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

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…