17-CIV-05361 CHENG HU, ET AL. VS. VARUN BHATIA, ET AL.

CHENG HU DAVID W. TATE

VARUN BHATIA PRO/PER

DEFENDANT BGSM, INC.’S MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ COMPLAINT

· DENIED. Defendants BGSM, Inc.[who claims to have been erroneously sued as KW Keller Williams Peninsula Estates], Jean Tzu-Chin Hsia, and David Tawei Hsia (hereafter, collectively, the “Broker Defendants”)’s Motion To Strike the Plaintiffs Hu et al’s Prayer for Attorneys Fees is Denied. Said Defendants to file and serve their Answer within 20 days of Notice of Entry of Order.

· This is a dispute about the sale of real property. Allegedly, the property at issue (325 Moseley Road, Hillsborough, California) was previously used as a large dumping ground for debris such as asphalt, rebar, wood, beams, and other construction materials. According to the allegations, the original owners (Glenn Rice and Cynthia Hoy) sold the property to the subsequent owners (Varum Bhatia and Ruchi Bhatia) without disclosing this. Then, the subsequent owners later discovered this and sold the property to plaintiffs (Cheng Hu and Xiao Liang)—again without disclosing the history of use as a dumping ground.

· Plaintiffs also allege that their brokers failed to uncover this defect and/or failed to disclose it to Plaintiffs. The alleged broker was defendant Jean Tzu-Chin Hsia, and it is alleged that she was employed by defendants:

David Tawei Hsia,

Keller Williams, and

KW Peninsula Estates.

· Against these defendants—i.e. the “Broker Defendants”—the complaint only alleges a single cause of action for breach of fiduciary duty. However, the prayer for relief seeks attorney fees as to all causes of action. The Broker Defendants are now moving to strike the attorney fee language from the prayer for relief.

· A motion to strike may be brought to strike any matter that is irrelevant, false, or improper. C.C.P. §§ 435-436. “A motion to strike can also be used to attack claims for damages that are not supported by the cause of action pleaded…,” which includes attorney fees. Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group, 2017) ¶¶ 7:182-7:183 (emphasis in original).

· Where plaintiff claims a right to recover attorney fees as an element of tort damages—e.g., fees incurred by the client in instituting or defending an action as a direct result of the opposing party’s (such as an insurer’s) tortious conduct (so-called “Brandt fees” under the “tort of another” doctrine, [internal citation])—the attorney fee allegations should be included as an element of the cause of action rather than simply in the prayer for relief, and the amount proved at trial.

· Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group, 2017) ¶ 6:275.3, citing Brandt v. Sup.Ct. (Standard Ins. Co.) (1985) 37 Cal.3d 813, 817 (italics in original; bold added). Here, Plaintiffs have not expressly alleged attorney fees against the Broker Defendants as an element of damages. See Complaint ¶¶ 31-35. Instead, they have merely alleged it in the prayer.

· The Broker Defendants take the position that attorney fees cannot be properly alleged against them here because the “tort of another” doctrine does not apply to them. Specifically, they argue that, as alleged, they are joint tortfeasors with the other defendants in this case—not separate tortfeasors whose actions caused Plaintiffs to have to litigate with third parties. That argument does not match the allegations being made. Essentially, that argument suggests that Plaintiffs are alleging some sort of collusion or conspiracy between the Broker Defendants and the sellers and/or the prior sellers. That is not the allegation being made. The allegation made in the operative complaint is that the Broker Defendants owed Plaintiffs a fiduciary duty to advise them and advocate for them in the real estate transaction process and that this duty included the duty to investigate the Subject Property and disclose any defects or prior conditions that impacted the Subject Property. This is a separate and distinct claim from the claims being made against the prior owners. Similarly, in Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 507, the California Supreme Court provided the following analysis:

· The next question is whether plaintiff is entitled to recover attorney fees on the basis of the ‘tort of another‘ exception to the general rule because he was required to protect his interest by bringing an action against the sellers as the result of Fitch’s wrongdoing. We can see no escape from the validity of plaintiff’s claim in this regard. If Fitch had not first falsely notified plaintiff that his offer had been accepted and several months later told him that the sellers declined to sell the property, plaintiff would not have incurred attorney fees in seeking to 0obtain the property in a suit for specific performance against the sellers. Thus, Fitch’s misrepresentation was the direct cause of plaintiff’s action for specific performance against the sellers.

· Therefore, Plaintiffs do have a basis for seeking attorney fees from the Broker Defendants as an element of damages under the “tort of another” doctrine.

· Ultimately, the Practice Guide’s guidance on this issue indicates that “the attorney fee allegations should be included as an element of the cause of action rather than simply in the prayer for relief…” Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group, 2017) ¶ 6:275.3, citing Brandt v. Sup.Ct. (Standard Ins. Co.) (1985) 37 Cal.3d 813, 817 (emphasis added). However, failure to engage in this better practice does not amount to making the attorney fee allegation improper, as Plaintiff will ultimately have to prove attorney fees as an element of damages at trial.