## Facts

- Leticia M. Easton purchased a one-acre residential property in Diablo, California, improved with a home, pool, and guest house, for $170,000; escrow closed in July 1976.
- Valley of California, Inc., doing business as Valley Realty, acted as the seller’s listing broker through agents Simkin and Mourning.
- After the purchase, the property experienced massive earth movement and landslides, including damage to the driveway, and the residence showed settlement-related problems (e.g., cracking and warping).
- Expert evidence attributed the slides to improperly engineered and compacted fill on part of the parcel.
- Evidence indicated prior landslides occurred in 1973 and 1975 and that a net/repair measure had been installed shortly before the sale; these matters were not disclosed to Easton.
- Valley Realty’s agents conducted multiple pre-sale inspections and observed conditions characterized as “red flags” suggestive of soil or geologic instability, but did not order a soils report, further investigate, or disclose the risk and history to the buyer.
- Easton sued the sellers, Valley Realty, and others for fraud-related theories and negligence; a jury found defendants negligent and awarded damages.
- Valley Realty appealed the negligence judgment and related rulings, including jury instructions on broker duties, the absence of expert testimony on broker standard of care, the damages measure, and denial of indemnity/contribution.

## Issues

1. Whether a seller’s real estate broker in a residential sale owes the buyer a duty to conduct a reasonably competent and diligent visual inspection and disclose material facts that such an inspection would reveal.
2. Whether expert testimony is required to establish the applicable standard of care for a broker’s inspection and disclosure duties in this context.
3. Whether Valley Realty preserved and established error regarding the measure of damages submitted to the jury.
4. Whether Valley Realty was improperly denied comparative indemnity/contribution rights against other responsible parties under California comparative fault principles.

## Decision

- The court held that a seller’s broker in a residential transaction owes the buyer a duty to conduct a reasonably competent and diligent inspection and to disclose all material facts affecting value or desirability that such an inspection would reveal.
- The court affirmed the negligence finding against Valley Realty, concluding the evidence supported breach and causation where agents encountered observable indications of soil instability yet failed to investigate further and failed to disclose.
- The court held expert testimony was not required to instruct or permit the jury to assess breach of this duty under the circumstances presented.
- The court declined to disturb the damages award because Valley Realty failed to properly object at trial to the damages instructions and therefore did not preserve the issue.
- The court reversed in part and remanded on indemnity, directing that Valley Realty be permitted to pursue comparative indemnity consistent with California comparative fault doctrine.

## Legal Principles

- A real estate broker representing the seller of residential property must exercise the care and skill of a reasonably prudent real estate licensee, which includes a reasonably competent and diligent visual inspection.
- A broker must disclose to prospective purchasers material facts affecting value or desirability that a reasonably diligent inspection would reveal, including conditions suggesting geologic or soil instability.
- Expert testimony is not invariably required to establish a broker’s duty or to submit breach to the jury when the duty involves reasonable care in light of observable conditions and can be defined as a matter of law.
- Appellate review of alleged instructional error on damages may be forfeited when a party fails to make a proper trial objection.
- Under California comparative fault principles, a defendant found liable in negligence may seek partial comparative indemnity from other responsible tortfeasors in proportion to relative fault.

## Conclusion

The court largely affirmed the negligence judgment against the seller’s broker, holding that residential listing brokers must reasonably inspect and disclose material, observable defects and warning signs, but it reversed and remanded to allow the broker to pursue comparative indemnity against other responsible parties.


Easton v. Strassburger, 152 Cal. App. 3d 90, 199 Cal. Rptr. 383 (Cal. Ct. App. 1984)