Real Estate Department Must Pay For Broker’s Fraud.

Plaintiffs obtained a judgment for $280,000 against their broker after four fraudulent real estate transactions.  Plaintiffs applied with the Department of Real Estate Recovery Account to pay what they could not collect from their broker. The Department paid $50,000 and denied the Remainder, Finding Some Of The Transactions Were Based On The Broker’s Breach Of Fiduciary Duty rather than fraud as required by Business and Professions Code § 10471 (a).  Plaintiffs filed an action against the Department, and both the trial and appellate courts determined the broker’s breach of fiduciary duty was based on intentionally fraudulent misrepresentations, so the Department of Real Estate must pay from the Recovery Account.  Worthington v. Jeff Davi, as Real Estate Commissioner (Cal. App. Fourth Dist., Div. 3;  August 7, 2012) 208 Cal.App.4th 263.