Worthington

Jennifer and Guy Worthington (the Worthingtons) filed a complaint against their real estate broker and several other defendants alleging they were the victims in four fraudulent real estate transactions. The case was arbitrated, and the Worthingtons prevailed. When the Worthingtons discovered the defendants’ assets were insufficient to cover the judgment (approximately $280,000), they filed an application with the Department of Real Estate’s Consumer Recovery Account (Recovery Account) for payment of the unsatisfied judgment (pursuant to Bus. & Prof. Code, § 10471 1 ). The Real Estate Commissioner (the Commissioner) granted part of their application, awarding $50,000 for one of the transactions. The Commissioner denied recovery on the other three transactions on the grounds judgment on those claims was based on breach of the broker’s fiduciary duty rather than “fraud, misrepresentation, or deceit” as required by section 10471, subdivision (a).

The Worthingtons filed an application in the superior court for an order directing payment out of the Recovery Account on the remaining three transactions. The trial court, reviewing the issue de novo, determined two of the…