FSR Brokerage, Inc. v. Superior Court

In FSR Brokerage, Inc. v. Superior Court (1995) 35 Cal.App.4th 69 (FSR), plaintiffs were partygoers standing on a balcony at a beachfront home in Malibu when it tragically collapsed, causing injury and death. They sued three of the seller's brokers, contending the brokers had a duty to the partygoers to advise the purchaser of a defective beam. (Id. at pp. 71-72.) The broker's summary judgment motion was denied by the trial court, who found there was a triable issue as to whether the brokers should have known that the prospective purchaser would have a party at the house where guests would get together on the defective balcony in such numbers that it would falter. (Id. at p. 72.) The Court of Appeal disagreed because the brokers "owed no duty to the partygoers with whom no broker-customer relationship existed . . . ." (Id. at p. 73.) The Court decided squarely against extending the duty. There, invitees of the buyer were injured when a balcony collapsed during a private party being held at the recently purchased home. The injured invitees sued various defendants, including the agents of the seller for allegedly failing to disclose the defective structural condition of the home. (Id. at pp. 71-72.) In finding no duty owed by the sellers' agents to the injured invitees, the court relied primarily on Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370 and its discussion of the duty owed by a supplier of information in a commercial transaction. (FSR Brokerage, at p. 73.)