Salahutdin v. Valley of California, Inc

In Salahutdin v. Valley of California, Inc. (1994) 24 Cal.App.4th 555, the Court affirmed a judgment that awarded plaintiffs benefit of the bargain damages for breach of fiduciary duty and fraud against a realtor who made false representations about property that the plaintiffs' purchased. (Id. at p. 567.) The Court reasoned that this broader measure of damages should apply in cases of fiduciary fraud so that "the faithless fiduciary shall make good the full amount of the loss of which his breach of faith is a cause." (Ibid.) The benefit of the bargain is one of two measures of damages applied by courts in cases in which the plaintiff seeks legal damages for intentional wrongdoing. "The 'benefit of the bargain' measure of damages is the difference between the actual value of what the plaintiff has received and that which he expected to receive. An 'out of pocket' measure of damages is the difference between the actual value received and the actual value conveyed." (Ibid.) In short, the court awarded benefit-of-the-bargain damages against a fiduciary in a real estate fraud action. The court found awarding benefit-of-the-bargain damages under Civil Code sections 1709 and 3333 was based on the "'"determination that the faithless fiduciary shall make good the full amount of the loss of which his breach of faith is a cause."' " (Salahutdin, at p. 567.)