Opinion
D073615
08-23-2018
KENT CHEN et al., Plaintiffs and Appellants, v. GROVE AVENUE BUSINESS PARK OWNERS ASSOCIATION et al., Defendants and Respondents.
Landing Law Offices, Stephen J. Thomas and Jonathan T. Wang for Plaintiffs and Appellants. Hatton, Petrie & Stackler, Arthur R. Petrie II and Daniel E. Heck for Defendant and Respondent Grove Avenue Business Park Owners Association. Buley Law, Michael J. Buley and Lisa A. Navarro for Defendant and Respondent Bud Pharris.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. CIVRS1400189) APPEAL from a judgment of the Superior Court of San Bernardino County, Keith Davis, Judge. Affirmed. Landing Law Offices, Stephen J. Thomas and Jonathan T. Wang for Plaintiffs and Appellants. Hatton, Petrie & Stackler, Arthur R. Petrie II and Daniel E. Heck for Defendant and Respondent Grove Avenue Business Park Owners Association. Buley Law, Michael J. Buley and Lisa A. Navarro for Defendant and Respondent Bud Pharris.
This appeal arises from a dispute between a commercial property owner (and its principals) (collectively plaintiffs) and a business park association (and related parties) concerning the association's removal of a fence near plaintiffs' property. Plaintiffs sued the association and its former board president, claiming the fence removal was wrongful and caused plaintiffs to suffer economic and emotional distress damages. After years of hard-fought litigation, the court sustained a demurrer on certain causes of action and later granted summary judgment on the remaining claims. Plaintiffs appeal from the summary judgment. We affirm.
OVERVIEW
CK Benefits Investment, LLC (CK) purchased commercial warehouse property in a business park governed by the Grove Avenue Business Park Owners Association (Association). Before the May 2010 escrow closing, the Association's board president, defendant Bud Pharris, told CK's principals that the Association approved their request to build a fence in the common area and that they could use the nearby parking spaces for loading and unloading purposes. Pharris provided this approval in writing and signed the document as the Association's board president. Early the next year, Pharris left for a different employment.
CK then leased and successfully operated the property with the fence for the next three years without objection. However, in 2013, the Association removed the fence when the City of Ontario (City) issued a code violation notice requiring the fence's removal. About two years later, CK sold the property at a price higher than the purchase price.
CK and its principals, Kent Chen and Pin Pin Chang (husband and wife), sued the original seller/developer and related parties (collectively, Seller/Developer), the Association, and Pharris. They sought damages resulting from the Association's revocation of its earlier fence approval and alleged interference with the CK tenant's loading/unloading activities. Plaintiffs asserted causes of action for fraud, breach of contract, violation of Business and Professions Code section 17200 (section 17200), and intentional interference with economic interests.
The court first sustained the Seller/Developer's demurrer without leave to amend on all of the claims against it, and sustained the Association's demurrer to the breach of contract claim. These rulings are not before us on this appeal. The court then granted summary judgment motions brought by the Association and Pharris, finding the undisputed facts established plaintiffs could not prove the elements of their remaining claims. The court granted attorney fees motions brought by the Association and Pharris, awarding Association $58,384 and awarding Pharris $64,247.11.
Plaintiffs challenge the summary judgment rulings and the attorney fees awards. We reject plaintiffs' contentions and affirm.
FACTUAL AND PROCEDURAL SUMMARY
Factual Background
We summarize the admissible evidence in the light most favorable to plaintiffs. (Rojas v. HSBC Card Services Inc. (2018) 20 Cal.App.5th 427, 431.)
In their appellate briefs, respondents do not always comply with this review standard and instead frequently rely on their own version of the facts. We disregard any factual assertions inconsistent with the applicable review standard.
In early 2010, Chen and Chang retained an experienced real estate broker to assist in the purchase of a warehouse for Chen's automobile parts business (Motor Street Performance, Inc. (Motor Street)). After viewing numerous properties, Chen and Chang visited Building 8-A (the Property) in the Grove Avenue Business Park. At the time, four marked parking spaces were located near the Property's back loading area, and Chen and Chang had some concerns whether this configuration would permit sufficient access for loading and unloading.
Chen was Motor Street's sole shareholder.
In February 2010, Chen and Chang submitted an offer to purchase the Property. They did not condition the offer on obtaining any additional access to the warehouse property. During the next few weeks, Chen and Chang exchanged various counteroffers and proposals with the Seller/Developer. None of these proposals contained any request regarding the common area space near the warehouse's loading docks.
Chen and Chang then met with Pharris, the Seller/Developer's senior development manager and the president of the Association's Board of Directors (Board). During this meeting, Chang discussed her concern that the parking spaces would interfere with how "a truck could get into the warehouse." Pharris responded that the marked spaces were a " 'mistake,' " and suggested he could seek Association approval for Chen and Chang to build a fence in the common area to provide a protected space for loading and unloading near the warehouse's rolling garage doors.
During the next several weeks, Chang and Chen asked the Seller/Developer's real estate broker to include language in the purchase agreement to provide for a right to build a fence in the common area. The Seller/Developer's broker responded that the fence issue was a matter within the Association's authority and required Association approval. But the Seller/Developer's broker noted the Association was controlled by the Seller/Developer, and the Board was composed solely of Seller/Developer employees. The broker said the best way to handle the issue was to make the fence part of the purchase contingencies.
Shortly after, on about March 24, Chen and the Seller/Developer's principal signed the purchase agreement and escrow instructions (Purchase Agreement). The Purchase Agreement did not contain a fence condition, or provide the purchase was contingent on fence approval. The Purchase Agreement stated the purchase was of the "airspace" of the Property "together with an undivided interest in the Common Area," as defined in the governing CC&R's to include parking spaces and the right to use parking spaces on a nonexclusive basis.
During the escrow period, Chen and Chang asked Pharris to confirm the Association's approval of their right to construct a fence to provide an exclusive loading area. In response, on April 8, Pharris transmitted a document to Chen and Chang approving the fence construction and the right to use the marked parking spaces for loading/unloading purposes. The document is a site map of the Grove Avenue Business Park, and includes a printed statement (with a line pointing to an area outside the Property) stating: "buyer has the right to install a fence between the two walls located in front of GL area, and the said area should be a loading area without parking space." The document states "APPROVED!" and was signed by Pharris, as "Board President."
Chen and Chang were also given a copy of the CC&R's during the escrow period. The CC&R's provided that the Association is governed by the three-member Board. Under the CC&R's provisions, each unit is entitled to one vote for board members, except the Seller/Developer was "entitled to at least fifteen (15) votes for each of the Condominiums retained by it, until . . . such Condominium is sold or transferred . . . ." At the time, the Seller/Developer owned the majority of the units. The CC&R's also contained provisions stating the property owners had an undivided 1/24 interest in the common area, and the nonexclusive use of the common areas, including parking spaces, except that each unit had the exclusive use of two parking spaces. The CC&R's further stated the Board had the right to approve fences, and to adopt rules regulating the use and enjoyment of the common area, including parking areas. The CC&R's also provided the City has "primary regulatory jurisdiction over the [business park]," and the Association and owners "shall abide by [the City's] codes, ordinances, resolutions and other applicable laws and regulation[s] . . . ." The CC&R's prohibit any use that "violates any law, ordinance, statute, rule, or regulation of any local, county, state or federal body."
Before escrow closed, Chen and Chang formed CK, a limited liability company, to take title to the Property. Chen and Chang were CK's sole members and managers.
Escrow closed at the end of May or early June 2010, and CK became the owner of the Property. The purchase price was $1,157,571. In August 2010, CK installed the approved fence. Pharris's position with the Board ended at about the same time. In about January 2011, Pharris accepted a different employment, and no longer had any business relationship with the Association or the Seller/Developer.
During the next several years, the fence remained in place and CK's tenant (Motor Street) successfully operated its business from the Property. There were no complaints or objections regarding the fence or the tenant's use of the nearby parking spaces for loading and unloading.
About three years after the fence was constructed, in June 2013, the new Board discussed the issue of the common area next to the Property, and noted a dispute among owners regarding the locked fence. The objecting owners did not dispute that CK could use the area for loading purposes, but expressed concerns about the locked fence.
Several months later, in November 2013, the City issued a formal notice that CK's fence violated municipal codes, and mandated the removal of the fence and another fence at the business park. The Association's property manager sent a notice to CK, stating that "[p]ursuant to" the City's notice of violation, "the [A]ssociation has contracted for the fence to be taken down . . . ." About six weeks later, in December 2013, the Association removed the fence.
The next month, CK, Chen, and Chang filed a superior court complaint against the Seller/Developer, the Association, and Pharris. Motor Street was not a named plaintiff and has never been a party in the action.
While the lawsuit was pending, Motor Street continued to operate from the Property and pay its full rent plus the Association fees. In August 2014, Motor Street moved its operations to a different property owned by Chen and Chang.
About one year later, in November 2015, CK sold the Property for about $1,615,000, $457,429 more than it had paid in 2010.
Operative Complaint Against Pharris and Association
Plaintiffs' operative (second amended) complaint against Pharris alleges fraud, breach of contract, intentional interference with economic relations, and violation of section 17200. The complaint alleges the same claims against the Association except the complaint did not name the Association as a defendant in the section 17200 cause of action, and the court had sustained a demurrer on plaintiffs' breach of contract claim against the Association.
The main factual basis underlying each cause of action was plaintiffs' allegations that Pharris—acting on behalf of the Association—engaged in wrongful conduct (1) when he told Chen and Chang (before the Purchase Agreement was signed) that he could obtain the Association's approval for plaintiffs to build a fence and to use the nearby marked parking spaces for loading and unloading purposes; and (2) during the escrow period when he signed (as Board president) and marked "APPROVED!" the document stating that plaintiffs would have the right to install a fence and use the parking space area for loading and unloading.
In their fraud claim, plaintiffs alleged Pharris's representations were knowingly false when they were made, and plaintiffs reasonably and justifiably relied on these representations in purchasing the Property because Pharris represented himself to be the Board president and a representative of the Seller/Developer, and they "had no reason to doubt the authenticity or authority of [his] representations . . . ." Plaintiffs alleged their reliance on the alleged fraudulent misrepresentations "caused them to become embroiled in this on-going dispute with [the Association and the City]. As a result, Plaintiffs suffered significant damages, including but not limited to direct monetary losses to their business [Motor Street], out of pocket expenses to relocate their business to another warehouse, severe emotional distress, and other damages to be proven at trial." Plaintiffs also sought punitive damages, alleging defendants' statements were "fraudulent, willful, and malicious and part of a conscious scheme to injure" them.
On their breach of contract claim, plaintiffs alleged Pharris's approval of the fence and the use of the parking spaces became part of the Purchase Agreement, and these contractual provisions in the Purchase Agreement were breached in 2013 when the Association removed the fence.
On their intentional interference claim, plaintiffs alleged defendants' misrepresentations and removal of the fence wrongfully interfered with the business relationships between "[p]laintiffs" and their "their third party clients who purchase goods . . . that are stored in Plaintiffs' warehouse." They alleged these acts caused "[p]laintiffs" to incur economic losses because "their" customers were unable to "reliably maneuver their trucks in and out of the loading area."
On their section 17200 claim, plaintiffs alleged Pharris's acts in making false representations regarding the fence and the parking spaces constituted a fraudulent and unlawful business practice.
Summary Judgment Proceedings
Pharris and the Association each moved for summary judgment, asserting separate (and sometimes conflicting) arguments. We summarize the arguments asserted in the summary judgment proceedings and will discuss additional relevant facts and arguments when considering the particular legal issues raised by the parties.
Pharris's Summary Judgment Motion
In his summary judgment motion, Pharris acknowledged signing the site map document on behalf of the Association's Board and agreed that this document reflected the Association's approval for plaintiffs to build the fence in the business park's common area. But Pharris argued plaintiffs could not recover on their claims because they had no evidence to show: (1) his representation regarding the fence approval was false; (2) he knew this statement was false; (3) he did not intend to perform the promise; and (4) plaintiffs suffered cognizable damages.
On the fraud claim, Pharris's main argument was that the undisputed facts showed the Association had in fact approved the fence (based on his written approval and signature on the site map); the fence was built and remained in the common area without objection for three years; and he could not have known or foreseen the Board's later decision to remove the fence, which—as plaintiffs had conceded in their complaint—was based on a directive from the City. He also argued his approval of the fence did not include a promise that plaintiffs had permanent exclusive control of the common area parking spaces, particularly given the CC&R's provisions that every owner has " 'an undivided interest in the Common Area . . . and the Parking Spaces,' " and that the Association's approval regarding common area use is expressly subject to government laws and regulations. Pharris also relied on the disclaimers in the Purchase Agreement that plaintiffs had not relied upon any representations other than the written warranties contained in the agreement.
Regarding damages on the fraud claim, Pharris relied on deposition testimony by Chang, who was designated as CK's person most knowledgeable. In her testimony, Chang was asked to identify circumstances when "goods could not be delivered" to the Property, and Chang responded by stating "when the recipient's address was wrong" or when the business was closed (without also identifying the fence removal as a factor). Pharris also relied on evidence showing CK purchased the property in 2010 for $1,157,571, and sold it in 2015 for $1,615,000, netting $457,429 in profit.
On the breach of contract claim, Pharris argued and presented evidence that (1) he was not a party to the Purchase Agreement; (2) the fence approval was not part of the Purchase Agreement; (3) the Purchase Agreement contains due diligence and disclaimer language that provide for plaintiffs' sole responsibility in verifying the accuracy of information and to confirm the sale conditions; (4) the Purchase Agreement contains an integration clause providing it is the entire agreement between the parties; and (5) the CC&R's provide for the nonexclusive use of common areas.
On the section 17200 claim, Pharris argued the undisputed facts showed he did not engage in any wrongful conduct, and had no involvement in the fence removal in December 2013 as he had ceased affiliation with the Association no later than January 2011.
On the intentional interference claim, Pharris argued that plaintiffs were unable to identify any particular relationships that Pharris knew about and intended to disrupt, and had no facts showing they suffered any harm from any purported disruption of the economic relationships.
Association's Summary Judgment Motion
In its summary judgment motion, the Association argued it could not be held liable for Pharris's alleged false representations because (1) Pharris did not have the authority on behalf of the Association to approve the fence construction and/or the exclusive use of the common area, and (2) plaintiffs could not have reasonably relied on Pharris's approval given the undisputed fact that they were provided a copy of the CC&R's before escrow closed and the CC&R's made clear that all owners have nonexclusive rights to the common areas, and modifications to this rule require formal Board approval and/or 67 percent owner authorization.
In support, the Association relied on Pharris's deposition testimony in which he said he did not recall whether he discussed the fence matter with other Board members, whether a Board vote was conducted on the issue of approving the fence, or whether the approval was documented in Board minutes. The Association also submitted the declaration of Luke Rutherford, the Association property manager from August 2009 through August 2010, who said he was unaware of any fence approval, and that his review of the Association's files failed to disclose any documentation for a fence approval. Rutherford also said a prospective buyer could have "quickly learned" no vote had taken place by telephoning the Association's property manager.
The Association also proffered a copy of the CC&R's providing that all property owners in the business park are entitled to the nonexclusive use of the common area (including parking spaces except for two designated spaces). It also relied on the law requiring a 67 percent vote of the owners of a common interest development to change this rule and grant "exclusive use" to a property owner. (See Civ. Code, § 4600, subd. (a); former Civ. Code, § 1363.07). The Association maintained that the CC&R's do not contain any provisions changing this statutory owner-vote requirement, and there was no evidence that the Board or the owners had voted to grant plaintiffs an exception to this rule.
The Association additionally argued the undisputed evidence showed plaintiffs had not suffered damages caused by Pharris's alleged misrepresentation. It relied on Chang's deposition testimony that when she purchased the property she "didn't think too much whether I overpaid or underpaid [for the Property] because it was for my own use. And the bank wanted to lend me the money, so I was fine with it," and that she was "fine" with the purchase price, because it was the appraised value, and the bank had approved the loan, and she accepted the price "because it was for my own self." The Association also relied on Chen's testimony that when escrow closed on the property, he thought he overpaid on the property "a little" because "there were other better buildings" and "within the same community there was another property that the payment price was about the same as what we were paying," and he could not think of any other reason that he may have overpaid for the property. The Association also argued that CK did not suffer any damages because it sold the Property for more than it paid for it.
On the intentional interference claim, the Association argued the undisputed facts showed plaintiffs had no evidence that the Association knew of the "existence of the particular relationship[s] interfered with"; the Association engaged in any wrongful conduct; the claimed interference between Motor Street and its customers caused any of plaintiffs' claimed damages; and/or that plaintiffs in fact suffered any compensable damages.
Plaintiffs' Opposition to the Summary Judgment Motions
In opposing both motions, plaintiffs argued they "were entitled to rely on the promises made to them by Pharris, and did so rely to [their] detriment, even though Pharris may well have failed to follow the proper procedures before making them." They argued that based on Pharris's signed, written approval as the Association's Board president, "he had either actual or ostensible authority" to approve the construction of the fence, and said they would not have purchased the Property without the approval.
They further argued the approval was valid under the CC&R's based on evidence that Pharris was the Seller/Developer's employee; the Seller/Developer controlled more than 67 percent of the votes by application of the 15:1 voting rule (pertaining to the election of the Board members); and the Seller/Developer owned a majority of the units. Plaintiffs also relied on Pharris's deposition testimony that he approved the fence, and in doing so he would have "consult[ed] the CC&R's" and would have followed his general practice to abide by all applicable CC&R's requirements before communicating this approval. Plaintiffs also argued the absence of a formal vote did not invalidate the approval, particularly because the Association ratified the approval by allowing the fence to remain for three years before making any effort to have it removed. Plaintiffs additionally maintained that the statutory owner-vote requirement did not apply because the fence construction fell within a statutory exception.
Chen and Chang also submitted their own supporting declarations. In Chen's declaration, he described the manner in which he and Chang decided to buy the Property, including that they initially recognized that the existing parking spaces would interfere with loading and unloading operations, and that Pharris "suggested to me and my wife during a meeting to view the Property that he could obtain approval for us to erect a fence to limit access to the loading dock area. At that time, Mr. Pharris stated that he was [the Seller/Developer's representative and] also [was the] President of the Board of the property owners association for the business park . . . . The possibility of erecting the fence made me willing to pay a higher price per square foot for the Property. "
Chen also stated: "It was my understanding that the seller of the Property did not have the right to grant permission for us to erect a fence, but that the Association, which controlled the common areas of the business park, did have that right. Because Mr. Pharris was an employee of the seller and also the President of the Association, I believed that he had the ability to obtain permission from the Association for us to erect a fence if we purchased the Property. Based in part on that belief, I subsequently signed a Purchase Agreement . . . . [¶] . . . Because it was the Association, and not the seller, that had the authority to grant permission for us to erect a fence to limit access to the loading dock, I did not believe it was necessary for the Purchase Agreement for the Property to make any mention of the fence. It was my belief that this could be handled as a contingency for the buyers, so that if permission was not granted, we could back out of the deal."
Regarding the events after the fence was removed in 2013, Chen stated: "The owner of [the neighboring unit] began parking trucks in the . . . area and interfering with access to the loading dock. The Association took no action to prevent this activity despite our protests. The business of Motor Street suffered financial losses as a result of these actions. For the long term, we would not be able to purchase and sell as many goods as when the fence had been in place, because the ingress and egress to the loading docks would be more difficult. From January 2014 forward, as we prepared to move the business, we were unable to purchase inventory on a normal basis, which caused the sales income for Motor Street to decrease until the present. [¶] . . . We began looking for new premises for Motor Street and making efforts to sell the Property. Because of the [lender] requirement that the Property be owner occupied, we were unable to generate income by leasing the Property to another business." Chen acknowledged that after Motor Street moved to a new location, it "continued to pay rent [to CK] and Association fees."
The last paragraph of Chen's declaration (Paragraph 18) concerned plaintiffs' claimed damages: "The actions of the Association, both in causing the fence to be removed and allowing interference with the use of the loading dock area by Motor Street, and in making inaccurate statements to potential buyers of the Property, caused damage to Motor Street, [CK], and to [Chang] and myself personally."
In her declaration, Chang focused solely on plaintiffs' claimed damages, which she said includes financial losses suffered by her and her husband resulting from Motor Street's "business decline[]," and her emotional distress allegedly caused by "the conduct of defendants."
The Association objected to many portions of the Chen and Chang declarations. The court overruled these objections, except it sustained objections to (1) the portions of Chang's declaration pertaining to plaintiffs' claimed damages; and (2) Paragraph 18 of Chen's declaration in which he summarily asserted that defendants' actions caused damage to Motor Street and to plaintiffs.
Plaintiffs did not challenge this ruling in their opening appellate brief, and thus forfeited any evidentiary challenge on appeal. (See Orange County Water Dist. v. Sabic Innovative Plastics US LLC (2017) 14 Cal.App.5th 343, 368.) In any event, our determinations would not change even if we considered these portions of plaintiffs' declarations.
Court's Summary Judgment Ruling
At the outset of the summary judgment hearing, the court stated it had not received plaintiffs' response to Pharris's undisputed statement of facts and therefore it would assume the truth of Pharris's asserted facts. Plaintiffs' counsel replied that he believed he had filed this opposition, and the court responded "Okay."
At the conclusion of the hearing, the court granted both summary judgment motions, finding the undisputed facts showed plaintiffs would be unable to establish the essential elements on each of their claims. The court later granted Pharris's and the Association's attorney fees motions after reducing the requested amounts by about 25 percent.
DISCUSSION
I. Review Standard
A summary judgment motion must be granted if the submitted papers show there is no triable issue on any material fact and the moving party is entitled to a judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) A triable issue of material fact exists only if "the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Id. at p. 850.)
The issues on a summary judgment motion are framed by the pleadings, "which 'set the boundaries of the issues to be resolved . . . .' " (Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1250 (Conroy); accord Hilton K. v. Greenbaum (2006) 144 Cal.App.4th 1406, 1412 (Hilton K.).) A moving defendant has the initial burden to show one or more elements of the plaintiff's cause of action cannot be established, or there is a complete defense to the claim. (Garcia v. W&W Community Development, Inc. (2010) 186 Cal.App.4th 1038, 1041.) If the defendant meets this burden, the burden shifts to the plaintiff to show the existence of a triable issue. (Ibid.)
"Because a summary judgment denies the adversary party a trial, [the motion] should be granted with caution." (Colores v. Board of Trustees (2003) 105 Cal.App.4th 1293, 1305.) We consider all of the evidence and view the evidence in the light most favorable to the opposing party. (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.) We review a summary judgment de novo and are not bound by the trial court's stated reasons. (Blue Shield of California Life & Health Ins. Co. v. Superior Court (2011) 192 Cal.App.4th 727, 732.)
Based on this de novo review standard, we reject plaintiffs' contention the summary judgment must be reversed based on the court's erroneous belief that plaintiffs had not submitted an opposition to Pharris's statement of undisputed facts. On our independent review, we have considered plaintiffs' opposition and have assumed the truth of plaintiffs' admissible evidence.
II. Plaintiffs' Claims Against Pharris
Plaintiffs alleged four claims against Pharris: fraud, breach of contract, violation of section 17200, and intentional harm to economic interests. The court granted summary judgment on each of these claims. On appeal, plaintiffs challenge the court's summary judgment only on the first three causes of action. Plaintiffs' contentions are without merit.
A. Fraud
The elements of fraud are "(1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages." (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816; accord, Conroy, supra, 45 Cal.4th at p. 1255.)
In moving for summary judgment on this claim, Pharris did not dispute that he had signed the site map as Board president, and thus provided the Association's approval for the fence and the use of the parking spaces for loading and unloading. But he argued and presented evidence that this approval was not a false representation because he was authorized, on behalf of the Board, to approve plaintiffs' construction of the fence and use of the parking spaces for loading and unloading. He argued that the validity of this approval was reflected in the undisputed facts that plaintiffs built the fence and used the space for unloading and loading for three years, and this use was permitted and thus ratified by the Association. Pharris further argued that the undisputed facts showed the Board later rescinded the fence approval based on a code violation notice received by the City, and not because the approval was not valid when it was given.
These facts met Pharris's burden to show plaintiffs could not establish an essential element of their fraud claim—a knowingly false representation. Plaintiffs argue that when Pharris transmitted the approval to plaintiffs, it carried with it the representation that the Association was allowing plaintiffs to erect a fence to control access to the loading dock area. However, Pharris presented evidence that this representation was true—he did approve this use, and asserted that as Board president and as representative of the Seller/Developer (that controlled the Board) he was authorized to do so on the Board's behalf.
In opposing the summary judgment, plaintiffs argued there was a question of fact as to whether the approval that Pharris transmitted was "technically . . . valid" and properly documented. This argument does not show a material disputed issue on the truth or falsity of the representation. Even assuming the documentation for the approval was not properly preserved and/or that the approval did not satisfy formal legal requirements (e.g., because it was not the result of a formal Board resolution or a 67 percent owner-vote was required), this does not show the representation regarding the approval was false. As plaintiffs concede, the evidence establishes Pharris was acting on behalf of the Board when he made this representation, and the Association was aware of, and permitted, the fence construction and the use of the parking spaces for the next three years. Thus, even if the approval was not initially properly documented or approved with the required vote, the Association and owners had effectively authorized the fence and use of the parking spaces under the ratification doctrine. (See Estate of Stephens (2002) 28 Cal.4th 665, 673; La Jolla Mesa Vista Improvement Assn v. La Jolla Mesa Vista Homeowners Ass'n (1990) 220 Cal.App.3d 1187, 1198, fn. 11.) "[W]hen an act has been ratified, it is treated as if originally authorized." (La Jolla, at p. 1198, fn. 11.) On appeal, plaintiffs continue to take the position that the Association did validly approve the fence in 2010, but assert that it wrongfully "revoked its approval of the fence in 2013." This asserted later "revoc[ation]" of the approval does not show that Pharris made a false statement when he communicated that approval in 2010.
Additionally, even assuming the approval representation could be fairly construed as "false" because it improperly suggested that all formal procedures for the approval had been followed, this alleged false representation is not actionable because the undisputed evidence establishes plaintiffs' claimed damages were not caused by this representation. In response to Pharris's motion, plaintiffs presented no information showing that the Association removed the fence because the initial approval did not meet formal CC&R's requirements. Rather, plaintiffs have conceded that the fence was removed because the City mandated the removal under its municipal regulations. On this record, the undisputed facts show the alleged misrepresentation regarding the formal validity of the approval did not cause plaintiffs' claimed damages. Plaintiffs' argument that the Association wrongfully refused to work with the City in 2013 to obtain permission to maintain the fence despite the code violation does not change this conclusion. Even assuming plaintiffs alleged and presented facts to support this theory, it does not show that Pharris's statement in April 2010 was false when it was made.
In support of their argument that the "lack of documentation" or other asserted technical problems with Pharris's approval caused them to suffer "significant damages," plaintiffs state these defects "caused its validity to be questioned." However, plaintiffs do not cite to any relevant supporting evidence. In support of their argument, plaintiffs direct us to portions of the record containing: (1) Pharris's deposition testimony stating he did not recall whether there was any documentation for the fence approval; (2) plaintiffs' chart identifying the amount of their claimed damages; (3) portions of Chang's declaration in which she describes her claimed damages (the court sustained evidentiary objections to these portions of her declaration); and (4) a portion of Chen's declaration in which he describes Motor Street's economic losses allegedly resulting from the fence removal. We have reviewed each of these documents, and find they contain no information showing Pharris's alleged failure to properly document the approval triggered the Association to revoke the approval and/or caused plaintiffs to suffer any of their claimed damages.
Plaintiffs argue "[a]ctual fraud is always a question of fact." This assertion overstates the law as applied to a summary judgment motion. The existence of fraud is generally a factual question, but the issue can properly be resolved on a summary judgment motion if reasonable people can come to only one conclusion based on the facts. (See Blankenheim v. E.F. Hutton & Co. (1990) 217 Cal.App.3d 1463, 1475; see also Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1239; Brown v. Chiang (2011) 198 Cal.App.4th 1203, 1229.)
B. Breach of Contract
On their breach of contract claim, plaintiffs allege that Pharris, acting as an agent for the Seller/Developer and Association, "modified the Purchase Agreement" when he gave written approval for plaintiffs to construct the fence and use the parking spaces, and this contractual provision was breached in December 2013 when the Association "dismantled" the fence and deprived them of "their right to exclusive use of the Subject Parking Spaces and to control access to the loading dock area."
In moving for summary judgment, Pharris argued he could not be held liable on this claim for various reasons, including that the undisputed facts show: (1) he was not a party to the identified contract (the Purchase Agreement); and (2) he could not be held liable for any alleged breach because his involvement with the Association and the Seller/Developer terminated by January 2011.
These arguments were supported by the submitted evidence and applicable law. The undisputed facts show that Pharris was not a party to the Purchase Agreement, and at most was an agent for the signing party, the Seller/Developer. An individual who is not a party to a contract is not liable for a breach of that contract. (See Software Design & Application v. Price Waterhouse (1996) 49 Cal.App.4th 464, 471.) This principle applies to agents. An agent is not liable for the breach of contract even if the agent signed the contract on behalf of the disclosed principal. (See McDevitt v. Chas. Corriea & Bros (1924) 70 Cal.App. 245, 250-251.) Pharris was not a party to the contract, and did not sign the contract on his own behalf or on behalf of the Sellers/Developers.
Additionally, the undisputed facts show that Pharris had no involvement in the conduct that constituted the alleged breach. He had not worked for the Association or the Seller/Developer since the beginning of January 2011, almost three years before the alleged breach occurred (the December 2013 removal of the fence).
In their reply brief, plaintiffs argue that Pharris breached the Purchase Agreement by failing to deliver the Property in 2010 as promised, i.e., with a claimed "irrevocable . . . interest" in the common area outside their property for loading and unloading purposes. However, this theory was not pleaded in the second amended complaint, and thus it is not properly before us on appeal. (See Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493 (Hutton).) Moreover, even if the allegation was part of the complaint, Pharris never signed the Purchase Agreement and therefore he is not liable for any claimed breaches of this agreement.
C. Alleged Section 17200 Violation
Section 17200 prohibits unlawful, unfair, and fraudulent business practices. Generally, if the predicate claim fails, so does the section 17200 claim. (See Ingels v. Westwood One Broadcasting Services, Inc. (2005) 129 Cal.App.4th 1050, 1060.) Plaintiffs' section 17200 claim against Pharris is based on the same allegations supporting their fraud and breach of contract claims. Because we have found those claims have no merit, we likewise find that their section 17200 claim fails. (See Goonewardene v. ADP, LLC (2016) 5 Cal.App.5th 154, 187.)
In their appellate briefs, plaintiffs argue Pharris can be held liable under section 17200 because his fence approval reflected "shoddy practices" based on evidence that the approval was either "technically invalid" or "valid . . . but of suspect documentation." However, as discussed above, plaintiffs did not proffer any facts showing that the lack of documentation and/or the failure to follow certain formalities to obtain the approval caused them any harm. The undisputed evidence showed that plaintiffs benefited from the fence for three years, and the Association removed the fence because it was required to do so by the City, and not because of any invalidity of the original approval.
Private standing under section 17200 is limited to a person who " ' "has lost money or property" ' " as a result of the unfair, unlawful or fraudulent conduct. (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 320-321, 326.) To prevail on a section 17200 claim, a plaintiff must establish an economic injury and that this "injury was the result of, i.e., caused by, the unfair business practice . . . that is the gravamen of the claim." (Id. at p. 322, italics omitted; accord, Sarun v. Dignity Health (2014) 232 Cal.App.4th 1159, 1166.)
Under these principles, even assuming the evidence showed that Pharris's approval did not satisfy the technical requirements of the CC&R's for allowing a property owner to construct a fence and use common area property for loading and unloading, plaintiffs did not present any evidence that this lack of compliance caused them to suffer damages. Thus, they cannot recover on their section 17200 claim even if they could establish an "unfair business practice" under the statute.
III. Plaintiffs' Claims Against Association
Against the Association, plaintiffs alleged: (1) fraud; (2) breach of contract; and (3) intentional interference with economic relationships with third parties. The court initially sustained the Association's demurrer on the contract claim, and that ruling is not before us. On appeal, plaintiffs contend the court erred in granting summary judgment on the fraud and intentional interference claims.
A. Fraud Claim
Plaintiffs' fraud claim against the Association is based solely on Pharris's alleged misrepresentation when he approved construction of the fence and plaintiffs' use of the marked parking spaces for loading and unloading. Because we have found the undisputed facts show Pharris's challenged statements were not false or otherwise actionable, the fraud claim against the Association fails for the same reason.
This straightforward conclusion is complicated by the fact that the Association has taken a position different from Pharris in this litigation. Although Pharris has stated, and presented evidence, that his approval of the fence construction and use of the parking spaces was a valid approval on behalf of the Association (or ratified by the Association and/or owners), the Association has strenuously argued that the approval was invalid because Pharris acted without authority or knowledge of the Association and/or the approval did not satisfy the formalities set forth in the CC&R's and applicable statutes regarding a property owner's rights to exclusive use in the common area property (see Civ. Code, § 4600, subd. (a); former Civ. Code, § 1363.07).
Plaintiffs rely on these arguments to assert that there are triable issues of fact regarding the differing positions taken by Pharris and the Association, and therefore the court erred in granting both summary judgment motions. This contention is without merit because any such disputed factual issues are not material to the fraud claim or the resolution of the summary judgment motion on this claim. As discussed above, even assuming a factual dispute exists regarding the formal validity of Pharris's fence approval in 2010, this dispute does not show plaintiffs can support their claim that the approval was actionable as a false representation.
Moreover, to the extent plaintiffs argue the Association's challenges to Pharris's authority made the litigation more complex or more difficult, this fact does not show a triable issue of fact on the fraud claim. Litigation-related damages are generally not a compensable item of fraud damages. (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 112; Trails Trucking, Inc. v. Bendix-Westinghouse Etc. Air Brake Co. (1973) 32 Cal.App.3d 519, 524 [general litigation expenses "have never been allowable as damages"]; see Falk v. Waterman (1874) 49 Cal. 224, 225.) An exception to this rule applies to a "tort of another" cause of action, in which a party's fraud required the plaintiff to bring or defend a lawsuit against a third party. (See Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 505; Prentice v. North American Title Guaranty Corp. (1963) 59 Cal.2d 618, 620-621.) This exception has no applicability in this case.
B. Intentional Interference Claim
1. Applicable Law
To prove intentional interference with economic advantage, a plaintiff must establish: " ' "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." [Citations.]' " (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) The plaintiff must also show "the defendant's interference was wrongful 'by some measure beyond the fact of the interference itself.' " (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 392-393.) An "act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." (Korea Supply, at p. 1159.)
2. Allegations and Evidence
In their intentional interference claim, plaintiffs alleged the Association was aware that "Plaintiffs' [automobile parts] business depended upon their relationships with their client customers" and that "unobstructed access to the Property loading docks was necessary for Plaintiffs to conduct their business," but the Association nonetheless "engaged in intentional acts that disrupted Plaintiffs' economic relationships." The alleged wrongful acts consisted of Pharris's alleged misrepresentations regarding the fence approval and the Association's removal of the fence structure in December 2013. On the fence removal issue, plaintiffs alleged the Association "removed the fence with full knowledge that Plaintiffs' business would be impacted because [the] Association knew that Plaintiffs' trucks required more room to maneuver in and out of the loading dock. [¶] . . . Plaintiffs' economic relationships with their clients suffered as a result of their inability to reliably maneuver their trucks in and out of the loading area. Plaintiffs' business suffered economic losses as a result. Plaintiffs' business also suffered losses when Plaintiffs had to pay significant out of pocket expenses to relocate to a new warehouse when it became clear that [the] Association would not cooperate with Plaintiffs to resolve their dispute."
In moving for summary judgment, the Association argued plaintiffs could not prevail on the claim because plaintiffs have no evidence that (1) the Association knew "of the particular relationship[s] interfered with"; (2) the Association's actions were wrongful; (3) their claimed damages were caused by any alleged delivery problems to the Property fence; and (4) they suffered any damages.
In response, plaintiffs presented evidence that the Association had actual knowledge when they purchased the Property that CK's tenant (Motor Street) would operate an automobile parts business requiring delivery trucks, and that the tenant's relationship with "third parties . . . would be disrupted if deliveries were hindered." They presented Chen's declaration in which he stated that after the Association "dismantled" the fence, "[t]he business of Motor Street suffered financial losses . . . . For the long term, we would not be able to purchase and sell as many goods as when the fence had been in place, because the ingress and egress to the loading docks would be more difficult. From January 2014 forward, as we prepared to move the business, we were unable to purchase inventory on a normal basis, which caused the sales income for Motor Street to decrease until the present." Chen also stated that Motor Street moved out of the Property because of disruption to its business, and CK was unable to rent the Property to another tenant because one of its loans required the property to be owner-occupied. Chang also testified in her deposition that Motor Street vacated the Property in part because of loading and unloading difficulties.
3. Analysis
The only relationship identified in the complaint with which the Association allegedly interfered was the relationship between Motor Street and Motor Street's customers/suppliers. During discovery, plaintiffs confirmed their intentional interference claim was directed solely to the interference with Motor Street's relationship with these third parties. Plaintiffs sought to recover for Motor Street's alleged business losses resulting from this interference, and for the costs of moving the business to another location.
On this record, the court properly granted summary judgment on the intentional interference cause of action because plaintiffs (Chen, Chang, and CK) were not real parties in interest on this claim. Motor Street was not a plaintiff, and was an entity separate from each plaintiff. CK was Motor Street's landlord, and Chang and Chen were members of CK (a limited liability company). As such, none of these parties had standing to recover for Motor Street's claimed losses to its business. (Code Civ. Proc., § 367; see Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 813; Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 54-55 (Fladeboe).)
Likewise, the fact that Chen was Motor Street's sole shareholder did not confer standing on Chen to recover for damages allegedly suffered by Motor Street. When a corporate entity is injured by a third party, a shareholder does not have standing to bring an action for redress of that injury. (See Fladeboe, supra, 150 Cal.App.4th at pp. 54-55.) "The remedy lies with the corporation, not the shareholder, even if the injured shareholder is the sole shareholder." (Vinci v. Waste Management, Inc. (1995) 36 Cal.App.4th 1811, 1815.)
On appeal, plaintiffs argue they created a triable issue of fact on the intentional interference claim by proffering evidence that the Association wrongfully interfered with CK's relationship with prospective buyers in 2015. They rely on the portion of Chen's declaration in which he claimed that the Association wrongfully interfered with his attempts to sell the property between September 2014 and November 2015 by telling prospective buyers: (1) plaintiffs' lawsuit alleged the developer (and not the Association) had given plaintiffs permission to erect the fence; and (2) the Association would pursue a "countersuit if it lost this case."
This evidence does not show the court erred in granting summary judgment on the intentional interference claim. First, on a summary judgment motion, the defendant's burden is limited to showing it is entitled to prevail on the allegations of the complaint. (See Hutton, supra, 213 Cal.App.4th at p. 493.) In their complaint, plaintiffs identified only the relationship between CK's tenant (Motor Street) and the tenant's customers/suppliers as the relationship with which the Association allegedly wrongfully interfered. Plaintiffs did not base their intentional interference claim on a claimed interference between plaintiffs and prospective buyers of the Property or on a claimed interference between CK and CK's tenant, Motor Street. If plaintiffs wanted to add either of these theories to their intentional interference claim, they were required to seek leave to amend the pleadings before the hearing on the summary judgment motion. By failing to do so, they cannot successfully oppose the summary judgment on these grounds. (See Hutton, at p. 493; Christina C. v. County of Orange (2013) 220 Cal.App.4th 1371, 1383 (Christina C.); Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1186.)
Additionally, the record does not contain evidence showing the misrepresentations allegedly made by the Association to the prospective buyers caused any damages to plaintiffs. There is no showing, for example, these prospective buyers would have purchased the property at a higher price had the statements not been made, or that the prospective buyers relied on these statements in making the decision not to purchase the property.
C. New Theory
In their appellate briefs, plaintiffs contend the summary judgment should be reversed because there are "triable issues of material fact as to whether [they] acquired an irrevocable property interest in the gated area when they purchased the property estopping [the] Association's removal of [plaintiffs'] property interest." (Italics added, capitalization omitted.) They acknowledge they did not assert this theory in their complaint or in their opposition to the summary judgment, but argue "a new theory on appeal is permitted when 'a question of law only is presented on the facts appearing in the record.' "
This argument is unavailing. First, as discussed, a summary judgment motion is directed to the issues framed by the pleadings, and those are the only issues a summary judgment motion must address. (Hilton K., supra, 144 Cal.App.4th at p. 1412.) A plaintiff cannot successfully oppose a summary judgment by showing disputed facts on issues outside the pleading or by asserting an unpleaded theory on appeal. (See Christina C., supra, 220 Cal.App.4th at p. 1383.) "[T]he burden of a defendant . . . only requires that he or she negate plaintiff's theories of liability as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings." (Hutton, supra, 213 Cal.App.4th at p. 493; accord, Christina C., at p. 1383.)
Second, the issue of whether Pharris's approval created an irrevocable right is not a legal question. As plaintiffs admit, it raises factual issues. Thus, it does not fall within the exception to the general rule that arguments must be raised in the trial court proceedings to be preserved for appeal. (See Noe v. Superior Court (2015) 237 Cal.App.4th 316, 335.)
Third, in asserting this new argument, plaintiffs ignore that the undisputed reason for the fence removal was the City's determination that the fence violated city codes. Thus, regardless of the nature of the property right provided by the approval, this right was subject to the requirement that owners abide by governing law. Additionally, to the extent plaintiffs argue that the Association acted wrongfully in failing to respond to their complaints that an adjacent property owner's vehicle was parked in front of the loading area, plaintiffs did not present admissible evidence showing they suffered damages resulting from this claimed conduct.
IV. Attorney Fees
Plaintiffs concede defendants were entitled to recover their attorney fees, but challenge the amount of the fees awarded by the court.
A. Factual Background
After the court entered summary judgment, the Association and Pharris each moved for attorney fees.
The Association sought the fees under a prevailing party attorney fees provision in the Association's CC&R's. The Association requested approximately $70,000, reflecting an hourly billing rate of $220 for partner time (about 41 hours) and $200 for associate time (about 290 hours), plus fees associated with the motion. The Association submitted a detailed breakdown of the work performed by its attorneys and the time spent on each task.
Pharris sought the fees under a prevailing party attorney fees provision in the Purchase Agreement. Pharris sought about $80,000, reflecting a $200 hourly billing rate for about 386 attorney hours. Pharris submitted a detailed breakdown of the work performed by his attorneys and the time spent on each task.
In responding, plaintiffs did not challenge that defendants were entitled to prevailing party attorney fees, but argued the number of hours spent by the attorneys was "unreasonable," "unnecessary, redundant and/or excessive." They also argued the documentation was inadequate.
At the outset of the hearing, the court stated that after reviewing the parties' submissions, it intended to reduce the requested attorney fees to $55,184 for the Association, and $59,447.11 for Pharris.
Regarding the Association, the court said it found some of plaintiffs' challenges to be without merit, but it did "make a sizable cut . . . with the fees spent on the motion for summary judgment," and found certain other fee amounts unwarranted (e.g. for travel time and certain correspondence). Plaintiffs' counsel responded that "I think on that basis, [the award] is acceptable for us." But the Association's counsel argued that the court deleted too many hours from the summary judgment motion work, given the complexity of the motion, the fact that there were three different plaintiffs, and the voluminous record that had to be reviewed. After providing plaintiffs' counsel the opportunity to respond, the court said that it was "very frugal," but the Association's counsel persuaded it that the Association was entitled to be compensated for 16 more hours for the summary judgment motion, and thus it would award a total of $58,384, slightly more than its tentative, but about 27 percent less than the Association had requested.
On Pharris's motion, the court stated it had tentatively decided to reduce the $80,727.11 claimed amount to $59,447.11 based on its findings that counsel had billed too much time for the demurrers, motions to strike, and summary judgment motion. Plaintiffs' counsel said this amount was acceptable. But Pharris's counsel objected to the reduction for the preparation of the summary judgment motion, noting the complexity of the motion. The court replied that "it may just be because I'm a dinosaur," but it found counsel had spent too much time to prepare the summary judgment motion, explaining: "I understand there was a great deal of discovery undertaken in this matter. I understand there were a number of varied issues that Mr. Pharris had to address. I'm aware of all of that. The difficulty I'm having is grasping the notion that it would take more than two full weeks to get a summary judgment motion prepared, served and filed." After allowing Pharris's counsel to argue further, the court decided it would award fees for an additional three days, but it would not award the full amount of time requested. The court thus awarded a total of $64,247.11, which was about 26 percent less than the total amount requested.
B. Analysis
We review the trial court's determination of a reasonable attorney fee for abuse of discretion. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094-1095; see Calvo Fisher & Jacob LLP v. Lujan (2015) 234 Cal.App.4th 608, 620.) The trial court has broad authority to determine the amount of a reasonable fee, consistent with equitable principles. (PLCM, at pp. 1094-1095.) " 'The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.' " (Id. at p. 1096.) Because of the broad discretion accorded to trial judges, "the 'only proper basis of reversal of the amount of an attorney fees award is if the amount awarded is so large or small that it shocks the conscience and suggests that passion and prejudice influenced the determination.' " (Calvo Fisher, at p. 620.)
The court did not abuse its discretion. The court's comments at the hearing make clear it carefully reviewed the submitted evidence on the amount of time the attorneys spent on each task and reduced the requested amount where the court felt the time was excessive. The court's reductions were fair, and its determination that the remaining amounts were reasonable was within the court's broad discretion. There is no indication the trial court's determination of a reasonable fee amount was governed by passion or prejudice.
Specifically, on Pharris's motion, the court reduced the requested fees by about 26 percent, eliminating various hours spent on several demurrers/motions to strike, the summary judgment motion, and travel. Plaintiffs contend Pharris's counsel spent an unreasonable amount of time on the demurrers and summary judgment. However, the court agreed with plaintiffs in part, and reduced these claimed fees. The record does not show the court was required to reduce the fees by any additional amount.
With respect to the Association's fees, plaintiffs contend the Association's counsel's time was excessive with respect to a demurrer, a motion to strike, an answer to the second amended complaint, and the summary judgment motion. We are satisfied the court carefully looked at the claimed time on these tasks, and reached reasonable conclusions. As an appellate court, it is not our role to second-guess the court's evaluation of attorney declarations and billing statements. (See Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1323.) We likewise find unavailing plaintiffs' challenge to the adequacy of the Association's fee documentation. Counsel submitted a detailed breakdown of the various tasks performed on the case. The court did not abuse its discretion in finding this documentation to be sufficient to support the request. (See Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1398.)
DISPOSITION
Judgment affirmed. Appellants to bear respondents' costs on appeal.
HALLER, J. WE CONCUR: HUFFMAN, Acting P. J. GUERRERO, J.