Ericksen Arbuthnot attorneys obtained a dismissal with prejudice on behalf of their client in a real estate/securities case filed in Santa Clara County. In the case of Castellanos v. Sun 1031 Exchange, plaintiffs sued multiple defendants, including Ericksen Arbuthnot’s client, a real estate agent, over a sale of ownership interests in an office building in Illinois.
The plaintiffs alleged that their tenancy in common (“TIC”) interests constituted securities under California and federal law and that the real estate agent defendants were not licensed to sell securities. They further alleged that the securities themselves were not “qualified”, that the real estate agents misrepresented the potential investment returns and committed “financial abuse” against an elder. Plaintiffs alleged violations of the Civil Code and Corporations Code, as well as fraud and negligence. The plaintiff/investors sought a complete return of their investment as well as attorney’s fees, punitive damages and treble damages based on the elder abuse claims.
After a succession of motions, Ericksen Arbuthnot succeeded in obtaining a dismissal of all of the claims against its client. In the first demurrer, the court dismissed the statutory claims, including the securities claims, based on the fact that the claims were time-barred under the three-year statute of limitations set forth in Civil Code section 338(a). The court also sustained the demurrer to the claims for negligence and fraud, but allowed plaintiffs to amend their complaint to try to correct these defects.
The complaint was amended twice more, but after further defense motions the court ultimately agreed that the remaining claims were time-barred and that the remaining plaintiffs had failed to allege any facts which showed that Ericksen Arbuthnot’s client engaged in any wrongdoing. The court sustained the demurrer to the remaining causes of action, denied plaintiffs’ request to amend, and entered judgment for the defendants represented by Ericksen Arbuthnot. Plaintiffs have since waived their appeal in exchange for a waiver of costs by defendants.
The case was handled by Partner Von Reyes and Senior Associate Nathaniel Lucey in the firm’s San Jose office. Mr. Reyes can be reached at (408) 286-0880 or and Mr. Lucey can be reached at (408) 286-0880 or .