Filed 5/26/21 Kim v. Lee CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

EDWARD KIM et al.,

Plaintiffs and Respondents,

v.

HELEN LEE et al.,

Defendants and Appellants.

 B295665, B303317

 (Los Angeles County

 Super. Ct. No. BC563651)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Maureen Duffy-Lewis, Judge. Affirmed in 

part; reversed in part.

Law Office of Jim P. Mahacek and Jim P. Mahacek for 

Defendants and Appellants.

Law Offices of Donna Bullock and Donna C. Bullock for 

Plaintiffs and Respondents.

__________________________
2

Helen Lee and Young Hee Kim (collectively, defendants) 

appeal in case No. B295665 from a judgment entered after a jury 

trial (case No. B295665) in favor of Edward Kim,1 Ginnie Cho, 

Seung Kang (collectively, Kim plaintiffs), and GNE Property 

Management, Inc. (GNE). Defendants also appeal the denial of 

their motion for judgment notwithstanding the verdict or, in the 

alternative, for a new trial.

The jury’s special verdict found defendants, through their 

agent John Rhee, contracted with Kim’s company GNE to 

perform remediation work on a multi-unit residential apartment 

building owned by defendants, but failed to pay GNE for all of the 

work performed under the contract. The jury further found 

defendants, through Rhee, sold the property to Kim, Cho, and 

Kang while intentionally concealing orders by the Los Angeles 

County Department of Public Health (Health Department) to 

remediate multiple public health code violations.

Defendants contend on appeal the trial court erred in 

allowing Kim to testify at trial with the assistance of a

noncertified interpreter and in excluding testimony from the 

incomplete deposition of Rhee. Defendants also argue 

substantial evidence does not support the jury’s finding 

defendants had knowledge of the Health Department orders, or 

that defendants had a duty to disclose the orders because Kim 

was reasonably able to discover the orders on his own. 

Defendants further assert the damages awarded are in excess of 

that proven at trial. We reduce the amount of damages but 

otherwise affirm. 

1 We refer to plaintiff Edward Kim as Kim and to defendant 

Young Hee Kim by her first name (Young Hee) to avoid 

confusion.
3

Defendants separately appeal the trial court’s award to the 

Kim plaintiffs of $412,500 in attorneys’ fees (case No. B303317). 

Defendants do not contest the amount awarded, instead arguing 

the Kim plaintiffs were not entitled to attorneys’ fees under the 

escrow agreement that consummated the sale because the Kim 

plaintiffs only asserted tort claims. We conclude the broadlyworded attorney fee provision in the escrow agreement supports 

recovery of fees for the Kim plaintiffs’ fraudulent concealment 

claim. 

FACTUAL AND PROCEDURAL BACKGROUND

The Complaint and Cross-complaint

On November 13, 2014 the Kim plaintiffs and GNE filed 

this action against Lee and Young Hee. The Kim plaintiffs

asserted causes of action for fraud and negligent 

misrepresentation. GNE asserted causes of action for breach of 

contract and a common count.

Defendants filed a cross-complaint against the Kim 

plaintiffs, GNE, and Rhee, asserting causes of action for fraud, 

concealment, conversion, common counts, and breach of contract

against Rhee; causes of action for breach of oral contract, 

intentional or negligent misrepresentation, concealment, and 

common counts against Kim; and causes of action for breach of 

fiduciary duty, aiding and abetting breach of fiduciary duty, 

negligent interference with prospective economic advantage, and 

conspiracy against all cross-defendants.
4

The Evidence at Trial

1. Kim plaintiffs’ case

(a) Lee and Young Hee’s purchase of the property

Prior to March 2013 Jeanne Salamon and Advanced 

Pension Programs owned a property located at 716 South 

Westlake Avenue (the property). The multi-unit apartment 

building on the property was distressed. At some point prior to 

March 2013, the property was placed in receivership. Receiver 

Thomas Coleman hired VPMI Property Management (VPMI), a 

company owned by Daniel and Adrian Talamentes,

2 to manage

the property. 

On August 15, 2012 the Health Department issued a notice 

to Salomon identifying multiple violations of the Los Angeles 

County Code and state housing laws, including rodent and insect 

infestations. The notice was signed by Environmental Health 

Specialist Guadalupe Castruita. 

On July 13, 2012 the property was referred to the Rent 

Escrow Account Program (REAP) (L.A. Mun. Code, § 162.00 et 

seq.) based on code violations identified by the City of Los 

Angeles Housing and Community Investment Department 

(Housing Department).

3 On October 29, 2012 the property 

2 Daniel and Adrian Talamentes both testified at trial. We 

refer to Daniel and Adrian by their first names to avoid 

confusion.

3 According to the Housing Department Web site, “REAP 

encourages owners to make the repairs and return the property 

to a safe and habitable condition. Tenants of affected units are 

given a 10% to 50% rent reduction depending on the nature and 

severity of the violations cited. Tenants have the option to pay 

their reduced rents to the landlord or into an escrow account 
5

entered REAP. When a property is placed in REAP, a portion of 

all tenants’ rental payments are withheld from the owner by the 

City of Los Angeles. 

On March 23, 2013 Rhee4 purchased the property at a 

foreclosure auction for approximately $1.3 million on behalf of 

defendants. After the purchase, the receivership on the property 

terminated, and VMPI ceased management of the property. Lee 

and Young Hee hired Rhee to manage the property. 

Rhee emailed Adrian and told her he was the agent of Lee 

and Young Hee and authorized to negotiate on their behalf. 

Adrian provided Rhee with past operating statements for the 

property, and Rhee and Adrian discussed the possibility of Lee 

and Young Hee hiring VPMI to manage the property again.

VPMI collected rents from the tenants for Rhee in April 2013. 

Ultimately, VPMI opted not to manage the property. 

(b) Rhee hires Kim and GNE to remediate the 

property in response to the Housing Department 

orders

Sometime in March 2013 Rhee approached Kim, seeking 

consultation on the Housing Department orders on the property. 

On March 26 Kim visited the property at Rhee’s invitation, while 

the Housing Department conducted an inspection of the property.

Kim believed Rhee wanted him there to show the inspector that 

managed by the Department.” (L.A. Housing & Community 

Investment Dept., What is REAP? (2021) 

<http://hcidladev.lacity.org/what-is-reap-for-renters> [as of 

May 12, 2021].)

4 Rhee hired real estate broker Simon Wu, who testified at 

trial, to purchase the property at the auction. 
6

Rhee had a contractor to address problems with the building. 

Kim did not participate in the discussions between Rhee and 

Housing Department inspector Erwin Larranaga, but he 

“listen[ed] to some of the conversations” from the hallway. 

Rhee and Kim discussed Rhee’s hiring of GNE to perform 

remediation work on the property. On April 2 or 3, 2013 Kim 

provided Rhee with a handwritten estimate of $200,000 for GNE 

to perform the remediation work required by the Housing 

Department. Rhee stated he needed to discuss the proposal with 

Lee and Young Hee. On April 3 Kim and Rhee met with Young 

Hee. In the presence of Kim, Young Hee told Rhee that Rhee was 

“in charge of everything” regarding the property. Young Hee 

authorized Rhee to hire Kim as the general contractor to work on 

the property on her behalf. After this initial meeting, Young Hee

relied on Rhee to communicate with Kim. Kim and Young Hee 

did not meet or speak again.

On April 16, 2013 the Housing Department issued a notice

and order to comply to both Rhee and Kim regarding violations 

on the property. However, the notice addressed to Kim listed an 

incorrect mailing address. The notice ordered additional work to 

be performed on the property, which Kim had not accounted for 

in his original estimate. Rhee asked Kim to perform the 

additional work and told him Lee or Young Hee would pay him,

or Rhee would “sell the building to pay” him. 

On April 18 Kim attended a hearing with Rhee regarding 

the property’s inclusion in REAP. At the hearing, Kim did not 

hear any mention of “pests” or an “unhealthy environment” at the 

building, or of any Health Department orders. Kim received a 

copy of the March 26, 2013 Housing Department notice and order 

for the first time on this date.
7

Young Hee authorized Rhee to hire Kim and to discuss the 

needs of the property with Kim while Rhee oversaw the 

completion of all repairs. Young Hee expected Rhee to handle 

any problems that arose on the property and authorized him to 

receive legal notices on her behalf. On April 28 or 30, 2013 Rhee 

returned to Kim a typed invoice memorializing the terms of Kim’s 

written proposal for GNE to perform the remediation work. Rhee 

signed the invoice on behalf of Lee and Young Hee. The signed 

invoice provided GNE would be paid $200,000 for the listed work, 

with an “extra charge on additional work beyond this list.” The 

invoice provided the property would “[p]ass LAHD [i]nspection” 

and “[p]ass LADBS [i]nspection,” in apparent reference to the 

Housing Department and the Los Angeles Department of 

Building and Safety. The scope of the work did not include pest 

control. Relying on the signed contract, Kim and GNE began to 

perform the remediation work. 

On May 2, 2013 Lee visited the property. Lee told Kim the 

contract price was too expensive and requested a discount, but 

she did not tell him to stop work on the property. On May 6 Lee 

returned to the property. She did not enter the building, but 

from the outside observed work being performed. At this time, 

Lee gave Kim two checks totaling $37,000 as partial payment for 

the work that was underway. In total, Kim received $97,000 as a 

down payment on the work. 

Lee and Young Hee did not pay for utilities, including 

water and electricity, during July and August 2013. Kim 

testified he paid between $17,000 and $18,000 for utility bills

owed by Lee and Young Hee. According to Kim, it would have 

been “impossible to continue construction” without paying the 

utilities. Normal business practice for contractors included 
8

paying utilities due and issuing an invoice to the owner, in order 

to continue work uninterrupted. 

In August 2013 GNE completed all of the remediation work 

under the contract and required by the Housing Department, 

including that required by the April 16, 2013 notice and order. 

Neither Lee or Young Hee ever told Kim and GNE to stop 

working. But neither defendants nor Rhee paid GNE the 

outstanding balance for the work performed. GNE introduced 

business records detailing the costs of materials, labor, and other 

expenses GNE incurred during defendants’ ownership of the 

property to remediate the code violations identified by the 

Housing Department orders, which Kim testified totaled 

$197,784.78. Kim calculated the total price of $227,452.50 for the 

work by applying “the standard markup . . . for [a] general 

contractor” of 15 percent. 

The Housing Department closed its case against the 

property on August 29, 2013. 

(c) The Health Department inspects the property

Carolyn Watson, an environmental health specialist 

supervisor with the Health Department, testified the general 

public can access the Health Department records on a particular 

property by submitting a request to the Health Department. On 

May 30, 2013 Watson received an email from Larranaga 

informing her the property had a new owner and the Housing 

Department had found continuing code violations upon a 

reinspection of the property. The email identified Lee and Young 

Hee as the new owners of the property. Watson sent Castruita, 
9

who worked with the Health Department’s housing task force,5 to 

inspect the property. The Health Department’s usual practice 

was to conduct a follow up inspection within 30 days of a 

property’s change in ownership and to inform the new owner of 

any “outstanding inspection” or “reported investigation against 

the old owner.” 

Rhee accompanied Castruita during her inspection. 

Castruita found “roaches” and “[mouse] droppings in the broiler 

and the stove” of one of the units. Throughout the inspection, 

Rhee “badgered” Castruita, arguing with her about the various 

problems she identified. After the inspection, Castruita prepared 

a compliance report on the property. Rhee did not tell Kim about 

Castruita’s inspection.

Castruita explained the Health Department requires 

elimination and exclusion of pest infestations but the Housing 

Department does not. The Housing Department deals with “just 

building structure.” Castruita opined the eradication and 

exclusion of pests is a longer and more difficult job than 

alleviating violations of the housing code. A superficial cleaning 

up after pests would not be sufficient to address the concerns of 

the Health Department. Castruita explained, “I’m very good at 

finding the bugs. . . . I open up the cabinets. I know where they 

hide. I’ll stick my head in the cabinet, and I look up where they 

have a crease, and there they are . . . .” Castruita added, “I know 

how to find the roaches. Pull the refrigerator. They like the back 

part of the refrigerator because it’s warm, and then I take my 

5 The housing task force is an interagency task force 

comprised of members of the Los Angeles City Fire Department, 

City Attorney’s Office, City Code Enforcement, and the Health 

Department.
10

flashlight and I see them . . . . It looks clean, but you haven’t 

gotten rid of the vermin.” After the pests were eradicated, 

structural amendments must be made, such as “seal[ing] every 

crack, nook, and cranny.”

(d) The Kim plaintiffs purchase the property and

discover the Health Department orders

On August 29, 2013 the Kim plaintiffs purchased the 

property from Lee and Young Hee for $1,577,000. Lee and Young 

Hee relied on Rhee to negotiate the sale and set the price. 

According to Kim, Rhee drafted the escrow instructions (escrow 

agreement), which contained the following clause: “AS-IS AND 

WHERE-IS CONDITIONS: Buyer hereby confirms that they 

have completed their own and professional inspection and 

investigation of the subject property and hereby further confirms 

that they have removed any and all contingencies of this 

sale/purchase prior to opening of escrow. Buyer also herein 

acknowledges that they are purchasing the property solely in 

reliance on Buyer’s own investigation, and that no 

representations or warrants of any kind whatsoever, expressed or 

implied have been made by Seller. Buyer herein confirms that 

they are fully aware of all future, existing zoning regulations, 

other governmental requirements, site, size of lot, and physical 

condition and other matters affecting the use and the condition of 

the property and agrees to purchase the property in its present 

‘As-is’ and ‘Where-is’ conditions without seller’s warranty at 

closing. [¶] The undersigned buyer hereby confirms that they 

are well aware of existing Housing Authority lien and accept the 

property in its present lien conditions. Buyer herein also 

confirms that they have agreed to comply with any and all 
11

required repairs and documentation including but not limited to 

the payment of any dues, if any, at buyer’s cost after closing.” 

Kim did not hire a professional to inspect the property prior 

to the Kim plaintiffs’ purchase of the property. Kim believed the 

property was in full compliance with the Housing Department

orders. During GNE’s work, Kim had observed some evidence of 

mice and cockroaches, but he believed all buildings had these 

issues. Kim did not think he needed to check with the Health 

Department, which he thought dealt with restaurants.

On October 3, 2013 Kim was called by the Housing 

Department to attend a meeting. On that date Kim met with 

representatives from the Housing Department as well as the 

Health Department’s housing task force (including Castruita). 

After the meeting Kim received an inspection report from the 

Health Department identifying multiple code violations on the 

property, including rodent and insect infestation. The report 

stated it was “[r]eissue[d],” and it referenced the August 15, 2012 

inspection report, which ordered Salomon (then-owner of the

property) to remediate multiple violations, including the presence 

of rodents and insects. Sometime after the October 3 meeting, 

Castruita inspected the property with Kim, who was much more 

cooperative than Rhee had been.

Larranaga did not learn of the Health Department’s 

outstanding order against the property until the October 3, 2013

meeting. Kim testified he had no knowledge of the Health

Department’s order before the meeting. Rhee previously 

disclosed to Kim the Housing Department orders, but not the 

Health Department orders. Rhee never mentioned to Kim before 

the sale that Rhee met with Castruita during an inspection by 

the Health Department. 
12

Because of the violations identified by the Health 

Department, the property remained in REAP for an additional 

three years. Kim suffered a “humongous financial loss” from the 

undisclosed Health Department issues. If Kim had known about 

the Health Department issues, he would not have purchased the 

property. 

(e) The Kim plaintiffs’ damages

Kim testified the Kim plaintiffs experienced lost rental 

income due to defendants’ concealment of the Health Department 

orders. The Kim plaintiffs introduced into evidence business 

records purporting to document a total loss of $272,5696 in rental 

income between September 2013 and May 2016, when the 

property was released from REAP. Kim explained the records 

represented “[t]wo major losses. First loss is because of the 

REAP violation, only 50 percent of the rent could be collect[ed]. 

Second loss, some of the unscrupulous tenant[s] [knew] about the 

REAP and because of that . . . did not pay any rent.” 

In May 2016 the property was released from REAP, and the 

Kim plaintiffs started collecting the full rent from tenants. 

Further, on April 11, 2017 Kim received $156,400 in back rent 

held by REAP and $352 in interest. The Kim plaintiffs could not 

raise tenants’ rents while the property was in REAP, and for one 

year following the release from REAP. In May 2017 the Kim 

plaintiffs raised the rent by 3 percent, the maximum allowed by 

the Los Angeles rent stabilization ordinance. Under the 

ordinance, the Kim plaintiffs could have again raised the rents in 

6 Dollar amounts have been rounded to the nearest dollar.
13

May 2018, but they did not due to a tenant lawsuit regarding the 

property. 

The Kim plaintiffs also introduced business records 

detailing the costs of materials, labor, and other expenses Kim 

incurred after purchasing the property to remediate the code 

violations identified by the August 15, 2012 and October 3, 2013 

Health Department orders, totaling $436,164. 

2. Defense case

Daniel testified he met with Kim at the property when Kim 

was working as the contractor, and Daniel told Kim about the 

various repairs required by the Housing Department. Daniel told 

Rhee and Kim the property was in REAP and provided Rhee’s 

assistant with a list of “repairs that the city was asking for.” On 

cross-examination, Daniel opined the repairs necessary to 

alleviate the issues identified by the Housing Department would 

cost much more than $97,000. Daniel did not inform Kim of the 

Health Department orders against the property.7

Real estate appraisers Benjamin Lara and Michael 

Frauenthal both testified the fair market value of the property on 

August 29, 2013 was $1,460,000. They did not include in their 

valuations the cost of remediating the violations identified by the 

Health Department as required to remove the property from 

REAP. Both acknowledged that if additional repairs were 

required by the Health Department, that would have affected the

valuation.

7 Kim acknowledged he had seen Daniel visit the property 

and observed Daniel and Rhee speaking, but Kim explained his 

“English is not sufficient to have a direct conversation with 

[Daniel] and understand him.” 
14

Real estate consultant Allan Snyder opined the property 

remained in REAP from October 2013 to February 2016 due to 

noncompliance with the Health Department’s orders. He opined 

the property’s noncompliance was “particularly bad” and a 

reasonable buyer in Kim’s position would have made an inquiry 

with the Health Department prior to purchase.

The Special Verdict and Judgment

On November 11, 2018 the jury returned a special verdict. 

As to Rhee’s agency, the jury found (1) Rhee was the agent of 

defendants during their ownership of the property; (2) Rhee was 

authorized by defendants to act on their behalf with regard to the 

property; (3) Rhee was authorized by defendants to act on their 

behalf in dealings with the Kim plaintiffs and GNE; (4) Rhee 

entered into a contract with GNE for construction services in the 

scope of his agency; (5) Rhee knew about the Health Department 

code violation case against the property at the time defendants 

sold the property to the Kim plaintiffs; (6) Rhee’s knowledge of 

the Health Department code violation case was imputed to 

defendants; and (7) defendants ratified the actions of Rhee 

concerning the plaintiffs and relating to the property. 

As to the Kim plaintiffs’ cause of action for fraud, the jury 

found (1) defendants “directly or through an authorized agent”

intentionally failed to disclose facts in the sale of the property 

that the Kim plaintiffs did not know or could not have reasonably 

discovered; (2) defendants intended to deceive the Kim plaintiffs; 

(3) the Kim plaintiffs would have behaved differently if the 

omitted facts had been disclosed; and (4) the concealment was a 

substantial factor in causing harm to the Kim plaintiffs. The jury 

awarded the Kim plaintiffs $992,595 in damages, comprised of 
15

lost earnings ($272,569), unspecified past economic damages 

($436,164), future economic loss ($22,487), past noneconomic loss, 

including mental suffering ($85,000), and prejudgment interest 

($176,375). The jury found the Kim plaintiffs failed to prove their 

claim for negligent misrepresentation. 

As to GNE’s cause of action for breach of contract, the jury 

found the parties agreed on the terms of the construction contract 

and GNE performed the work required by the contract, but Lee 

and Young Hee failed to perform (by not making payment). The 

jury awarded GNE $141,028 for past economic loss and $72,911 

in prejudgment interest, for total damages of $213,939. The jury 

further found GNE proved its cause of action for common count 

against defendants, but awarded no damages on that claim.

The jury found Lee and Young Hee failed to prove each of

their cross-claims.

On December 10, 2018 the trial court entered judgment in 

favor of the Kim plaintiffs and GNE.

Defendants’ Postjudgment Motions

On December 14, 2018 defendants filed motions for 

judgment notwithstanding the verdict (JNOV) and for new trial.

In their postjudgment motions, defendants argued, among other 

things, plaintiffs’ use of a noncertified interpreter and the trial 

court’s exclusion of the transcript of the incomplete deposition of 

Rhee were error, substantial evidence did not support the fraud 

verdict, and the jury’s damages award was excessive. 

The trial court denied the motions on January 16, 2019. As 

to the motion for new trial, the court ruled there was “[n]o 

irregularity nor error in the proceedings. Damages are not 

excessive. Evidence was sufficient to justify the verdict.” As to 
16

the JNOV motion, the court found the “[d]ecisions made by the 

jury and their resulting verdict are supported by substantial 

evidence and by reasonable inferences made from that evidence.” 

Defendants timely appealed.

DISCUSSION

Plaintiffs’ Use of a Noncertified Interpreter at Trial Was Not 

Reversible Error

1. Proceedings below

During jury selection on October 3, 2018, plaintiffs’ 

attorney Donna Bullock informed the court Kim required a 

Korean language interpreter for his testimony at trial. Bullock

explained she was in contact with three private translation 

services regarding Kim’s needs at trial but had not yet retained 

an interpreter. On October 4 Bullock informed the court the only 

interpreter available for the next day was a noncertified 

interpreter with some experience translating court proceedings. 

The court responded, “As long as he is sworn in and as long as all 

counsel agree.” The court asked defendants’ attorney Paul P. Lin

whether defendants agreed not to object to the proposed 

interpreter as long as “he had a resume that was appropriate.” 

Lin agreed.

The next day, Bullock proposed George Park as the Korean

language interpreter for Kim. Park informed the court he had 

provided translation services in “small claim[s] court and in a 

hospital and some mediations.” Asked by Lin to state his 

qualifications, Park responded he had taken training courses in 

translation for the legal and medical fields. At Lin’s request, 

Park then engaged in an off-the-record discussion with Lin’s legal 
17

assistant, who spoke Korean fluently but did not speak fluent 

English. At the close of the exchange, the court stated, “I think 

we’re fine,” and the clerk swore in Park as interpreter. Lin did 

not object to the use of a noncertified interpreter.

Throughout the trial, Park translated the testimony of Kim 

and other Korean-speaking witnesses for plaintiffs. Defendants 

did not use Park to translate during their cross-examination of 

Kim or the other Korean-speaking witnesses, but instead utilized 

several certified Korean-language translators.

On October 10 Lin raised issues with Park’s translation 

during Kim’s testimony. Defense interpreter Hyoshin Kim 

stated, “I have observed there were many occasions of omissions, 

additions, and explanations during the interpretation” and

explained that during a series of questions each ending with 

“while Helen Lee and Young Hee Kim were the owners of the 

property,” Park had failed to include this qualifying language.

Park had on one occasion translated “negotiation as consultation, 

agreed as declared, ignored as denied,” and “terms and conditions 

as process.” Park also once interpreted $97,000 as $9,700. After 

hearing from Park, who indicated not every word could be “100 

percent exactly” translated between Korean and English, the 

court stated, “He’s certified from the court. He took an oath. His 

English is extremely good, and as long as the plaintiff is 

comfortable with the interpretation that he’s heard now.” After 

confirming with Kim he had testified the figure in question was

$97,000, the court ruled, “[W]e’re going to continue on with the 

plaintiffs’ interpreter, since you’re paying him, and it appears 

that everything is moving along fine. There can be distinctions 

but not enough for me to remove him from the case.” The court 

added that the defense “may certainly use their own interpreter.”
18

In support of their postjudgment motions, defendants filed 

a declaration from Julie Wagner, who served as one of 

defendants’ certified interpreters at trial. Wagner averred she 

“observed numerous errors” in Park’s translation of Kim’s 

testimony, providing as examples: “In once instance, he 

interpreted ‘received a payment’ as ‘received a partial payment’”;

“A few times, he added his personal comments addressing the 

jury while at the witness stand, making the jur[o]rs laugh. At 

these instances, it was unclear when he was speaking for himself 

or interpreting”; and “When [Kim’s] response became long, [Park] 

would trail off without completing the interpretation. He would 

also leave out words.”

2. Statutory scheme

“In general, interpreters are required to take an oath and 

to be certified. (Evid. Code, § 751, subd. (a); Gov. Code, § 68561, 

subd. (a).)” (People v. Suarez (2020) 10 Cal.5th 116, 143 (Suarez); 

accord, Correa v. Superior Court (2002) 27 Cal.4th 444, 462

[“[W]ith respect to in-court interpretation by certified 

interpreters, concerns regarding the competence of the 

interpreter normally will be met by statutory certification 

requirements.”].) “A trial court, however, may use an interpreter 

who is not certified if there is ‘good cause’ to do so. (Gov. Code, 

§ 68561, subd. (a).) In that situation, the court must find, among 

other things, that good cause exists and that the interpreter is 

qualified to interpret the proceedings.” (Suarez, at pp. 143-144; 

accord, People v. Superior Court (Almaraz) (2001) 89 Cal.App.4th 

1353, 1358 [“interpreters must be certified, unless good cause is 

shown for using a noncertified interpreter in a particular 

instance”]; Cal. Rules of Court, rule 2.893(d)(1) [“If after a 
19

diligent search a certified or registered interpreter is not 

available, the judge in the proceeding may either appoint a 

noncertified or nonregistered interpreter who has been 

provisionally qualified under (d)(3) or, in the limited 

circumstances specified in (d)(4), may use a noncertified or 

nonregistered interpreter who is not provisionally qualified.”].)

“‘Improper procedures in the use of an interpreter do not 

rise to the level of a constitutional violation unless they result in 

prejudice demonstrating defendant was denied his right to a fair 

trial.’” (Suarez, supra, 10 Cal.5th at pp. 144, 148-149 

[defendants’ examples of “three instances in which 

interpretations were incorrect or clarified” did not demonstrate 

the “errors violated his rights or prejudiced him”]; Almaraz, 

supra, 89 Cal.App.4th at pp. 1359-1360 [failure to follow 

procedural requirements or administer oath for an interpreter 

alone does not deprive a defendant of the constitutional right to 

an interpreter]; People v. Estrada (1986) 176 Cal.App.3d 410, 

414, 416 [no prejudice resulted from use of a noncertified 

interpreter who had served as defendant’s personal interpreter at 

the preliminary hearing].)

3. Defendants have failed to demonstrate prejudice due 

to Kim’s use of Park as an interpreter

Defendants contend the trial court committed reversible 

error by failing to follow the procedures of Government Code 

section 68561 and California Rules of Court, rule 2.893. They 

argue Kim did not make a diligent search for a certified 

interpreter and the trial court failed to make a finding a certified 

interpreter was unavailable or there was otherwise good cause 

for appointing a noncertified interpreter. 
20

We agree with defendants the trial court erred in failing to

follow the required procedure for appointing a noncertified 

interpreter. The court made no findings with respect to the 

availability of certified interpreters or whether good cause existed 

for appointing Park, as required under California Rules of Court, 

rule 2.893(d)(2)(B) and (C). We reject plaintiffs’ argument Park 

was appropriately utilized as a noncertified “temporary 

interpreter.” Under California Rules of Court, rule 2.893(b)(7), 

“‘[t]emporary interpreter’ means an interpreter who is not 

certified, registered, or provisionally qualified, but is used one 

time, in a brief, routine matter.” A multi-week civil trial is not a 

“brief, routine matter.”

However, defendants have failed to demonstrate the use of 

Park to translate Kim’s testimony was prejudicial. Throughout 

the trial, the defendants used their own Korean language 

interpreters during their examination and cross-examination of 

witnesses, including their cross-examination of Kim. The defense 

interpreters were free to listen to the testimony of Kim and 

Park’s translation to check the accuracy of the translation and 

raise any concerns with the court during the trial, but they did 

not do so after initially raising the issue on October 10. (See 

Suarez, supra, 10 Cal.5th at p. 149 [defendant failed to make a 

showing in trial court that interpreter had deficient skills, trial 

court therefore did not err in denying request for “‘check’ 

interpreter”]; People v. Aranda (1986) 186 Cal.App.3d 230, 237 

[“When a showing is made, at trial, that an interpreter may be 

biased or his skills deficient, one solution may be appointment of 

a ‘check interpreter.’”].) Although Wagner submitted a 

declaration in support of defendants’ posttrial motions pointing to 

some examples of incorrect translations, defendants have not 
21

shown how those errors affected the outcome at trial or otherwise 

prejudiced defendants. Thus, defendants have not shown they

were denied a fair trial, and any error was harmless.8 (Suarez, 

supra, 10 Cal.5th at pp. 148-149.)

The Trial Court Did Not Abuse Its Discretion in Excluding 

Testimony from the Incomplete Deposition of Rhee

1. Proceedings below

On October 26, 2018, near the close of the defense case, Lin

requested to read into evidence excerpts from the November 4, 

2016 deposition of Rhee. The court found that Rhee, by failing to 

appear at the trial after the first day, had voluntarily absented 

8 In their reply brief, defendants argue the trial court 

authorized Park “to make partial translations of the questions 

asked and Kim’s answers.” Defendants rely on an exchange 

between Park and the trial court, in which Park asked, “I’m going 

to have to ask [Kim] to cut off [his answers] a little shorter. Can 

I do that?” The trial court responded, “Yes. Answer even if it’s 

only partial. Just interpret it, even if it’s only partial.” 

Defendants did not object at trial nor did they raise this 

contention in their opening brief. Thus, the issue is forfeited. 

(See Orozco v. WPV San Jose, LLC (2019) 36 Cal.App.5th 375, 

397 [“‘It is hornbook law that a timely and specific objection is 

required to prevent the consideration of certain evidence; the 

failure to object at all waives any claim of error.’”]; Aptos Council 

v. County of Santa Cruz (2017) 10 Cal.App.5th 266, 296, fn. 7

[“Issues not raised in the appellant’s opening brief are deemed 

waived or abandoned.”]; Altavion, Inc. v. Konica Minolta Systems 

Laboratory, Inc. (2014) 226 Cal.App.4th 26, 63 [argument made 

for the first time in reply brief is forfeited].) Even if defendants 

had not forfeited this argument, the trial court did not err in 

allowing Park to translate Kim’s partial answers.
22

himself from the trial. Bullock objected to introduction of Rhee’s 

deposition testimony because plaintiffs did not have an 

opportunity fully to cross-examine him.

At an in camera hearing, Lin explained, “Bullock was at 

the deposition. She did have a chance to cross-examine . . . Rhee. 

[¶] However, at 5:00 we broke and Ms. Bullock had more 

questions to ask and John Rhee and his lawyer promised to set 

up a date. Actually, we had set up . . . [a date] a week 

afterwards, and they cancelled. [¶] And we didn’t have a chance 

to further depose him either.” Bullock responded, “Rhee canceled 

and I set his deposition date at least two other times. I got 

certificates of non-appearance. Same difficulty we’re having here 

at this trial. [¶] . . . [Lin is] going to read in statements from Mr. 

Rhee denying knowledge about everything relating to the 

transactions. Just, ‘no, no, no,’ and ‘I don’t knows.’ So we didn’t 

get a chance to cross-examine.” Lin added, “And on our side, we 

didn’t have a chance to further depose him either” because direct 

examination was “cut off in the middle and then he wouldn’t 

show up. And [Bullock] didn’t get a chance to re-examine at the 

end.” The court asked Bullock whether, during the deposition, 

she intended “to challenge those questions and ask specifics 

about them,” to which Bullock replied, “Oh, yes.” The court 

sustained Bullock’s objection, stating, “That causes the court to 

rule that she’s not had a chance to cross-examine him.” After the 

trial court excluded the Rhee deposition, the defense rested.

In support of their postjudgment motions, defendants filed 

the excerpts of Rhee’s deposition they had intended to introduce 

at trial. 
23

2. Exclusion of the incomplete deposition was not an

abuse of discretion

Code of Civil Procedure section 2025.620 provides, “At the 

trial or any other hearing in the action, any part or all of a 

deposition may be used against any party who was present or 

represented at the taking of the deposition, or who had due notice 

of the deposition and did not serve a valid objection under 

Section 2025.410, so far as admissible under the rules of evidence 

applied as though the deponent were then present and testifying 

as a witness, in accordance with the following provisions: . . . [¶] 

. . . [¶] . . . (c) Any party may use for any purpose the 

deposition of any person or organization, including that of any 

party to the action, if the court finds any of the following: . . . [¶] 

. . . (2) The deponent, without the procurement or wrongdoing of 

the proponent of the deposition for the purpose of preventing 

testimony in open court, is any of the following: . . . [¶] . . . [¶] 

. . . (D) Absent from the trial or other hearing and the court is 

unable to compel the deponent’s attendance by its process.”

“‘Generally, the admission of a deposition is a matter 

within the discretion of the trial court.’” (Sprague v. 

Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1042 (Sprague); accord, 

People ex rel. Harris v. Sarpas (2014) 225 Cal.App.4th 1539, 1555 

[explaining as to admission of deposition testimony at trial, “Trial 

court rulings on the admissibility of evidence, whether made in 

limine or during trial, are usually reviewed under the abuse of 

discretion standard.”].) “A ruling that constitutes an abuse of 

discretion has been described as one that is ‘so irrational or 

arbitrary that no reasonable person could agree with it.’” 

(Sargon Enterprises, Inc. v. University of Southern 

California (2012) 55 Cal.4th 747, 773; accord, Olive v. General 
24

Nutrition Centers, Inc. (2018) 30 Cal.App.5th 804, 817 [“A ruling 

will be deemed an abuse of discretion only if it is ‘“so irrational or 

arbitrary that no reasonable person could agree with it.”’”].)

“Where cross-examination was not completed, the trial 

court’s refusal to admit the deposition is not ordinarily an abuse 

of discretion.” (Sprague, supra, 166 Cal.App.3d at p. 1042 [trial 

court did not abuse its discretion in excluding deposition 

testimony of witness where second day of deposition was 

cancelled and plaintiff could not complete cross-examination]; cf. 

George v. Double-D Foods, Inc. (1984) 155 Cal.App.3d 36, 44 [trial 

court did not abuse discretion in allowing use of deposition 

transcript where witness was cross-examined but corrections 

were later made to the transcript].)9 “Particularly where . . . the 

court has taken evidence in the form of declarations and 

testimony at the hearing on admissibility of the deposition, the 

court’s determination is entitled to great weight on appeal, 

including substantial evidence effect as to any disputed issues of 

fact.” (Sprague, at p. 1042.)

Defendants contend the trial court abused its discretion 

because plaintiffs failed to move to compel Rhee to complete the 

9 Pollard v. Pollard (1959) 166 Cal.App.2d 698, relied on by 

defendants, is not to the contrary. There, a witness died before 

his deposition could be completed, and there was no opportunity 

for cross-examination. The Court of Appeal affirmed the trial 

court’s exclusion of the testimony, noting a cited out-of-state 

authority “specifically limits admission of a partially completed 

deposition to cases where the cross-examination ‘has not in any 

way been prevented’ by the party producing the witness.” (Id. at 

p. 705.) The court did not address the circumstances under which 

it would be an abuse of discretion to exclude testimony in the 

absence of misconduct by the party producing the witness.
25

deposition and defendants were not at fault for Rhee’s failure to 

appear. But it was defendants who sought to use Rhee’s 

deposition testimony at trial, and nothing prevented them from 

moving to compel Rhee’s attendance at his continued deposition. 

And as the parties seeking to call Rhee as a witness at trial, 

defendants bore the burden to exercise reasonable diligence to 

procure Rhee’s attendance at trial. (Code Civ. Proc., § 2025.620, 

subd. (c)(2)(E) [party may use deposition testimony at trial if 

court finds the deponent is absent from trial and the “the 

proponent of the deposition has exercised reasonable diligence 

but has been unable to procure the deponent’s attendance by the 

court’s process”].) Further, the absence of meaningful crossexamination undermines the reliability of the Rhee’s deposition 

testimony. Under these circumstances, the trial court acted 

within its discretion in excluding Rhee’s deposition testimony.

Substantial Evidence Supports the Jury’s Findings on the 

Kim Plaintiffs’ Claim for Fraudulent Concealment 

Defendants contend substantial evidence does not support 

the jury’s findings of liability for fraudulent concealment because 

the Health Department orders were issued after defendants’ sale 

of the property to the Kim plaintiffs; Rhee’s knowledge of the 

Health Department orders cannot be imputed to defendants; the 

Kim plaintiffs agreed to purchase the property “as-is”; and Kim 

failed to check available public records to discover the Health 

Department orders. None of these contentions has merit. 

1. Applicable law and standard of review

“In evaluating the evidentiary validity of a jury’s verdict, 

our task is merely to assess whether the record contains 
26

‘substantial evidence, contradicted or uncontradicted, which will 

support’ the verdict. [Citation.] In assessing the substantiality of 

the evidence, we ‘review the record in the light most favorable to 

the’ verdict, resolve all conflicts in favor of the verdict, and draw 

all reasonable inferences in favor of the verdict. [Citation.] 

Through this prism, we may not reweigh the evidence [citation]

and the testimony of a single witness can constitute substantial 

evidence [citation].” (Flores v. Liu (2021) 60 Cal.App.5th 278, 

296; accord, Shirvanyan v. Los Angeles Community College 

District (2020) 59 Cal.App.5th 82, 98.)10

“The elements of a cause of action for fraudulent 

concealment are: (1) concealment of a material fact; (2) by a 

defendant with a duty to disclose; (3) the defendant intended to 

defraud by failing to disclose; (4) plaintiff was unaware of the fact 

and would not have acted as it did had it known the fact; and (5) 

damages.” (Butler America, LLC v. Aviation Assurance Co., LLC

(2020) 55 Cal.App.5th 136, 144; accord, Burch v. CertainTeed 

Corp., supra, 34 Cal.App.5th at p. 348.) “With respect to 

concealment, ‘“[t]here are ‘four circumstances in which 

nondisclosure or concealment may constitute actionable fraud: 

10 We apply the same substantial evidence standard to an 

appeal from the denial of a motion for JNOV or a motion for new 

trial based on lack of evidence. (See Burch v. CertainTeed 

Corp. (2019) 34 Cal.App.5th 341, 348 [“‘“A motion for judgment 

notwithstanding the verdict may be granted only if it appears 

from the evidence, viewed in the light most favorable to the party 

securing the verdict, that there is no substantial evidence in 

support.”’”]; Minnegren v. Nozar (2016) 4 Cal.App.5th 500, 514, 

fn. 7 [“The denial of a new trial motion is reviewed for an abuse of 

discretion, except that a trial court’s factual determinations are 

reviewed under the substantial evidence test.”].)
27

(1) when the defendant is in a fiduciary relationship with the 

plaintiff; (2) when the defendant had exclusive knowledge of 

material facts not known to the plaintiff; (3) when the defendant 

actively conceals a material fact from the plaintiff; and (4) when 

the defendant makes partial representations but also suppresses 

some material facts.’”’ [Citation.] The latter three circumstances 

‘“presuppose[] the existence of some other relationship between 

the plaintiff and defendant in which a duty to disclose can 

arise.”’” (Burch, at pp. 349-350; accord, Hoffman v. 162 North 

Wolfe LLC (2014) 228 Cal.App.4th 1178, 1186-1187.) 

“Reasonable or justifiable reliance on the nondisclosure is an 

element of such fraud. [Citation.] ‘“Except in the rare case where 

the undisputed facts leave no room for a reasonable difference of 

opinion, the question of whether a plaintiff’s reliance is 

reasonable is a question of fact.”’” (Alfaro v. Community Housing 

Improvement System & Planning Assn., Inc. (2009) 171

Cal.App.4th 1356, 1383 (Alfaro).)

A contract between a seller and buyer of property creates a 

relationship from which a duty to disclose may arise. (Alfaro, 

supra, 171 Cal.App.4th at p. 1383 [“It is fraud to suppress a fact 

with intent to induce a person to enter into a contract to acquire 

realty.”]; see Burch v. CertainTeed Corp., supra, 34 Cal.App.5th 

at pp. 349-350 [The relationship creating a duty includes one 

“between ‘“‘seller and buyer, employer and prospective employee, 

doctor and patient, or parties entering into any kind of 

contractual arrangement.’”’”].) “‘[W]here the seller knows of facts 

materially affecting the value or desirability of the property 

which are known or accessible only to him and also knows that 

such facts are not known to, or within the reach of the diligent 

attention and observation of the buyer, the seller is under a duty 
28

to disclose them to the buyer.’” (Holmes v. Summer (2010) 

188 Cal.App.4th 1510, 1518-1519; accord, Roche v. Hyde (2020) 

51 Cal.App.5th 757, 821 [“[I]n ‘mere nondisclosure’ cases, the 

plaintiff has the burden to show that the seller knew the 

undisclosed information was ‘not known to, or within the reach of 

the diligent attention and observation of the buyer.’”].) 

2. The Health Department orders predate the Kim

plaintiffs’ purchase of the property

Contrary to defendants’ contention, there was substantial 

evidence the Health Department orders and underlying code 

violations existed before the Kim plaintiffs purchased the 

property. The Health Department issued a citation against the 

property in August 2012, before the Kim plaintiffs—and even Lee 

and Young Hee—purchased the property. After defendants 

purchased the property, Health Department inspector Castruita 

toured the property with Rhee, informed him of the code 

violations, and issued a new compliance report on the property. 

The October 3, 2013 inspection report issued to Kim makes clear

the Health Department’s August 2012 report was “being 

reissued” to the new owner. 

3. The jury properly imputed Rhee’s knowledge and 

conduct as an agent to Lee and Young Hee

Defendants contend Rhee’s knowledge of the Health 

Department orders cannot be imputed to them as principals for 

purposes of the intentional tort of fraudulent concealment. The 

law is to the contrary.

An agent is “‘one who represents another . . . in dealings 

with third persons.’” (RSB Vineyards, LLC v. Orsi (2017) 
29

15 Cal.App.5th 1089, 1100, quoting Civ. Code, § 2295.)11 

Section 2332 provides, “As against a principal, both principal and 

agent are deemed to have notice of whatever either has notice of, 

and ought, in good faith and the exercise of ordinary care and 

diligence, to communicate to the other.” “So long as the agent 

was under a duty to disclose certain information, the principal is 

bound by the agent’s knowledge of that information whether or 

not the agent communicated it to the principal. [Citations.] For 

this purpose, there is no difference between constructive and 

actual notice.” (Santillan v. Roman Catholic Bishop of 

Fresno (2008) 163 Cal.App.4th 4, 10-11; accord, Herzog v. 

Capital Co. (1945) 27 Cal.2d 349, 353 [knowledge of agent, who 

acted within scope of his agency when he caused structural 

defects in real property to be concealed from buyer, was properly 

imputed to principals]; cf. RSB Vineyards, LLC v. Orsi, supra, 

15 Cal.App.5th at pp. 1101-1102 [construction workers’ 

knowledge of structural defects not imputed to property owner 

where workers were not acting as agents of owner].)

A principal’s liability extends to fraudulent conduct of the 

agent. As section 2338 provides, “a principal is responsible to 

third persons for the negligence of his agent in the transaction of 

the business of the agency, including wrongful acts committed by 

such agent in and as a part of the transaction of such business, 

and for his willful omission to fulfill the obligations of the 

principal.” (Italics added; see Lisa M. v. Henry Mayo Newhall 

Memorial Hospital (1995) 12 Cal.4th 291, 295, fn. 2 [“[S]ection 

2338, which has been termed a codification of the respondeat 

11 Further undesignated statutory references are to the Civil 

Code.
30

superior doctrine [citation], is not limited to employer and 

employee but speaks more broadly of agent and principal; it 

makes the principal liable for negligent and ‘wrongful’ acts 

committed by the agent ‘in and as part of the transaction of such 

[agency] business.’”].) “‘If the principal places the agent in a 

position to defraud, and the third person relies upon his apparent 

authority to make the representations, the principal is liable even 

though the agent is acting for his own purposes.’” (Alhino v. 

Starr (1980) 112 Cal.App.3d 158, 174, italics omitted; accord,

Spahn v. Guild Industries Corp. (1979) 94 Cal.App.3d 143, 156 

[“[A]n agent’s liability for compensatory and punitive damages 

may be imputed to even an innocent principal.”]; Eamoe v. Big 

Bear Land & Water Co. (1950) 98 Cal.App.2d 370, 374 [“[W]hen 

an agent on behalf of his principal performs an unauthorized act, 

if the principal has put the agent in a position to mislead 

innocent parties, he is responsible to the latter.”].)

Substantial evidence supports the jury’s findings Rhee 

acted as an agent of defendants; he was authorized to act on 

defendants’ behalf with respect to the sale of the property to the 

Kim plaintiffs; he knew about the Health Department code 

violations; and his knowledge should be imputed to defendants. 

Lee testified she and Young Hee relied on Rhee to manage the 

property, to negotiate the sale to the Kim plaintiffs, and to set the 

sale price. Young Hee authorized Rhee to receive legal notices on 

her behalf, told Rhee in Kim’s presence that Rhee was “in charge 

of everything” regarding the property, and authorized Rhee to 

hire Kim as the general contractor to remediate the property. By 

relying on Rhee as their agent, defendants placed Rhee in a

position to mislead the Kim plaintiffs by his concealment of the 

Health Department orders. Rhee accompanied Castruita during 
31

her inspection following defendants’ purchase of the property in 

which he learned of the significant pest infestation problems in 

the building. During the inspection, Rhee would have observed 

Castruita’s investigation of “every crack, nook, and cranny,”

making Rhee aware of the difficulty of discovering the extent of 

the pest problem. But Rhee never advised Kim of the Health 

Department violations at the property, instead only discussing 

with Kim the Housing Department citations and negotiating an 

agreement for remediation by GNE limited to the Housing 

Department violations. Further, Rhee set the sale price of the 

property at a level that did not reflect a reduction for the Health 

Department orders, showing he was aware of Kim’s ignorance of 

the Health Department violations. As defendants’ real estate 

appraisal experts testified, the Health Department orders would 

have negatively affected the valuation of the property at the time 

of sale.

4. The “as-is” clause of the sales contract does not 

preclude the Kim plaintiffs’ suit for fraud

Defendants’ contention that the “as-is” clause in the escrow 

agreement bars the Kim plaintiffs’ fraudulent concealment claim 

lacks merit. Section 1668 provides, “All contracts which have for 

their object, directly or indirectly, to exempt anyone from 

responsibility for his own fraud, or willful injury to the person or 

property of another, or violation of law, whether willful or 

negligent, are against the policy of the law.” “It is well

established in California that a party to a contract is precluded 

under section 1668 from contracting away his or her liability for 

fraud or deceit based on intentional misrepresentation.” 

(Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 
32

1500; accord, Blankenheim v. E. F. Hutton & Co. (1990) 

217 Cal.App.3d 1463, 1471 [under section 1668, “a party may not 

contract away liability for fraudulent or intentional acts”]; Smith 

v. Rickards (1957) 149 Cal.App.2d 648, 653-654 [provision in 

purchase agreement stating “‘[b]uyer has personally examined 

said property and is familiar with its location and condition and 

is not relying upon any representation relating thereto’” did not 

bar buyer’s claim for fraud].) “[A] sale ‘as is’ is not the equivalent 

of a waiver of potential claims of misrepresentation. . . . [T]he ‘as 

is’ sale simply means the buyer accepts the property in the 

condition visible or observable by him.” (Loughrin v. Superior 

Court (1993) 15 Cal.App.4th 1188, 1195.)

Defendants’ reliance on Driver v. Melone (1970) 

11 Cal.App.3d 746 (Driver) is misplaced. There, the sellers’ real 

estate broker told the plaintiff buyer, who was an experienced 

real property investor with a degree in engineering, that the 

property was “a dog,” in “really . . . bad shape,” and “dangerous”

with “faulty wiring.” (Id. at p. 749.) Further, the building 

inspector advised the buyer to obtain an authorization letter from 

the current owner to access the building records, but the buyer

did not do so. (Id. at pp. 749-750.) The buyer purchased the 

property “as-is,” then sued the seller after the building was 

condemned due to defective wiring. (Id. at pp. 748, 750.) The 

Court of Appeal affirmed the judgment for the sellers, explaining

a purchase agreement’s inclusion of an as-is clause “does not in 

itself protect the sellers or absolve them from liability for 

misrepresentation or passive concealment.” (Id. at p. 752.) 

Rather, “it is a factor to be considered with all other 

circumstances in determining whether the buyer has been 

misled.” (Ibid.) The Court of Appeal observed there was no 
33

evidence the sellers had any information that was unknown or 

beyond the reach of the buyer, nor was there evidence the buyer 

was induced to purchase the property by the nondisclosure of 

material information. (Id. at p. 753.)

By contrast, Rhee extensively discussed with Kim the 

Housing Department order but never disclosed the Health 

Department’s demands. According to Castruita, the pest 

problems at the property were difficult to detect and required use 

of a flashlight to search dark areas where pests lived. Kim did 

not observe the severity of the pest problems until he 

accompanied Castruita on her inspection of the property after the 

Kim plaintiffs purchased the property. The jury was free to 

consider the as-is clause, but it was also free to conclude it did 

not bar the Kim plaintiffs’ recovery.

5. Knowledge of the Health Department public records is 

not imputed to Kim

Contrary to defendants’ contention, Kim’s failure to search 

the public records before purchasing the property does not, as a 

matter of law, preclude the Kim plaintiffs from recovery. 

“‘Negligence on the part of the plaintiff in failing to discover the 

falsity of a statement is no defense when the misrepresentation 

was intentional rather than negligent.’ [Citation.] ‘Nor is a 

plaintiff held to the standard of precaution or of minimum 

knowledge of a hypothetical, reasonable man.’” (Alliance 

Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239-1240; 

accord, Seeger v. Odell (1941) 18 Cal.2d 409, 414-415 [“The fact 

that an investigation would have revealed the falsity of the 

misrepresentation will not alone bar his recovery [citations], and 

it is well established that he is not held to constructive notice of a 
34

public record which would reveal the true facts.”]; Bishop Creek 

Lodge v. Scira (1996) 46 Cal.App.4th 1721, 1734 [“Under a long 

line of cases, the fact that the victim had constructive notice of 

the truth from public records is no defense to fraud. The 

existence of such public records may be relevant to whether the 

victim’s reliance was justifiable, but it is not, by itself, 

conclusive.”].) “‘Except in the rare case where the undisputed 

facts leave no room for a reasonable difference of opinion, the 

question of whether a plaintiff’s reliance is reasonable is a 

question of fact.’” (Alliance, at p. 1239.)

The principle that constructive notice of a public record is 

not a bar to a fraud action applies in fraudulent concealment 

cases. (See Alfaro, supra, 171 Cal.App.4th at p. 1389 [purchasers 

of residences were not charged with constructive notice of deed 

restrictions as defense to their claims against sellers for 

fraudulent concealment of the restrictions, but defendants could 

present evidence of plaintiffs’ actual knowledge of documents 

presented to them or inquiry notice based on those documents]; 

Bishop Creek Lodge v. Scira, supra, 46 Cal.App.4th at pp. 1734, 

1736 [purchaser of lodge was not charged with constructive notice 

of settlement by seller with owner of neighboring property under 

which restrictive covenant on neighboring property was removed, 

in action by purchaser for fraudulent concealment of judgment 

declaring covenant unenforceable, but seller could present 

evidence that lis pendens on lodge was removed as part of 

settlement to show purchaser had actual knowledge].)

The cases relied on by defendants are distinguishable. In 

Barnett v. Marsili (1933) 131 Cal.App. 337, the parties in the 

lawsuit, unlike here, were the victims of a third party’s fraud.

The plaintiff buyer had purchased a car from a dealer but never 
35

obtained the registration. (Id. at p. 338.) Four months after the 

sale the dealer secured a loan against the car without the buyer’s 

knowledge, and the lenders registered the car in their names.

(Ibid.) The Court of Appeal affirmed the trial court’s judgment 

for possession of the car to the lenders, reasoning that the lenders 

and buyer were innocent, but because the buyer was negligent in 

failing to register the car in his name, he had to bear the loss 

caused by the dealer’s fraud. (Id. at p. 339.) In Stevenson v. 

Baum (1998) 65 Cal.App.4th 159, the buyers of property sued the 

sellers for failure to disclose an easement on the property for an 

oil pipeline. (Id. at pp. 162-163.) The Court of Appeal affirmed 

the trial court’s grant of summary judgment for the sellers, 

reasoning that the purchase contract stated the buyer took title 

subject to easements of record, and thus did not conceal that

there was a recorded easement for a pipeline. (Id. at p. 166.) 

Here, the escrow agreement did not mention the Health 

Department orders despite expressly noting the “existing 

Housing Authority lien” on the property. Thus, in contrast to 

Stevenson, the agreement did not place the Kim plaintiffs on 

notice of the Health Department orders.

Defendants argue Kim, as an experienced investor and

general contractor, should have been on notice there were Health 

Department violations (and thus checked the public records) as a 

result of his visit to the property in March 2013 during which he 

would have observed the property’s condition. But there was no 

evidence of Kim’s special knowledge of pests or pest control.12 

Although Kim observed some evidence of pests at the property 

12 Defendants assert Kim was a “pest control licensee” but do 

not support this assertion with a citation to the record.
36

during GNE’s construction work, he testified he believed all 

properties have some pest issues. And, as discussed, Castruita 

testified pest issues were frequently not apparent. Even 

Larranaga, who inspected the property for Housing Department 

violations, was unaware of the Health Department violations. 

Based on this evidence the jury could reasonably have concluded 

Kim was not aware of and did not have reason to discover the 

Health Department violations, and thus defendants had a duty to 

disclose these facts to him.

Substantial Evidence Supports the Jury’s Award of 

Damages to GNE for Work Performed on the Property

Defendants contend the jury’s award to GNE of 

approximately $141,000 in damages plus prejudgment interest 

for breach of contract was excessive. They argue GNE agreed to 

perform the remediation work for $200,000 and was paid

$97,000, so the damages should not exceed $103,000. Further, 

they assert the contract was never modified and defendants did 

not agree to pay GNE to perform the additional work.

Defendants’ arguments are not persuasive.

In early April 2013 Kim gave Rhee a handwritten estimate 

of $200,000 for GNE’s remediation. On April 16 the Housing 

Department issued a notice and order to comply, which identified 

violations requiring remediation work in addition to the work 

included in Kim’s handwritten estimate. On April 28 or 30 Rhee 

returned to Kim a typed invoice signed by Rhee memorializing 

the terms of Kim’s handwritten proposal. The invoice stated

GNE would be paid $200,000 for the listed work, with an “extra 

charge on additional work beyond this list.” Rhee asked Kim to 

perform the additional work required by the April 16 Housing 
37

Department order and told Kim he would be paid for the 

additional work. As discussed, Rhee had authority to reach this 

agreement on behalf of defendants. Young Hee told Rhee he was 

“in charge of everything” regarding the property, and Young Hee 

had authorized Rhee to hire Kim and GNE to work on the 

property.

Defendants argue GNE did not submit any written change 

orders, and therefore there was no agreement between GNE and 

defendants for performance of the additional work. However, the 

signed invoice does not require written change orders, instead 

stating only that GNE would charge for “additional work beyond 

this list.” As Kim testified, the work required by the April 16 

Housing Department order was beyond that included in the 

invoice, and the terms of the signed invoice contemplated an 

extra charge for that work.

Further, Rhee’s agreement on behalf of defendants to pay 

for GNE’s work to comply with the April 16 Housing Department 

order was an enforceable oral modification of a written contract. 

(See § 1698, subd. (b) [“A contract in writing may be modified by 

an oral agreement to the extent that the oral agreement is 

executed by the parties.]; Conley v. Matthes (1997) 

56 Cal.App.4th 1453, 1465 [“[A] contract in writing may be 

modified by an oral agreement to the extent that the oral 

agreement is executed by the parties” as long as the written 

contract does not by its terms require modifications to be made in 

writing and the modification is supported by new consideration].)

Defendants alternatively argue any agreement between 

Rhee and GNE for the additional work is unenforceable because 

it failed to set a price for the work. Not so. Although Kim and 

Rhee did not agree on a specific price, GNE was entitled to 
38

recover for the reasonable value of the additional work 

performed. As the Supreme Court explained in City Street 

Improv. Co. v. Kroh (1910) 158 Cal. 308, 323, overruled in part on 

other grounds by Pasadena v. Charleville (1932) 215 Cal. 384, “In 

cases where extra work is caused by authorized deviations from a 

building contract, and no agreement is made regarding the price 

thereof, or payment therefor, the law implies an agreement by 

the owner to pay the reasonable value of the extra work.” 

(Accord, Benson Electric Co. v. Hale Bros. Associates, Inc. (1966) 

246 Cal.App.2d 686, 697 [“[T]he authorized ‘extras’ are in effect a 

separate implied contract under which appellants must pay a 

reasonable price, since none was provided at the time the ‘extras’

were installed.” Italics omitted.]; C. F. Bolster Co. v. J. C. 

Boespflug Constr. Co. (1959) 167 Cal.App.2d 143, 151 [“Where the 

extras are of a different character from the work called for in the 

contract and no price is agreed on for extra work, their 

reasonable value may be recovered.”].) Defendants do not argue 

GNE’s recovery is unreasonable based on the actual work 

performed. Thus, substantial evidence supports the jury’s 

inclusion of approximately $28,000 for additional work performed 

by GNE and included in GNE’s demand for payment.

The jury’s damages award to GNE also includes

approximately $10,000 for the payment of the property’s utilities 

by GNE. Kim testified he spent $17,000 or more on utilities in 

order to perform the construction work required by the contract, 

in accordance with normal business practices for contractors.13 

Although Lee admitted during trial that defendants did not pay 

13 The utility bills paid by GNE were admitted as trial 

exhibits.
39

for the property’s utilities during their ownership, defendants 

argue neither they nor Rhee authorized Kim or GNE to pay the 

utilities on behalf of defendants. But defendants had an 

obligation to pay for the utilities so GNE could perform its work

(which required electricity and running water) as part of the 

covenant of good faith and fair dealing implied into every 

contract. (See Chu v. Old Republic Home Protection Company, 

Inc. (2021) 60 Cal.App.5th 346 [“‘The essence of the implied 

covenant is that neither party to a contract will do anything to 

injure the right of the other to receive the benefits of the 

contract.’”]; Howard Contracting, Inc. v. G.A. MacDonald 

Construction Co. (1998) 71 Cal.App.4th 38, 50-51 [“[I]n 

every construction contract the law implies a covenant that the 

owner will provide the contractor timely access to the project site 

to facilitate performance of work.”].) GNE’s payment of the 

utilities was a reasonable step taken to complete performance, 

thereby mitigating damages that would have flowed from 

defendants’ breach of contract had they failed to ensure the 

construction site had the necessary electricity and water. (See 

Agam v. Gavra (2015) 236 Cal.App.4th 91, 111 [“‘“[A] plaintiff 

who suffers damage as a result of . . . a breach of contract . . . has 

a duty to take reasonable steps to mitigate those damages and 

will not be able to recover for any losses which could have been 

thus avoided.”’”].) Therefore, substantial evidence supported the 

jury’s award of damages to cover GNE’s payment of the utility 

bills.
40

Substantial Evidence Supports Some but Not All of the 

Jury’s Award of Damages to the Kim Plaintiffs for 

Fraudulent Concealment

1. Governing law

“As a general matter, in fraud claims involving the 

purchase, sale or exchange of property, the Legislature has 

directed that the ‘out-of-pocket’ rather than the ‘benefit-of-thebargain’ measure of damages should apply.” (Moore v. 

Teed (2020) 48 Cal.App.5th 280, 289; accord, Kwikset Corp. v. 

Superior Court (2011) 51 Cal.4th 310, 334.) Section 3343, 

subdivision (a), provides, “One defrauded in the purchase, sale or 

exchange of property is entitled to recover the difference between 

the actual value of that with which the defrauded person parted 

and the actual value of that which he received, together with any 

additional damage arising from the particular transaction,” 

including enumerated damages such as lost use and enjoyment 

and lost profits. Damages recoverable under section 3343 include 

“expenses and other consequential damages stemming from the 

fraud.” (O’Neil v. Spillane (1975) 45 Cal.App.3d 147, 159.)

“‘Damage to be subject to a proper award must be such as 

follows the act complained of as a legal certainty . . . .’” (Ferguson 

v. Lieff, Cabraser, Heimann & Bernstein (2003) 30 Cal.4th 1037, 

1048.) Damages do not flow from a defendant’s act if there is 

“‘[a] superseding cause[, that] is an act of a third person or other 

force which by its intervention prevents the actor from being 

liable for harm to another which his antecedent [misconduct] is a 

substantial factor in bringing about.’” (Brewer v. Teano (1995) 

40 Cal.App.4th 1024, 1031; accord, Persson v. Smart Inventions, 

Inc. (2005) 125 Cal.App.4th 1141, 1166 [“[I]f damages do not flow 
41

from the concealment, but rather from some other extrinsic 

factor, the award of damages would be improper.”].)

2. Substantial evidence supports the jury’s award of 

economic damages for the cost of remediation

The jury awarded the Kim plaintiffs $436,164 for “other 

past economic damages.” Defendants contend this award is 

improper because it duplicates the damage award for lost rental 

income. However, it is clear from the record this award did not 

duplicate the Kim plaintiffs’ claimed lost rental income, but 

rather, was to compensate them for the expenses incurred to 

remediate the code violations identified in the concealed Health 

Department orders. Section 3343 authorizes recovery of damages 

including “expenses . . . stemming from the fraud” (O’Neil v. 

Spillane, supra, 45 Cal.App.3d at p. 159), and defendants make 

no argument to the contrary.

3. Substantial evidence supports a portion of the jury’s 

award of damages for lost earnings

The jury awarded the Kim plaintiffs $272,569 for lost 

earnings. Defendants argue substantial evidence does not 

support this part of the jury’s award because the Kim plaintiffs 

received the rental income held by REAP after the property 

exited the program, and the lost rent due to “unscrupulous 

tenants” who elected not to pay any rent is not fairly attributable 

to defendants’ concealment of the Health Department orders. 

Defendants are correct as to the lost rent attributed to the 

unscrupulous tenants, but not the remainder of the lost rental 

income awarded by the jury.
42

The business records the Kim plaintiffs introduced at trial 

to support their claim for lost rental income include for each year 

from 2013 through 2016 a table with five columns labeled 

“RENT,” “REAP Collect,” “Paid to Owner,” “Vacancy,” and “Rent 

Loss.” In each row, representing a given month of the year, the 

amounts in the REAP collect, paid to owner, and vacancy 

columns are subtracted from the rent column to calculate the 

number in the rent loss column. The monthly amounts of rent 

loss are then added together to compute a subtotal. A second 

table titled “REAP Uncollected Rent” ascribes to four or five 

apartment units uncollected rent amounts, the sum of which is 

added to the rent loss subtotal, to compute the purported total 

lost rental income for the year.

Kim explained that the charts show “all the financial loss 

due to the citation that was issued by [the] Health Department 

following also with REAP.” He added as to the 2014 chart, “This 

represents two major financial losses. [The] first loss because of 

the REAP violations and the Health Code, I’ve lost 50 percent of 

the rent. Second loss, since . . . the building was under REAP 

control by then, the five units had not paid the rent, and there’s 

no action I could have taken legally.” Kim testified similarly as 

to the 2014 and 2015 charts, except that in 2015 and 2016 only 

four units did not pay rent. 

Even considered together with Kim’s testimony at trial, the 

tables are difficult to understand. Kim testified the lost rental 

income was attributable to a 50 percent reduction in the rent 

resulting from the REAP program and tenants who withheld all 

rent payments while the property was in REAP. Ostensibly, the 

REAP collect column represents the amount paid to REAP 

instead of to the Kim plaintiffs, although these figures are 
43

consistently less than 50 percent of the total rent amount. At the 

same time, the rent loss column does not reflect a loss of more 

than 50 percent of the rent claimed by the Kim plaintiffs for all 

apartment units. Although it is not clear exactly how each 

column was calculated, defendants stipulated to admission of the 

document, and Kim testified based on the document as to the 

total rent losses the Kim plaintiffs suffered for each year. The 

jury awarded to the Kim plaintiffs the “total” rent loss for the 

years 2013 through 2016 reflected in the exhibits ($272,569).

Further, to the extent the REAP collect column represents

the amount paid into the REAP program (which the Kim 

plaintiffs later recovered),

14 the paid to owner column reflects

sums the tenants paid directly to the Kim plaintiffs, and the 

vacancy column reflects the lost rent due to vacancies (instead of 

from REAP), subtracting those sums from the total rent due for 

all apartments in REAP reasonably constituted the Kim 

plaintiffs’ loss from placement of the apartment units in the 

program. These amounts totaled $35,520 in 2013; $88,337 in 

2014;15 $83,444 in 2015; and $35,298 in 2016. Substantial 

evidence therefore supports this portion of the jury’s award for 

lost income, totaling $242,599.

14 Kim testified all rental income held in REAP was released 

to the Kim plaintiffs in April 2017 after the property exited the 

program. 

15 Because defendants failed to include in the appellate record 

exhibit 220 with the calculation for the REAP uncollected rent 

from the five units that refused to pay rent in 2014, we include 

the total amount of uncollected rent for 2014 according to Kim’s 

testimony.
44

However, substantial evidence does not support the jury’s 

award to the extent it reflects the unpaid rents of the 

“unscrupulous tenant[s]” who failed to pay their rent to the Kim 

plaintiffs or to REAP. These losses were not fairly attributable to 

defendants’ concealment, but rather, resulted from the unlawful 

misconduct of the tenants who refused to pay rent due under the 

terms of their leases with the Kim plaintiffs.

4. Substantial evidence does not support the jury’s 

award of future economic loss

Defendants contend substantial evidence does not support 

the jury’s damages award of $22,487 for future economic loss. 

This contention has merit. The Kim plaintiffs argue the award 

was for “future lost profits from loss of yearly rental increases 

which would have been allowed by the Los Angeles Rent 

Stabilization Ordinance . . . if the Property had not been held up 

in REAP.” But they provide no citation to the record in support 

of this assertion. Kim testified the Kim plaintiffs could not raise 

the rent while the property was in REAP and for one subsequent 

year. When he was asked, “[D]id you lose five years’ worth of 

rental increases because of REAP?,” Kim responded, “Yes.” The 

challenge is that neither Kim nor another witness calculated the 

lost rental income during the period the property was in REAP

(or the following year). In her closing argument, Bullock simply 

asserted, “[Kim] lost the rental increases because the property 

was prolonged in REAP for another three years. That means he 

lost three years of rent control increases, along with all that rent 

that he didn’t get.” 

Even assuming the rent column on the rent loss charts 

reflected the rent due on all apartments in REAP and the 
45

vacancy column reflected the rent not paid due to a vacancy, the 

record on appeal does not contain exhibit 220, which according to 

Kim reflects rent losses during 2014. Thus, we cannot tell what 

rent was charged in 2014 or the rent lost due to vacancies. And 

the record is devoid of any evidentiary support for the jury’s 

calculation of $22,487 (actually, the unusually precise number of 

$22,486.94) for future economic loss. Therefore, defendants have 

met their burden to show that substantial evidence does not 

support the jury’s award of damages for future economic loss. 

The burden therefore shifted to the Kim plaintiffs to provide 

citations to the record and argument explaining the evidentiary 

support for the jury’s calculation, which they have not done. (See 

People v. Bryant, Smith and Wheeler (2014) 60 Cal.4th 335, 363 

[“If a party’s briefs do not provide legal argument and citation to 

authority on each point raised, ‘“the court may treat it as waived, 

and pass it without consideration.”’”]; In re Marriage of Davila & 

Mejia (2018) 29 Cal.App.5th 220, 227 [“‘Issues not supported by 

citation to legal authority are subject to forfeiture.’”].) It is not 

our task on appeal to speculate how the jury calculated the award 

in the absence of any guidance from a witness, the Kim plaintiffs’ 

trial attorneys, or appellate counsel as to how the future rent loss 

figure should have been calculated. Further, even if we were to 

assume the rent and vacancy rates in 2014 were comparable to 

those in 2013 and 2015, there is no evidentiary basis for the 

jury’s future economic loss award, and thus substantial evidence 

does not support the award.
46

5. Substantial evidence does not support the jury’s 

award of noneconomic damages 

Defendants contend substantial evidence does not support 

the jury’s award of damages for past noneconomic loss, including 

mental suffering. They argue neither Kim nor Kang testified at 

trial they experienced mental suffering or other noneconomic 

harm due to defendants’ fraudulent concealment and Cho did not 

testify at trial. 

The Kim plaintiffs make no argument to the contrary and 

provide no citation to any such record evidence. Our review of 

the record reveals no evidence Kim, Kang, or Cho mentally 

suffered or otherwise incurred noneconomic injury because of 

defendants’ conduct. Although “the testimony of a single person, 

including the plaintiff, may be sufficient to support an award of 

emotional distress damages” (Knutson v. Foster (2018) 

25 Cal.App.5th 1075, 1096), the record here does not appear to 

include such testimony.16 Thus, the jury’s award of $84,000 in 

noneconomic damages is not supported by substantial evidence.17

16 At oral argument the Kim plaintiffs’ attorney pointed to 

Kim’s testimony that he “lost the trust with . . . mankind” and 

realized mankind was “very devious.” This testimony does not 

show emotional distress suffered by Kim.

17 Because we conclude substantial evidence does not support 

the jury’s award of noneconomic damages, we do not reach 

defendants’ contention of instructional error regarding emotional 

distress damages. We note, however, that “[s]ection 3343 

delineates in detail the damages recoverable for fraud in property 

transactions, and does not include a provision for recovery of 

damages for emotional distress.” (Branch v. Homefed Bank

(1992) 6 Cal.App.4th 793, 798.)
47

6. The trial court must recalculate prejudgment interest

Because we reverse the jury’s award of damages on the 

Kim plaintiffs’ claim of fraudulent concealment for future 

economic loss, noneconomic loss, and a portion of lost earnings,

prejudgment interest must be recalculated.

The Trial Court Did Not Err in Finding the Kim Plaintiffs 

Were Entitled to Attorneys’ Fees

1. Proceedings below

On February 8, 2019 the Kim plaintiffs and GNE filed a 

motion for attorneys’ fees with supporting documentation. In 

their motion, the Kim plaintiffs sought to recover attorneys’ fees 

pursuant to Civil Code section 1717 and Code of Civil Procedure 

section 1021, relying on the attorney fee provision in the escrow 

agreement. The escrow agreement provided, “In any action, 

proceeding, or arbitration between Buyer and Seller arising out 

of this Agreement, the prevailing Buyer or Seller shall be entitled 

to reasonable attorney’s fees and costs from the non-prevailing 

Buyer or Seller, except as provided in paragraph 21A of the 

original purchase agreement.”18 The Kim plaintiffs argued they 

were the prevailing party in the action and their claims arose out 

of the escrow agreement, entitling them to recover their 

attorneys’ fees. The Kim plaintiffs requested $591,936 in 

attorneys’ fees, plus application of a multiplier. 

Defendants opposed the motion as to the Kim plaintiffs on 

the ground the attorney fee provision in the escrow agreement 

did not support recovery of attorneys’ fees in a tort action. As to 

18 It is undisputed the parties never entered into a purchase 

agreement. Rather, the terms of the sale were included in the 

escrow agreement. 
48

GNE, defendants argued the parties’ agreement for remediation 

work (the invoice) did not contain an attorney fee provision. 

Defendants also challenged the amount of the requested fees. 

At a hearing on May 10, 2019, the trial court found the Kim 

plaintiffs were entitled to attorneys’ fees, but not GNE. On 

June 4, 2019, after supplemental briefing on the amount of the 

award, the court granted the Kim plaintiffs’ motion and ordered 

plaintiffs’ counsel to prepare a judgment for the court’s signature. 

Although the June 4 minute order does not reflect the amount of 

fees awarded, defendants’ attorney submitted a declaration on 

September 26, 2019 stating the court had orally pronounced 

plaintiffs had reasonably incurred $450,000 in attorneys’ fees.19 

On December 11, 2019 the court signed an amended judgment 

setting forth the amounts awarded by the jury to the Kim 

plaintiffs and GNE, and awarding the Kim plaintiffs $412,500 in 

attorneys’ fees. Defendants timely appealed the amended 

judgment. 

2. Governing law and standard of review

“With regard to an award of attorney fees in litigation, 

California generally follows what is commonly referred to as the 

‘American Rule’, which provides that each party to a lawsuit 

19 According to defendants’ attorney James Mortensen, 

plaintiffs had not proposed an order on their motion for attorneys’ 

fees as of September 24, 2019, so Mortensen submitted his 

declaration and a proposed order. Although Mortensen stated in 

his declaration the Kim plaintiffs’ reasonable fees were $450,000, 

it appears the court ruled that $450,000 was the total amount of 

reasonable fees, with $412,500 allocated to work for the Kim 

plaintiffs. 
49

must ordinarily pay his or her own attorney fees.” (Tract 19051 

Homeowners Assn. v. Kemp (2015) 60 Cal.4th 1135, 1142; accord, 

Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 

3 Cal.5th 744, 751 (Mountain Air).) This rule is codified in Code 

of Civil Procedure section 1021,20 but that section also “permits 

parties to ‘“contract out” of the American rule’ by executing an 

agreement that allocates attorney fees.” (Mountain Air, at p. 751;

accord, R.W.L. Enterprises v. Oldcastle, Inc. (2017) 

17 Cal.App.5th 1019, 1025.) “‘“Parties may validly agree that the 

prevailing party will be awarded attorney fees incurred in any 

litigation between themselves, whether such litigation sounds in 

tort or in contract.”’” (Mountain Air, at p. 751.) Contracting 

parties may also “limit the recovery of fees only to claims arising 

from certain transactions or events, or award them only on 

certain types of claims.” (Brown Bark III, L.P. v. Haver (2013) 

219 Cal.App.4th 809, 818 (Brown Bark).)

“‘“On review of an award of attorney fees after trial, the 

normal standard of review is abuse of discretion. However, de 

novo review of such a trial court order is warranted where the 

determination of whether the criteria for an award of attorney 

fees and costs in this context have been satisfied amounts to 

statutory construction and a question of law.”’ [Citations.] In 

other words, ‘it is a discretionary trial court decision on the 

propriety or amount of statutory attorney fees to be awarded, but 

a determination of the legal basis for an attorney fee award is a 

20 Code of Civil Procedure section 1021 provides in relevant 

part, “Except as attorney’s fees are specifically provided for by 

statute, the measure and mode of compensation of attorneys and 

counselors at law is left to the agreement, express or implied, of 

the parties . . . .”
50

question of law to be reviewed de novo.’” (Mountain Air, supra, 

3 Cal.5th at p. 751; accord, Orozco v. WPV San Jose, LLC (2019) 

36 Cal.App.5th 375, 407; see Eden Township Healthcare Dist. v. 

Eden Medical Center (2013) 220 Cal.App.4th 418, 425 [“‘On 

appeal this court reviews a determination of the legal basis for an 

award of attorney fees de novo as a question of law.’”].)

In deciding the scope of an attorney fee provision, we apply 

traditional rules of contract interpretation. (Mountain Air, 

supra, 3 Cal.5th at p. 752; accord, Orozco v. WPV San Jose, LLC, 

supra, 36 Cal.App.5th at p. 407.) “Our initial inquiry is confined 

to the writing alone. [Citations.] ‘“The ‘clear and explicit’

meaning of these provisions, interpreted in their ‘ordinary and 

popular sense,’ unless ‘used by the parties in a technical sense or 

a special meaning is given to them by usage’ [citation], controls 

judicial interpretation. [Citation.] Thus, if the meaning a 

layperson would ascribe to contract language is not ambiguous, 

we apply that meaning. [Citations.]”’ [Citations.] At the same 

time, we also recognize the ‘interpretational principle that a 

contract must be understood with reference to the circumstances 

under which it was made and the matter to which it relates.’” 

(Mountain Air, at p. 752; accord, Xuereb v. Marcus & Millichap, 

Inc. (1992) 3 Cal.App.4th 1338, 1342 (Xuereb).)

Neither party has presented extrinsic evidence to interpret 

the escrow agreement. Because defendants on appeal only raise 

the legal question whether the attorney fee provision in the 

escrow agreement provides for recovery of fees on the Kim 
51

plaintiffs’ fraudulent concealment claim,21 we apply a de novo 

standard of review. (Mountain Air, supra, 3 Cal.5th at p. 751.)

3. The attorney fee provision in the escrow agreement 

applies to the Kim plaintiffs’ fraudulent concealment

claim

As discussed, the attorney fee provision in the escrow

agreement provides for the prevailing party to recover reasonable 

attorneys’ fees in “any action, proceeding, or arbitration between 

Buyer and Seller arising out of this Agreement . . . .” Defendants 

contend this provision should be read narrowly not to apply to the 

Kim plaintiffs’ fraudulent concealment claim because it arose out 

of a common law duty to disclose, not the escrow agreement, and 

it predated the escrow agreement. We conclude otherwise.

Contrary to defendants’ position, the appellate courts have 

interpreted attorney fee provisions in property purchase 

agreements authorizing the recovery of fees incurred in an action 

“arising out of” the agreement broadly to cover a party’s tort 

claims. (See Lerner v. Ward (1993) 13 Cal.App.4th 155, 157, 160 

(Lerner) [construing language in agreement for purchase of 

property allowing recovery of attorneys’ fees incurred “arising out 

of this agreement” broadly to apply to claim that seller 

fraudulently induced plaintiffs to enter into agreement by falsely 

representing that property could be subdivided]; Xuereb, supra, 

3 Cal.App.4th at pp. 1340, 1343 [plaintiffs were entitled to 

recover attorneys’ fees for fraud and related claims alleging sale 

of defective property based on attorney fee provision in purchase 

21 The same analysis would apply to the Kim plaintiffs’ claim 

for negligent misrepresentation. For simplicity, we focus on the 

fraudulent concealment claim.
52

agreement that provided for recovery of fees “‘[i]f this Agreement 

gives rise to a lawsuit or other legal proceeding between any of 

the parties’”]; see also Santisas v. Goodin (1998) 17 Cal.4th 599, 

608 [provision in purchase agreement stating attorneys’ fees were 

recoverable for claims “‘arising out of the execution of th[e] 

agreement or the sale’” was a broad provision that supported 

recovery of fees for plaintiffs’ fraud and related claims alleging 

defects in home].)

The holding in Xuereb is instructive. There, the buyers of 

property sued the real estate broker and agent, asserting 

fraudulent concealment and other claims relating to the sale. 

(Xuereb, supra, 3 Cal.App.4th at p. 1340.) The Court of Appeal 

held the language in the purchase agreement providing for 

recovery of attorneys’ fees by the prevailing party if the lawsuit 

or other legal proceeding was one “to which ‘this Agreement gives 

rise’” was “broad enough to encompass both contract actions and 

actions in tort . . . .” (Id. at pp. 1342-1343.) The defendants, as 

here, argued the lawsuit did not arise from the purchase 

agreement because all the alleged omissions and misstatements 

occurred prior to execution of the agreement. (Ibid.) The Court 

of Appeal rejected this argument, explaining, “[B]ut for the 

execution of the Purchase Agreement and the subsequent close of 

escrow, respondents would have had no basis on which to claim 

detrimental reliance or damages, as alleged in their lawsuit.” 

(Id. at p. 1344.) The court concluded, “[T]he various tort causes 

of action set forth against [the broker and agent] in [the buyers’] 

complaint and tried before the jury must be said to have arisen 

from the Purchase Agreement. None of them was ‘quite 

independent of the basic contractual arrangement’; they arose 
53

from the underlying transactional relationship between the 

parties, as memorialized by the Purchase Agreement.” (Ibid.)

Exxess Electronixx v. Heger Realty Corp. (1998) 

64 Cal.App.4th 698, relied on by defendants, is distinguishable. 

There, a commercial property owner sued a tenant for breach of 

the lease, and the tenant filed a cross-complaint for fraud and 

breach of fiduciary duty against the property broker, alleging the 

broker concealed defects in the property known before execution 

of the lease. (Id. at pp. 702-703.) After the case settled, the 

broker sought fees as a prevailing party pursuant to the lease 

agreement, which provided for the recovery of fees by a prevailing 

party in “‘an action or proceeding to enforce the terms hereof or 

declare rights’” under the agreement. (Ibid.) The Court of 

Appeal concluded the broker was not entitled to recover its fees 

because the tenant’s claims for fraud and breach of fiduciary duty 

were not claims to enforce the terms of the lease or to declare 

rights under it, but instead “were premised on a duty that arose 

without regard to the terms of the lease and before the lease 

existed.” (Id. at p. 711.) Notably, the attorney fee provision in 

Exxess Electronixx, unlike the escrow agreement, did not provide 

for the recovery of fees arising out of the agreement. As the 

Court of Appeal explained, “the provision before us appears to be 

quite narrow.” (Id. at p. 712.) The court contrasted the fee 

provision at issue there with “broader provisions to permit an 

award of attorneys’ fees on a tort claim,” including the provisions 

at issue in Santisas v. Goodin, supra, 17 Cal.4th at page 607 and 

Xuereb, supra, 3 Cal.App.4th at page 1343 authorizing fees in 

actions arising out of the agreements. (Exxess Electronixx, at 

pp. 712-713.) 
54

The gravamen of the Kim plaintiffs’ fraudulent 

concealment claim is that defendants’ concealment of the Health 

Department violations induced them to purchase the property. 

The parties memorialized the purchase transaction in the escrow 

agreement, and thus, as in Lerner and Xuereb, the Kim plaintiffs’ 

claim for fraudulent concealment was an action arising from the 

escrow agreement. (See Lerner, supra, 13 Cal.App.4th at p. 160; 

Xuereb, supra, 3 Cal.App.4th at p. 1344.)

DISPOSITION

The judgment in favor of the Kim plaintiffs is modified by 

reducing the award of damages from $992,596 to $855,138

(reflecting a reduction of $29,970 for lost earnings ($272,569 

awarded reduced to $242,599); $22,487 for future economic loss;

and $85,000 for past noneconomic loss). We remand for the trial 

court to recalculate prejudgment interest. In all other respects, 

we affirm the judgment, including the award of attorneys’ fees. 

The parties are to bear their own costs on the appeal in case No. 

B295665. The Kim plaintiffs are to recover their costs on appeal 

in case No. B303317.

FEUER, J.

We concur:

PERLUSS, P. J. SEGAL, J.