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March 19, 2026 Get Citation Alerts Download PDF Add Note

Seaker & Sons v. Cushman & Wakefield of Cal. CA2/4

California Court of Appeal

• Citations: None known
• Docket Number: B340850

• Precedential Status: Non-Precedential

• Opinion

• Authorities (6)

• Cited By (0)

• Summaries (0)

• Similar Cases (83K)

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Combined Opinion

Filed 3/19/26 Seaker & Sons v. Cushman & Wakefield of Cal. CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

SEAKER & SONS, B340850

Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 23STCV17644)
v.

CUSHMAN & WAKEFIELD OF
CALIFORNIA, INC.,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County,
Stephanie M. Bowick, Judge. Reversed with directions.
Mann Legal Team Inc., James White and Elizabeth Mann; Complex
Appellate Litigation Group, Ben Feuer and Charles M. Kagay for Plaintiff
and Appellant.
Mayer Brown, Ruth Zadikany, Daniel D. Queen, C. Mitchell Hendy and
Michael A. Scodro for Defendant and Respondent.
INTRODUCTION
Appellant Seaker & Sons (Seaker), a commercial landlord, was
compelled to reimburse a tenant for improvements constructed by that tenant
without permits. Seaker sued its property manager, respondent Cushman &
Wakefield of California, Inc. (Cushman), for allowing the unpermitted
construction to proceed. Seaker asserted both tort and breach of contract
claims.
Cushman demurred, arguing Seaker had hired another agent to
oversee the improvements and its tort claims were barred by the economic
loss rule. The trial court agreed, and sustained the demurrer without leave
to amend. We conclude the tort claims are barred by the economic loss rule,
but the breach of contract claim is properly pled. Therefore, we reverse with
directions.

FACTS AND PROCEDURAL BACKGROUND
In July 1994, Seaker hired Cushman to manage a commercial property
known as the Gumps Building, located at 135 Post Street in San Francisco.1
The relationship between Seaker and Cushman is governed by a written
“Management Agreement”. The Management Agreement designates
Cushman “the sole [a]gent for management” of the Gumps Building and
requires Cushman to inform Seaker of any violations of “federal[,] state or
municipal authority” affecting the building. Cushman must also offer “advice
and consultation” for any “ordinary repairs” conducted by tenants, but may
not allow tenants to make such repairs without the consent of Seaker.

1 Because a demurrer admits all properly pled allegations of the
operative complaint, we draw our statement of facts from those allegations
and matters subject to judicial notice. (Brown v. Deutsche Bank National
Trust Co. (2016) 247 Cal.App.4th 275, 279 (Brown).)

2
I. Lease and Construction
In December 2019, Seaker leased the third and fourth floors of the
Gumps Building to App Annie, Inc. (App Annie) for office space. The lease
included a “Work Agreement” intended to govern improvements App Annie
would make to its portion of the building. Seaker agreed to reimburse App
Annie for the cost of these improvements, up to the amount of $2,615,400.
The Work Agreement provided that App Annie could not begin
construction until it had “procured and delivered” to Seaker “a copy of all
[p]ermits.” Construction was to be complete by February 1, 2021; App Annie
could not claim reimbursement for work performed after that date. Seaker
designated an architect, Koonshing Wong, as its “sole representative” with
respect to the improvements, “who, until further notice to [App Annie], shall
have full authority and responsibility to act . . . as required in this Work
Agreement.” App Annie was required to use Wong’s firm, WZ Architecture,
to obtain permits and for all communications with the City of San Francisco.
App Annie applied for permits in June 2020. No permits were ever
issued. After waiting a month or two, App Annie began construction without
them. By December 2020, the work was substantially complete.

II. Arbitration
In February 2021, App Annie filed a complaint seeking rescission of the
lease. Seaker and App Annie stipulated to arbitration. In January 2022, the
arbitrator ruled for App Annie.
The arbitrator found the lease had been the product of a mutual
mistake: both Seaker and App Annie had thought the Gumps Building was
zoned for office space, when in fact it had been recently rezoned for retail use
only. This was the reason App Annie had been unable to obtain permits. The

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arbitrator decided Seaker was obliged to return App Annie to its pre-contract
position, requiring Seaker not only to return App Annie’s security deposit,
but also reimburse App Annie for all construction expenses. The resulting
damages award was $6,612,332.36, plus prejudgment interest and attorney’s
fees, for a total of $7,795,134.25.
The award was confirmed by the San Francisco Superior Court, and the
confirmation order was affirmed on appeal.

III. Present Litigation
Shortly thereafter, Seaker filed a complaint against Cushman,
asserting causes of action for professional negligence, breach of fiduciary
duty, and breach of contract. Seaker subsequently filed an amended
complaint, asserting the same claims. Cushman demurred to the amended
complaint, and the trial court sustained the demurrer, with leave to amend.
Seaker timely filed a second amended complaint (SAC), asserting the
same causes of action. Specifically, Seaker alleged Cushman was its sole
agent with respect to App Annie’s improvements, and was professionally
negligent in failing to either (a) inform App Annie that the improvements
could not commence without permits, or (b) inform Seaker that App Annie
had commenced construction without permits. Seaker alleged that these
failures also constituted a breach of fiduciary duty and a breach of the
Management Agreement. Additionally, Seaker alleged Cushman breached
the Management Agreement by affirmatively authorizing App Annie to
proceed with construction.
Cushman demurred again, raising three central arguments. First,
Cushman argued the Work Agreement made Wong Seaker’s sole agent
concerning the improvements, not Cushman. Second, Cushman claimed

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there was no causation: the harm was caused by Seaker’s entry into the lease
without understanding how its own building was zoned. Third, Cushman
contended it had no fiduciary relationship with Seaker related to the
improvements, and any tort claims were barred by the economic loss rule.
The trial court sustained Cushman’s demurrer, without leave to
amend. The court ruled that Cushman did not cause Seaker’s harm. The
court further held that Cushman owed no fiduciary duty to Seaker with
respect to App Annie’s improvements, and concluded the economic loss rule
barred Seaker’s tort claims.
The court entered judgment of dismissal on July 9, 2024. Seaker
timely appealed.

DISCUSSION
We review the sustention of a demurrer de novo. (Brown, supra, 247
Cal.App.4th at p. 279.) We review the decision to deny leave to amend for
abuse of discretion. (Ibid.) The plaintiff has the burden of showing a
reasonable possibility that any defect could be cured by amendment. (Ibid.)
On appeal from an order sustaining a demurrer, the plaintiff may raise
legal theories not presented below. (Kruitbosch v. Bakersfield Recovery
Services, Inc. (2025) 114 Cal.App.5th 200, 210.) Because we review the trial
court’s ruling and not its rationale, and a demurrer presents questions of law,
the defendant may do likewise. (Ivanoff v. Bank of America, N.A. (2017) 9
Cal.App.5th 719, 732, fn. 2.) Finally, the issue of leave to amend remains
open on appeal, even if leave was not sought below. (Code Civ. Proc., § 472c,
subd. (a).)

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I. Professional Negligence
A claim for professional negligence has four elements: (1) the duty of a
professional to use the skill and care commonly used by other professionals in
the same field, (2) breach of that duty, (3) causation, and (4) damages. (Oasis
West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821 (Oasis West).)
The SAC alleges Cushman failed to notify App Annie and its
contractors that they were required to obtain permits, and failed to notify
Seaker that App Annie was constructing improvements without permits. The
SAC further alleges that, had Cushman taken either of those steps, App
Annie could have been prevented from going forward with the improvements,
lowering the amount of the reimbursement Seaker would have been required
to pay. Cushman argues this claim is barred by the economic loss rule.
Cushman is correct.
The economic loss rule has two branches. First, it provides that there
is no general duty to avoid the infliction of economic losses, meaning there
can be no negligence claim for such losses. (Sheen v. Wells Fargo Bank, N.A.
(2022) 12 Cal.5th 905, 922 (Sheen).) Second, it provides that where litigating
parties have a pre-existing contractual relationship, their obligations and
potential recovery are defined by the terms of the contract, rather than tort
law. (Id. at pp. 922–924.) Because Seaker and Cushman had a contractual
relationship, and Seaker’s claim arises out of that relationship, the second
branch of the rule applies here. (Id. at pp. 923–924.)
Seaker argues the economic loss rule does not govern professional
negligence claims, relying on language in Sheen and Rattagan v. Uber
Technologies, Inc. (2024) 17 Cal.5th 1 (Rattagan) to the effect that in “some”
professional negligence cases, where there is a “special relationship” between
the parties, the economic loss rule does not apply. (Sheen, supra, 12 Cal.5th

6
at pp. 929–933; Rattagan, supra, 17 Cal.5th at p. 23, fn. 5.) Such “special
relationships” exist between an insured and their insurer, or an attorney and
their client. (Rattagan, supra, 17 Cal.5th at p. 23, fn. 5.) This is not one of
those circumstances, and in the absence of authority, we decline to expand
the scope of the exception.
These “special relationships” represent a “major departure” from
ordinary legal principles, and any extension of that departure requires “great
care.” (Sheen, supra, 12 Cal.5th at pp. 929–930.) Insurance contracts are
“unique in nature and purpose” and involve an inherent conflict between the
financial interests of the insurer and insured. (Id. at p. 930.) Attorneys owe
independent duties created by the Rules of Professional Conduct that cannot
be modified by any contract. (See Rattagan, supra, 17 Cal.5th at p. 23.)
Property managers are not similarly regulated, nor do their contracts share
the unique features of insurance policies.

II. Breach of Fiduciary Duty
To state a claim for breach of fiduciary duty, a plaintiff must allege the
existence of a fiduciary relationship, a breach of the fiduciary’s duties, and
resulting damages. (Oasis West, supra, 51 Cal.4th at p. 820.)
The SAC asserts two causes of action for breach of fiduciary duty, on
alternative theories. First, the SAC alleges Cushman was Seaker’s agent for
management of the Gumps Building, and therefore had fiduciary obligations
with respect to the building. Second, the SAC alleges Cushman voluntarily
undertook to manage the App Annie improvements for Seaker. Cushman
argues App Annie’s Work Agreement specifically named a different agent for
Seaker, and the SAC does not allege how Cushman undertook a fiduciary

7
duty. Cushman also argues these claims are barred by the economic loss
rule. We agree with Cushman.
An agent’s fiduciary duties are limited to matters within the scope of its
agency. (Oakland Raiders v. National Football League (2005) 131
Cal.App.4th 621, 632 & fn. 8.) While the Management Agreement calls for
Cushman to manage “ordinary repairs” by tenants, it does not permit
Cushman to authorize tenants to make any such repairs, unless they are
made solely at the tenant’s expense.2 App Annie’s improvements were clearly
not ordinary repairs, nor were they to be made at App Annie’s sole expense.
And the Work Agreement named Wong, not Cushman, as Seaker’s sole agent
for App Annie’s project. The SAC expressly concedes Cushman is not a party
to, nor mentioned in, App Annie’s lease. Nothing in the relevant contracts
indicates that Cushman was Seaker’s agent with respect to App Annie’s
improvements.
Nor does the SAC specify how Cushman “assumed” that role. It alleges
that, at some unspecified point, the parties agreed to substitute a different
architect in place of Wong. But this does not explain how any authority was
delegated to or otherwise placed with Cushman.3
Even without those deficiencies, these claims are barred by the
economic loss rule, as explained above. On this point, Seaker argues that a
fiduciary relationship is the sort of “special relationship” that obviates the

2 Seaker did not attach the Management Agreement to any of its
pleadings, nor was it the subject of any request for judicial notice. Therefore,
we rely on the summaries and short quotations provided by the SAC.

3 At one point the SAC alleges Cushman was duty-bound to report to
Wong, rendering the prospective chain even more unclear.

8
economic loss rule. (Rattagan, supra, 17 Cal.5th at p. 23, fn. 5.) But none of
the authorities Seaker cites support that proposition.
Only one of the cases Seaker relies on, Southern California Gas Leak
Cases (2019) 7 Cal.5th 391, discusses the economic loss rule. There, the
California Supreme Court held that businesses could not recover lost income
caused by the Southern California Gas Company’s failure to prevent a gas
leak that necessitated the relocation of an entire neighborhood. (Id. at pp.
394–397.) That case is factually distinct from this one, and it dealt with the
other branch of the economic loss rule, refusing to impose a general tort duty
on the Gas Company to prevent purely economic losses. (Id. at pp. 397–398;
see Sheen, supra, 12 Cal.5th at p. 922.) In the absence of on-point authority,
we decline to adopt Seaker’s position.

III. Breach of Contract
“[T]he elements of a cause of action for breach of contract are (1) the
existence of the contract, (2) plaintiff’s performance or excuse for
nonperformance, (3) defendant’s breach, and (4) the resulting damages.”
(Oasis West, supra, 51 Cal.4th at p. 821.) The SAC alleges three breaches:
first, that Cushman “authorized” App Annie to proceed with the
improvements, second, that Cushman failed to direct App Annie to halt
construction, and third, that Cushman failed to report App Annie’s
construction to Seaker.
Cushman argues it had no responsibility to supervise App Annie’s
construction, noting the contractual appointment of Wong as Seaker’s sole
representative for that project and the lack of any statement indicating how
or when Cushman replaced Wong. Cushman also claims it could not have
caused Seaker’s damages. Neither argument is compelling.

9
As noted above, the Management Agreement contains a provision that
prevents Cushman from authorizing tenant construction in the Gumps
Building, except under certain conditions not met here. The allegation that
Cushman nevertheless authorized App Annie to proceed with construction
clearly identifies a breach of the Management Agreement. Likewise, the
Management Agreement requires Cushman to report any violations of
“federal[,] state or municipal authority” affecting the Gumps Building.
Cushman does not dispute that App Annie’s unpermitted construction would
qualify as a violation of municipal authority. The allegation that Cushman
failed to report this to Seaker clearly identifies another breach of the
Management Agreement. These breaches do not depend on any
determination of who was responsible for oversight of App Annie’s particular
construction project.
Nor do the facts pled negate causation. Cushman argues the harm was
caused by Seaker’s entry into a voidable contract and App Annie’s decision to
rescind that contract. Yet “events generally have multiple causes,” and the
existence of other dependent causes does not by itself absolve Cushman.
(Malo v. Willis (1981) 126 Cal.App.3d 543, 548.) Cushman points out that the
Work Agreement required delivery of permits before construction commenced
and that Seaker knew construction had commenced, reasoning that Seaker
must therefore have known there were no permits. This argument assumes
the permits were to be delivered directly to Seaker, rather than to its agent
(whether that was Wong or Cushman or someone else). And even if accepted,
the argument only negates causation with respect to the work Seaker knew

10
had been done. Any construction beyond that could still be the result of
Cushman’s alleged breaches.4
Seaker properly pled a breach of contract.

IV. Leave to Amend
Seaker bears the burden of demonstrating that any defect in its
pleadings could be cured by amendment. (Brown, supra, 247 Cal.App.4th at
p. 279.) Because we conclude Seaker has properly pled a claim for breach of
contract, we need only consider whether Seaker can cure defects in its claims
for professional negligence and breach of fiduciary duty. The amendments
suggested by Seaker would not remove those claims from the ambit of the
economic loss rule. Therefore, Seaker has failed to meet its burden of
showing it can cure the defects in those claims.

4 The same logic applies to Cushman’s argument that App Annie
attempted to mislead Cushman. That would only negate causation to the
extent App Annie’s supposed deception succeeded.

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DISPOSITION
The judgment of the trial court is reversed. The trial court is directed
to vacate its order sustaining the demurrer without leave to amend and enter
a modified order overruling the demurrer to the cause of action for breach of
contract. Seaker shall recover its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

ZUKIN, P. J.

WE CONCUR:

MORI, J.

TAMZARIAN, J.

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