Valencia

BACKGROUND AND PROCEDURAL HISTORY

A. The Valencias’ Home Purchase 2 In August 2016 the Valencias purchased a house on South Harbor View Drive in San Pedro (the home) from Coastal Holdings, a company wholly owned and controlled by Mendoza. Mendoza’s broker in the transaction was Class A Realty; Mendoza owned 50 percent of Class A Realty, and his fiancée owned the other 50 percent. The Valencias were attracted to the home because it appeared to be in move-in condition. Mendoza had purchased the home several months earlier from Fillipo Tranni with the intention to “flip” 3 the home for resale. Tranni had lived in the home for many years and started a major renovation: Tranni had hired an architect, obtained some permits, and begun demolition work when he realized the renovation was too complicated, and he decided instead to sell the

Our recitation of the facts underlying the dispute is taken from the arbitrator’s findings of fact in the arbitration award and, except as noted, are undisputed for the purpose of the appeal. Merriam-Webster dictionary defines “flip” in relevant context as follows: “[T]o buy and usually renovate (real estate) so as to quickly resell at a…