Wednesday, January 28, 2026
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C.A. Revives Lawsuit Seeking to Hold Realtor Liable for Not Disclosing Rezoning Possibility
Opinion Says Although Judge Correctly Found Duty to Disclose ‘Facts’ Did Not Apply, Jury Could Conclude That Not Sharing What City Said It Might Do Violated Honesty Obligations
By a MetNews Staff Writer
Div. Two of the Fourth District Court of Appeal held yesterday that a trial judge erred in finding that a buyer’s purported real estate broker did not violate his statutory duties as a matter of law by failing to disclose to the seller that the parcel in question was located in an area that the City of Adelanto had, during a public meeting, designated for possible rezoning to allow cannabis cultivation, a move that would significantly increase the value of the real estate.
Yesterday’s unpublished decision, written by Justice Carol D. Codrington, declares that the trial judge correctly found that a duty to disclose “facts” did not apply to the city’s mere “consideration” of the move but says the jurist erred in granting a motion for nonsuit because a reasonable jury could conclude that he did breach more general obligations of honesty and fair dealing where evidence was presented that indicated that he knew of the “possibility.”
A realtor’s obligations are outlined in Civil Code §2079.16, which provides that a buyer’s agent owes a fiduciary duty “of honest and fair dealing and good faith” to the seller as well one to “disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties.”
Scope of Duties
The question as to the scope of these duties arose after a Hesperia-based company, Agcon Inc., sold an undeveloped nine-acre property in the City of Adelanto to Industrial Integrity Solutions LLC (“IIS”) for $460,000 on Oct. 27, 2016. According to Agcon, the buyer’s agent, Daniel C. Pocius, knew that the municipality was considering rezoning the land to allow for cannabis growth operations but intentionally withheld that information.
That information was publicly available as the officials openly discussed expanding the cannabis cultivation zone to include the area in which the parcel is located at a City Council meeting held the day before the parties signed the sale documents.
After the proposal was approved a few months later, Agcon filed a complaint against Pocius and his brokerage, Cornerstone Financial, as well as IIS and other entities, in October 2017. The plaintiff asserted causes of action for a violation of §2079.16, fraud, rescission, and civil conspiracy.
Before trial, Agcon represented that all causes of action were rooted in statutory duties imposed by §2079.16.
Motion for Nonsuit
During a 2023 jury trial, the defendants moved for nonsuit after the plaintiff presented its case-in-chief, arguing that Pocius did not know about the potential zoning change and, even if he did, he was under no obligation to share such speculative information.
San Bernardino Superior Court Judge Winston S. Keh granted the request in May 2023, saying that the defendants had “no legal obligation” to share contemplated zoning changes, citing the Fifth District’s 1977 decision in Borba v. Thomas.
In that case, the Court of Appeal declared that a buyer was not entitled to rely on a seller’s representation that there would be “no problem” obtaining necessary approvals from a federal agency, noting that “[t]here is nothing to suggest that [the defendant] had access to any fact concerning…approval which [the plaintiff]…did not” and that the statement was only “[an] expression of opinion concerning the future decision of [public officials].”
Keh awarded the defendants $61,000 in costs, primarily related to expert fees. Yesterday’s opinion, joined in by Acting Presiding Justice Douglas P. Miller and Justice Richard T. Fields, reverses the defense judgment.
Acting as Broker
Acknowledging that there was some dispute at the trial court level as to whether Pocius was acting as IIS’ broker, Codrington said, in a footnote, that the defendants did not allege in appellate briefing that he was not acting as the buyer’s agent and commented that “[w]e will assume without deciding that Pocius was IIS’s broker.”
Addressing whether the sale of undeveloped property triggers the duties set forth in §2079.16, she opined, based on the legislative history, that “the Legislature intended for vacant land to be covered” by the disclosure obligations. Having settled the threshold question, the jurist remarked:
“Agcon correctly notes that the trial court focused entirely on a broker’s third duty to disclose material facts when granting respondents’ motion for nonsuit. As Agcon emphasizes, however, this case also concerns Pocius’s duty of honest and fair dealing and good faith. We agree with Agcon that the trial court overlooked that fact and respondents overlook it on appeal.”
Distinct Duties
Saying that “[t]he duty to disclose is distinct from the duty to act honestly, fairly, and in good faith,” she wrote:
“[A] broker’s conduct may breach the duty of honest and fair dealing while not violating (or even implicating) the duty to disclose….A breach of the duty to disclose generally involves some kind of misrepresentation, omission, or concealment that amounts to fraud….But it does not follow that a broker’s failure to disclose information, while perhaps not reaching the level of fraud, could nonetheless amount to a breach of the broker’s duty under section 2079.16 to act honestly, fairly, and in good faith.”
Codrington said that, although “[w]e…agree…that Pocius may not be liable for fraud under Borba…or other fraud cases,” that “does not mean” that he could not face liability “for violating his section 2079.16 duty to act honestly, fairly, and in good faith.”
Pointing out that “some of [Pocius’] emails…suggest” that he knew that the parcel in question “would be included in the new cultivation zone that the City was in the process of approving,” she declared:
“A jury could reasonably find that these emails during this timeline show that, at a minimum, Pocius knew the City was considering rezoning Agcon’s property to allow for cannabis cultivation in the upcoming months. Although that was not guaranteed, a jury could reasonably find that it was unfair, dishonest, or in bad faith for Pocius not to tell Agcon of this possibility….”
The case is Agcon Inc. v. Cornerstone Financial, E081767.
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