What could cause this to happen? He was driving normally, came to an intersection and applied the brakes normally, but the brakes felt free and were easily pressed to the floor, but he wasn't stopping...so he had a choice, hit a family, a car, or try the alley....he tried the alley but he was going to fast and had forgotten about the e-brake so he understeered right into a wooden post....

What could cause the rear Brake Calipers (both of them) to go out/break/blow?

 

Huh???

The front brakes would stop the car just fine as well, with the rears not working so it sound like he lost all braking from your story.

Did he use the Parking Brake or not?

If he didn't and just the pedel went to the floor: He either lost brake fluid, and/has a leak internally or externally in the brake pistons, or his master cyl is bad.