Davis

The trial court awarded Willie L. and Joyce Davis (the Davises) $20,000 from the Real Estate Recovery Account (Recovery Account) to compensate them for fraud perpetrated by a real estate salesperson who performed acts outside the scope of his license. The California Department of Real Estate (the Department) challenges the award, arguing that it was improper under a statutory amendment to Business and Professions Code section 10471, subdivision (a) which became effective January 1, 1987. (All further statutory references are to this code.) The Department contends the amendment limits recovery to actions within the scope of the particular license held by the defendant. We agree and accordingly reverse the judgment.

Factual and Procedural Summary

The Davises were interested in purchasing a house and used Charles Eugene Harris as their purported broker. In this capacity, Harris accepted a $3,000 deposit and $25,000 down payment on the house. But Harris was a real estate salesperson, not a broker. He falsely represented to the Davises that he was a broker and gave them a fictitious business card stating that he was a broker at ERA EZ Real Estate, Inc. Harris converted the…