That is, Plaintiff must otherwise demonstrate that it fully performed under the contract.

The clause at issue here allows for a commission fee under two theories. Either the Property is sold during the Term or within 120 days after expiration of the term, provided that (1) “CBRE either negotiated (either directly or through another broker or agent)” the sale or (2) the sale of the Property was to a buyer “to whom the Property was submitted during the Term (“Existing Prospect).”

WAIVER

To the extent that Plaintiff is arguing that it performed under the contract because the Property was sold during the Term (as the expiration date was waived), the Court disagrees. (Kraemer v. Smith (1960) 179 Cal.App.2d 52, 56 [“Whether there is a waiver or extension of time is a question of fact for determination in the trial court”].) Both Baker and Kraemer were appeals from a jury verdict. (Id. at p. 53; Baker, supra, 105 Cal.App.2d at p. 664.)

In addition, there is a dispute of material fact here. Plaintiff provides evidence that the owners intended to waive the termination date – Defendant Frank Menlo reportedly sent e-mails to Plaintiff informing that it was still the broker on the Property, though it appears from the evidence that Plaintiff was only communicating with Menlo and not with Defendant Zipp. (See Compendium, Exs. 68, 72, 73.)

Plaintiff also points to a series of communications in March 2018 (Post-Term period) in which the Owners informed CBRE to negotiate the Property with Encompass Health, Providence Health Group, and SCI, despite these entities not being on CBRE’s registration letters. CBRE asserts that the Owners encouraged it to continue working with Encompass throughout June and July 2018, which supports a finding of waiver of the term expiration. (Plaintiff’s Undisputed Material Fact, no. 4.)

Plaintiff also argues that on July 18, 2018, the Owners informed it of the following with respect to the Encompass negotiations:

“I had a meeting with Steve [Zipp] we have decided that any deals that were brought to you and registered with you[,] you will represent us and we will not have our current firm dealing with us regarding your deals. But I will need from you a list of registered clients that you had contact with so I know who they are and I can tell them [IREA] who they are so there’s no confusion … We really need to meet with the client [PMB/Encompass] to discuss issues so nobody’s wasting time I don’t think we can do a counter without that thank you[.]”

Defendant Owners submitted contrary evidence - Defendant Zipp reportedly e-mailed Plaintiff through May 2018 to have the CBRE signs removed from the Property and to de-list the Property from its website. (Appendix, Exs. 17-19.) In addition, the Owners assert that their communications to CBRE was only as to previously registered prospective buyers under Section 9 of the contract. (Opposition to MSJ, Zipp Decl., 61-66; Compendium, Lustig-Bower Decl., 22-24, 27-29, 31-36; Appendix, Ex. 14.)

Further, Defendants argue that CBRE misled them on the status of Encompass as a buyer. That is, CBRE did not inform the Owners whether Encompass was an “Existing Prospect” as defined under the agreement and had the Owners known it was not an “Existing Prospect,” they would have ceased negotiations. Defendants also argue that CBRE admitted in an e-mail that it was “not well protected” with respect to Encompass, which shows a concession that it knew that the contract expired, and no extension was given. Finally, Defendants contend that they never authorized CBRE to communicate with any potentials buyers that it had not registered and for CBRE to do so was a breach of the contract. (Defendants’ Additional Undisputed Material Fact, Nos. 37-38; 55-60.)

Thus, from the facts above, it appears that CBRE insufficiently establishes that the Owners actively encouraged it to continue negotiating on their behalf. The Owners’ alleged communications do not contradict the plain language of Section 9 of the Listing Agreement providing for a Post-Term period. Some of CBRE’s evidence appears to relate to the 120-day Post-Term Registration period rather than support a finding of waiver of the expiration of the agreement. For example, CBRE was previously working with Providence Health as of June 24, 2016, during the term. CBRE then asserts that as part of their ongoing efforts to sell the property (that was encouraged by the Owners), they arranged an “all hands meeting” on February 15, 2018. (Compendium, Lustig-Bower Decl., 35.) Yet, the contract was still in its 120-day Post-Term period at this time and so the Owners were not necessarily representing a desire to waive the expiration date.

There is a dispute of material fact on whether the conduct of the Owners constitutes a waiver.

Plaintiff’s Reply is unavailing. The citation to a January 5, 2018 e-mail from Gene Paleno does not indicate an unequivocal desire by the Owners for CBRE to remain its Broker in perpetuity; indeed, even if this e-mail constituted a temporary waiver of the termination date, it limited the authority “until the February meeting.” The e-mail also failed to include the other owner, the Menlo Trust, and was presented during the 120-day Post-Term.

Finally, the Court notes that Section 16 of the Listing Requirement indicates that “It may not be altered or terminated except in a writing signed by both you and CBRE.” Indeed, unlike Baker, the parties did agree, on two separate occasions in writing, to extend the expiration to March 15, 2017, and again, to December 31, 2017. (Compendium, Exs. 9, 11.) This knowledge is additionally corroborated by an e-mail from CBRE’s Executive Vice President requesting for a “short term listing extension until July 31st [2018].” (Appendix, Ex. 41.) The Owners rejected this request. (Opposition to MSJ, Zipp Decl., 82-85; Menlo Decl., 27- 29.) On January 5, 2018, CBRE called Defendant Zipp and requested an extension of the contract, but Zipp expressly rejected the request. (Opposition to MSJ, Zipp Decl., 55-56.) The Owner’s express rejection of CBRE’s request to extend the listing agreement raises a triable issue of fact concerning the Owner’s waiver of the termination provision.

The Court finds that there is a dispute of material fact on whether the Owners did, in fact, intend for the expiration date to be waived.

There is an issue of material fact on whether CBRE negotiated the sale or whether SCI was an “Existing Prospect” under the Listing Agreement

Since waiver is a question of fact, section 9(a) does not apply on its face because the Property was sold after the Listing Agreement already expired. Thus, the only other way for Plaintiff to prevail on summary judgment is if it shows that it performed the contract through compliance with Section 9(b) of the Listing Agreement. The Court finds that this too is subject to a dispute of material fact.

Section 9(b) provides CBRE an additional 120 days after the expiration to “resume or commence and thereafter continue leading to a sale of the Property” if it (1) either negotiated (either directly or through another broker or agent)” the sale or (2) the sale of the Property was to a buyer “to whom the Property was submitted during the Term (“Existing Prospect).” Thus, this Post-Term period concluded on April 30, 2018, at which point the entire Listing Agreement would terminate.

Plaintiff does not directly argue that it negotiated with SCI, the ultimate buyer; instead, it contends that it located and obtained an offer from SCI. That is, Plaintiff reportedly sent a list of registered potential buyers, which included an affiliate of SCI (Eden Memorial Park), to the Owners. (Compendium, Lustig-Bower Decl. 8, 11, 15, 30, 39-40, 64, 69-72, 74-80; Paydar Decl. 8, 13, 15- 16, 25-26, 38, 42, 52-57; Exs. 7, 10, 28, 100-102, 110-130; Menlo Depo. (Ex. 146) 116:24-118:19, 336:22- 338:24, 362:3-22, 391:23-393:7; Paleno Depo. (Ex. 147) 76:6-9, 84:2-7, 97:8-20.)

Defendants argues that CBRE did not negotiate with SCI during the contract term. (Opposition to MSJ, Zipp Decl., 27-29; Paleno Decl., 18-20; Narveson Decl., 5-10.) While there were e-mails and phone calls between SCI and CBRE, these were short and did not constitute any substantive negotiations. (Compendium, Paydar Decl. 7-8, 15; Lustig-Bower Decl., 8, 17-19.)

Moreover, the Owners argue that they met Dann Narveson, the Director of Real Estate for SCI in 2015, before the Listing Agreement. Therefore, it was improper for CBRE to have registered SCI’s affiliate, Eden Memorial Homes, as an “Existing Prospect” given the Owners’ prior relationship to SCI, of which CBRE was not involved. (Zipp Decl., 9-15; Paleno Decl., 7-17; Narveson Decl., 3; Appendix, Ex. 34, Lustig-Bower Depo., p. 167:6-168:6; Ex. 36, Paydar Depo., pp. 37:11-19, 40:5-15, 42:2-12, 53:15-19).) Narveson also reportedly sent a Letter of Intent to purchase the Property in November 2015. (Opposition to MSJ, Paleno Decl., 14-17; Zipp Decl., 13-15; Narveson Decl., 3; Appendix, Exs. 3A-3B.) In other words, Defendants argue that SCI was not an “Existing Prospect” because the Property was never “submitted” to SCI. Defendants further contends that CBRE is falsely asserting that merely because Eden Memorial Park (which is affiliated with SCI) is registered, this also places SCI on the Registration list. In any event, Defendants states that CBRE never submitted the Property to either Eden Memorial Park or SCI and therefore, these two entities did not qualify as “Existing Prospects” as defined under Section 9(b) of the Listing Agreement and CBRE had no right to place them on its registration list.[1]

WHETHER CBRE SUBMITTED SCI AS AN EXISTING PROSPECT

Plaintiff CBRE’s Reply reiterates that it timely submitted and registered SCI’s affiliate, Eden Memorial Park, as a potential buyer in October 2016, April 2017, and January 2018. (Compendium, Exs. 7, 10, 28.) It claims SCI was an “existing prospect” as defined under the Listing Agreement, which is defined as potential buyers “to whom the Property was submitted during the Term.” (Appendix, Ex. 5, 9.)

Assuming Plaintiff is correct that it properly submitted SCI as a potential buyer, this still does not necessarily entitle it to a commission. Section 9 of the Listing Agreement also requires that the sale be consummated within the 120 days following expiration of the Term. It is undisputed that the Property was sold to SCI on July 12, 2019, well past 120 days of the agreed-upon expiration date of December 31, 2017. Again, Plaintiff’s argument here is dependent on the termination date being waived, which the Court has found to be a disputed issue of fact.

Plaintiff further asserts that the Owners’ prior interactions with SCI in 2015 are meaningless because (1) the Owners did not separately exclude SCI from the Listing Agreement and (2) the discussions were unsuccessful. This fails to address the underlying issue, however, as to whether the Owner’s prior communications with SCI constitutes submitting the property to SCI.[2] Plaintiff further argues that its submission efforts satisfy the requirements of Section 9(b), but this assertion is contradicted by Defendants’ evidence that CBRE’s agent understood that it was the Owners who had already “submitted” the Property to SCI. (Appendix, Ex. 34, Lustig-Bower Depo., pp. 167:6-168:6.) At the least, the parties appear to dispute what it means to submit the Property during the Term.

This issue was briefly raised in Baker. The property owner in that case contended that the “mere calling of the purchaser’s attention to the property…is not sufficient to entitle the agent to compensation.” (Baker, supra, 105 Cal.App.2d at p. 670.) The appellate court disposed of the argument, stating that if “the seller and the buyer were brought together through the efforts of the broker…that while the contract of employment was still in force…the sale was consummated by the seller with the buyer the broker had procured” and therefore, “the broker is entitled to the payment of the full commissions.” (Ibid.) Here, unlike Baker, Defendants argues that the Owners were already in contact with SCI from 2015, prior to the Listing Agreement. Therefore, it is disputed whether CBRE’s efforts were what brought the seller and buyer together.

CONCLUSION

The Court finds that Plaintiff CBRE has not met its burden to show that every element of a breach of contract claim is met. Specifically, Plaintiff has not shown that it fully performed under the contract because, on its face, the sale of the Property occurred after the Listing Agreement expired. While Plaintiff argues that there has been a waiver of the termination date, this is a disputed question of fact given the Listing Agreement’s imposition of a 120 day Post-Term period. Whether Defendants’ actions during that Post-Term constituted a waiver is subject to a dispute of material fact given that the parties still had ongoing obligations to each other.

CBRE has also failed to establish it performed under the alternative provision of section 9(b) of the Listing Agreement such that CBRE negotiated with the ultimate buyer, SCI, or that SCI was an “existing prospect” to whom the Property was submitted during the contract’s term because of the Owners previous communications with SCI.

The motion for summary judgment or, in the alternative, summary adjudication, is denied.


[1] Defendants uses this line of reasoning to argue that CBRE was actually in breach of the Listing Agreement themselves. However, the Court does not reach this issue and merely finds that CBRE has not sufficiently proved that it performed under the contract.

[2] Plaintiff states that “If Defendants tried and failed to make a deal with SCI before they retained CBRE, and then CBRE submitted the Property to SCI and obtained an offer to buy the Property from SCI, it would only make sense that CBRE should be paid for its successful work.” (Italics added.) Plaintiff provides no evidence that CBRE obtained any offer and in fact fails to address whether CBRE did, in fact, negotiate with SCI. Defendants’ Opposition argues that no such negotiation was ever conducted. Thus, this Court finds that Plaintiff’s argument for a commission is predicated merely on the fact that it “submitted” and “registered” the Property.


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