Case Name: Vince Nakayama v. Suneet Singal, et al.
Case No.: 19-CV-342281

Currently before the Court are the following matters: (1) the demurrer by defendants Suneet Singal (“Singal”) and First Capital Real Estate Investments, LLC (“FCREI”) to the first amended complaint (“FAC”) of plaintiff Vince Nakayama (“Plaintiff”); and (2) the joinder by Singal and defendant Majique Ladnier (“Ladnier”), in their capacities as trustees of the Ladnier-Singal Family Trust (the “Trust”), to the demurrer.

Factual and Procedural Background

This is an action for breach of contract and fraud, among other things, arising out of a business dispute. Singal, a licensed mortgage broker, is the chief executive officer, chairman, and sole owner of FCREI. (FAC, ¶¶ 2 & 3.) FCREI is the majority owner and Singal is the managing partner of defendant First Capital Real Estate Advisors, LP (“FCREA”). (Id. at ¶ 4.) Additionally, FCREI has a subsidiary, defendant FCREI Property Management, LLC (“FCREI Property Management”). (Id. at ¶ 5.) Singal and his wife, Ladnier, are also trustors and trustees of the Trust. (Id. at ¶ 6.) The Trust owns defendant First Capital Advisor, LLC (“FCMA”), which in turn owns defendant SRS, LLC (“SRS”). (Id. at ¶¶ 6 & 7.)

FCREI, FCREA, FCREI Property Management, the Trust, FCMA and SRS are allegedly the alter egos of one another and Singal. (FAC, ¶¶ 3, 5, 6, & 9.) Singal and his businesses allegedly have a history of defrauding investors. (Id. at ¶ 14.)

In September 2015, Singal and FCREI approached Plaintiff for a $600,000 bridge loan and represented that they needed the funds to facilitate FCREI’s acquisition of a mortgage company named Castle Mortgage. (FAC, ¶¶ 16 & 17.) Singal and FCREI further represented that the acquisition of Castle Mortgage was scheduled to close within the next 48 hours and FCREI needed an additional $600,000 to consummate the transaction. (Id. at ¶ 17.)

On September 18, 2015, unaware of Singal’s history of defrauding private lenders, Nakayama wired $300,000 to a FCREI bank account designated by Singal. (FAC, ¶ 18.) “Although that loan, according to its terms, was to be repaid with interest within four months, Singal and [FCREI] failed do so—and over the course of the next two years, would repay only part of the loan’s principal balance. (Ibid.) Plaintiff filed suit to recover the unpaid balance of that loan (the “Castle Mortgage Loan”) and obtained a stipulated judgment for over $800,000 in December 2018. (Id. at ¶ 19.) However, the judgment has not been satisfied. (Ibid.)

Moreover, in November 2015, “Singal convinced [Plaintiff] to wire an additional
$500,000—in consideration for which, Singal promised to sell [Plaintiff] a [two percent] share in [FCREA].” (FAC, ¶ 21.) Plaintiff, Singal, and FCREI signed an Agreement for Sale of Limited Partnership Interest (“Agreement”) on or about November 2, 2015, which provided that Plaintiff’s two percent interest guaranteed him quarterly distributions of at least $18,750 beginning on January 31, 2016. (Id. at ¶¶ 21, 24, 35, & 42.) “After soliciting and accepting [Plaintiff’s] $500,000 investment …, Singal and [FCREI] failed to make the first guaranteed payment on January 31, 2016—and thereafter failed to make any distributions … .” (Id. at ¶ 26.)

Furthermore, Singal took steps to make FCREA worthless. (FAC, ¶ 27.) At the time of Plaintiff’s investment, FCREA had one significant non-cash asset: a contract between FCREA and First Capital Real Estate Trust, Inc. (“FCREIT”), a subsidiary of FCREI. (Id. at ¶ 28.) That contract obligated FCREIT to pay FCREA a fee from the income generated by the valuable real assets FCREIT owned. (Ibid.)

Sometime after November 2015, Singal caused FCREIT to sell its real assets to third parties, including a company called Gadsden Growth Properties, Inc.
(“Gadsden”) and another called FC Global Realty, Inc. (“FC Global”). (FAC, ¶ 30.) Instead of paying FCREIT for the properties, Singal structured the deals so that Gadsden and FC Global paid Singal, personally, through the Trust. (Ibid.) Plaintiff alleges that FCREA was thereby rendered valueless. (Ibid.)

Singal also took steps to drain FCREA of its cash assets, which he transferred to FCREI. (FAC, ¶ 31.) “For example, records obtained in 2018 by [Plaintiff] in the [Castle Mortgage Loan] action show that Singal caused [FCREA] to transfer over $300,000 in cash assets to [FCREI] over a one-week period in March 2016—not long after [FCREA] failed to make” the first guaranteed distribution to Plaintiff. (Ibid.)

“Throughout 2016 and 2017, [Plaintiff] attempted to work with Singal in good faith to obtain an accounting of [FCREA’s] books and records, his guaranteed payments, or, a return of his investment.” (FAC, ¶ 32.) However, Singal refused and concealed the transfer of FCREIT’s property and FCREA’s cash assets. (Ibid.) Instead of divulging that FCREA had been rendered valueless, Singal lied about the delayed distributions and claimed as late as December 2017, that the delay was due to the fact that the “advisor business is fairly complex.” (Ibid.) Given the private nature of FCREI, FCREA, and FCREIT, Singal’s wrongful conduct was not discoverable by Plaintiff. (Ibid.)

Based on the foregoing allegations, Plaintiff filed the operative FAC against Singal, FCREI, FCREA, FCREI Property Management, the trustees of the Trust, FCMA and SRS, alleging causes of action for: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) breach of fiduciary duty; (4) fraudulent inducement; (5) accounting; and (6) money had an received.

On July 5, 2019, Singal and FCREI filed the instant demurrer to the FAC. On August 29, 2019, Singal and Ladnier, in their capacities as trustees of the Trust, filed a joinder to the demurrer. Plaintiff filed papers in opposition to the demurrer on September 5, 2019. On September 12, 2019, Singal and FCREI filed a reply.

Discussion

I. Joinder

Singal and Ladnier, as trustees of the Trust, filed their joinder to the demurrer on August 29, 2019. They served the joinder on Plaintiff the same day, mailing the joinder to Plaintiff from New York. A joinder is subject to the same notice and service requirements as the moving party’s motion. (See Frazee v. Seely (2002) 95 Cal.App.4th 627, 636-637; see also Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 719; Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1176.) Thus, similar to the demurrer, Singal and Ladnier were required to file their joinder 16 court days prior to the hearing, with 10 additional calendar days for service by mailing. (See Code Civ. Proc. §§ 1005, subd. (b) and 1013.) However, Singal and Ladnier’s joinder was filed and served only 14 court days before the hearing and is, therefore, untimely. Given these procedural defects,, it is unlikely that Plaintiff received the joinder before his opposition was due on September 6, 2019.

Accordingly, Singal and Ladnier’s joinder is DENIED.

II. Demurrer

Singal and FCREI demur to each and every cause of action of the FAC on the ground of failure to allege facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)

A. Legal Standard

The function of a demurrer is to test the legal sufficiency of a pleading. (Trs. Of Capital Wholesale Elec. Etc. Fund v. Shearson Lehman Bros. (1990) 221 Cal.App.3d 617, 621.) Consequently, “[a] demurrer reaches only to the contents of the pleading and such matters as may be considered under the doctrine of judicial notice.” (South Shore, supra, 226 Cal.App.2d at p. 732, internal citations and quotations omitted; see Code Civ. Proc., § 430.30, subd. (a).) “It is not the ordinary function of a demurrer to test the truth of the [ ] allegations [in the challenged pleading] or the accuracy with which [the plaintiff] describes the defendant’s conduct. [ ] Thus, [ ] the facts alleged in the pleading are deemed to be true, however improbable they may be.” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958 (Align), internal citations and quotations omitted.) However, while “[a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions of law or fact.” (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1120.)

B. First Cause of Action

Singal and FCREI argue that the first cause of action for breach of contract fails to state a claim because the copy of the Agreement attached to the FAC as Exhibit B is not signed by Singal or FCREI. Specifically, Singal and FCREI contend that there is no contract between the parties because the copy of the Agreement attached to the FAC is unsigned. Singal and FCREI further argue that the cause of action is time-barred by the two-year statute of limitations set forth in Code of Civil Procedure section 399, which governs oral contracts. Singal and FCREI contend that the statute of limitations applicable to oral contracts applies here because the copy of the Agreement attached to the FAC is unsigned.

These arguments lack merit. Plaintiff expressly alleges that the written Agreement was signed by Singal and FCREI on or about November 2, 2015. (FAC, ¶¶ 21, 24, 35, & 42.) This factual allegation is accepted a true on demurrer. (See Align, supra, 179 Cal.App.4th at p. 958 [facts alleged in the pleading are deemed to be true, however improbable they may be].) Consequently, Plaintiff adequately alleges the existence of a contract between the parties (i.e., the written Agreement) and the first cause of action is not controlled by the two-year statute of limitations set forth in Code of Civil Procedure section 399.

For purposes of this demurrer, it is immaterial that the copy of the Agreement attached to the FAC as Exhibit B is not signed by Singal or FCREI. Plaintiff explains that Exhibit B is merely a copy of the final version of the Agreement and he has not been able to locate his copy of the written Agreement that was signed by Singal. (FAC, 21 & 24.) Plaintiff’s admission that he cannot locate a fully executed copy of the Agreement does not establish that such a copy does not exist or that the Agreement was never executed by Singal and FCREI.

For these reasons, Singal and FCREI’s demurrer to the first cause of action is OVERRULED.

C. Second Cause of Action

Singal and FCREI argue, among other things, that the second cause of action for breach of the implied covenant of good faith and fair dealing fails to state a claim because there are no allegations showing that their alleged wrongful conduct frustrated Plaintiff’s rights to receive the benefits of the Agreement.

“The covenant of good faith and fair dealing is implied in law to assure that a contracting party ‘refrain[s] from doing anything to injure the right of the other to receive the benefits of the agreement.’ [Citation.] In essence, the covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party’s rights to the benefits of the contract.” (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1153.) “It cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.” (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349-350; Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1032 “[the implied covenant is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated in the contract”].)
Plaintiff here alleges that Singal and FCREI interfered with his right to receive benefits under the Agreement by “selling the [FCREIT’s] real assets to third parties for no consideration to [FCREIT], thereby severely devaluing [FCREA],” and “transferring all of [FCREA’s] cash assets to [FCREI] in exchange for nothing” (FAC, ¶¶ 45 & 46.) However, Plaintiff does not point to any contractual provision that obligated Singal and FCREI to sell FCREIT’s and/or FCREA’s assets for a particular amount. And Plaintiff cannot complain about a deprivation of the benefits due to a reduction in FCREA’s valuation because the Agreement never provided that FCREA would be valued at a certain amount. Plaintiff does not allege any facts showing that Singal and FCREI’s alleged conduct frustrated his right to receive the benefits of the Agreement, i.e., a two percent interest in FCREA and guaranteed distributions in a set amount.

Accordingly, Singal and FCREI’s demurrer to the second cause of action is SUSTAINED, with 20 days’ leave to amend. (See City of Stockton v. Super. Ct. (2007) 42 Cal.4th 730, 747 (City of Stockton) [where plaintiff has not had opportunity to amend complaint in response to demurrer, “leave to amend is liberally allowed as a matter of fairness unless the complaint shows on its face that it is incapable of amendment”].)

D. Third Cause of Action

Singal and FCREI argue that the third cause of action for breach of fiduciary duty fails to state a claim because there was no fiduciary relationship between Singal and Plaintiff under the terms of the Agreement. Singal and FCREI point out that the Agreement states, “Nothing contained in this Agreement shall be deemed or construed by the parties to create the relationship of principal and agent, partnership, joint venture or any other association between the parties hereto.” (FAC, Ex. B, Section 13(h).)

Plaintiff alleges he purchased a limited partnership interest in FCREA, Singal is the managing partner of FCREA, and “[a]s such, Singal owed [him] a fiduciary duty … .” (FAC, ¶¶ 4, 21, & 51, Ex. B.) Thus, as currently pleaded, the second cause of action is predicated on the allegation that Singal and Plaintiff had a limited partnership relationship. (See Cleveland v. Johnson (2012) 209 Cal.App.4th 1315, 1343–1344 (Cleveland) [a limited partnership is where the general partner manages and controls the partnership business and the limited partner provides capital, but does not take part in running the enterprise], citing Wyler v. Feuer (1978) 85 Cal.App.3d 392, 402.)

A managing partner owes fiduciary duties to other members of the partnership. (Cleveland, supra, 209 Cal.App.4th at pp. 1343–1344; Everest Investors 8 v. McNeil Partners (2003) 114 Cal.App.4th 411, 424–425 (Everest ).) Additionally, the fiduciary obligations of a managing partner with respect to matters fundamentally related to the partnership business cannot be waived or contracted away in the partnership agreement. (Everest, supra, 114 Cal.App.4th at pp. 424–425; BT-I v. Equitable Life Assurance Society of the United States (1999) 75 Cal.App.4th 1406, 1410–1412.)

Singal and FCREI’s argument—that there cannot be a partnership between Plaintiff and Singal because the Agreement says that it does not create a partnership—is not well-taken.

The question of the existence of a partnership depends primarily upon the intention of the parties ascertained from the terms of the agreement and from the surrounding circumstances. [Citations.] Ordinarily the existence of a partnership is evidenced by the right of the respective parties to participate in the profits and losses and in the management of the business. [Citations.] In ascertaining the intention of the parties, where they have entered into a written agreement, such intention should be determined chiefly from the terms of the writing. [Citation.] While the question of whether a partnership exists is to be determined from the nature of the relation agreed upon rather than the name which the parties have given to it, some weight must be given to the language of the parties themselves. [Citations.] It is the intention as evidenced by the terms of the agreement, and not the subjective or undisclosed intention of the parties, that controls. As was said by this court in Associated Piping etc. Co. v. Jones, 17 Cal.App.2d 107, 110, “The parties did intend to create exactly the relationship as shown by the contract, but did not intend that relationship to be called that of partnership. However, their intention in this respect is immaterial [citation]; and if the contract by its terms establishes a partnership between the parties, even the expressed intent that it should not be so classed would be of no avail. It is the intent to do the things which constitute a partnership that usually determines whether or not that relation exists between the parties. [Citation.]”

(Constans v. Ross (1951) 106 Cal.App.2d 381, 386–387, italics added; see Hansen v. Burford (1931) 212 Cal. 100, 104–105 [“We are further of the view that it is clearly to be implied from said clause negativing the existence of a partnership, and from the agreements considered apart from said clause, that it was the intention of the parties thereto that Cole and Owen should not be liable for any bills incurred for labor or materials in the construction of the buildings.”], italics added.)

Thus, the statement in the Agreement that the Agreement does not establish a partnership is not, in and of itself, dispositive of the issue of whether there is a partnership between Plaintiff and Singal. Rather, the issue turns on whether Plaintiff and Singal intended to do things which constitute a partnership. As Singal and FCREI do not address whether Plaintiff and Singal intended to do things pursuant to the Agreement which constituted a partnership, they have not shown that there was no fiduciary relationship between Singal and Plaintiff.

Consequently, Singal and FCREI’s demurrer to the third cause of action is OVERRULED.

E. Fourth Cause of Action

Singal and FCREI initially argue that the fourth cause of action for fraudulent inducement fails to state a claim because it is time-barred by the three-year statute of limitations set forth in Code of Civil Procedure section 338. They assert that Plaintiff cannot rely on the doctrine of delayed discovery because Plaintiff alleges Singal had a history of defrauding investors that dates back to 2008. Singal and FCREI contend that Plaintiff, therefore, had notice or information of circumstances to put him on inquiry or the opportunity to obtain knowledge from sources open to his investigation.

In order to sustain a demurrer on the basis of the statute of limitations, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint show that the action might be barred. (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1317.) “In assessing whether claims are time-barred, two basic questions drive [the] analysis: (a) [w]hat statutes of limitations govern the plaintiff’s claims? (b) [w]hen did the plaintiff’s causes of action accrue?” (Id. at p. 1316.) Generally, a cause of action accrues at the time when the claim is complete with all its elements. (Id. at p. 1317.) A claim such as fraud accrues and, thus, the limitations period commences when “the plaintiff suspects or should suspect that her injury was caused by wrongdoing.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal. 3d 1103, 1110; see also Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal. 4th 797, 807 [“we look to whether the plaintiffs have reason to suspect that a type of wrongdoing has injured them”].) “Resolution of the statute of limitations issue is normally a question of fact.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810.)

Plaintiff alleges that Singal and FCREI concealed their alleged fraud throughout 2016 and 2017, by refusing to provide him with an accounting of FCREA’s books and records and falsely stating that his guaranteed distributions had been delayed merely because the “advisor business is fairly complex.” (FAC, ¶¶ 32 & 63.) Although Plaintiff also alleges that Singal and his businesses had a history of defrauding investors and Singal admitted committing fraud in response to a formal accusation filed by the California Department of Real Estate in 2008 (id. at ¶¶ 14 & 15), the Court cannot say, as a matter of law, that Plaintiff should have suspected that he was a victim of the fraud allegedly perpetrated by Singal and FCREI in 2015, simply because Singal previously admitted to fraud in 2008. Thus, Singal and FCREI’s statute of limitations argument lacks merit.

Next, Singal and FCREI argue that Plaintiff cannot recover in tort for the alleged harm because the alleged misrepresentation is a term of the Agreement and, therefore, compensation for the breach is limited to contract remedies. In other words, Singal and FCREI contend that the claim is barred by the economic loss rule.

The economic loss rule provides that “where a purchaser’s expectations in a sale are frustrated because the product he brought is not working properly, his remedy is said to be in contract alone, for he has suffered only economic losses.” (Robinson Helicopter Company v. Dana Corporation (2004) 34 Cal.4th 979, 988 (Robinson).) This doctrine hinges on a “distinction drawn between transactions involving the sales of goods for commercial purposes where economic expectations are protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are injured in a manner which has traditionally been remedied by resort to the law of torts.” (Ibid.) The rule requires a purchaser to recover solely in contract for purely economic loss due to disappointed expectations, unless the purchaser can demonstrate harm above and beyond a broken contractual promise. (Ibid.)

In Robinson, the California Supreme Court carved out an exception to this rule, holding that it does not bar claims for fraud and intentional misrepresentations, which are independent of the contract that is alleged to have been breached. (Robinson, supra, 34 Cal.4th at p. 991.) The court reasoned that a breach of contract remedy assumes the parties to a contract can negotiate the risk occasioned by a breach; given this negotiation, it is “appropriate to enforce only such obligations as each party voluntarily assumed, and to give him only such benefits as he expected to receive … .” (Ibid., citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 517.) However, because a party to a contract could not “rationally calculate the possibility that the other party will deliberately misrepresent terms critical to that contract,” the court explained that public policy demanded that the party who is deceived be permitted to recover damages not limited to the contract. (Ibid.) Thus, where one party commits fraud during the contract formation or performance, the injured party may recover in contract and tort. (Ibid.; see Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 79, 78; see also Lazar v. Super. Ct. (1996) 12 Cal. 4th 631, 645 [“[F]raudulent inducement of contract—as the very phrase suggests—is not a context where the ‘traditional separation of tort and contract law’ [citation] obtains. To the contrary, this area of the law traditionally has involved both contract and tort principles and procedures.”]; Erlich v. Menezes (1999) 21 Cal. 4th 543, 551-552 [“Tort damages have been permitted in contract cases … where the contract was fraudulently induced.”].)

For these reasons, the economic loss rule does not apply to Plaintiff’s claim for fraudulent inducement.

Finally, Singal and FCREI argue that Plaintiff cannot state a claim for fraudulent inducement because the Agreement contains an integration clause, providing that no party made any promises or representations of any kind to induce the execution of the Agreement.

This argument lacks merit. It is well settled that “ ‘[a] party to a contract who has been guilty of fraud in its inducement cannot absolve himself or herself from the effects of his or her fraud by any stipulation in the contract, either that no representations have been made, or that any right that might be grounded upon them is waived. Such a stipulation or waiver will be ignored, and parol evidence of misrepresentations will be admitted, for the reason that fraud renders the whole agreement voidable, including the waiver provision. [Citations.]’ ” (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1500–1503; see 1 Witkin, Summary of Cal. Law (11th ed. 2018) Contracts, § 305; see also Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 300–301 [“Fraud in the inducement renders the entire contract voidable, including any provision in the contract providing the written contract is, for example, the sole agreement of the parties, that it contains their entire agreement and that there are no oral representations (integration/no oral representations clause).”].)

Accordingly, Singal and FCREI’s demurrer to the fourth cause of action is OVERRULED.

F. Fifth Cause of Action

Singal and FCREI argue that the fifth cause of action for an accounting fails to state a claim because it is derivative of the first cause of action for breach of contract and that claim does not survive demurrer.

Singal and FCREI argument’s is not well-taken because, as explained above, Singal and FCREI fail to dispose of the first cause of action.

Accordingly, Singal and FCREI’s demurrer to the fifth cause of action is OVERRULED.

G. Sixth Cause of Action

Singal and FCREI argue, among other things, that the sixth cause of action for money had and received fails to state a claim because there is an express contract covering the same subject matter.

A claim for money had and received is an action based on an implied-in-fact or quasi-contract, and such a claim cannot lie where there exists between the parties a valid express contract covering the same subject matter. (Shvarts v. Budget Group, Inc. (2000) 81 Cal.App.4th 1153, 1160; Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203.)

In his first cause of action, Plaintiff alleges the existence of an express written contract (i.e., the Agreement) between him, Singal, and FCREI regarding the provision of a two percent interest in FCREA to Plaintiff in exchange for $500,000. (FAC, ¶¶ 21-26 & 35-39.) The sixth cause of action incorporates by reference those allegations and alleges that Singal and FCREI kept the $500,000 without transferring a two percent ownership interest in FCREA to Plaintiff. (Id. at ¶¶ 74-78.) The allegations of an express contract are inconsistent with the allegations of an implied-in-fact or quasi-contract. Moreover, the allegations of the sixth cause of action are not pled in the alternative. Consequently, as Singal and FCREI persuasively argue, the sixth cause of action cannot lie.
For this reason, Singal and FCREI’s demurrer to the sixth cause of action is SUSTAINED, with 20 days’ leave to amend. (See City of Stockton, supra, 42 Cal.4th 730, 747 [where plaintiff has not had opportunity to amend complaint in response to demurrer, “leave to amend is liberally allowed as a matter of fairness unless the complaint shows on its face that it is incapable of amendment”].)

H. Request for Attorney Fees

In connection with their demurrer, Singal and FCREI assert they are entitled to an award of attorney fees under Civil Code section 1717.

That statute provides that a prevailing party is entitled to an award of attorney fees in an action on a contract, where the contract specifically provides that attorney’s fees and costs incurred to enforce the contract shall be awarded. (Civ. Code, § 1717; North Associates v. Bell (1986) 184 Cal.App.3d 860, 863.)

Singal and FCREI are not prevailing parties under Civil Code section 1717 and, therefore, are not entitled to an award of attorney fees.

Accordingly, Singal and FCREI’s request for attorney fees is DENIED.