Castleton Real Estate & Dev. v.
Filed 6/28/12 Castleton Real Estate & Dev. v. Tai-Fu
California Partnership CA4/3
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH
APPELLATE DISTRICT
DIVISION
THREE
CASTLETON REAL ESTATE &
DEVELOPMENT, INC.,
Plaintiff, Cross-defendant and
Appellant,
v.
TAI-FU
CALIFORNIA PARTNERSHIP et al.,
Defendants, Cross-complainants and
Respondents;
JUSTIN HUANG et al.,
Cross-defendants and Appellants.
G044304
(Super. Ct. No. 07CC00624)
O P I N I O N
Appeal from a
postjudgment order of the Superior Court
of
County, Geoffrey T. Glass, Judge. Affirmed in part and reversed and remanded in
part.
Manning & Kass,
Ellrod, Ramirez, and Trester, Fredric W. Trester, Christopher A. Kanjo and
Ronald J. Selgrath for Plaintiff, Cross-defendant and Appellant and
Cross-defendants and Appellants.
Castro & Associates,
Joel B. Castro, Toneata Martocchio; Law Office of Morton Minikes and Morton
Minikes for Defendants, Cross-complainants and Respondents.
* * *
After plaintiff
Castleton Real Estate & Development, Inc. (Castleton) sued defendants
Tai-Fu California Partnership and Hsiuh Chin Lin (collectively Tai-Fu) to
recover a real estate broker’s commission under an exclusive
certain real property, Tai-Fu cross-complained against, inter alia, Castleton
and two of its employees, cross-defendants Justin Huang and Howard Ting,
seeking rescission and making other contractual claims. Tai-Fu later amended its cross-complaint to
allege various torts, including negligent
misrepresentation, constructive fraud, and elder abuse. The jury found in favor of Castleton and its
employees on the complaint and cross-complaint.
In a related case (G043720 [consol. w/ G043760 & G043787]), Tai-Fu
appeals the judgment, and Castleton and another cross-defendant sued by Tai-Fu,
YK America Group, Inc., cross-appeal from the order denying their motions for
prejudgment interest.
This appeal involves the
denial of Castleton, Huang, and Ting’s motion for attorney fees based on a
provision in the listing agreement. The
court found Castleton’s failure to request mediation before filing its
complaint as required by the fee provision barred recovery of fees for both
prosecution of its complaint and defending against the cross-complaint. It further determined Huang and Ting were not
entitled to fees because they were not parties to the listing agreement,
although it agreed at the motion hearing if Castleton had been entitled to fees
on the cross-complaint it would include those incurred to defend all three
cross-defendants against the contractually-based claims in the cross-complaint. Because Huang and Ting do not challenge the
court’s ruling they could not individually recover fees, only Castleton’s
entitlement is at issue on appeal.
Castleton concedes it
may not recover fees for the prosecution of its complaint because it failed to
seek mediation prior to filing it. (
Cal.App.4th 1412, 1414.) But it contends
it was entitled to fees for its defense against the cross-complaint, as that
initiated a separate action. We agree
and remand the matter to the trial court to determine the appropriate amount of
fees to award Castleton. In all other
respects, the order is affirmed.
DISCUSSION
We review de novo the
legal basis for the court’s denial of attorney fees. (Snyder
v. Marcus & Millichap (1996) 46 Cal.App.4th 1099, 1102.)
The listing agreement
between Castleton and Tai-Fu allows for the recovery of attorney fees to the
prevailing party “[i]n any action” between them regarding Tai-Fu’s obligation
to pay a commission. The parties agreed
“to mediate any dispute or claim arising between them out of this [l]isting
[a]greement . . . before resorting to arbitration or court
action . . . . If, for any dispute or claim to which
this paragraph applies, any party commences an action without first attempting
to resolve the matter through mediation, or refuses to mediate after a request
has been made, then that party shall not be entitled to recover attorney fees,
even if they would otherwise be available to that party in any such action.”
Castleton did not
request mediation before filing its complaint, but Tai-Fu demanded it a month
after it was sued. Although Castleton
thereafter made efforts to mediate the matter, Tai-Fu refused to proceed and
filed its cross-complaint. In doing so
Tai-Fu “commence[d] an action” without first attempting to resolve the matter
through mediation, having “refuse[d] to mediate” after requesting it.
Tai-Fu contends the
cross-complaint was part of a single action initiated by Castleton because the
proceedings were not severed. But the Supreme
Court has held the filing of a cross-complaint “institute[s] a
‘ . . . separate, simultaneous action’” distinct from the
initial complaint and makes the cross-defendant a defendant. (Bertero
v. National General Corp. (1974) 13 Cal.3d 43, 51.) The result is “‘two simultaneous actions
pending between the same parties wherein each is at the same time both a
plaintiff and a defendant.’
[Citations.]” (
definition of a complaint to mean either a complaint or cross-complaint
“reinforces [the] ‘treatment of all cross-actions as independent suits.” (Id.
after Tai-Fu refused to mediate, Castleton was entitled to recover fees
incurred for its defense. (See
1087, 1101 [affirming fee award to the defendant under mediation clause similar
to this case where the plaintiff filed complaint without first seeking to
mediate].)
Tai-Fu argues otherwise,
quoting Johnson v. Siegel,
(italics omitted), for the proposition “[s]eeking mediation is a condition
precedent to the recovery of attorney fees by the party who initiates the
action.” According to Tai-Fu, that means
only Castleton, as the party who initiated the lawsuit, must request
mediation. We are not persuaded.
In Johnson, the defendant did not file a cross-complaint, but merely
answered, and thus had not “commenced an action.” (Johnson
v. Siegel, supra, 84 Cal.App.4th
at pp. 1091, 1100.) Because Tai-Fu filed
a cross-complaint and thus “commenced an action,” Johnson undermines rather than supports Tai-Fu’s position.
Nor does
1506 assist Tai-Fu. Frei involved an attorney fees request by the defendant sellers of
a house who filed a cross-complaint against the buyer and the real estate
broker. The agreement contained an
essentially identical mediation condition to the one in this case. The court reversed an order awarding fees to defendants
upon determining they had refused the plaintiff buyer’s request to mediate
without a legally valid reason. (
by a plaintiff sued on a cross-complaint by the defendant. “[I]t is axiomatic that cases are not
authority for propositions not considered.
[Citations.]” (
1161, 1176.)
Tai-Fu maintains the
cross-complaint’s gravamen and tenor was defensive in nature to Castleton’s
complaint and “many” of its causes of action tracked its affirmative
defenses. Bertero rejected a similar contention the defendants’
cross-complaint “did not initiate a judicial
proceeding” because it was “in effect only an affirmative defense which
they were obligated to assert under penalty of waiver” and “that it did not
interject any theories or burdens not raised by the answer to the
complaint.” (Bertero v. National General Corp., supra, 13 Cal.3d at p. 50.)
According to the court, “[f]or our purposes no sound reason appears for
treating a cause of action initiated by a cross-pleading as only an integral
part of that cause initiated by the complaint.”
(Id. at p. 51.) Moreover, “by seeking affirmative relief,”
defendants did “more than attempt to repel [the plaintiff’s] attack; they took
the offense in attempting to prosecute a cause of action of their own.” (Id.
at p. 53.) Although Bertero involved an action for malicious prosecution based on
“affirmative relief asserted in a cross-pleading” (id. at p. 53), its analysis pertains to this case.
By stating “many” of its
claims followed its affirmative defenses, Tai-Fu acknowledges not all of them
did. To the contrary, Tai-Fu’s second
amended complaint goes on the offense by asserting causes of action for breach
of fiduciary duty and elder abuse against Castleton, Huang, and Ting, and fraud
against Huang. It was thus a separate
action from the initial complaint. (
The final issue raised
on appeal is whether the fee provision of the listing agreement covers both the
contract and tort claims asserted by Tai-Fu.
It does. A provision such as the
one in this case allowing for the recovery of fees arising out of the agreement
is broad enough to support an award for the defense of both contract and tort
claims. (Johnson v. Siegel,
1101-1102.)
DISPOSITION
The order denying an
award of attorney fees to Castleton Real Estate & Development, Inc. is
reversed and the matter is remanded to the trial court to determine the
appropriate amount to which it is entitled consistent with the views expressed
in this opinion. In all other respects,
the order is affirmed. Castleton Real
Estate & Development, Inc. shall recover its
RYLAARSDAM,
J.
WE CONCUR:
O’LEARY, P. J.
BEDSWORTH, J.
