In California, several classes of persons are entitled to some form of immunity protecting them from liability for activities performed in connection with judicial proceedings.
For example, “judicial immunity” bars civil actions against judges for acts they perform in the exercise of their judicial functions. Public policies supporting judicial immunity include: (1) protecting the finality of judgments and discouraging inappropriate collateral attacks; and (2) protecting judicial independence by insulating judges from vexatious actions prosecuted by disgruntled litigants, which is necessary in order to have an independent and impartial judiciary.
“Quasi-judicial immunity” extends judicial immunity to persons other than judges who act in a judicial or quasi-judicial capacity, which includes three broad classes:
- Persons who perform functions normally performed by a judge, or who act in a judicial or quasi-judicial capacity. This class includes court commissioners, temporary judges, administrative hearing officers, arbitrators, referees, prosecutors, State Bar officials, and public officials tasked with crime investigation and instituting criminal proceedings (e.g., law enforcement officers, prosecutors, grand jurors, building inspectors, and fire marshals).
- Persons who function apart from the courts but are engaged in neutral dispute resolution. This class includes mediators, local bar volunteers conducting settlement conferences, and neutral dispute resolution providers.
- Persons connected to the judicial process but who are not public officials, arbitrators, or referees but serve functions integral to the judicial process and “act as the arms of the court.” This class includes: (a) persons appointed by the courts for their expertise (such as receivers, bankruptcy trustees, guardians ad litem, Probate Code investigators, and therapists); and (b) persons not appointed by the courts but whose work product comes into the judicial process to be used by the courts (such as probation officers, social workers, and psychiatrists). These persons fulfill quasi-judicial functions “intimately related to the judicial process.”
A recent opinion published by California’s Third District Court of Appeal — Holt v. Brock — extends quasi-judicial immunity to real estate brokers appointed by the trial court in a partition action.
The partition action: court-appointed broker angers one side in fulfilling his role
Darrell Holt and his sister Darice Harlan each inherited a 50% share of real property in Nevada City. Harlan sued Holt to partition the property. The parties were unable to agree on the terms of the partition, so the trial court ordered that the property be sold and the proceeds divided equally. The court directed the parties to select a licensed real estate broker to list the property.
After the parties failed to agree on a broker, the court appointed Charles Brock, a licensed broker, to list the property. The court ordered the parties to sign all listing agreements and other documents needed to list the property, and provided for certain terms of the listing, including a minimum listing price of $882,500. The order required Brock to provide s summary of the listing and marketing activity to the court and parties each month. Any sale was subject to confirmation by the court.
The parties signed the listing agreement, and Brock listed the property for $925,000. Holt — one of the parties to the partition action — offered to purchase the property for $1 million and to represent himself in the sale if Brock agreed to reduce his commission. Brock initially agreed, but reversed course, stating he would not change the listing agreement.
Holt filed a motion to have Brock removed as the listing broker, which the trial court denied, confirming that the original listing order was still in effect. The trial court also appointed a receiver to manage and approve the sale.
Later, Holt submitted a formal offer to purchase the Harlan share for $462,500 (one-half of the listed sale price of $925,000 for the entire property). His offer’s terms were $100 down and the rest financed. A week later, Harlan submitted a formal offer to purchase the Holt half of the property for $475,000 — all cash, with a $10,000 deposit and the remainder deposited into escrow. Unsurprisingly, the receiver accepted the Harlan offer, and escrow closed shortly afterward.
Holt’s action against the broker
Holt sued Brock in a separate action alleging causes of action for breach of fiduciary duty, breach of contract, negligence, and others. Holt argued that Brock breached his agreement to sell the property to him at a discounted commission, undervalued the property, and unreasonably sold the property for a price lower than Holt’s original offer.
Brock filed a motion for summary judgment. The trial court granted the motion, ruling that Brock was entitled to quasi-judicial immunity in connection with the tasks he undertook as the court-appointed partition broker.
Holt appealed, arguing that Brock was not entitled to quasi-judicial immunity because he undertook “an ordinary commercial transaction as an advocate for his joint seller clients” and breached fiduciary duties in the course of his work on the sale.
Court of Appeal: broker protected by quasi-judicial immunity
The Court of Appeal affirmed.
As a starting point, the court noted that Brock was “appointed by the court for his expertise to carry out the court’s order to sell the property.” The court then turned to the “touchstone” for the quasi-judicial immunity doctrine’s applicability: “performance of the function of resolving disputes between parties, or of authoritatively adjudicating private rights.” Court-appointees performing those activities are entitled to quasi-judicial immunity because “their judgments are functionally comparable to those of judges.”
Here, the court held that the trial court’s orders “did more than merely appoint Brock to sell the property. They vested an element of discretionary authority in Brock to assist the court in resolving” the partition dispute between Holt and his sister. At the time of Brock’s appointment as broker, Holt and his sister were admittedly “at a standstill” and an “impasse” over what to do with the property, and couldn’t agree on a broker.
The court rejected Holt’s characterization that Brock merely undertook “an ordinary commercial transaction as an advocate for his joint seller clients.” Instead, Brock “was ordered by the court to market the property as part of a partition action.” The trial court also gave Brock limited authority to resolve a key disputes between the sellers — the property’s value — and to set the other terms of sale he deemed appropriate. Notably, Brock “was authorized to adjust the listing terms upon a court order and without the sellers’ stipulation.” Final approval of any sale negotiated by Brock “rested with the court, not the sellers.”
The court concluded: “In short, Brock was appointed by the court to exercise discretionary judgment in serving a function integral to the partition action and as an arm of the court. As a result, he was entitled to quasi-judicial immunity.”
The court also cited policy reasons supporting its decision: “Without immunity, persons such as Brock who are asked to perform a discretionary function on behalf of the court in the face of opposition from the affected parties will be reluctant to accept court appointments or provide work product for the courts’ use. Additionally, the threat of civil liability may affect the manner in which they perform their jobs.”
Under the Holt opinion, court-appointed partition brokers are entitled to quasi-judicial immunity.