Lashgari v. Chen CA4/1

Filed 4/29/14 Lashgari v. Chen CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

ALI R. LASHGARI, D063300

Plaintiff and Appellant,

v. (Super. Ct. No. 37-2011-00097188-
CU-OR-CTL)
ANNIE CHEN et al.,

Defendants and Respondents.

APPEALS from a judgment and an order of the Superior Court of San Diego

County, Joel M. Pressman, Judge. Judgment affirmed. Order affirmed as modified.

Law Office of Malinda R. Dickenson and Malinda R. Dickenson for Plaintiff and

Appellant.

Lewis Brisbois Bisgaard & Smith, Lann G. McIntyre and Jeffry A. Miller;

White & Bright, Eric R. Ginder and Codie C. Dukes; Lafer Ginder and Eric R. Ginder for

Defendants and Respondents.

Ali R. Lashgari appeals the summary judgment entered against him in his action

against Annie Chen and HKT CAL, Inc. (HKT) for fraud and other claims arising out of
a home sale in which Lashgari was the buyer, Chen represented the sellers, and HKT

provided escrow services. Lashgari also appeals the postjudgment order awarding Chen

and HKT their costs. We modify the order to delete certain costs that were improperly

awarded and otherwise affirm.

I.

FACTUAL AND PROCEDURAL BACKGROUND

A. Lashgari's Purchase of the Property

The transaction giving rise to this lawsuit was Lashgari's purchase of a house and

associated land (the Property) from Oussama and Helen Aris. Laleh Hedayat, a licensed

real estate agent, represented Lashgari in the transaction. Chen, a licensed real estate

agent who worked for HKT doing business as Keller Williams Realty, represented the

Arises.

After tenants who had occupied the Property from June 2004 through June 2010

moved out, Chen listed the Property for sale. In July 2010, Lashgari made an offer to

purchase the Property, contingent upon his right to inspect and accept the condition of the

Property. The Arises responded with a counteroffer that changed the escrow holder to

Carmel Valley Coast Escrow. Lashgari accepted the counteroffer.

The Arises and Lashgari signed joint escrow instructions. Those instructions

disclosed the relationships among HKT, Keller Williams Realty, and Carmel Valley

Coast Escrow in the first three sentences: "HKT CAL, INC., DOING BUSINESS AS

KELLER WILLIAMS REALTY AND CARMEL VALLEY COAST ESCROW, IS

ACTING AS BOTH REAL ESTATE BROKER AND THE ESCROW HOLDER IN
2
THIS TRANSACTION AND WILL BE PAID AN ESCROW FEE. CARMEL

VALLEY COAST ESCROW IS WHOLLY OWNED BY HKT CAL., INC. HKT

CAL, INC. IS LICENSED BY THE DEPARTMENT OF REAL ESTATE, STATE

OF CALIFORNIA, LICENSE NUMBER 01524589." The parties also signed a

disclosure form that stated: "This is to give notice that HKT CAL, Inc. dba Keller

Williams Realty Carmel Valley/Del Mar has affiliate business arrangements with the

listed providers." Among the listed providers was Carmel Valley Coast Escrow. The

form further advised: "You are NOT required to use the listed providers, as a condition

for settlement of your loan on the subject property."

During the escrow period, the Arises provided statutory disclosure forms to

Lashgari, which he signed. On their real estate transfer disclosure statement, the Arises

stated they were not aware of "any significant defects/malfunctions" in walls, roof,

windows, doors, or plumbing/sewers/septics. In a seller property questionnaire and its

addendum, the Arises disclosed that a water heater was replaced in 2004, a leaking hot

water pipe was rerouted in 2007, a roof leak was repaired in 2007, a prior tenant had a

dog, and valves were "changed" in the master bathroom. Also during the escrow period,

Lashgari commissioned multiple inspections of the Property.

Integrity Home Inspections issued a lengthy and detailed written report that

identified multiple defects in need of repair, including (1) openings in exterior walls that

may need to be sealed, (2) a broken outdoor sprinkler valve, (3) leaking outdoor hose

faucets, (4) cracked and misaligned roof tiles that could leak, (5) a damaged water heater

stand surface, and (6) excess moisture in a kitchen/dining room wall section and a wall of

3
the upstairs bathroom. After receiving this report, Lashgari sent Hedayat an e-mail in

which he wrote he had "second thoughts" about the Property, particularly because of the

roof defects, the prior leaks, and "the moisture in the upper floor bathroom and under the

sink." Nevertheless, the following day, Lashgari advised Hedayat he would proceed with

the purchase of the Property.

Plumbing Plus inspected the Property and identified several plumbing problems.

Outdoor hose faucets, the toilet in the downstairs bathroom, and the ice maker were

reported to be leaking. The outflow from the water heater was noted to have been

re-piped.

Roof Rx, a roof repair company, inspected the roof and confirmed the findings of

Integrity Home Inspections that several roof tiles had broken or slipped and

recommended repairing them. Roof Rx also recommended repairing the roof field and

ridgeline and resealing mortar cracks, pipes, and flashing.

San Diego Water Damage & Remediation Services reported water damage and

mold remediation in various parts of the house. In the kitchen, cabinets showed water

damage and mold formation, and a leak in the refrigerator water supply valve was

damaging surrounding building materials. The upstairs hall bathroom had elevated

moisture readings. The utility closet had "evidence of a previous water loss . . . that was

not cleaned up properly." A "strong odor" was detected in an upstairs bedroom and was

probably emanating from a source under the carpet. Lashgari also noticed a "putrid

smell" in the bedroom during a visit to the Property with Hedayat.

4
 Kennedy Pest Control, Inc. (Kennedy) found drywood termite damage for which it

recommended fumigation and also noted excessive moisture in the utility closet door.

Chen informed Hedayat that in June 2010, a company fumigated the Property and issued

clearance tags and a two-year warranty, but Kennedy would not accept the clearance. A

third inspector, Trump Pest Control, Inc. (Trump), was then hired to re-inspect the

Property. Trump reported no current activity by termites, but recommended repairs of

prior damage caused by drywood termites. Chen advised Hedayat that the reports

prepared by Kennedy and Trump were the same, except the Trump report did not note

any problem with the utility closet door, which had been replaced before the inspection

by Trump. Lashgari signed amended escrow instructions acknowledging receipt of the

reports prepared by Kennedy and Trump.

Based on the findings and recommendations of the various inspectors, Lashgari

(through Hedayat) submitted a list of questions to the Arises, which they answered; and

he then submitted a written request that the Arises make the repairs recommended by the

inspectors, including the roof defects, leaks and water damage, and the odor in the

upstairs bedroom. The Arises agreed to repair some of the items on Lashgari's list and

gave him a credit toward the purchase price for the others. Lashgari subsequently

removed all contingencies and completed the purchase of the Property.

B. The Post-purchase Problems at the Property

After escrow closed, Lashgari hired a contractor to eliminate the noxious odor in

the upstairs bedroom. According to Lashgari, the contractor pulled up the carpet and

discovered the padding underneath "had urine and feces stains all over it."

5
 After Lashgari moved into the Property, two leaks occurred. One involved the

bathtub in the master bathroom. A leak in the overflow valve of the bathtub caused water

to flow through walls down to the dining room. A plumber hired to repair the leak found

that the valve was broken and that someone had tried to repair it with glue. The second

leak involved the piping for the water heater and caused water to seep under the

downstairs flooring. When this leak was repaired, prior water damage and mold were

found on the water heater stand.

C. Lashgari's Lawsuit Against Defendants

Lashgari sued defendants for damages.1 In a second amended complaint, he

generally alleged that "a dishonestly conducted sale of residential property" has "cost

[him] too much, including the cost of repairs, improvements, and time away from his

business and with his two young daughters."

More specifically, Lashgari alleged that Chen (1) "failed to disclose and concealed

that repairs were required to the plumbing in the master bathroom"; (2) "actively

concealed" the existence of "excessive feces and urine stains throughout the [house]";

(3) "actively misled and concealed . . . water intrusion and damage near the dining room

wall"; (4) falsely told Lashgari she was "unaware of any leak in the upstairs hall

bathroom"; (5) "concealed the extent of the roof problems, . . . as well as water intrusion

near and around the front window and the chimney on the ceiling in the living room";

(6) failed to disclose "any flooding or drainage problems," even though she knew that

1 Lashgari also sued the Arises, but they settled and are not parties to this appeal.

6
incomplete or inadequate plumbing repairs had been made; and (7) failed to disclose

problems with sprinklers and other water-related equipment. Lashgari further alleged

that defendants (1) "attempted to prevent [him] from becoming aware of water intrusion

problems" described in a pest inspection report by requiring him to sign amended escrow

instructions acknowledging the report; and (2) "did not explain the true nature or the

effect of the[ir] relationship . . . and led [Lashgari] to believe he was being represented by

an escrow company which was a separate and distinct entity from HKT, Keller Williams

[Realty], and [Chen]."

Based on these allegations, Lashgari asserted counts labeled "Fraud and Deceit"

and "Failure to Disclose Material Facts" against both Chen and HKT. He also asserted

counts labeled "Breach of Fiduciary Duty" and "Constructive Fraud" against only HKT in

its capacity as escrow holder.

Defendants answered the second amended complaint by asserting general denials

and various affirmative defenses.

D. Defendants' Motion for Summary Judgment

Defendants filed a motion for summary judgment. Based on declarations from

Chen and the escrow officer; excerpts of the transcripts of the depositions of Lashgari,

Hedayat, and former tenants of the Property; and various documents related to

inspections of the Property and the escrow, defendants argued Lashgari could not

establish that defendants made any affirmative misrepresentations about the condition of

the Property, that he justifiably relied on any of their representations, or that he suffered

any damages as a result of such reliance. Defendants also argued Lashgari's claims failed

7
because he actually knew all of the allegedly concealed facts about the condition of the

Property and about the business relationships among HKT, Keller Williams Realty, and

Carmel Valley Coast Escrow and because he was not harmed by any alleged

concealment.

Lashgari opposed the motion. Based on various deposition excerpts and exhibits,

correspondence, and documents obtained from online governmental sources, Lashgari

argued Chen affirmatively misrepresented the effects of the multiple termite reports and

concealed leaks, roof repairs, and odor problems, and HKT concealed the facts that

Carmel Valley Coast Escrow and Keller Williams Realty did not exist as separate

entities. Had he known the true facts, Lashgari asserted, he would not have bought the

Property. As part of his opposition, Lashgari requested a continuance of the hearing on

the motion so that he could conduct additional discovery into the corporate structure of

HKT, and also requested leave to amend his complaint to assert consumer protection

claims.

In reply papers in support of the summary judgment motion, defendants

emphasized Lashgari's inability to prove he justifiably relied on any misrepresentation or

concealment or suffered any harm as a result of such reliance. Defendants also argued

HKT, in its role as escrow holder, had no duty to disclose the defects in the Property of

which Lashgari complained.

The trial court heard oral argument on defendants' motion for summary judgment

and took the matter under submission. The court stated it would decide whether to grant

8
Lashgari leave to amend his complaint based on its decision on the summary judgment

motion.

E. The Judgment

Several days after the hearing on defendants' motion for summary judgment, the

trial court issued a written order granting the motion, and later entered a judgment of

dismissal in favor of defendants and against Lashgari.

F. Lashgari's Ex Parte Applications Regarding Leave to Amend

Three days before the hearing on defendants' motion for summary judgment,

Lashgari filed an ex parte application for an order shortening time to file a motion for

leave to amend. The following day, the court did not rule on the application but stated it

would address the request for leave to amend "if needed" at the hearing on the summary

judgment motion.

Five days after entry of judgment, Lashgari filed an ex parte application for a

hearing date on a motion for leave to file a third amended complaint. The court denied

the application on the ground "[t]here is no need to have a motion for leave to amend a

complaint that has been dismissed."

G. Lashgari's Motion for a New Trial

Lashgari moved for a new trial (Code Civ. Proc., § 657) on the grounds the

summary judgment was improperly entered without first allowing him to conduct

additional discovery, to amend his complaint, or to object to the form of the judgment.

The trial court denied the motion.

9
H. The Award of Costs

Defendants filed a memorandum of costs. Lashgari moved to strike the

memorandum or, alternatively, to tax costs. The trial court struck some of defendants'

claimed costs, but awarded all of the filing and motion fees they requested.

I. Lashgari's Appeals

Lashgari filed three notices of appeal: (1) from the judgment of dismissal based

on the order granting defendants' motion for summary judgment; (2) from the order

denying his motion for a new trial;2 and (3) from the order awarding defendants their

costs.

II.

DISCUSSION

Lashagari contends the trial court should not have granted defendants' motion for

summary judgment, but should have granted him a continuance and leave to amend. He

also contends the trial court erroneously awarded defendants certain costs. As we shall

explain, we agree certain filing and motion fees were improperly awarded as costs but

reject Lashgari's other contentions.

2 Lashgari's appeal from the order denying his new trial motion is not properly
before us. "An appeal does not lie from an order denying a motion for a new trial."
(Erickson v. Estergomy (1932) 214 Cal. 557, 558.) Although such an order may be
reviewed on an appeal taken from a judgment (Fogo v. Cutter Laboratories, Inc. (1977)
68 Cal.App.3d 744, 749), Lashgari abandoned this aspect of his appeal by failing to
include in his briefing any argument as to why the order was wrong (In re Sade C. (1996)
13 Cal.4th 952, 994; Spitler v. Children's Institute International (1992) 11 Cal.App.4th
432, 442; Thompson v. Thompson (1966) 247 Cal.App.2d 339, 341). We therefore do not
consider further Lashgari's appeal from the order denying his motion for a new trial.

10
A. The Trial Court Properly Granted Defendants' Motion for Summary Judgment

Lashgari complains the trial court erred by granting summary judgment because

defendants "did not even attempt to show each cause of action had no merit," and "there

were triable issues of material fact on the limited issues [they] did address." We disagree.

1. Standard of Review

A defendant may move for summary judgment on the ground the action has no

merit, i.e., as to each cause of action at issue, the plaintiff cannot establish an essential

element or the defendant has a complete defense. (Code Civ. Proc., § 437c, subds. (a),

(o); Ventura Kester, LLC v. Folksamerica Reinsurance Co. (2013) 219 Cal.App.4th 633,

640.) To prevail on a motion for summary judgment, the defendant must submit

evidence showing there are no triable issues of material fact, and under the applicable law

the plaintiff cannot prevail on any asserted cause of action. (Code Civ. Proc., § 437c,

subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).) To

defeat the motion, the plaintiff must set forth specific facts showing the existence of a

triable issue of material fact. (Code Civ. Proc., § 437c, subd. (p)(2); Ventura Kester, at

p. 640.) We review the trial court's decision de novo based on the record that was before

the court when it ruled on the motion, liberally construing the plaintiff's evidence and

resolving any evidentiary doubts in his favor. (Ennabe v. Manosa (2014) 58 Cal.4th 697,

705; Cann v. Stefanec (2013) 217 Cal.App.4th 462, 467-468.)

11
 2. Analysis

a. The Issues Raised by Lashgari's Complaint

We begin with an analysis of Lashgari's pleadings, which delimit the issues to be

resolved by defendants' motion for summary judgment. (Conroy v. Regents of University

of California (2009) 45 Cal.4th 1244, 1250; Hutton v. Fidelity National Title Co. (2013)

213 Cal.App.4th 486, 493.) After describing the counts Lashgari alleged, we shall set

forth the essential elements of each.

The counts labeled "Fraud and Deceit" and "Failure to Disclose Material Facts,"

though separately stated, were based on the same underlying factual allegations.

Lashgari alleged that Chen knew about but did not disclose various leaks, a foul odor,

and other defects in the Property and concealed her relationship with HKT; and that Chen

and HKT led him to believe Carmel Valley Coast Escrow was separate and distinct from

HKT. Lashgari further alleged that defendants intended their misrepresentations and

nondisclosures to induce him to buy the Property and that he believed them; but had he

known the true facts about all the defects in the Property and the relationships among

Chen, HKT, Carmel Valley Coast Escrow and Keller Williams Realty, he would not have

bought it.

Substantially identical allegations were contained in separate counts labeled

"Breach of Fiduciary Duty" and "Constructive Fraud," but these counts were asserted

only against HKT in its capacity as escrow holder. In these counts, Lashgari alleged that

HKT knew about but did not disclose to him the leaks, foul odor, and other defects in the

Property, the relationship between Chen and HKT, and the fact that Keller Williams

12
Realty and Carmel Valley Coast Escrow were not separate and distinct from HKT. As a

result of these nondisclosures, Lashgari alleged he was unaware of the true facts and

would not have closed escrow and purchased the Property had he known them.

As indicated above, the allegations underlying Lashgari's counts labeled "Fraud

and Deceit" and "Failure to Disclose Material Facts" are essentially the same and can be

considered a claim for actual fraud based on nondisclosure or concealment. (We

sometimes refer to these counts collectively as "the actual fraud counts.") "It is fraud to

suppress a fact with intent to induce a person to enter a contract to acquire realty."

(Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171

Cal.App.4th 1356, 1383 (Alfaro).) To establish such a fraud claim, Lashgari must prove:

(1) defendants concealed a material fact; (2) defendants had a duty to disclose the fact to

him; (3) defendants concealed the fact with the intent to induce reliance by him; (4) he

was unaware of the fact and would not have acted as he did had he known of the

concealed fact; and (5) as a result of the concealment of the fact, he sustained damages.

(Knox v. Dean (2012) 205 Cal.App.4th 417, 433 (Knox); County of Mariposa v. Yosemite

West Associates (1988) 202 Cal.App.3d 791, 812 (County of Mariposa).)

As also indicated above, the allegations underlying Lashgari's constructive fraud

and breach of fiduciary duty counts are essentially the same. (We sometimes refer to

these counts collectively as "the constructive fraud counts.") The elements of Lashgari's

13
count for breach of fiduciary duty are the existence of a fiduciary relationship,3 the

failure to disclose material facts, and damages resulting from the nondisclosure.

(Jameson v. Desta (2013) 215 Cal.App.4th 1144, 1164 (Jameson); Byrum v. Brand

(1990) 219 Cal.App.3d 926, 938, 941 (Byrum).) Similarly, "[c]onstructive fraud arises

on a breach of duty by one in a confidential or fiduciary relationship to another which

induces justifiable reliance by the latter to his prejudice." (Odorizzi v. Bloomfield School

Dist. (1966) 246 Cal.App.2d 123, 129.) " 'In its generic sense, constructive fraud

comprises all acts, omissions and concealments involving a breach of legal or equitable

duty, trust, or confidence, and resulting in damages to another.' " (Barrett v. Bank of

America (1986) 183 Cal.App.3d 1362, 1368-1369.) Thus, "breach of a fiduciary duty

usually constitutes constructive fraud." (Knox, supra, 205 Cal.App.4th at p. 434; accord,

Salahutdin v. Valley of California, Inc. (1994) 24 Cal.App.4th 555, 563.)

b. Defendants' Showing

We next determine whether the evidence defendants submitted in support of their

summary judgment motion showed Lashgari could not establish one or more essential

elements of his claims. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th

at pp. 850-851, 853-854; Knox, supra, 205 Cal.App.4th at p. 423.) Defendants contended

Lashgari could not establish the nondisclosure, reliance, or damage elements of the actual

3 "An escrow holder is an agent and fiduciary of the parties to the escrow." (Summit
Financial Holdings, Ltd. v. Continental Lawyers Title Co. (2002) 27 Cal.4th 705, 711
(Summit Financial).) The fiduciary duty, however, is "limited to the obligation of the
escrow holder to carry out the instructions of each of the parties to the escrow." (Ibid.)

14
fraud counts. They also contended he could not establish the nondisclosure element of

the constructive fraud counts. As we discuss below, defendants submitted evidence

sufficient to sustain these contentions.

Chen filed a declaration in support of the motion for summary judgment.4 She

stated she knew of plumbing leaks and roof leaks that occurred during the long-term

tenancy that preceded Lashgari's purchase of the Property, but to her knowledge those

leaks were all promptly and adequately repaired. Chen also stated she had no knowledge

of any foul odors or animal feces in the house, inadequate repairs to the overflow valve of

the bathtub in the master bathroom, or mold in the water heater closet. Because an agent

of the seller of real property has a duty to disclose facts materially affecting the value or

desirability of the property only if the agent actually knows of those facts, Chen had no

duty to disclose current roof leaks, foul odors, animal feces, the broken overflow valve in

the bathtub of the master bathroom, or mold in the water heater closet. (See, e.g.,

Assilzadeh v. California Federal Bank (2000) 82 Cal.App.4th 399, 410 (Assilzadeh)

[seller's "agent must have actual knowledge in order to be liable for failing to disclose a

material fact"]; San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048,

1055 ["the duty cannot arise when, as here, such significant facts are not actually known

4 Lashgari disparages Chen's declaration and that of HKT's escrow officer as "self-
serving," and complains the trial court did not rule on his objections to the declarations.
Lashgari, however, has not renewed any specific objections on appeal, or offered any
reasoned argument with citations to authority as to why the objections should have been
sustained. We therefore deem his evidentiary objections abandoned. (Lopez v. Baca
(2002) 98 Cal.App.4th 1008, 1014-1015; Badie v. Bank of America (1998) 67
Cal.App.4th 779, 784-785.)

15
to the defendant"]; Karoutas v. HomeFed Bank (1991) 232 Cal.App.3d 767, 771 ["a duty

to disclose arises at common law if material facts are known only to the defendant"].)

Thus, to the extent Lashgari's actual fraud counts were based on Chen's failure to disclose

those particular defects in the Property, defendants showed the counts had no merit.

Defendants also demonstrated the actual fraud counts had no merit by submitting

documents showing that information Lashgari alleged was not disclosed to him — the

leaks, odor, and other defects in the Property and the relationships among Chen, HKT,

Keller Williams Realty, and Carmel Valley Coast Escrow (see pt. I.C., ante) — was, in

fact, disclosed. For example:

— San Diego Water Damage & Remediation Services reported a "strong
odor" in an upstairs bedroom and suggested it was coming from a source
under the carpet. Lashgari himself detected a "putrid smell" in the bedroom
when he visited the Property with Hedayat. The Arises disclosed in the
property questionnaire that a prior tenant had a dog, an obvious potential
cause of the odor.

— Both Integrity Home Inspections and San Diego Water Damage &
Remediation Services identified excess moisture in walls in the kitchen and
the upstairs hall bathroom.

— In the property questionnaire addendum, the Arises disclosed a roof leak
in 2007. Both Integrity Home Inspections and Roof Rx reported broken
tiles and other roof defects that could cause leakage.

— In the property questionnaire and in response to questions from
Lashgari, the Arises disclosed that in 2005 pipes had burst and had to be
re-routed in several downstairs rooms.

— Integrity Home Inspections and Plumbing Plus identified leaking hose
faucets and defects in the outdoor sprinkler system.

— The pest inspection report prepared by Kennedy disclosed "[e]xcessive
moisture" in the utility closet door. Chen explained in an e-mail to Hedayat
that the pest inspection report later issued by Trump did not contain a
similar disclosure because the door had been replaced before Trump

16
 performed its inspection. Copies of both the Kennedy and the Trump
reports were provided to Lashgari as part of the escrow.

— The offer to buy the Property submitted by Lashgari listed Keller
Williams Realty as the listing broker and Chen as the listing agent, and
Chen completed an agent's inspection disclosure form in which she listed
herself as an associate licensee with Keller Williams Realty. The escrow
instructions and a separate disclosure form advised that HKT does business
as Keller Williams Realty and as Carmel Valley Coast Escrow, that HKT
was acting as both real estate broker and escrow holder in the transaction,
that HKT would be paid an escrow fee, and that Lashgari was not required
to use Carmel Valley Coast Escrow to close the transaction.

In addition to these documents, the complaint contains an allegation that the Arises

disclosed in the property questionnaire addendum that " 'valves has [sic] been changed' in

the master bathroom."5 Thus, the material facts Lashgari alleged were concealed from

him were actually disclosed to him in writing before he purchased the Property.

Lashgari is charged with knowledge of all of these disclosures. He signed the

property questionnaire and addendum, the agent's inspection disclosure, the escrow

instructions, the escrow disclosure form, and amended escrow instructions

acknowledging receipt of the pest inspection reports prepared by Kennedy and Trump.

Parties dealing at arm's length in a transaction are presumed to have read and understood

the documents they signed. (Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87,

93; Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1674.) Also, after

Lashgari received the inspection reports, he sent Hedayat an e-mail expressing "second

thoughts about buying this house" and then "list[ing] the issues" that were causing him

5 The copy of the property questionnaire addendum contained in the record on
appeal contains no such disclosure, but page 4 of the addendum is missing.

17
concern, including roof defects, leaks, and mold. Lashgari subsequently submitted

written questions to the Arises about several defects in the Property and received written

responses from them. Finally, at the hearing on the summary judgment motion,

Lashgari's counsel conceded that Lashgari had read all of the reports prepared by the

property inspectors he hired.

On this record, defendants met their initial burden of showing that Lashgari could

not establish an essential element of his actual fraud counts, namely, that he was actually

unaware of and could not reasonably discover the allegedly undisclosed facts. (See, e.g.,

Knox, supra, 205 Cal.App.4th at p. 433 [fraud by nondisclosure requires "the plaintiff

was unaware of the fact"]; Stevenson v. Baum (1998) 65 Cal.App.4th 159, 166 [defendant

did not breach duty to disclose when disclosures put plaintiff on notice of material facts

even though disclosures did not reveal all details of those facts]; Sweat v. Hollister (1995)

37 Cal.App.4th 603, 608 ["Actionable nondisclosure relates to facts not discoverable by

the plaintiffs."]; County of Mariposa, supra, 202 Cal.App.3d at p. 812 [fraud by

nondisclosure requires material facts "being unknown to or beyond the reach of the

plaintiff"].)

Defendants also submitted evidence satisfying their initial burden to show

Lashgari's constructive fraud counts had no merit. Those counts were asserted against

HKT in its capacity as escrow holder. "[A]n escrow holder 'has no general duty to police

the affairs of its depositors[.]' " (Summit Financial, supra, 27 Cal.4th at p. 711.) Unless

the escrow holder colludes with a party to the escrow, the escrow holder has no

obligation to inform the other party of suspicious facts that might indicate he is being

18
defrauded. (Ibid.; Romo v. Stewart Title of California (1995) 35 Cal.App.4th 1609, 1618,

fn. 9; Lee v. Title Ins. & Trust Co. (1968) 264 Cal.App.2d 160, 161-163.) Here,

defendants filed a declaration from the escrow officer that negated any such collusion:

"During the escrow, [the escrow officer] was never informed by any source of any false

representations, false disclosure, or concealed information, by either [Chen] or the

[Arises]." This evidence defeated the constructive fraud counts to the extent they were

based on a duty to disclose defects in the Property. To the extent those counts were based

on HKT's failure to disclose its relationships with Chen, Keller Williams Realty, and

Carmel Valley Coast Escrow, the counts failed because the relationships were disclosed

in the offer to purchase the Property, the agent's inspection disclosure form, the escrow

instructions, and the escrow disclosure form, all of which Lashgari signed. Defendants'

evidence thus negated the nondisclosure element of Lashgari's counts for breach of

fiduciary duty and constructive fraud. (See Byrum, supra, 219 Cal.App.3d at pp. 938,

941 [constructive fraud and breach of fiduciary duty require failure to disclose material

facts known to fiduciary].)

Defendants' documentary evidence also sufficed to meet their initial burden to

show Lashgari's entire action had no merit, because that evidence indicated he could not

prove the reliance element essential to each of his counts. Reasonable or justifiable

reliance on an alleged nondisclosure is an essential element of a claim for actual or

constructive fraud. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239,

fn. 4; Alfaro, supra, 171 Cal.App.4th at p. 1383.) "Reliance exists when the

misrepresentation or nondisclosure was an immediate cause of the plaintiff's conduct

19
which altered his or her legal relations, and when without such misrepresentation or

nondisclosure he or she would not, in all reasonable probability, have entered into the

contract or other transaction." (Alliance Mortgage, at p. 1239.) In deciding to purchase

the Property, Lashgari could not reasonably have relied on alleged nondisclosures of

defects in the Property and the extent of defendants' business relationships when such

nondisclosures were contrary to information he knew from inspection reports, escrow

instructions, disclosure forms, and other documents he read or signed. (See, e.g., Dore v.

Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 393-394 [plaintiff's signature of letter

stating employment was at will defeated contention in fraud claim that he reasonably

understood defendant to have promised long-term employment]; Hadland v.

NN Investors Life Ins. Co. (1994) 24 Cal.App.4th 1578, 1589 [plaintiff could not

reasonably rely on defendants' oral representations that "were patently at odds with the

express provisions of the written contract" they received but did not read].) Where, as

here, " 'the conduct of the plaintiff in the light of his own intelligence and information

was manifestly unreasonable, . . . he will be denied recovery.' " (Alliance Mortgage, at

p. 1240.)

In sum, we conclude defendants satisfied their initial burden to show Lashgari's

action had no merit by showing he could not establish one or more of the essential

elements of each count he asserted against them. (Code Civ. Proc., § 437c, subd. (p)(2);

Aguilar, supra, 25 Cal.4th at p. 853.) The burden then shifted to Lashgari to submit

evidence that created a triable issue of material fact. (Code Civ. Proc., § 437c,

20
subd. (p)(2); Aguilar, at p. 850; Allyson v. Department of Transportation (1997) 53

Cal.App.4th 1304, 1317.)

c. Lashgari's Showing

Finally, we examine the evidence Lashgari submitted in opposition to defendants'

summary judgment motion to determine whether he set forth "specific facts showing that

a triable issue of material fact exists." (Code Civ. Proc., § 437c, subd. (p)(2); see

Aguilar, supra, 25 Cal.4th at p. 850; Assilzadeh, supra, 82 Cal.App.4th at p. 408.) As we

shall explain, Lashgari's showing was insufficient to defeat defendants' motion.

Initially, Lashgari argues the burden to submit evidence showing a triable issue of

material fact never shifted to him because defendants "failed to present any evidence that

[his counts] had no merit as to the allegations regarding HKT directly." We disagree. As

a corporation, HKT "cannot act at all except through its employees and agents." (Black v.

Bank of America (1994) 30 Cal.App.4th 1, 6.) Thus, "a corporation and its employees

generally function as a single legal unit and are the same legal 'person' for purposes of

applying various tort, agency, and jurisdiction principles." (Kight v. CashCall, Inc.

(2011) 200 Cal.App.4th 1377, 1392.) In particular, "a judgment in favor of the agent ex

propri[o] vigore relieves the principal of responsibility, and may be availed of by the

principal for that purpose." (Bradley v. Rosenthal (1908) 154 Cal. 420, 425.) Here, in its

dealings with Lashgari, HKT acted through Chen and the escrow officer. Indeed,

Lashgari repeatedly alleged in his operative complaint that Chen was an agent of HKT

and was authorized to act and did act on HKT's behalf. Therefore, defendants' showing

21
on the motion for summary judgment applied to HKT to the same extent it applied to

Chen and the escrow officer, both of whom acted as HKT's agents.

In a related argument, Lashgari contends defendants "produced no evidence

whatsoever that HKT satisfied its fiduciary duties." According to Lashgari, "[t]he

evidence provided in fact appears to indicate that HKT did not follow the escrow

instructions, and that HKT did not disclose to [him] that it had not done so." Lashgari

relies on documents specifying how a payment that the escrow instructions directed be

made to Keller Williams Realty was to be shared with two other entities, and other

documents explaining that Carmel Valley Coast Escrow had changed banks and directing

all wire transfers be deposited in a bank different from the one specified in the escrow

instructions. Defendants, however, had no obligation to introduce evidence showing

HKT strictly complied with the escrow instructions, because Lashgari did not allege

noncompliance with the instructions as the basis of his breach of fiduciary count against

HKT. "The burden of a defendant moving for summary judgment only requires that he

or she negate plaintiff's theories as alleged in the complaint. A 'moving party need not

". . . refute liability on some theoretical possibility not included in the pleadings." ' "

(Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342.)

In any event, Lashgari has not explained how the complained-of deviations from the

escrow instructions actually caused him any loss that would support a claim for breach of

fiduciary duty. (See Amen v. Merced County Title Co. (1962) 58 Cal.2d 528, 532

[escrow holder is liable for losses caused by failure to follow instructions]; Jameson,

22
supra, 215 Cal.App.4th at p. 1164 [essential element of breach of fiduciary duty claim is

" 'damage proximately caused by the breach' "].)

Lashgari next asserts that defendants "made no attempt to negate" that: (1) "HKT

had represented it 'owned' something that did not exist or that it had held Carmel Valley

Coast Escrow out to be a separate entity from HKT and Keller Williams Realty when in

fact it was a fiction"; or (2) "HKT did not fully disclose its agency relationship with

Chen." Again, we disagree. The escrow instructions and a separate disclosure form, both

of which Lashgari signed, clearly stated that HKT did business as Carmel Valley Coast

Escrow and as Keller Williams Realty, and that HKT was acting as both real estate

broker and escrow holder in the transaction. The offer to purchase the Property and the

agent's inspection disclosure form, both of which Lashgari signed, identified Chen as an

agent of Keller Williams Realty. These disclosures were sufficient to negate Lashgari's

allegations that defendants failed to disclose their affiliated business relationships and

misled him into believing Carmel Valley Coast Escrow was separate and distinct from

HKT.

Finally, Lashgari argues the trial court failed to consider evidence he submitted

that purportedly created triable issues of material fact as to his actual fraud claims against

Chen. He cites e-mails and other documents that purportedly showed that Chen

concealed or failed to disclose various defects in the Property (e.g., "prior leaks in the

upstairs hall bathroom," "chronic roof leaks," and "urine and feces stains and odors"), and

misrepresented the differences among and reasons for the multiple pest inspection

reports. These documents did not create a triable issue of material fact.

23
 As to the Property defects, the material facts were disclosed to Lashgari. Again,

as discussed above, disclosure forms and correspondence provided by the Arises and

inspection reports prepared by contractors hired by Lashgari identified multiple plumbing

and water intrusion problems (including in the upstairs hall bathroom), multiple roof

defects that could cause leaks, a foul odor in an upstairs bedroom, and other defects

Lashgari contends Chen concealed. Although the exact cause, extent, or duration of each

defect was not disclosed, a seller's agent has no "duty to provide details that would

merely serve to elaborate on the disclosed facts." (Calemine v. Samuelson (2009) 171

Cal.App.4th 153, 161; see Pagano v. Krohn (1997) 60 Cal.App.4th 1, 9 [seller's agents

had no duty to disclose "additional facts [that] would have served only as elaboration on

the basic disclosed fact that there was a water intrusion problem"].) Moreover, Chen

cannot be held liable for actual fraud for not disclosing material facts of which the Arises

and his own inspectors made Lashgari aware. (See Knox, supra, 205 Cal.App.4th at

p. 433 [fraud by nondisclosure requires "the plaintiff was unaware of the fact"].)

As to the pest inspection reports, Lashgari simply cited the e-mail in which Chen

explained to Hedayat that the Trump and Kennedy reports were the same, except the

moisture in the utility closet door noted in the Kennedy report was not noted in the

Trump report because the door had been replaced in the time between the two

inspections. Lashgari submitted no evidence that contradicted Chen's explanation or that

showed Chen had other information about the pest inspection reports she did not disclose.

Lashgari merely "speculat[es] [Chen] must have known more than [she] said. ' "[T]he

opposition to summary judgment will be deemed insufficient when it is essentially

24
conclusionary, argumentative or based on conjecture and speculation . . . ." ' [Citation.]

Such is the case here. The trial court did not err in granting summary judgment on the

[actual fraud] theories." (Padgett v. Phariss (1997) 54 Cal.App.4th 1270, 1284.)

In sum, Lashgari did not satisfy his burden to "set forth the specific facts showing

that a triable issue of material facts exists" as to each count challenged by defendants.

(Code Civ. Proc., § 437c, subd. (p)(2).) The trial court therefore correctly granted

defendants' motion for summary judgment. (Id., § 437c, subd. (c); Aguilar, supra, 25

Cal.4th at p. 843; Assilzadeh, supra, 82 Cal.App.4th at p. 412.)

B. The Trial Court Properly Denied a Continuance and Leave to Amend

Lashgari argues the trial court erroneously denied his request for a continuance of

the hearing on defendants' summary judgment motion to allow him to depose another

witness and to obtain additional documents regarding HKT's corporate structure. He also

argues the court erroneously denied his request for leave to file a third amended

complaint to assert "viable consumer protection claims." These arguments have no merit.

1. Standards of Review

We review for abuse of discretion a trial court's denial of a plaintiff's request to

continue a hearing on a defendant's summary judgment motion so that the plaintiff may

conduct further discovery. (Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1038;

Combs v. Skyriver Communications, Inc. (2008) 159 Cal.App.4th 1242, 1270.) We also

review for abuse of discretion a trial court's denial of leave to amend a complaint that has

been challenged by a motion for summary judgment. (Kirby v. Albert D. Seeno

Construction Co. (1992) 11 Cal.App.4th 1059, 1067-1070.)

25
 2. Analysis

a. Denial of Continuance of Summary Judgment Hearing

Lashgari has not shown any error in the trial court's denial of his request for a

continuance of the summary judgment hearing.6 A party opposing a summary judgment

motion may obtain a continuance of the hearing by submitting a declaration stating that

"facts essential to justify opposition may exist but cannot, for reasons stated, then be

presented." (Code Civ. Proc., § 437c, subd. (h).) The declaration "must detail the

specific facts that would show the existence of controverting evidence" and "the specific

reasons why they cannot then be presented." (Lerma v. County of Orange (2004) 120

Cal.App.4th 709, 715, 716.) Lashgari submitted no such declaration. Instead, in a

memorandum of points and authorities filed in opposition to the motion, he asked for a

continuance to take another deposition and obtain additional documents that "will shed

further light on the corporate structure of HKT." Lashgari did not explain, however, what

specific information he expected to obtain about HKT's corporate structure or how such

information would defeat the motion. The only pertinent allegation of the complaint

related to HKT's corporate structure was that defendants misled Lashgari to believe that

Carmel Valley Coast Escrow was "a separate and distinct entity" from HKT. Defendants

disproved this allegation by submitting escrow instructions and a disclosure form, both

signed by Lashgari, which disclosed that HKT did business as Carmel Valley Coast

6 The record in this case contains no express ruling on Lashgari's request for a
continuance, but we presume the trial court denied it based on its decision to grant
defendants' motion for summary judgment. (California Automobile Ins. Co. v. Hogan
(2003) 112 Cal.App.4th 1292, 1305, fn. 4 (Hogan).)
26
Escrow, was acting as both real estate broker and escrow holder in the transaction, and

would derive a financial benefit from the transaction. (See pt. I.A., ante.) In light of this

evidence and the absence of any explanation from Lashgari, we do not see how his

proposed additional discovery into HKT's corporate structure would enable him to create

a triable issue of fact as to whether defendants misled him into believing Carmel Valley

Coast Escrow was separate and distinct from HKT. Where, as here, the party requesting

a continuance of a hearing on a summary judgment motion did not submit a declaration

"showing 'that a continuance is needed to obtain facts essential to justify opposition to the

motion' " (Hogan, supra, 112 Cal.App.4th at p. 1305), and "the proposed discovery is

focused on matters beyond the scope of the dispositive issues framed by the pleadings"

(Ace American Ins. Co. v. Walker (2004) 121 Cal.App.4th 1017, 1023), a trial court

properly may deny the continuance.

b. Denial of Leave to Amend

Lashgari also has not demonstrated any error in the trial court's denial of his

request for leave to file a third amended complaint. He complains the court "never

considered [his] viable consumer protection claims, but nevertheless entered dismissal

with prejudice." In his opening brief on appeal, however Lashgari neither identified any

specific claim he wished to add to his complaint nor made any legal argument as to how

the court abused its discretion in denying leave to amend. As the appellant, Lashgari has

the burden of affirmatively showing error; he may not simply assert error and then leave

it to us to supply a supporting argument. (Cahill v. San Diego Gas & Electric Co. (2011)

194 Cal.App.4th 939, 956; Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1207.)

27
Lashgari did not satisfy that burden by arguing — for the first time in his reply brief —

that the trial court improperly denied leave to amend based on calendaring constraints, or

that he has meritorious claims for violations of the Consumers Legal Remedies Act (Civ.

Code, § 1750 et seq.) and the unfair competition law (Bus. & Prof. Code, § 17200 et

seq.). "Points raised for the first time in a reply brief will ordinarily not be considered,

because such consideration would deprive the respondent of an opportunity to counter the

argument." (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.)

Since Lashgari has provided no reason to depart from this rule, we deem forfeited his

challenge to the trial court's denial of leave to file a third amended complaint. (Holmes v.

Petrovich Development Co. (2011) 191 Cal.App.4th 1047, 1064, fn. 2; Keyes v. Bowen

(2010) 189 Cal.App.4th 647, 660; Schauer v. Mandarin Gems of Cal., Inc. (2005) 125

Cal.App.4th 949, 960, fn. 4.)

C. The Trial Court Erroneously Awarded Defendants Certain Filing Fees as Costs

Finally, Lashgari contends the trial court improperly included among the costs

awarded to defendants certain filing and motion fees paid for Keller Williams Realty and

Carmel Valley Coast Escrow because those entities are fictitious. (See Code Civ. Proc.,

§ 1033.5, subds. (a)(1), (c)(2) [filing and motion fees are recoverable as costs if they are

reasonably necessary to conduct of litigation].) We agree.

"Doing business under a fictitious business name does not create a separate legal

entity." (Meller & Snyder v. R & T Properties, Inc. (1998) 62 Cal.App.4th 1303, 1311.)

Consequently, a corporation sued in its fictitious business name need only appear in its

28
true corporate name and need not also appear separately in its fictitious name.

(Pinkerton's, Inc. v. Superior Court (1996) 49 Cal.App.4th 1342, 1349 (Pinkerton's).)

Here, the trial court awarded defendants the entirety of the $1,225 they paid when

they made their first appearances in the trial court. That amount appears to include three

fees of $355 each (totaling $1,065) for filing "the first paper in the action . . . on behalf of

any defendant" (Gov. Code, § 70612, subd. (a)), which in this case was a demurrer, plus

four fees of $40 each (totaling $160) for filing an accompanying motion to strike (id.,

former § 70617, subd. (a)). No separate "first paper" or motion fees should have been

paid for either Keller Williams Realty or Carmel Valley Coast Escrow, however, because

they are merely fictitious names by which HKT does business. (Pinkerton's, supra, 49

Cal.App.4th at p. 1349.) Defendants should have paid only two "first paper" fees

(totaling $710) and only two motion fees (totaling $80), for a grand total of $790 in first

appearance fees. (See Townzen v. County of El Dorado (1998) 64 Cal.App.4th 1350,

1358 [each defendant must pay separate filing fee].) The order awarding costs therefore

must be modified to reduce it by $435, the difference between the $1,225 defendants

actually paid and the $790 they should have paid. (See, e.g., Robert L. Cloud &

Associates, Inc. v. Mikesell (1999) 69 Cal.App.4th 1141, 1154 [modifying costs order to

delete items improperly awarded]; Ripley v. Pappadopoulos (1994) 23 Cal.App.4th 1616,

1627-1628 [same]; Gaffey v. Mann (1906) 3 Cal.App. 124, 127 [unnecessary filing fee

was properly stricken from cost bill].)

29
 DISPOSITION

The judgment is affirmed. The postjudgment order awarding costs is modified by

reducing the total amount awarded from $11,530.70 to $11,095.70, and as so modified

the order is affirmed. Defendants are entitled to recover their costs on appeal.

IRION, J.

WE CONCUR:

NARES, Acting P. J.

AARON, J.

30