Case Name: Chiocchi, et al. v. Dariano, et al
Case No.: 17CV310881

I. Background

This case brought by William Chiocchi and Adriana Chiocchi as Trustees of the William and Adriana Chiocchi Living Trust dated April 12, 2000 (collectively, “Sellers”) against Mark Von Kaenel, Dianna von Kaenel (erroneously sued as Dianne Von Kaenel), Kenneth Robinson, Bonnie Robinson (collectively, “Buyers”), Anthony Dariano, and Alexa Andrea Ingram-Cuachi as Trustee of the Old Santa Cruz Revocable Trust dated January 13, 2015 arises from Sellers attempts to build an access road.

Sellers initially filed a complaint to quiet title and prevent interference with an access easement that runs from their property (“Sellers’ Property”) through land they recently sold (“Buyers’ Property”). Buyers filed a cross-complaint (“Buyers’ Cross-Complaint”) against Sellers, alleging among other things that Sellers failed to disclose the easement at the time of sale. Subsequently, Sellers filed a cross-complaint (“Sellers’ Cross-Complaint”) against Mark Von Kaenel and TCGLG Inc. dba KW Bay Area Estates (“KW Bay Area”) (collectively, “Buyers’ Brokers”), which is the pleading at issue here.

According to Sellers’ Cross-Complaint, Andriana Chiocchi was diagnosed with a medical condition requiring the use of a wheel chair. Because it was difficult to maneuver around their home using a wheel chair, Sellers built a new home that is compliant with the Americans with Disabilities Act on their adjacent lot. In order to access their new home, Sellers would need to build an access road leading through their current property. Sellers put their current home on the market, and Buyers eventually purchased it.

During the purchase, Sellers made Buyers’ Brokers aware of an easement for ingress and egress running through Buyers’ Property, and their plan to build an access road on that easement. Buyers’ Brokers received two title reports informing them of the easement. In addition, William Chiocchi repeatedly informed Buyers’ Brokers that Sellers owned another piece of property nearby, and planned to use the easement to build an access road through Buyers’ Property to their new home.

Buyers’ Brokers failed to advise their clients of the easement and the need for an access road through Buyers’ Property. Buyers refused to allow Sellers to exercise their rights under the easement and eventually filed Buyers’ Cross-Complaint against Sellers alleging they did not disclose the easement. Subsequently, Sellers brought Sellers’ Cross-Complaint against Buyers’ Brokers, alleging they failed to inform Buyers of the easement and therefore caused Sellers to incur attorney’s fees defending against Buyers’ Cross-Complaint.

Sellers’ Cross-Complaint includes causes of action for: (1) tort of another; (2) equitable indemnity; and (3) declaratory relief. Currently before the Court is Buyers’ Brokers motion to strike attorney’s fee allegations from the pleading.

II. Request for Judicial Notice

Buyers’ Brokers filed a request for judicial notice in support of their motion, seeking judicial notice of (1) Sellers’ underlying second amended complaint (“SAC”); and (2) Sellers’ Cross-Complaint.

Generally, court records are proper subjects for judicial notice. (Evid. Code, § 452, subd. (d).) Both of the requested documents are court records. The SAC is relevant to deciding the instant motion to strike. (See also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters are subject to judicial notice].) While the Court can take judicial notice of court records, the Court does not accept as true all facts stated within those records. (People v. Woodell (1998) 17 Cal.4th 448, 455.) Thus, the request for judicial notice of the SAC is GRANTED.

Turning to Sellers’ Cross-Complaint, it is the pleading under review. As such, it is unnecessary to take judicial notice of it. (See Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091, fn. 1; Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255 [courts presume truth of pleading challenged by a motion to strike].) Therefore, the request for judicial notice of the Sellers’ Cross-Complaint is DENIED as unnecessary.

III. Merits of the Motion to Strike

The motion is made pursuant to Code of Civil Procedure section 436, which permits the striking of “any irrelevant, false, or improper” matter from a pleading. Irrelevant matter includes a demand for relief not supported by the allegations. (Code Civ. Proc., § 431.10, subds. (b)(3), (c).)

The specific portions of the pleading that Buyers’ Brokers move to strike are the prayer for attorney’s fees as well as references to attorney’s fees in each cause of action. Buyers’ Brokers argue the references to attorney’s fees should be struck because Sellers do not identify a statutory or contractual basis for recovery of fees and the tort of another doctrine does not apply.

Buyers’ Brokers are correct that generally parties must bear their own legal fees, absent some agreement or statutory authority. (See Code Civ. Proc., § 1021; Musaelian v. Adams (2009) 45 Cal.4th 512, 516; In re Marriage of Reyes (1979) 97 Cal.App.3d 876, 879.) While there does not appear to be legal authority requiring a statutory or contractual basis to be affirmatively plead, (see Snatchko v. Westfield LLC (2010) 187 Cal.App.4th 469, 497; Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, 194; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2017), ¶ 6:275, p. 6-91) they affirmatively concede they are not seeking recovery of fees based on their pursuit of Sellers’ Cross-Complaint. Instead, this request for attorney’s fees is predicated solely the tort of another doctrine as it applies to the defense of Buyers’ Cross-Complaint.

Under that doctrine, attorney’s fees incurred as a result of a third party’s negligence may be recoverable as compensatory damages. (Mega RV Corporation v. HWH Corporation (2014) 225 Cal.App.4th 1318, 1337.) Sellers therefore agree that it would be appropriate to strike the prayer for attorney’s fees which currently reads as an independent fee request as opposed to a component of compensatory damages. Thus, the sole issue to be resolved is whether the allegations and matters subject to judicial notice reflect that Sellers may recover compensatory damages under the tort of another doctrine.

For background, the seminal case on the tort of another doctrine is Prentice v. North Am. Title Guaranty Corp., Alameda Division (1963) 59 Cal.2d 618 (“Prentice”), where the California Supreme Court held that, in contrast to the general rule that parties bear their own attorney’s fees, “[a] person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred.” (Prentice, supra, 59 Cal.2d at 620.) In Prentice, real property sellers were forced to bring an action to quiet title because of an escrow holder’s negligence. (Id. at pp. 619-20.) The California Supreme Court held the sellers could recover attorney’s fees incurred in their litigation with third parties. (Id. at p. 621.)

Buyers’ Brokers argue that the tort of another doctrine “does not allow a party to recover fees and costs associated with direct litigation against an allegedly negligent defendant.” (Motion to Strike (“MTS”) p. 5:6-7.) In support of this assertion Buyers’ Brokers cite three cases, which taken together do support this general proposition. (See Vacco Industries, Inc. v. Van Den Berg (1992) 5 Cal.App.4th 34 (Vacco); Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44; Pederson v. Kennedy (1982) 128 Cal.App.3d 976.) However, this is not determinative of the motion because this case does not involve a request for attorney’s fees incurred in direct litigation against the opposing party.

Buyers’ Brokers attempt to analogize the present facts to Vacco. In Vacco, several ex-employees of a company used trade secrets to operate a competing business. (Vacco, supra, 5 Cal.App.4th at 43-44.) The company sued an ex-employee—Van Den Berg—and co-defendants for violation of a noncompetition agreement and misappropriation of trade secrets. (Id. at p. 45.) Van Den Berg brought a cross-complaint for wrongful termination against his ex-employer. (Ibid.) After jury trial, the plaintiff company brought a motion for attorneys’ fees against Van Den Berg under two theories, one of which was tort of another pursuant to Prentice. The trial court granted the motion based upon Prentice and awarded attorney’s fees but the Court of Appeal struck the award of fees.

The Court of Appeal stated the case was in essence a two-party lawsuit to which the general rule of paying one’s own attorneys’ fees applied. (Vacco, supra, 5 Cal.App.4th at p. 57.) The Court of Appeal reasoned that “[t]he rule of Prentice was not intended to apply to one of several joint tortfeasors in order to justify additional attorney’s fee damages … As Prentice originally emphasized, there is no basis for awarding attorney’s fees to a successful party in what is essentially a ‘two-party’ lawsuit.” (Ibid.)

Buyers’ Brokers assert that Sellers “make the same allegations” against themselves and their clients. (MTS, p. 5:26-27.) They argue that because these allegations overlap “[a]s it relates to the dispute between our clients, it is essentially a two-party lawsuit” and thus the tort of another doctrine does not apply. (MTS, p. 5:27-28.)

Overlap between the SAC and Sellers’ Cross-Complaint does not make this a two-party lawsuit. To the contrary, as Sellers argue persuasively in opposition, this is not a two-party lawsuit. Here, Sellers originally sued Buyers and two other nearby landowners to enforce their rights under the easement. Buyers then filed a cross-complaint against Sellers alleging a failure to disclose the easement. Subsequently, Sellers filed a cross-complaint alleging that the “negligence and incompetence” of Buyers’ Brokers caused their clients to sue Sellers. (Sellers’ Cross-Complaint, ¶¶ 13, 21, 22.) The parties to the SAC and Sellers’ Cross Complaint are not identical. All but one defendant in the SAC is absent from the Sellers’ Cross-Complaint. KW Bay Area is not a party to the SAC, but is a cross-defendant in the Sellers’ Cross-Complaint. Thus, this case is not essentially a two-party lawsuit.

Moreover, the parties’ positions and conduct here are quite different than in Vacco. In Vacco, the plaintiff sued several co-defendants who “working together … jointly committed the tortious acts of which [it] complained.” (Vacco, supra, 5 Cal.App4th at p. 57.) The decision not to apply the tort of another doctrine to the joint tortfeasors in Vacco was based upon the premise that none of the co-defendants had forced the plaintiff to bring or defend an action against the other co-defendants. (Ibid. [“There is nothing about their relationship or their conduct that justifies singling out Van Den Berg as the one whose conduct caused Vacco to have to prosecute a legal action against the other two”].) Here, the allegations are that Buyers’ Brokers allegedly caused Sellers to have to defend Buyers’ Cross-Complaint.

Insomuch as Buyers’ Brokers argue overlapping facts in the SAC and Sellers’ Cross-Complaint imply that the defendants in the SAC and cross-defendants in the Sellers’ Cross-Complaint should be lumped together as joint tortfeasors or co-defendants similar to the co-defendants in Vacco, they do not support this point with law.

In addition, the conclusion that this is not a tow-party lawsuit and the tort of another doctrine applies is supported by the opposition, Sellers cite Vacco for its summary of Gray v. Don Miller & Associates (1984) 35 Cal.3d 498 (Gray). In Gray, a prospective purchaser of real estate was falsely informed by his broker that his offer had been accepted. (Gray, supra, 35 Cal.3d at p. 502.) Several months later the broker told the prospective buyer that the sellers had refused to sell the property. (Ibid.) In reliance on this information, the prospective buyer sued the sellers for specific performance. (Ibid.) The prospective buyer sought to recover attorney’s fees incurred in his suit against the seller from his broker because the broker’s misrepresentation caused damages in the form of attorney’s fees. The California Supreme Court held the tort of another doctrine applied, and the broker must pay the prospective buyers’ attorney’s fees for litigation against the sellers. (Id. at p. 509.)

The Court sees no distinction between the broker’s fraud resulting in litigation in Gray, and the broker’s alleged negligence resulting in litigation here. In both cases the tortious conduct of the broker required a party to a real estate transaction to commence or defend litigation.

In reply, Buyer’s Brokers attempt to distinguish Gray on the basis the broker there was the agent of the party seeking fees, which the broker in the instant case is not the agent of the party seeking fees. Buyers’ Brokers assert that, in Gray, the broker had a duty to the party seeking attorney’s fees, and here there is no similar duty. There is nothing in Gray suggesting that the tort of another doctrine only applies when the party from whom fees are sought has some pre-existing duty to the party demanding fees.

Based upon the forgoing, the motion to strike is GRANTED as to the prayer for attorney’s fees and DENIED as to the balance of the motion.