Complaint Unlimited Fee AppliesCal. Super. - 6th Dist.March 29, 2021Eric T. Hartnett (Bar No. 234765) Law Office of Eric T. Hartnett 563 S. Murphy Avenue Sunnyvale, California 94086 (408) 290-8228 Attorneys for Plaintiffs SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA BO WANG AND ALICIA WANG Case No. 10 vs. Plaintiffs, COMPLAINT FOR BREACH OF FIDUCIARY DUTY; CONSTRUCTIVE FRAUD; AND NEGLIGENCE 12 13 14 SERENO GROUP, INC.; NICHOLAS A. FRENCH; AND DOES 1 THROUGH 50, inclusive Defendants. 15 16 17 Plaintiffs Bo Wang and Alicia Wang allege as follows: GENERAL ALLEGATIONS 18 19 20 21 22 23 24 25 26 27 28 1. Plaintiffs Bo Wang and Alicia Wang (collectively "Plaintiffs") are a married couple. 2. Plaintiffs are informed and believe that defendant Sereno Group, Inc. ("Sereno") is, and at all times mentioned herein was, a licensed corporation with the Department of Real Estate, Department of Real Estate license number 0201181, with its principal place of business in the City of Los Gatos and County of Santa Clara. 3. Plaintiffs are informed and believe that defendant Nicholas A. French ("French") is, and at all times herein mentioned was, an individual doing business in the City of Los Gatos and County of Santa Clara as a real estate broker associate for Sereno, with the Department of Real Estate license number 01350085. 4. The true names and capacities, whether individual, corporate or otherwise, of 4822-9614-2302 COMPLAINT E-FILED 3/29/2021 5:07 PM Clerk of Court Superior Court of CA, County of Santa Clara 21CV381442 Reviewed By: M Vu 21CV381442 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Defendants DOES 1 through DOES 50, inclusive, are unknown to Plaintiffs who therefore sue said Defendants by such fictitious names. Plaintiffs are informed and believes, and based on information and belief, allege that each of the Defendants sued herein under fictitious names is responsible in some manner for the events and occurrences referred to herein. When the true names, capacities and involvements of said Defendants are ascertained, Plaintiffs will seek leave of Court to amend this Complaint accordingly. 5. Plaintiffs are informed and believe and thereon allege that, at all relevant times, Defendants, including DOES 1 through 50, inclusive, were acting as the agent, employee of each of the other Defendants, and the acts, omissions, and other conduct alleged herein were done in the County of Santa Clara, and within the course and scope of that agency or employment relationship. 6. This Court has jurisdiction to hear the subject matter of this Complaint. All of Plaintiffs'laims alleged herein arise under California Law. This Court also has the jurisdiction over each defendant, as the wrongful acts and violations of law alleged herein took place in the County of Santa Clara, California. Venue is also proper because Plaintiffs are informed and believe that Defendants, and each of them, either reside and/or do business in the County of Santa Clara. 7. Since 2019, Plaintiffs had been searching to purchase a new home for their growing family. This would be their first single family home purchase. The focus of their search was in Santa Clara County. Plaintiffs utilized the services of French and Sereno, as a real estate agent and broker, to aid in their search. French had represented himself as an expert in residential real estate transactions in the Santa Clara County area and was aware of Plaintiffs'nexperience. Based on French's representations and their own inexperience, Plaintiffs relied on French for his advice and guidance in their search for a new home. 8. In early 2020, French advised Plaintiffs that the property located at 26540 Conejo Court, Los Altos Hills, California (hereinafter the "Property") was listed for sale. 9. On or about March 5, 2020, French, on behalf of Plaintiffs prepared and submitted a written offer to purchase the Property. 4822-9614-2302 COMPLAINT 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10. On or about March 6, 2020, French advised Plaintiffs that the seller had accepted Plaintiffs'ffer and that French would receive the fully-signed contract shortly. By the time Plaintiffs received French's call, Plaintiffs had become increasingly concerned over the COVID-19 pandemic and had just received a cancerous tumor diagnosis for Mr. Wang. In this call Plaintiffs advised French of their concerns of COVID-19 and the cancerous tumor diagnosis and, as such, unambiguously instructed French to not move forward with the purchase of the Property and expressed their wish to cancel the purchase. 11. In response, during the same call, French advised Plaintiffs that this was "not the time to pull out, but the time to go all in." French implored and convinced Plaintiffs to just "think it over" for a couple of days and then let French know of Plaintiffs'inal decision. Following his guidance, Plaintiffs did exactly that. At no time during this call did French advise Plaintiffs that they should either: (I) have French immediately communicatePlaintiffs'osition to seller prior to the seller delivering the contract; and/or (2) seek the advice of legal counsel. Later that same day he sent an e-mail to Plaintiffs stating that this is "a tricky situation since we are technically in contract now, ...as I mentioned I'd be all-in if I were you...." Consistent with the earlier phone call, there was no suggestion that Plaintiffs should seek legal advice. Instead, French encouraged them to complete the transaction, where he (through Sereno) would collect a commission. 12. On March 8, 2020, Plaintiffs spoke with French over the phone and told French that they wanted to cancel the contract for the purchase of the Property. In this call, French again did not recommend that Plaintiffs seek legal counsel, instead French assured Plaintiffs that they had the right to cancel the contract to purchase the Property. French instructed Plaintiffs to e-mail French stating Plaintiffs'ntention to cancel and, in the same communication, to state that the reason for cancelling was not because of defects in the house itself but because of the escalating COVID-19 situation. 13. Subsequently, in the evening on March 8, French sent Plaintiffs a cancellation document to sign, which they proceeded to do without the benefit of legal counsel. Based on the foregoing representations and assurances by French, Plaintiffs did not deposit any funds 4822-9614-2302 COMPLAINT 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 into escrow as required by the contract. 14. On March 11, 2020, unbeknownst to Plaintiffs, French received an e-mail from listing agent, which included a "Notice to Perform," and the explicit warning, "if buyer wants to breach the contract, then the seller will take legal action to enforce the contract." French did not forward this e-mail to Plaintiffs when he received it. 15. On March 12, 2020, French forwarded to Plaintiffs an e-mail from Sereno's legal counsel. French simply described this e-mail as "laying out options and providing overview information." French proceeded to downplay the discussion of the potential legal consequences of Plaintiffs'ontract cancellation. Of note, in their subsequent telephone conversation, French conveyed to Plaintiffs that Sereno's counsel's e-mail was "not helpful;" and to the contrary of Sereno's counsel's advice, French re-emphasized his confidence that Plaintiffs had the right to cancel the contract. French then "coached" Plaintiffs and instructed them to send him an e-mail (that he dictated to them) stating that the listing agent's updated Agent Visual Inspection Disclosure ("AVID") was the real reason they had cancelled the contract, as opposed to the previously-stated COVID-19 pandemic. Notably, Plaintiffs were not even aware of this updated AVID until March 12 even though, on information and belief, it was provided to French on March 6. 16. On March 18, 2020, Plaintiffs are informed and believe that Sereno's counsel sent French another e-mail stating that French should let Plaintiffs know of the "probable legal battle with the seller" if Plaintiffs were to proceed with the cancellation. Plaintiffs are informed and believe that later that day, French responded to Sereno's counsel's e-mail, claiming that, "I [French] forwarded your previous email to my client in entirity (sic) so they are away (sic) of risks and indicated they do not plan on moving forward. They feel they are fully in the right with a 3 day right of recision (sic) and canceled within that time." French's claim in this aforementioned e-mail was false. Notably, Plaintiffs never informed French that they felt they were "fully in the right with a 3 day right of recision (sic) and canceled within that time." 17. As of March 18, 2020, Plaintiffs are informed and believe that French had personally concluded that Plaintiffs were "fully in the right with a 3 day right of recision (sic)." 4822-9614-2302 COMPLAINT 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 As a result, French continued to downplay any legal risk of the Plaintiffs'ontract cancellation and was dismissive of Sereno's counsel's communications. Plaintiffs detrimentally relied on French's improper legal advice. 18. On March 18, 2020, French assured Plaintiffs that the updated AVID was a "technicality" allowing them to cancel the contract and that French was "still going to bat for you [Plaintiffs] using the 3 day right of rescission argument." Once again, French made no recommendation to Plaintiffs to seek legal advice or even suggest that they had any potential liability for not performing. Plaintiffs trusted French and took no further steps to protect themselves. Plaintiffs still had no idea that on March 11, seller had threatened to take legal action if Plaintiffs cancelled the contract. 19. Over two months passed before French again communicated with Plaintiffs about the subject transaction. On May 21, French forwarded to Plaintiffs an e-mail from the seller's attorney announcing an intention of seller to pursue a claim against Plaintiffs for $250,000 and demanding mediation. This demand was a complete surprise to Plaintiffs. 20. It was not until June 2, 2020, nearly three months after French initially received it, that French forwarded the March 11 e-mail from seller's agent, discussed in paragraph 14, supra, to Plaintiffs. 21. Plaintiffs are informed and believe that seller found another buyer for the Property, and evidently sold the Property for $250,000 less than Plaintiffs'ffer submitted on March 5, 2020. 22. Due to French's improper, intentional, and deceptive legal and real estate advice, Plaintiffs were placed in a very precarious legal position with seller. As a result, Plaintiffs paid seller $217,500 to resolve seller's claims. 23. Plaintiffs are informed and believe that the Property is now worth approximately $4,200,000; or $250,000 over Plaintiffs'3,950,000 offer to purchase the Property accepted by 26 seller. 27 28 4822-9614-2302 COMPLAINT FIRST CAUSE OF ACTION 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 (Breach of Fiduciary Duty - Against All Defendants) 24. Plaintiffs re-allege and incorporate by reference each and every allegation set forth in the foregoing paragraphs of this Complaint. 25. As Plaintiffs'eal estate broker/agent in this sales transaction, Defendants, and each of them, owed fiduciary duties to Plaintiffs, including the duty of loyalty and good faith, the duty to be honest and truthful, the duty to investigate and disclose material facts that might affect Plaintiffs'ecision to purchase the Property, and the duty to advise Plaintiffs to seek legal advice regarding the contract for the purchase of the Property. 26. Defendants breached their fiduciary duties to Plaintiffs by, among other things, failing to immediately communicate Plaintiffs'ish to not purchase the Property to listing agent; misleading Plaintiffs by repeatedly providing inaccurate re-assurances that Plaintiffs could cancel the contract without any consequence; deliberately, or in conscious disregard of Plaintiffs'ights, failing to advise Plaintiffs to seek legal advice regarding the cancelling of the contract; failing to instruct Plaintiffs to deposit funds into escrow as required by the contract; deliberately, or in conscious disregard for Plaintiffs'ights, misrepresenting Sereno's counsel's communications regarding the cancellation of the contract; deliberately, or in conscious disregard for Plaintiffs'ights, failing to communicate seller's Notice to Perform as well as seller's agent's threat of legal action by seller if Plaintiffs "breached" (or cancelled) the contract; deliberately, or in conscious disregard for Plaintiffs'ights, providing improper legal advice to Plaintiffs outside of the expertise of a real estate agent/broker; and deliberately and intentionally acting in the best interests of Sereno and its agents (seller and listing agent) to the detriment of Plaintiffs. 27. Defendants, and each of them, acted maliciously, oppressively, or fraudulently, in wanton disregard for the rights of Plaintiffs, by deliberately misrepresenting facts and/or legal options to Plaintiffs, deliberately failing to deliver communications from seller and listing agent; and deliberately and intentionally acting in the best interests of Sereno. The intentional malicious, oppressive, and/or fraudulent actions of Defendants provides Plaintiffs with a claim 4822-9614-2302 COMPLAINT for punitive damages against said Defendants. 28. Plaintiffs allege that as a direct, substantial, and proximate result ofDfedants'reach of fiduciary duty, Plaintiffs have suffered actual damages in the form of costs and monetary damages in an amount to be proven at trial in excess of $250,000. WHEREFORE, Plaintiffs pray for judgment against the Defendants, and each of them, as hereinafter set forth. SECOND CAUSE OF ACTION 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (Constructive Fraud - Against All Defendants) 29. Plaintiffs re-allege and incorporate by reference each and every allegation set forth in the foregoing paragraphs of this Complaint. 30. As Plaintiffs'eal estate broker/agent in this sales transaction, Defendants, and each of them, owed duties to Plaintiffs, including the duty of loyalty and good faith, the duty to be honest and truthful, the duty to investigate and disclose material facts that might affect Plaintiffs'ecision to purchase the Property, and the duty to advise Plaintiffs to seek legal advice regarding the contract for the purchase of the Property. 31. As Plaintiffs'eal estate broker/agent in this sales transaction, Defendants, and each of them, knew, or should have known, that if Plaintiffs attempted to cancel, or acted as if the contract was canceled, for the purchase the Property, Plaintiffs would face legal consequences through claims of breach of contract by the seller. 32. Defendant French, in the course and scope of his agency as a broker associate for Sereno, misled Plaintiffs by repeatedly reassuring Plaintiffs that they had the right to cancel the contract and/or could cancel without consequence. Defendants further misled Plaintiffs with information that was either inaccurate or incomplete by Plaintiffs by, among other things, deliberately, or in conscious disregard of Plaintiffs'ights, failing to advise Plaintiffs to seek legal advice regarding the cancelling of the contract; failing to instruct Plaintiffs to deposit funds into escrow as required by the contract; deliberately, or in conscious disregard for Plaintiffs'ights, misrepresenting Sereno's counsel's communications regarding the cancellation of the contract; deliberately, or in conscious disregard for Plaintiffs'ights, failing 4822-9614-2302 COMPLAINT 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to communicate seller's Notice to Perform as well as seller's agent's threat of legal action by seller if Plaintiffs "breached" (or cancelled) the contract; deliberately, or in conscious disregard for Plaintiffs'ights, providing improper legal advice to Plaintiffs outside of the expertise of a real estate agent/broker; and deliberately and intentionally acting in the best interests of Sereno and its agents, including but not limited to seller and listing agent, to the detriment of Plaintiffs. 33. Defendants, and each of them, acted maliciously, oppressively, or fraudulently, in wanton disregard for the rights of Plaintiffs, by deliberately misrepresenting facts and/or legal options to Plaintiffs, deliberately failing to deliver communications from seller and listing agent; and deliberately and intentionally acting in the best interests of Sereno. The intentional malicious, oppressive, and/or fraudulent actions of Defendants provides Plaintiffs with a claim for punitive damages against said Defendants. 34. Plaintiffs allege that as a direct, substantial, and proximate result ofDfedants'reach of fiduciary duty, Plaintiffs have suffered actual damages in the form of costs and monetary damages in an amount to be proven at trial in excess of $250,000. WHEREFORE, Plaintiffs pray for judgment against the Defendants, and each of them, as hereinafter set forth. THIRD CAUSE OF ACTION (Negligence Against All Defendants) 35. Plaintiffs refer and incorporate the allegations contained in paragraphs 1 through 23, inclusive, as though fully set forth herein. 36. As Plaintiffs'eal estate broker/agent in this sales transaction, Defendants, and each of them, owed Plaintiffs a duty of care, including the duty of loyalty and good, faith, the duty to be honest and truthful, the duty to investigate and disclose material facts that might affect Plaintiffs'ecision to purchase the Property, and the duty to advise Plaintiffs to seek legal advice regarding the contract for the purchase of the Property. 37. Defendants breached their duties to Plaintiffs by, among other things, failing to immediately communicate Plaintiffs'ish to not purchase the Property to listing agent; misleading Plaintiffs by repeatedly providing inaccurate re-assurances that Plaintiffs could 4822-9614-2302 COMPLAINT 10 12 13 14 15 16 17 18 cancel the contract without any consequence; failing to advise Plaintiffs to seek legal advice regarding the cancelling of the contract; failing to instruct Plaintiffs to deposit funds into escrow as required by the contract; misrepresenting Sereno's counsel's communications regarding the cancellation of the contract; failing to communicate seller's Notice to Perform as well as listing's agent's threat of legal action by seller if Plaintiffs "breached" (or cancelled) the contract; providing improper legal advice to Plaintiffs outside of the expertise of a real estate agent/broker; and acting in the best interests of Sereno and its agents (seller and listing agent) to the detriment of Plaintiffs. 38. Plaintiffs allege that as a direct and proximate result of Defendants'reach of their duty, Plaintiffs have suffered actual damages in the form of costs and monetary damages in an amount to be proven at trial in excess of $250,000. WHEREFORE, Plaintiffs pray for judgment against Defendants as follows: PRAYER 1. For general damages according to proof against Defendants; 2. For compensatory, special and consequential damages according to proof against Defendants; 3. For punitive and exemplary damages against Defendants based on the First and Second Causes of Action; 19 20 4. For costs of suit incurred herein; 5. For other such relief as the Court may deem appropriate. 21 22 Dated: March ~, 2021 Law Office of Eric T. Hartnett 23 24 25 26 By: Eric T. Hartnett Attorneys for Plaintiffs Bo Wang and Alicia Wang 27 28 4822-9614-2302 COMPLAINT
