Preview
1 SHANNON B. JONES LAW GROUP, INC.
SHANNON B. JONES (Bar No. 149222)
2 sbj@sbj-law.com
3 LINDSEY A. MORGAN (Bar No. 274214)
lam@sbj-law.com
4 208 W. El Pintado Road
Danville, California 94526
5 Telephone: (925) 837-2317
Facsimile: (925) 837-4831
6
Attorneys for Plaintiff
7 PACIFIC UNION INTERNATIONAL, INC.
8
9 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 IN AND FOR THE COUNTY OF PLACER
11 PACIFIC UNION INTERNATIONAL, INC., ) Case No. SCV0042080
)
12 Plaintiff, ) PACIFIC UNION INTERNATIONAL,
) INC.’S TRIAL BRIEF
13 v. )
)
14 ERIK LUDWICK, an individual and )
beneficiary of The Anything Trust Dated ) Trial Date: August 8, 2022
15 October 12, 2007; THE ANYTHING TRUST ) Time: 8:30 a.m.
DATED OCTOBER 12, 2007; PAUL D. ) Dept: 42
16 BOOTH, in his capacity as trustee of The )
Anything Trust Dated October 12, 2007; and ) Complaint Filed: November 7, 2018
17 DOES 1-50, )
)
18 Defendants. )
)
19
20 Plaintiff PACIFIC UNION INTERNATIONAL, INC. (“Pacific Union”) submits
21 its trial brief.
22 I. INTRODUCTION
23 This action arises from the wrongful refusal of Defendant The Anything Trust
24 Dated October 12, 2007 (“Trust”) by and through its Trustee, Defendant Paul D. Booth
25 (“Trustee”), to pay Pacific Union money earned in 2017. Trustee signed a written contract
26 agreeing to pay real estate salesperson Madison Hildebrand and his brokerage six percent (6%)
27 of the sale price of real property at 200 Toyopa Drive (the “Property”), in exchange for Mr.
28 Hildebrand’s services in listing and marketing the Property. Mr. Hildebrand and his brokerage,
_____________________________________________________________________________________________________________________
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 Partners Trust, which was acquired by Pacific Union International, Inc. during the transaction at
2 issue in this lawsuit, marketed the Property, procured a buyer, and obtained a sale price of
3 sixteen million three hundred thousand dollars ($16,300,000) for the Trust and its beneficiary,
4 Defendant Erik Ludwick.
5 In the course of marketing the Property, another interested potential buyer made
6 an offer under which Pacific Union would have earned a lower commission of two and half
7 percent (2.5%) of the sale price of the Property. That offer was ultimately canceled, and Pacific
8 Union represented the eventual buyer, Behdad Eghbali, in the transaction. Accordingly, Pacific
9 Union earned a commission from both sides of the transaction. Defendants, however, are
10 holding on to the 2.5% commission amount. Trustee sent an email to Terra Coastal Escrow on
11 the day escrow closed, stating, “As there is a dispute regarding commission for 200 Toyopa,
12 please hold 6% of proceeds until the dispute is resolved.” The Nine Hundred Seventy Eight
13 Thousand Dollar ($978,000) commission has languished in a non-interest bearing escrow
14 account since November 2017.
15 Pacific Union brings this lawsuit to obtain the contractually agreed upon
16 commission. Defendants, with the benefit of nearly five years to come up with legal theories,
17 appear to be taking the position that Pacific Union does not have standing to recover the
18 commission, that Pacific Union’s agents acted without the best interest of Seller in mind, and
19 that Seller was somehow harmed in the sale. None of those theories are supported by the
20 admissible evidence, which shows that Pacific Union completed the job it was hired to do, and
21 has still not been paid for its work.
22 II. FACTUAL BACKGROUND
23 A. The Parties
24 Pacific Union is a California licensed real estate brokerage firm doing business
25 throughout California. Pacific Union acquired Partners Trust on August 21, 2017, and as part of
26 the acquisition is the owner of the Contract at issue in this action. As part of the acquisition,
27 Pacific Union obtained the right to any commission earned by Partners Trust for open listing
28 agreements.
2
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 The other party to the Contract was the Trust, a revocable living trust instrument
2 operating for the benefit of Defendant Erik Ludwick (“Ludwick”), by and through its Trustee.
3 B. The Contract
4 On or about August 29, 2016, Trustee, on behalf of the Trust, executed a
5 Residential Listing Agreement (the “Contract”) with Pacific Union and its agents for the sale of
6 real property located at 200 Toyopa Drive, Pacific Palisades, Los Angeles County, California
7 90272, assessor’s parcel no. 4411-026-001 (the “Property”). The initial listing price for the
8 Property was Twenty Million Dollars ($20,000,000) and the term of the Contract was from
9 September 1, 2016 through February 28, 2017. The term was later modified to extend through
10 August 31, 2017.
11 The Contract set Pacific Union’s compensation at six percent (6%) of the
12 Property’s sales price if: “during the Listing Period, or any extension, Broker, cooperating
13 broker, Seller or any other person procures a ready willing, and able buyer whose offer to
14 purchase the Property on any price and terms is accepted by Seller…” The Contract also
15 provided that Pacific Union would be due a commission if, “within 180 calendar days (a) after
16 the end of the Listing Period or any extension; or (b) after any cancellation of this Agreement,…,
17 Seller enters into a contract to sell, convey, lease or otherwise transfer the Property to anyone
18 (‘Prospective Buyer’) or that person’s related entity: (i) who physically entered and was shown
19 the Property during the Listing Period or any extension by Broker or a cooperating broker; or (ii)
20 for whom broker or any cooperating broker submitted to Seller a signed, written offer….” but
21 only if Broker submitted to Seller a written list of Prospective Buyers “not later than the end of
22 the Listing Period or any extension…” The Contract also provides, “Seller hereby irrevocably
23 assigns to Broker the above compensation from Seller’s funds and proceeds in escrow.” Finally,
24 the Contract notes that, “If a Buyer is procured directly by Broker or an associate-licensee in
25 Broker’s firm, Seller hereby consents to Broker acting as a dual agent for Seller and Buyer.”
26 The Contract was modified on February 23, 2017, to extend the term to August
27 31, 2017 and to reduce the listing price to Nineteen Million, Five Hundred Thousand
28 ($19,500,000). The Contract was further modified on June 9, 2017, to reduce the listing price to
3
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 Eighteen Million Eight Hundred and Eighty Thousand Dollars ($18,880,000). On July 7, 2017,
2 the Contract was modified to reduce the Property’s listing price to Sixteen Million Eight
3 Hundred and Eighty Thousand Dollars ($16,880,000).
4 C. Pacific Union’s Performance of the Contract
5 Pacific Union performed all of its obligations under the Contract, listing the
6 Property for sale, marketing it, and ultimately directly procuring buyer Behdad Eghbali
7 (“Buyer”). Buyer made an initial offer to purchase the Property on August 24, 2017.
8 During this time, a different prospective buyer, Tony Antoci, also submitted an
9 offer to purchase the property. During escrow, Mr. Antoci submitted a request for repair and
10 sought a reduction in the purchase price of $175,000. Ludwick and the Trustee did not find that
11 acceptable, and ultimately Mr. Antoci and Defendants mutually cancelled the contract on
12 September 15, 2017. Defendants appear to believe that this cancellation was caused by Pacific
13 Union inadvertently including Mr. Antoci’s wife on an email discussing the various potential
14 buyers, sent on August 27, 2017. But even if that were the case, which Defendants cannot prove,
15 Defendants have provided no evidence that the Trust’s decision to accept Buyer’s offer caused
16 Defendants any harm. Indeed, Defendants made more money selling the Property to Buyer than
17 they would have if the Antoci purchase had been finalized.
18 Pursuant to the terms of the Contract, Pacific Union provided an exclusion list of
19 prospective buyers to Defendants at the expiration of the Contract, on August 31, 2017, which
20 included Buyer’s name. Using Pacific Union as a dual agent, Buyer made a second offer to
21 purchase the Property on September 13, 2017 for the amount of Sixteen Million, Three Hundred
22 Thousand Dollars ($16,300,000), which the Trust accepted. Escrow closed on November 9,
23 2017.
24 D. Defendants’ Bad Faith Conduct
25 On September 20, 2017, Title Resource Group, LLC dba Terra Coastal Escrow,
26 Inc. (“Terra Costal Escrow”) requested that Defendants sign instructions releasing the
27 commission owed to Pacific Union. On November 9, 2017, Ludwick instructed the Trustee to
28 refuse to pay Pacific Union any commission. On November 9, 2017, escrow on the Property
4
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 closed and Buyer took title to the Property. That same day, Trustee sent Terra Coastal Escrow
2 an email, stating, “As there is a dispute regarding commission for 200 Toyopa, please hold 6% of
3 proceeds until the dispute is resolved.” The commission remains in the Terra Coastal Escrow
4 account. Pacific Union still has not received any payment whatsoever from Trust, Trustee, or
5 Ludwick for the work and expenses incurred in listing and selling the Property, which Pacific
6 Union performed under the Contract. Terra Coastal Escrow has held and continues to hold the
7 Commission at the direction of Trustee.
8 E. Pacific Union Successfully Closes Escrow
9 Pacific Union procured a Buyer within 180 calendar days after the end of the
10 Contract who had previously submitted an offer and who was included on Pacific Union’s
11 exclusion list. Accordingly, Pacific Union is entitled to a commission of six percent (6%) of the
12 Sixteen Million, Three Hundred Thousand Dollars ($16,300,000) sale price of the Property
13 pursuant to the express terms of Paragraph 3 of the Contract. This amounts to Nine Hundred
14 Seventy Eight Thousand Dollars ($978,000) (the “Commission”). Moreover, under the express
15 terms of the Contract, Pacific Union is also entitled to recover its attorneys’ fees incurred in
16 having to file and prosecute this action.
17 III. LEGAL ARGUMENT
18 A. Pacific Union Owns All Rights to Pursue This Commission
19 Pacific Union owns the Contract with the Trust entered into by Partners Trust.
20 When Pacific Union acquired Partners Trust in August 2017, it acquired the right to enforce a
21 contract held by Partners Trust. Under the Corporations Code:
22 Upon merger pursuant to this chapter the separate existence of the
disappearing corporations ceases and the surviving corporation
23 shall succeed, without other transfer, to all the rights and property
of each of the disappearing corporations and shall be subject to all
24 the debts and liabilities of each in the same manner as if the
surviving corporation had itself incurred them.
25
(Corp. Code § 1107.)
26
There is no issue of fact as to whether Partners Trust transferred its rights to sue
27
for recovery of the commission to Pacific Union. No open listing agreements were excluded in
28
the acquisition. Nor is there any legal question as to whether Pacific Union was entitled to
5
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 receive those rights, as “A thing in action, arising out of the violation of a right of property, or
2 out of an obligation, may be transferred by the owner.” (Civ. Code § 954.) Accordingly, Pacific
3 Union is entitled to enforce the Contract. (“Persons entitled to enforce an instrument means (a)
4 the holder of the instrument, (b) a non-holder in possession of the instrument who has the rights
5 of a holder . . .”. (Com. Code, § 3301.)) Successor companies have standing to enforce
6 provisions of a contract initially entered into by the company they purchased. (Jenks v. DLA
7 Piper Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 10.)
8 Unpaid commissions in real estate, moreover, are assignable interests. (Schaffter
9 v. Creative Capital Leasing Group, LLC (2008) 166 Cal.App.4th 745, holding a breach of
10 contract action for unpaid commissions on the sale of real estate is assignable from one business
11 entity to another.) Brokers have long been able to assign their rights to commissions.
12 (Richmond Realeteria, Inc. v. Canterbury Estates, Inc. (1965) 234 Cal.App.2d 400, 401-402,
13 determining how to apply a complicated commission provision assigned by a real estate broker
14 to a company.)
15 B. Defendants Breached The Listing Agreement By Refusing To Sign
Commission Release Instructions
16
There is no dispute that the parties entered into a contract when the Listing
17
Agreement was signed on August 29, 2016. At his deposition, Trustee Paul Booth agreed, after
18
looking at the Contract, that he had indeed signed a listing agreement with Pacific Union
19
agreeing to a commission of six percent (6%) of the purchase price of the Property. (Deposition
20
of Paul Booth at p. 46:10-14).)
21
Pacific Union’s predecessor, Partners Trust, and its agent Madison Hildebrand
22
entered into the Contract with the Trust, by and through the Trustee, on August 29, 2016. Pacific
23
Union and its agent performed their obligations under the Contract and procured Buyer, as
24
provided by the terms of the Contract. The Property was sold to Buyer for Sixteen Million Three
25
Hundred Thousand Dollars ($16,300,000). The Contract expressly stated that six percent (6%)
26
of the purchase price was to be assigned to Pacific Union out of escrow. But Defendants failed
27
and refused, and continue to fail and refuse, to honor that agreement. As Trustee Paul Booth
28
admitted at deposition, he received an email from Ludwick on November 9, 2017 directing him
6
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 to tell Terra Coastal Escrow to hold the commission. (Deposition of Paul Booth at p. 43:8-16).)
2 Trustee testified that he followed this request from Ludwick, that Terra Coastal
3 Escrow complied with the request and held the commission, and that Trustee did not thereafter
4 instruct Terra Coastal Escrow to release any commission proceeds to Pacific Union. (Deposition
5 of Paul Booth at p. 44:1-16).)
6 The Trust, by and through its Trustee, breached the Listing Agreement by
7 refusing to allow payment of the commission to Pacific Union, damaging Pacific Union in the
8 amount of the unpaid $970,000 commission, interest, and the attorneys fees required to pursue
9 Pacific Union’s rights under the contract. Defendants have no defense to this cause of action.
10 Instead, Defendants are attempting to unjustly enrich themselves in seeking a forfeiture of
11 monies Pacific Union rightfully earned under a written contract. (Cal. Civ. Code § 3275.)
12 B. Defendants Have No Defenses to Pacific Union’s Claims and the Court
Has Rejected The Defenses Offered in Defendants’ Motion for Summary
13 Judgment
14 There are no legitimate grounds for Defendants’ failure to agree to release the
15 commission from escrow. Defendants certainly have not identified any. Moreover, this Court
16 has already ruled, after evaluating Defendants’ motion for summary judgment, that Defendants
17 have not provided any admissible evidence challenging Pacific Union’s acquisition of the listing
18 agreement an asset, or of Pacific Union’s ability to enforce the agreement. This is a binding
19 decision in this case and Defendants attempts to revisit it are inappropriate. The prior holdings
20 in this matter are the law of the case. Moreover, Defendants have not provided any such
21 evidence because none exists.
22 In evaluating Pacific Union’s motion for summary judgment, this Court ruled that
23 there may be a triable issue of fact regarding whether Madison Hildebrand continued to negotiate
24 the terms of the listing agreement. Pacific Union does not dispute that Mr. Hildebrand and Mr.
25 Ludwick engaged in discussions regarding an acceptable commission on the Property. At the
26 time escrow closed, however, there had been no agreement other than the written and executed
27 listing agreement. Accordingly, the only enforceable agreement remains the listing agreement.
28
7
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 Finally, Defendants point to an email Mr. Hildebrand inadvertently sent to
2 Josephine Antoci, another potential buyer, as alleged evidence that Mr. Hildebrand did not act in
3 the best interests of Defendants in the sale of 200 Toyopa. This is sheer speculation. Defendants
4 have no evidence to provide that this email caused any party to act differently than they would
5 have acted anyhow. Ultimately, Mr. Hildebrand marketed and sold the Property for $16,300,000
6 – nearly $500,000 more than the prior potential buyers had offered to pay even before those
7 buyers requested a significant credit for soil issues before deciding not to proceed with the
8 transaction.
9 Defendants have not provided a single piece of evidence supporting their flat
10 refusal to pay a commission for the sale of 200 Toyopa. Their position in this litigation is not
11 supported by the facts, and accordingly is without merit. Defendants allowed Pacific Union to
12 spend over a year of time, effort and money marketing the Property for sale and facilitating the
13 purchase and sale transaction, and then actively prevented Pacific Union from being
14 compensated for that work by sending an email to the title company directing the title company
15 to hold the commission.
16 IV. DAMAGES
17 Defendants are liable to Pacific Union for breach of contract. Under the listing
18 agreement, Defendants agreed to pay six percent (6%) of the purchase price for the Property to
19 its agent and broker as a commission. As a result of Defendants’ failure to comply with the
20 listing agreement, Pacific Union is entitled to all amounts which will compensate it for all the
21 detriment proximately caused thereby, or which, in the ordinary course of things, would be likely
22 to result therefrom. (Civ. Code §3300.) This includes damages for lost profits that are
23 reasonably foreseeable. (See Stark v. Shaw (155 Cal.App.2d 171, 180 [“A party to a contract is
24 entitled to recover against the other party who violated it, damages for the profits he would have
25 made out of it had it been performed.”].) Pacific Union is entitled to recovery of the unpaid
26 $970,000 commission, interest, and the attorneys fees required to pursue Pacific Union’s rights
27 under the contract, and it will seek all of that at trial.
28
8
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
1 V. CONCLUSION
2 There is no dispute that the parties entered into the Contract, that the Property was
3 sold due to the efforts of Pacific Union, and that Defendants have ensured that Pacific Union has
4 not received payment for any of the work related to the transaction. Pacific Union seeks an order
5 that Ludwick must instruct the Trust, by and through the Trustee, to sign the commission release
6 instructions to Terra Coastal Escrow, releasing the full commission as agreed to in the Contract
7 to Pacific Union.
8 Dated: July 28, 2022
SHANNON B. JONES LAW GROUP, INC.
9
10
By
11 SHANNON B. JONES
LINDSEY A. MORGAN
12 Attorneys for Plaintiff,
PACIFIC UNION INTERNATIONAL, INC.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9
PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF
Preview
1 SHANNON B. JONES LAW GROUP, INC. SHANNON B. JONES (Bar No. 149222) 2 sbj@sbj-law.com 3 LINDSEY A. MORGAN (Bar No. 274214) lam@sbj-law.com 4 208 W. El Pintado Road Danville, California 94526 5 Telephone: (925) 837-2317 Facsimile: (925) 837-4831 6 Attorneys for Plaintiff 7 PACIFIC UNION INTERNATIONAL, INC. 8 9 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 IN AND FOR THE COUNTY OF PLACER 11 PACIFIC UNION INTERNATIONAL, INC., ) Case No. SCV0042080 ) 12 Plaintiff, ) PACIFIC UNION INTERNATIONAL, ) INC.’S TRIAL BRIEF 13 v. ) ) 14 ERIK LUDWICK, an individual and ) beneficiary of The Anything Trust Dated ) Trial Date: August 8, 2022 15 October 12, 2007; THE ANYTHING TRUST ) Time: 8:30 a.m. DATED OCTOBER 12, 2007; PAUL D. ) Dept: 42 16 BOOTH, in his capacity as trustee of The ) Anything Trust Dated October 12, 2007; and ) Complaint Filed: November 7, 2018 17 DOES 1-50, ) ) 18 Defendants. ) ) 19 20 Plaintiff PACIFIC UNION INTERNATIONAL, INC. (“Pacific Union”) submits 21 its trial brief. 22 I. INTRODUCTION 23 This action arises from the wrongful refusal of Defendant The Anything Trust 24 Dated October 12, 2007 (“Trust”) by and through its Trustee, Defendant Paul D. Booth 25 (“Trustee”), to pay Pacific Union money earned in 2017. Trustee signed a written contract 26 agreeing to pay real estate salesperson Madison Hildebrand and his brokerage six percent (6%) 27 of the sale price of real property at 200 Toyopa Drive (the “Property”), in exchange for Mr. 28 Hildebrand’s services in listing and marketing the Property. Mr. Hildebrand and his brokerage, _____________________________________________________________________________________________________________________ PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 Partners Trust, which was acquired by Pacific Union International, Inc. during the transaction at 2 issue in this lawsuit, marketed the Property, procured a buyer, and obtained a sale price of 3 sixteen million three hundred thousand dollars ($16,300,000) for the Trust and its beneficiary, 4 Defendant Erik Ludwick. 5 In the course of marketing the Property, another interested potential buyer made 6 an offer under which Pacific Union would have earned a lower commission of two and half 7 percent (2.5%) of the sale price of the Property. That offer was ultimately canceled, and Pacific 8 Union represented the eventual buyer, Behdad Eghbali, in the transaction. Accordingly, Pacific 9 Union earned a commission from both sides of the transaction. Defendants, however, are 10 holding on to the 2.5% commission amount. Trustee sent an email to Terra Coastal Escrow on 11 the day escrow closed, stating, “As there is a dispute regarding commission for 200 Toyopa, 12 please hold 6% of proceeds until the dispute is resolved.” The Nine Hundred Seventy Eight 13 Thousand Dollar ($978,000) commission has languished in a non-interest bearing escrow 14 account since November 2017. 15 Pacific Union brings this lawsuit to obtain the contractually agreed upon 16 commission. Defendants, with the benefit of nearly five years to come up with legal theories, 17 appear to be taking the position that Pacific Union does not have standing to recover the 18 commission, that Pacific Union’s agents acted without the best interest of Seller in mind, and 19 that Seller was somehow harmed in the sale. None of those theories are supported by the 20 admissible evidence, which shows that Pacific Union completed the job it was hired to do, and 21 has still not been paid for its work. 22 II. FACTUAL BACKGROUND 23 A. The Parties 24 Pacific Union is a California licensed real estate brokerage firm doing business 25 throughout California. Pacific Union acquired Partners Trust on August 21, 2017, and as part of 26 the acquisition is the owner of the Contract at issue in this action. As part of the acquisition, 27 Pacific Union obtained the right to any commission earned by Partners Trust for open listing 28 agreements. 2 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 The other party to the Contract was the Trust, a revocable living trust instrument 2 operating for the benefit of Defendant Erik Ludwick (“Ludwick”), by and through its Trustee. 3 B. The Contract 4 On or about August 29, 2016, Trustee, on behalf of the Trust, executed a 5 Residential Listing Agreement (the “Contract”) with Pacific Union and its agents for the sale of 6 real property located at 200 Toyopa Drive, Pacific Palisades, Los Angeles County, California 7 90272, assessor’s parcel no. 4411-026-001 (the “Property”). The initial listing price for the 8 Property was Twenty Million Dollars ($20,000,000) and the term of the Contract was from 9 September 1, 2016 through February 28, 2017. The term was later modified to extend through 10 August 31, 2017. 11 The Contract set Pacific Union’s compensation at six percent (6%) of the 12 Property’s sales price if: “during the Listing Period, or any extension, Broker, cooperating 13 broker, Seller or any other person procures a ready willing, and able buyer whose offer to 14 purchase the Property on any price and terms is accepted by Seller…” The Contract also 15 provided that Pacific Union would be due a commission if, “within 180 calendar days (a) after 16 the end of the Listing Period or any extension; or (b) after any cancellation of this Agreement,…, 17 Seller enters into a contract to sell, convey, lease or otherwise transfer the Property to anyone 18 (‘Prospective Buyer’) or that person’s related entity: (i) who physically entered and was shown 19 the Property during the Listing Period or any extension by Broker or a cooperating broker; or (ii) 20 for whom broker or any cooperating broker submitted to Seller a signed, written offer….” but 21 only if Broker submitted to Seller a written list of Prospective Buyers “not later than the end of 22 the Listing Period or any extension…” The Contract also provides, “Seller hereby irrevocably 23 assigns to Broker the above compensation from Seller’s funds and proceeds in escrow.” Finally, 24 the Contract notes that, “If a Buyer is procured directly by Broker or an associate-licensee in 25 Broker’s firm, Seller hereby consents to Broker acting as a dual agent for Seller and Buyer.” 26 The Contract was modified on February 23, 2017, to extend the term to August 27 31, 2017 and to reduce the listing price to Nineteen Million, Five Hundred Thousand 28 ($19,500,000). The Contract was further modified on June 9, 2017, to reduce the listing price to 3 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 Eighteen Million Eight Hundred and Eighty Thousand Dollars ($18,880,000). On July 7, 2017, 2 the Contract was modified to reduce the Property’s listing price to Sixteen Million Eight 3 Hundred and Eighty Thousand Dollars ($16,880,000). 4 C. Pacific Union’s Performance of the Contract 5 Pacific Union performed all of its obligations under the Contract, listing the 6 Property for sale, marketing it, and ultimately directly procuring buyer Behdad Eghbali 7 (“Buyer”). Buyer made an initial offer to purchase the Property on August 24, 2017. 8 During this time, a different prospective buyer, Tony Antoci, also submitted an 9 offer to purchase the property. During escrow, Mr. Antoci submitted a request for repair and 10 sought a reduction in the purchase price of $175,000. Ludwick and the Trustee did not find that 11 acceptable, and ultimately Mr. Antoci and Defendants mutually cancelled the contract on 12 September 15, 2017. Defendants appear to believe that this cancellation was caused by Pacific 13 Union inadvertently including Mr. Antoci’s wife on an email discussing the various potential 14 buyers, sent on August 27, 2017. But even if that were the case, which Defendants cannot prove, 15 Defendants have provided no evidence that the Trust’s decision to accept Buyer’s offer caused 16 Defendants any harm. Indeed, Defendants made more money selling the Property to Buyer than 17 they would have if the Antoci purchase had been finalized. 18 Pursuant to the terms of the Contract, Pacific Union provided an exclusion list of 19 prospective buyers to Defendants at the expiration of the Contract, on August 31, 2017, which 20 included Buyer’s name. Using Pacific Union as a dual agent, Buyer made a second offer to 21 purchase the Property on September 13, 2017 for the amount of Sixteen Million, Three Hundred 22 Thousand Dollars ($16,300,000), which the Trust accepted. Escrow closed on November 9, 23 2017. 24 D. Defendants’ Bad Faith Conduct 25 On September 20, 2017, Title Resource Group, LLC dba Terra Coastal Escrow, 26 Inc. (“Terra Costal Escrow”) requested that Defendants sign instructions releasing the 27 commission owed to Pacific Union. On November 9, 2017, Ludwick instructed the Trustee to 28 refuse to pay Pacific Union any commission. On November 9, 2017, escrow on the Property 4 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 closed and Buyer took title to the Property. That same day, Trustee sent Terra Coastal Escrow 2 an email, stating, “As there is a dispute regarding commission for 200 Toyopa, please hold 6% of 3 proceeds until the dispute is resolved.” The commission remains in the Terra Coastal Escrow 4 account. Pacific Union still has not received any payment whatsoever from Trust, Trustee, or 5 Ludwick for the work and expenses incurred in listing and selling the Property, which Pacific 6 Union performed under the Contract. Terra Coastal Escrow has held and continues to hold the 7 Commission at the direction of Trustee. 8 E. Pacific Union Successfully Closes Escrow 9 Pacific Union procured a Buyer within 180 calendar days after the end of the 10 Contract who had previously submitted an offer and who was included on Pacific Union’s 11 exclusion list. Accordingly, Pacific Union is entitled to a commission of six percent (6%) of the 12 Sixteen Million, Three Hundred Thousand Dollars ($16,300,000) sale price of the Property 13 pursuant to the express terms of Paragraph 3 of the Contract. This amounts to Nine Hundred 14 Seventy Eight Thousand Dollars ($978,000) (the “Commission”). Moreover, under the express 15 terms of the Contract, Pacific Union is also entitled to recover its attorneys’ fees incurred in 16 having to file and prosecute this action. 17 III. LEGAL ARGUMENT 18 A. Pacific Union Owns All Rights to Pursue This Commission 19 Pacific Union owns the Contract with the Trust entered into by Partners Trust. 20 When Pacific Union acquired Partners Trust in August 2017, it acquired the right to enforce a 21 contract held by Partners Trust. Under the Corporations Code: 22 Upon merger pursuant to this chapter the separate existence of the disappearing corporations ceases and the surviving corporation 23 shall succeed, without other transfer, to all the rights and property of each of the disappearing corporations and shall be subject to all 24 the debts and liabilities of each in the same manner as if the surviving corporation had itself incurred them. 25 (Corp. Code § 1107.) 26 There is no issue of fact as to whether Partners Trust transferred its rights to sue 27 for recovery of the commission to Pacific Union. No open listing agreements were excluded in 28 the acquisition. Nor is there any legal question as to whether Pacific Union was entitled to 5 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 receive those rights, as “A thing in action, arising out of the violation of a right of property, or 2 out of an obligation, may be transferred by the owner.” (Civ. Code § 954.) Accordingly, Pacific 3 Union is entitled to enforce the Contract. (“Persons entitled to enforce an instrument means (a) 4 the holder of the instrument, (b) a non-holder in possession of the instrument who has the rights 5 of a holder . . .”. (Com. Code, § 3301.)) Successor companies have standing to enforce 6 provisions of a contract initially entered into by the company they purchased. (Jenks v. DLA 7 Piper Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 10.) 8 Unpaid commissions in real estate, moreover, are assignable interests. (Schaffter 9 v. Creative Capital Leasing Group, LLC (2008) 166 Cal.App.4th 745, holding a breach of 10 contract action for unpaid commissions on the sale of real estate is assignable from one business 11 entity to another.) Brokers have long been able to assign their rights to commissions. 12 (Richmond Realeteria, Inc. v. Canterbury Estates, Inc. (1965) 234 Cal.App.2d 400, 401-402, 13 determining how to apply a complicated commission provision assigned by a real estate broker 14 to a company.) 15 B. Defendants Breached The Listing Agreement By Refusing To Sign Commission Release Instructions 16 There is no dispute that the parties entered into a contract when the Listing 17 Agreement was signed on August 29, 2016. At his deposition, Trustee Paul Booth agreed, after 18 looking at the Contract, that he had indeed signed a listing agreement with Pacific Union 19 agreeing to a commission of six percent (6%) of the purchase price of the Property. (Deposition 20 of Paul Booth at p. 46:10-14).) 21 Pacific Union’s predecessor, Partners Trust, and its agent Madison Hildebrand 22 entered into the Contract with the Trust, by and through the Trustee, on August 29, 2016. Pacific 23 Union and its agent performed their obligations under the Contract and procured Buyer, as 24 provided by the terms of the Contract. The Property was sold to Buyer for Sixteen Million Three 25 Hundred Thousand Dollars ($16,300,000). The Contract expressly stated that six percent (6%) 26 of the purchase price was to be assigned to Pacific Union out of escrow. But Defendants failed 27 and refused, and continue to fail and refuse, to honor that agreement. As Trustee Paul Booth 28 admitted at deposition, he received an email from Ludwick on November 9, 2017 directing him 6 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 to tell Terra Coastal Escrow to hold the commission. (Deposition of Paul Booth at p. 43:8-16).) 2 Trustee testified that he followed this request from Ludwick, that Terra Coastal 3 Escrow complied with the request and held the commission, and that Trustee did not thereafter 4 instruct Terra Coastal Escrow to release any commission proceeds to Pacific Union. (Deposition 5 of Paul Booth at p. 44:1-16).) 6 The Trust, by and through its Trustee, breached the Listing Agreement by 7 refusing to allow payment of the commission to Pacific Union, damaging Pacific Union in the 8 amount of the unpaid $970,000 commission, interest, and the attorneys fees required to pursue 9 Pacific Union’s rights under the contract. Defendants have no defense to this cause of action. 10 Instead, Defendants are attempting to unjustly enrich themselves in seeking a forfeiture of 11 monies Pacific Union rightfully earned under a written contract. (Cal. Civ. Code § 3275.) 12 B. Defendants Have No Defenses to Pacific Union’s Claims and the Court Has Rejected The Defenses Offered in Defendants’ Motion for Summary 13 Judgment 14 There are no legitimate grounds for Defendants’ failure to agree to release the 15 commission from escrow. Defendants certainly have not identified any. Moreover, this Court 16 has already ruled, after evaluating Defendants’ motion for summary judgment, that Defendants 17 have not provided any admissible evidence challenging Pacific Union’s acquisition of the listing 18 agreement an asset, or of Pacific Union’s ability to enforce the agreement. This is a binding 19 decision in this case and Defendants attempts to revisit it are inappropriate. The prior holdings 20 in this matter are the law of the case. Moreover, Defendants have not provided any such 21 evidence because none exists. 22 In evaluating Pacific Union’s motion for summary judgment, this Court ruled that 23 there may be a triable issue of fact regarding whether Madison Hildebrand continued to negotiate 24 the terms of the listing agreement. Pacific Union does not dispute that Mr. Hildebrand and Mr. 25 Ludwick engaged in discussions regarding an acceptable commission on the Property. At the 26 time escrow closed, however, there had been no agreement other than the written and executed 27 listing agreement. Accordingly, the only enforceable agreement remains the listing agreement. 28 7 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 Finally, Defendants point to an email Mr. Hildebrand inadvertently sent to 2 Josephine Antoci, another potential buyer, as alleged evidence that Mr. Hildebrand did not act in 3 the best interests of Defendants in the sale of 200 Toyopa. This is sheer speculation. Defendants 4 have no evidence to provide that this email caused any party to act differently than they would 5 have acted anyhow. Ultimately, Mr. Hildebrand marketed and sold the Property for $16,300,000 6 – nearly $500,000 more than the prior potential buyers had offered to pay even before those 7 buyers requested a significant credit for soil issues before deciding not to proceed with the 8 transaction. 9 Defendants have not provided a single piece of evidence supporting their flat 10 refusal to pay a commission for the sale of 200 Toyopa. Their position in this litigation is not 11 supported by the facts, and accordingly is without merit. Defendants allowed Pacific Union to 12 spend over a year of time, effort and money marketing the Property for sale and facilitating the 13 purchase and sale transaction, and then actively prevented Pacific Union from being 14 compensated for that work by sending an email to the title company directing the title company 15 to hold the commission. 16 IV. DAMAGES 17 Defendants are liable to Pacific Union for breach of contract. Under the listing 18 agreement, Defendants agreed to pay six percent (6%) of the purchase price for the Property to 19 its agent and broker as a commission. As a result of Defendants’ failure to comply with the 20 listing agreement, Pacific Union is entitled to all amounts which will compensate it for all the 21 detriment proximately caused thereby, or which, in the ordinary course of things, would be likely 22 to result therefrom. (Civ. Code §3300.) This includes damages for lost profits that are 23 reasonably foreseeable. (See Stark v. Shaw (155 Cal.App.2d 171, 180 [“A party to a contract is 24 entitled to recover against the other party who violated it, damages for the profits he would have 25 made out of it had it been performed.”].) Pacific Union is entitled to recovery of the unpaid 26 $970,000 commission, interest, and the attorneys fees required to pursue Pacific Union’s rights 27 under the contract, and it will seek all of that at trial. 28 8 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF 1 V. CONCLUSION 2 There is no dispute that the parties entered into the Contract, that the Property was 3 sold due to the efforts of Pacific Union, and that Defendants have ensured that Pacific Union has 4 not received payment for any of the work related to the transaction. Pacific Union seeks an order 5 that Ludwick must instruct the Trust, by and through the Trustee, to sign the commission release 6 instructions to Terra Coastal Escrow, releasing the full commission as agreed to in the Contract 7 to Pacific Union. 8 Dated: July 28, 2022 SHANNON B. JONES LAW GROUP, INC. 9 10 By 11 SHANNON B. JONES LINDSEY A. MORGAN 12 Attorneys for Plaintiff, PACIFIC UNION INTERNATIONAL, INC. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 PACIFIC UNION INTERNATIONAL, INC.’S TRIAL BRIEF