Court Opinion

ID: 4654345
Source: CourtListenerOpinion
Date Created: 2021-01-25 20:02:31.070927+00
Date Added: 2024-06-11T07:58:39.160023
License: Public Domain

Filed 1/25/21 Chow v. Szeto & Company etc. CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION ONE

HOWARD CHOW et al.,                                          B298523

         Plaintiffs and Appellants,                          (Los Angeles County
                                                             Super. Ct. No. BC676964)
         v.

SZETO & COMPANY
ACCOUNTANCY
CORPORATION et al.,

         Defendants and
         Respondents.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Randolph M. Hammock, Judge. Affirmed.
     John L. Dodd & Associates and John L. Dodd; Law Office of
Robert E. Gibson and Robert E. Gibson for Plaintiffs and
Appellants.
     Shaw Koepke & Satter and Jens B. Koepke for Defendants
and Respondents.
               _______________________________
      In this action alleging accountancy malpractice, defendants
Szeto & Company Accountancy Corporation, and accountants Leo
Szeto and Josie Hung (collectively, the Szeto defendants)
successfully moved for summary judgment on the ground the
action is barred by the two-year statute of limitations set forth in
Code of Civil Procedure section 339, subdivision (1).1 Plaintiffs
Howard Chow and Yi Hua Chen (collectively, Chow)2 appeal from
the judgment, contending the trial court erred in granting the
summary judgment motion because they showed triable issues of
material fact regarding whether they discovered or had reason to
discover their causes of action within the statute of limitations
period. We affirm the summary judgment.
                          BACKGROUND
I.    Third Amended Complaint
      On September 22, 2017, Chow filed this accountancy
malpractice action against the Szeto defendants (and other tax
firms and professionals that Chow later dismissed from the
action before the summary judgment stage). In the operative
third amended complaint, filed on June 19, 2018, Chow asserted
causes of action against the Szeto defendants for negligence and
breach of oral contract. The crux of Chow’s causes of action is

      Further statutory references are to the Code of Civil
      1

Procedure.
      2 Chow and Chen were married at all relevant times. In his
declaration in opposition to the Szeto defendants’ motion for
summary judgment, Chow stated he handled the family tax
matters at issue in this action, and Chen did not communicate
directly with the Szeto defendants. Hence, for practicality and
ease of reference, we refer to plaintiffs Chow and Chen
collectively as Chow.

                                 2
that in August 2011—more than six years before Chow filed this
action—the Szeto defendants erred in carrying back Chow’s 2009
tax losses (net operating losses from Chow’s businesses and
losses from the foreclosure of a commercial property) to the 2006
tax year. The Szeto defendants did not prepare Chow’s original
2006 personal income tax return. They prepared Chow’s 2009-
2013 personal income tax returns.3 They also prepared Chow’s
amended 2006 personal income tax return, which (along with the
2009 personal income tax return) is the return Chow asserts they
prepared incorrectly.4 Chow explained in the third amended
complaint that he “instructed the Szeto [d]efendants to carryback
[sic] [the] 2009 tax losses to the 2006 tax year, to eliminate or
reduce” the 2006 tax liability of approximately $396,000.
        Chow also alleged in the third amended complaint that due
to his reliance on the Szeto defendants’ tax expertise, he could
not have discovered their negligence/breach of contract until

      3 Chow also asserted in the third amended complaint that
the Szeto defendants untimely filed his 2009 and 2012 personal
income tax returns. Chow acknowledged during the proceedings
below that he claimed no damages because of the Szeto
defendants’ alleged untimely filing of the 2009 and 2012 tax
returns, as he was not penalized because he overpaid income
taxes during those years. The refunds apparently were used to
reduce Chow’s outstanding tax liability. The parties’ statute of
limitations analyses do not address the alleged untimely filing of
the tax returns.
      4There is no evidence in the record indicating accountant
Josie Hung (one of the Szeto defendants) was involved in the
preparation of, or communicated with Chow about, the tax
returns at issue in this action. We need not address this issue
further based on our conclusion Chow’s action against all the
Szeto defendants is barred by the statute of limitations.

                                 3
August 2016—five years after the acts constituting the alleged
negligence/breach of contract—when a new accountant he had
recently hired informed him the 2009 losses “were not fully
applied to the 2006 tax year to reduce or eliminate the 2006”
unpaid tax liability. Chow further alleged he “did not suffer any
damage that would have put [him] on notice or aroused
suspicions of [the Szeto defendants]’ negligence or contract
breaches” until September 27, 2016, when the Internal Revenue
Service (IRS) sold Chow’s 50 percent interest in an entity called
Poplar LLC to cover his outstanding tax liabilities.5 Chow
asserted in the third amended complaint that the Szeto
defendants’ “negligence was a substantial factor in causing
[Chow] to suffer damages of at least $6 million.”
II.   Motion for Summary Judgment
      In January 2019, the Szeto defendants moved for summary
judgment, arguing, among other things, Chow’s action is barred
as a matter of law by the two-year statute of limitations set forth
in section 339, subdivision (1).6 The evidence the Szeto
defendants presented with their summary judgment motion
established, in pertinent part, the following:
      In 2010, Chow asked the Szeto defendants to prepare tax
forms to carry back 2009 tax losses to the 2006 tax year to
eliminate or reduce Chow’s 2006 outstanding tax liability. On

      5 After Chow lost a commercial property in Fontana to
foreclosure in 2009, Poplar LLC repurchased the property later
the same year.
      6 Chow agrees the two-year statute of limitations set forth
in section 339, subdivision (1) applies to his causes of action
against the Szeto defendants for negligence and breach of
contract.

                                 4
December 3, 2010, Chow sent an e-mail to accountant Leo Szeto
(Szeto), informing Szeto the IRS had instructed that Chow
needed to file form 6251 (titled “Alternative Minimum Tax—
Individuals”), with lines 10 and 27 filled in, to carry back his
2009 net operating losses to 2006.
        Nearly eight months later, on July 25, 2011, Chow sent an
e-mail to Szeto, explaining he (Chow) had “just spok[en] with the
IRS” and was informed the IRS required further information to
carry back the 2009 net operating losses to 2006: an amended
form 1040 (income tax return) for 2006 and a completed form
6251 with line 10 filled in (“[i]ncorporating NOL [net operating
losses],” as Chow explained in the e-mail) and line 27 filled in
(with “amount and NOL Computation,” as Chow set forth in the
e-mail). Chow’s e-mail indicated the form 6251 Chow had
submitted previously for 2006 “was [i]ncomplete.” Chow also
stated in the e-mail: “This [information regarding the tax
information required by the IRS] was conveyed to you last year. I
recall earlier emails to this effect. There is no point for me to just
resend in the [2006 tax forms submitted previously] if they are
incomplete.”
        Two days later, on July 27, 2011, Chow sent Szeto an
e-mail, stating he had received a “package in the mail” from
Szeto. (The contents of the package are not identified in the
e-mail.) Chow reiterated in this e-mail the list of tax documents
the IRS required for 2006, including form 6251 with lines 10 and
27 filled in. Chow asked Szeto, “What do you want me to do?”
Szeto responded the same day, with an e-mail to Chow stating,
“I’ll try to understand what they want.”
        On July 29, 2011, Szeto sent Chow an e-mail, attaching an
amended form 1040 for 2006, as well as a form 6251 for 2006

                                  5
with line 10 (net operating loss deduction from form 1040, line
21) filled in, but line 27 (alternative tax net operating loss
deduction) left blank. Szeto stated in the e-mail that he had
“worked the file for a few hours” and, as reflected in the 2006 tax
documents attached to the e-mail, Chow’s refund for 2006 “was
only $36,810.00.” Szeto further stated that he would send Chow
the entire tax file for 2006, and Chow “could sign the tax return
and send to the IRS for processing.”
       The same day, July 29, 2011, Chow responded, asking in an
e-mail to Szeto: “How are you coming up with the Part 1 Line 28
– Alternative minimum Taxable Income of 1,202,160 [on form
6251]???? [¶] Do we have to complete form 6251 to get this
outcome? This cannot be. A K1 of 814,000 [net operating loss]
resulting in a net return [refund] of 36,810???” On August 1,
2011, Chow followed up with another e-mail to Szeto stating,
“The 2009 refund of 36000.00 [sic] cannot be correct. I cannot see
how that can be. I will call you tomorrow. What is a good time?”
Szeto replied that day, scheduling a time for the two to talk.
       On August 3, 2011, Szeto sent Chow an e-mail stating: “I
checked the entire file. Due to the AMT [alternative minimum
tax] items were too much [sic], such as mortgage interest and
NOL [net operating loss] fill in the 6251 [sic]. The refund is only
$36,000 for the carryback year 2006. You can send the forms
that I have sent you to the IRS.” Chow and Szeto had no further
discussion regarding the 2006 amended personal income tax
return or the carryback losses. As summarized above, there was
no discussion in these e-mails regarding the 2009 foreclosure
losses (although Chow asserts in this action that he informed the
Szeto defendants before August 3, 2011 about the 2009
foreclosure of the Fontana property).

                                6
       On or about August 18, 2011, Chow filed the 2006 amended
tax return, with line 27 on form 6251 left blank. Chow’s refund
was hundreds of thousands of dollars less than he expected when
he asked Szeto to carry back the 2009 losses to the 2006 tax year.
Chow filed this action on September 22, 2017, more than six
years after he filed the tax documents he alleges the Szeto
defendants erroneously prepared.
III. Opposition to Motion for Summary Judgment
       The declaration of Howard Chow is the only evidence Chow
presented in opposition to the Szeto defendants’ motion for
summary judgment. In pertinent part, Chow stated the following
in the declaration:
       He has “fairly limited knowledge regarding accounting
practices” and has relied on accounting professionals, including
the Szeto defendants, “to represent [his] interests and
competently prepare [his family’s] taxes and present [their] case
to the IRS.” In July 2011, when he was corresponding by e-mail
with Szeto as set forth above, he “didn’t specifically know what
form 6251 was, or the impact lines 10 and 27 had on the amount
of [his] taxes.” He relied on “Szeto’s representations that he had
taken care of the items [Chow] had told him about in [Chow’s]
prior email.” Chow believed the refund “should be higher,” so he
questioned Szeto about “how he was coming up with the total
alternative minimum taxable income.” During a call on August
2, 2011, Szeto told Chow “repeatedly that there was no basis for a
higher refund” and “reassured [Chow] that the calculations for
the Alternative Minimum Tax and the Net Operating Losses
were correct.” In signing the 2009 and 2006 amended tax
returns, Chow relied on Szeto’s “experience in the accounting

                                7
profession” and Szeto’s representations “that his calculations
were correct and the returns were prepared properly.”
       In May 2016, Chow retained another accountant. The new
accountant informed Chow on or about August 16, 2016 “that
some of the losses identified on [Chow’s] 2009 personal income
tax returns were not fully applied to the 2006 tax year which
could have been used to reduce or eliminate [Chow’s] 2006
personal income tax liability.” Chow further asserted in his
declaration he “could not have discovered the [Szeto defendants’]
negligence or breaches of contract prior to August 16, 2016” due
to his reliance on the Szeto defendants’ “expertise, statements,
and advice” and his belief they “were competently handling [the]
tax matters.” Chow also stated he first believed he might have
been injured by the Szeto defendants’ negligence when the IRS
seized his interest in Poplar LLC and then sold it on September
27, 2016.
       In the written opposition to the motion for summary
judgment, Chow reiterated the assertion in his declaration that
he did not discover the Szeto defendants’ negligence or breaches
of contract until more than five years after the Szeto defendants
committed the acts, due to his reliance on the Szeto defendants’
“professional accounting expertise” and repeated assurances
“that the items [Chow brought to Szeto’s attention] had been
addressed and [Szeto’s] calculations were correct.” Chow argued
he filed this action less than two years after he discovered or
should have discovered the Szeto’s negligence/breaches of
contract and any injury caused by those acts. Chow further
argued the issue of whether he “reasonably relied on Szeto’s
repeated representations he had reviewed the file and checked
the calculations is a question of fact for the jury.”

                                8
IV.    Ruling and Judgment
       After hearing oral argument, the trial court granted the
Szeto defendants’ motion for summary judgment, concluding
Chow’s action is barred as a matter of law by the two-year statute
of limitations set forth in section 339, subdivision (1). On April
16, 2019, the court entered judgment in favor of the Szeto
defendants and against Chow.
                            DISCUSSION
I.     Standard of Review
       A trial court should grant summary judgment “if all the
papers submitted show that there is no triable issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law.” (§ 437c, subd. (c).) A defendant may
establish a right to summary judgment by showing that one or
more elements of the cause of action cannot be established or that
there is a complete defense to the cause of action. (§ 437c, subd.
(p)(2).) Once the moving defendant has satisfied this burden, the
burden shifts to the plaintiff to show that a triable issue of
material fact exists as to each cause of action. (Ibid.) A triable
issue of material fact exists where “the evidence would allow a
reasonable trier of fact to find the underlying fact in favor of the
party opposing the motion in accordance with the applicable
standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25
Cal.4th 826, 850.)
       “We review the trial court’s decision de novo, considering
all the evidence set forth in the moving and opposition papers
except that to which objections were made and sustained.”7

      7The trial court declined to rule on Chow’s objections to the
Szeto defendants’ evidence in support of the summary judgment
motion because Chow set forth his objections in the separate

                                 9
(Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65-66.) We
view the evidence and the inferences reasonably drawn from the
evidence “in the light most favorable to the opposing party.”
(Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 843.)
II.    Statute of Limitations and the Discovery Rule
       As the parties agree, the two-year statute of limitations set
forth in section 339, subdivision (1) applies to Chow’s causes of
action against the Szeto defendants for negligence and breach of
oral contract. (Apple Valley Unified School Dist. v. Vavrinek,
Trine, Day & Co. (2002) 98 Cal.App.4th 934, 942 (Apple Valley)
[“the statute of limitations for malpractice by an accountant is
two years” under section 339, subdivision (1)].) Thus, Chow was
required to bring his causes of action within two years after the
causes of action accrued. (§ 312 [“Civil actions, without
exception, can only be commenced within the periods prescribed
in this title, after the cause of action shall have accrued”].)
       “Generally speaking, a cause of action accrues at ‘the time
when the cause of action is complete with all of its elements.’
[Citations.] An important exception to the general rule of accrual
is the ‘discovery rule,’ which postpones accrual of a cause of
action until the plaintiff discovers, or has reason to discover, the
cause of action.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35
Cal.4th 797, 806-807 (Fox).) “A plaintiff has reason to discover a

statement of material disputed and undisputed facts in support of
his opposition instead of in a separate document. (Cal. Rules of
Court, rule 3.1354 (b) [“All written objections to evidence must be
served and filed separately from the other papers in support of or
in opposition to the motion”].) On appeal, Chow does not
challenge this ruling or reference the objections to the Szeto
defendants’ evidence.

                                10
cause of action when he or she ‘has reason at least to suspect a
factual basis for its elements.’ [Citations.] Under the discovery
rule, suspicion of one or more of the elements of a cause of action,
coupled with knowledge of any remaining elements, will
generally trigger the statute of limitations period.” (Id. at p.
807.) “Rather than examining whether the plaintiffs suspect
facts supporting each specific legal element of a particular cause
of action, we look to whether the plaintiffs have reason to at least
suspect that a type of wrongdoing has injured them.” (Ibid.)
“The discovery rule only delays accrual until the plaintiff has, or
should have, inquiry notice of the cause of action.” (Ibid.)
       “Simply put, in order to employ the discovery rule to delay
accrual of a cause of action, a potential plaintiff who suspects
that an injury has been wrongfully caused must conduct a
reasonable investigation of all potential causes of that injury. If
such an investigation would have disclosed a factual basis for a
cause of action, the statute of limitations begins to run on that
cause of action when the investigation would have brought such
information to light.” (Fox, supra, 35 Cal.4th at pp. 808-809.) “So
long as a suspicion exists, it is clear that the plaintiff must go
find the facts; she cannot wait for the facts to find her.” (Jolly v.
Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1111.) “These principles
apply in accounting malpractice actions.” (Apple Valley, supra,
98 Cal.App.4th at p. 943.)
       To successfully proceed on a theory of delayed discovery,
the plaintiff must plead and prove that, “despite diligent
investigation of the circumstances of the injury, he or she could
not have reasonably discovered facts supporting the cause of
action within the applicable statute of limitations period.” (Fox,
supra, 35 Cal.4th at p. 809; Czajkowski v. Haskell & White, LLP

                                 11
(2012) 208 Cal.App.4th 166, 174.) Where a plaintiff alleges
delayed discovery based on his reliance on the assurances of a
professional, his causes of action will only be barred by the
statute of limitations “if his conduct is manifestly unreasonable
in the light of his own intelligence or information.” (Czajkowski,
at p. 175.)
       “ ‘The resolution of a statute of limitations defense is
typically a factual question for the trier of fact. However,
summary judgment is proper if the court can draw only one
legitimate inference from the uncontradicted evidence about the
limitations issue.’ ” (Choi v. Sagemark Consulting (2017) 18
Cal.App.5th 308, 323-324; see Fox, supra, 35 Cal.4th at p. 810
[“Resolution of the statute of limitations is normally a question of
fact”; appeals from summary judgments, in contrast to appeals
from judgments entered after the sustaining of demurrers,
however, present “a more fully developed factual basis for
determining,” based on undisputed material facts, “when and
how the plaintiff discovered an injury, whether the plaintiff
conducted a reasonable investigation, when such an investigation
would have brought to light the factual basis for the cause of
action for which the plaintiff sought delayed accrual, and
whether the plaintiff could have discovered the factual basis for a
cause of action earlier by exercising reasonable diligence”].)
III. As a Matter of Law, This Action is Barred by the
       Statute of Limitations
       Chow contends the trial court erred in granting summary
judgment on statute of limitations grounds, arguing he showed
triable issues of material fact as to (1) whether he was on inquiry
notice of his causes of action in 2011 or 2016, and (2) whether his
reliance “on the presumed superior knowledge of the professional

                                12
accountants” was reasonable. For the reasons explained below,
we conclude the undisputed material facts—principally Chow’s
e-mail exchanges with Szeto—demonstrate Chow was on inquiry
notice of his negligence and breach of contract causes of action
against the Szeto defendants in August 2011, and this action,
filed more than six years later, is barred as a matter of law by the
two-year statute of limitations set forth in section 339,
subdivision (1).
        Undisputed facts establish: Chow asked Szeto to carry
back 2009 losses to the 2006 tax year, believing it would
eliminate or substantially reduce his 2006 tax liability of
approximately $396,000. Chow had consulted with the IRS, and
the IRS informed him that, in order to carry back the 2009 losses
to 2006, he needed to file a form 6251 for tax year 2006 with lines
10 and 27 filled in. In December 2010, Chow conveyed the
instruction he had received from the IRS to Szeto.
        In July 2011, Chow had another discussion with the IRS,
and the IRS informed him the information he had submitted to
the IRS was insufficient to carry back his 2009 losses to 2006
because it was incomplete. The IRS reiterated that Chow needed
to file a form 6251 for tax year 2006 with lines 10 and 27 filled in,
as well as an amended form 1040 for 2006. On July 25, 2011,
Chow again conveyed this information to Szeto. Two days later,
on July 27, 2011, after receiving a package of tax documents from
Szeto, Chow again informed Szeto what documents and specific
information in those documents the IRS required to carry back
the 2009 losses to 2006. Szeto responded that he would try to
understand what information the IRS wanted Chow to provide.
        Chow’s July 29 and August 1, 2011 e-mails to Szeto
demonstrate Chow was shocked when Szeto produced tax

                                 13
documents showing a refund of only $36,810, hundreds of
thousands of dollars less than Chow expected. In both e-mails,
Chow asserted Szeto’s calculations could not be correct. After
further discussions with Szeto, Chow signed and filed the 2006
amended form 1040 and the 2006 form 6251. Although the IRS
had told Chow on multiple occasions that the form 6251 needed
to have both lines 10 and 27 filled in for Chow to carry back his
2009 losses to 2006, Chow signed and filed the 2006 form 6251
with line 27 left blank.
       Based on the above undisputed facts, in August 2011, Chow
was on inquiry notice (1) that Szeto had prepared the 2006 tax
documents incorrectly, and (2) that Szeto’s error had injured him
in that his refund was hundreds of thousands of dollars less than
he expected it to be based on his net operating losses. Chow’s
e-mails demonstrate unequivocally his suspicions that Szeto’s
calculations were incorrect.
       Based on the above undisputed facts, in August 2011, Chow
was on inquiry notice (1) that Szeto had prepared the 2006 tax
documents in a manner that did not comply with the instructions
Chow received from the IRS and conveyed to Szeto, and (2) that
the amended return prepared by Szeto resulted in an injury to
Chow—a refund that was hundreds of thousands of dollars less
than Chow expected it to be based on his net operating losses.
Chow’s e-mails demonstrate unequivocally he had reason to
suspect that Szeto’s calculations were incorrect.
       Chow argues the two-year statute of limitations applicable
to his causes of action did not begin to run in August 2011
because Szeto assured him the calculations were correct, and he
was entitled to rely on his tax professional’s assurances. He cites
Neel v. Magana, Olney, Levy Cathcart & Gelfand (1971) 6 Cal.3d

                                14
176, 188, for the proposition that a client need not “hire a second
professional to observe the work of the first” where the client does
not have the ability to “detect [the] misapplication” of the
professional’s special expertise. In other words, a client need not
conduct an investigation in search of error in his tax documents
where he suspects none. The client does have a duty to
investigate, however, “even where a fiduciary relationship exists
when ‘he has notice of facts sufficient to arouse the suspicions of
a reasonable man.’ [Citation.] If such facts actually do come to
his attention he may not sit idly by for at that point the statute of
limitations begins to run.” (Electronic Equipment Express, Inc. v.
Donald H. Seiler & Co. (1981) 122 Cal.App.3d 834, 855.)
       The Szeto defendants did not conceal any material facts
from Chow in August 2011 that would have prevented Chow from
discovering the alleged negligence/breach of contract, as the tax
professionals did in cases on which Chow relies. (See, e.g., L.B.
Laboratories, Inc. v. Mitchell (1952) 39 Cal.2d 56, 58-59.) A tax
professional’s failure to tell the plaintiff that he “might have
grounds for a negligence or malpractice cause of action under the
facts known to all parties” does not toll the statute of limitations.
(Curtis v. Kellogg & Andelson (1999) 73 Cal.App.4th 492, 502.) It
“is not necessary for the plaintiff to have knowledge of the
specific applicable legal theories in order for the statute of
limitations to accrue.” (Ibid.)
       The facts Chow knew in August 2011 undisputedly aroused
his suspicions that Szeto had prepared the 2006 tax documents
incorrectly and that Szeto’s error had injured him in that his
refund was hundreds of thousands of dollars less than he
expected it to be based on his net operating losses. Thus, the
statute of limitations began to run in August 2011, and Chow

                                 15
was required to conduct a reasonable investigation based on his
suspicions. Instead, he waited for the facts to find him. Five
years later, in August 2016, a new accountant he hired allegedly
confirmed his suspicions that his refund would have been
hundreds of thousands of dollars larger if Szeto had included the
loss deduction in line 27 on form 6251, just like the IRS told
Chow in December 2010 and July 2011 that he needed to do to
carry back his 2009 losses to 2006, and just like Chow instructed
Szeto to do. By that point, however, Chow’s causes of action were
barred by the two-year statute of limitations.
      The trial court did not err in granting the Szeto defendants’
motion for summary judgment on the ground Chow’s action is
barred by the two-year statute of limitations set forth in section
339, subdivision (1). The undisputed facts establish as a matter
of law that Chow was on inquiry notice of his causes of action
against the Szeto defendants in August 2011, and the statute of
limitations began to run at that time. Based on his suspicions
that Szeto’s calculations were incorrect and his refund was
substantially less than he expected it to be, coupled with the fact
that Szeto had not completed the forms in the manner the IRS
instructed, Chow was required to investigate. Instead, he
ignored his suspicions for five years and filed this action more
than six years after he was on inquiry notice of his causes of
action. The action is time-barred.

                                16
                         DISPOSITION
      The judgment is affirmed. Respondents are entitled to
recover costs on appeal.
      NOT TO BE PUBLISHED

                                                 CHANEY, J.

We concur:

             ROTHSCHILD, P. J.

             FEDERMAN, J.*

      *Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.

                                17