Blickman Turkus v. MF Downtown Sunnyvale

Opinion

The primary question in this case is whether a realtor who represented the lessee in a complex commercial lease transaction had a duty to inform the lessor, after the lease was signed but before the lessee took possession, that the lessee’s ability to perform the conditions of the lease was jeopardized by its deteriorating financial condition. The trial court held that the lessor had failed to plead facts sufficient to establish any duty on the realtor’s part to disclose this information. We find no error in this determination. Nor do we find any error in the trial court’s refusal to award attorney fees to the lessor based upon its defeat of the realtor’s claims for unpaid commissions. Since these determinations render the realtor’s cross-appeal moot, we will dismiss it and affirm the judgment.

Background

Appellant MF Downtown Sunnyvale, LLC, is described in the pleadings as a limited liability company owning certain real property in Sunnyvale. At issue in this action are two buildings, known as buildings 2 and 3, situated on that property. Appellant Mozart Development Co. is described as the agent for MF Downtown Sunnyvale, LLC, for purposes of leasing and managing the property. Both entities are apparently affiliated with John Mozart, who is

Mozart alleges in its cross-complaint that in early 1999, it entered into a written commission agreement with Commercial Property Services (CPS) by which it engaged CPS and two affiliated individuals to act as its listing broker and agent in securing a lease of the premises for a specified commission. Inferentially, the buildings had “not yet been constructed or completed,” but awaited execution of a lease so that they could be completed or improved to the tenant’s specifications. Under the agreement, the first half of the commission would be “due and payable upon full lease execution and the second half . . . upon rent commencement.”

In early 2001, Mozart entered into written leases with Handspring, Inc., for buildings 2 and 3. The leases contemplated delivery of the premises in August and September, 2002, with both parties working in the interim to prepare the buildings for occupancy in accordance with Handspring’s needs. Their respective rights and obligations in connection with these efforts were set forth in “[w]ork [l]etter[s]” attached to the leases. Under the work letters, Handspring was required to secure its performance by providing letters of credit in the aggregate amount of some $23 million. Additional letters of credit or security deposits may have been required to secure Handspring’s obligations under the leases.

Respondent Blickman Turkus, LP, doing business as BT Commercial Real Estate (BTC), through its agent Tom Snider, represented Handspring in the lease transaction. BTC later contended that it was the “procuring agent” entitled to a commission under the commission agreement between Mozart and CPS. Mozart acknowledged this assertion in its cross-complaint, and while denying it, also adopted it hypothetically as a basis for recovery against BTC should it be sustained by the court. (See pt. I.G., post.)

Mozart alleged that from October 2001 through “at least” July 2002, Snider and BTC were “advised by Handspring that [it] was having financial difficulties,” that “its projected growth was not as fast as [it] had originally thought,” and that it was “considering possible exit strategies” from the leased buildings, including a negotiated termination of the leases and reducing Handspring’s financial risk. Mozart alleged that it did not learn of these matters until mid-August, 2002, when another agent contacted it to negotiate a termination of the leases. Mozart alleged that as a result of the delay in its learning of these matters, it sustained damage. (See pt. I.D., post.) Mozart and Handspring eventually negotiated a termination of the leases.

This action was commenced on January 28, 2003, not by Mozart, but by BTC, which filed a complaint against Mozart and Handspring in which it

Mozart successfully attacked BTC’s complaint by motions for summary adjudication and judgment on the pleadings. BTC successfully demurred to Mozart’s cross-complaint, with the court ultimately dismissing the third amended cross-complaint without leave to amend. The court entered a judgment by which neither party took anything. Mozart moved to vacate the judgment and for an award of attorney fees incurred by it in opposing BTC’s complaint. The court denied both motions.

Mozart filed a notice of appeal from the judgment of dismissal on its cross-complaint. BTC filed a cross-appeal from (1) the summary adjudication of its claims, and (2) an order denying sanctions under Code of Civil Procedure section 128.5. Mozart filed a separate notice of appeal from the order denying its motion to vacate the dismissal of its cross-complaint and the order denying its motion for attorney fees.

Discussion

A. Standard of Review

“On appeal from a judgment of dismissal following the sustaining of a demurrer without leave to amend, the appellant ‘has the burden to show either [that] the demurrer was sustained erroneously or that to sustain the demurrer without leave to amend constitutes an abuse of discretion.’ [Citation.]” (Smith v. County of Kern (1993) 20 Cal.App.4th 1826 , 1829-1830 [ 25 Cal.Rptr.2d 716 ] (Smith).) Because a general demurrer raises only a pure question of law—whether the facts set forth in the challenged pleading are sufficient to constitute a cause of action—a reviewing court considers it without deference to the trial court. (Leko v. Cornerstone Bldg. Inspection Service (2001) 86 Cal.App.4th 1109 , 1114 [ 103 Cal.Rptr.2d 858 ] (Leko); see Code Civ. Proc., § 430.10, subd. (e).) In doing so it examines the allegations of the challenged pleading, as supplemented by matters of which judicial notice is taken. (Leko, supra, 86 Cal.App.4th at p. 1114.) The court must

This leaves us with the possibilities that a duty to disclose arose from a relationship between Mozart and BTC, or from conduct by BTC obligating it to speak. Mozart contends that BTC owed such a duty (1) as the agent for Handspring; (2) hypothetically, as an agent for Mozart itself; or (3) by virtue of statements by BTC that obligated it to speak when they ceased to be correct.

C. Concealment: Elements

Mozart’s first cause of action asserts “concealment” against Snider and BTC in that they (1) breached a duty of full and fair disclosure they owed to Mozart as the real estate agents for Handspring; and (2) made representations at the time of Mozart’s entry into the lease agreement that obligated them to speak when they learned that Handspring might be unable to perform that agreement. As reflected in the immediately preceding discussion, these are two quite distinct legal theories, which we will address separately. (See pts. I.E., I.F., post.) First, however, we will review general principles governing the tort of concealment.

Concealment is a species of fraud or deceit. (See Civ. Code, §§ 1710, subd. 3, 1572, subd. 3; Lovejoy v. AT&T Corp. (2004) 119 Cal.App.4th 151 , 158 [ 14 Cal.Rptr.3d 117 ] (Lovejoy).) “[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603 , 612-613 [ 7 Cal.Rptr.2d 859 ]; see Lovejoy, supra, 119 Cal.App.4th at pp. 157-158.)

The parties have focused their attention almost exclusively on the second element, i.e., whether Mozart has alleged facts from which a duty to disclose

D. Fraudulent Intent, Causation, Damage

As noted above, liability for concealment requires that the defendant have “suppressed the fact with the intent to defraud the plaintiff.” (Marketing West, Inc. v. Sanyo Fisher (USA) Corp., supra, 6 Cal.App.4th at p. 613.) It must also appear, as with any other tort, that the defendant’s wrongful conduct was a legal or proximate cause of harm to the plaintiff. These are two distinct elements. It is not enough that the misstatement (or concealment) actually harmed the plaintiff; it must have been made by the defendant with the intent to induce action (or inaction) by the plaintiff. Similarly, an intent to deceive the plaintiff is legally meaningless unless the deception caused injury.

In the context of fraud by affirmative false statements, the mental element is commonly stated in terms of intent to induce “reliance.” (E.g., Lazar v. Superior Court (1996) 12 Cal.4th 631 , 638 [ 49 Cal.Rptr.2d 377 , 909 P.2d 981 ], italics added.) In the context of fraud by concealment, the more precise formula is probably intent to induce conduct—action or inaction—that differs from what the plaintiff would have done if informed of the concealed fact. (See Southern Cal. etc. Assemblies of God v. Shepherd of Hills etc. Church (1978) 77 Cal.App.3d 951 , 959, fn. 5 [ 144 Cal.Rptr. 46 ] (Assemblies of God) [fraud causes of action appeared “imperfectly pleaded” where “plaintiff never alleges in so many words that defendants’ statements were made for the purpose of inducing the sale”].)

Here the only attribution of intention to BTC and Snider, for purposes of Mozart’s first cause of action, appears as follows: “The aforementioned conduct of BTC and Snider was an intentional concealment of material facts known to them with the intention on their part of procuring a commission without fulfilling their duties and obligations, as a real estate broker and salesperson, to advise Cross-complainants of all material facts regarding Handspring and all knowledge they had regarding Handspring which was despicable conduct that subjected Cross-complainants to cruel and unjust hardship in conscious disregard of their rights so as to justify an award of punitive damages.” This allegation fails to assert that cross-defendants intended to induce action or inaction on the part of cross-complainants. For that reason alone, no cause of action for concealment is stated.

In Norman I. Krug Real Estate Investments, Inc. v. Praszker, supra, 220 Cal.App.3d 35 , 40 (Krug), the seller of an apartment building told his realtor about an unrecorded deed of trust he had given to a creditor. The realtor thereafter sold the building without advising the creditor of the sale, or the buyer of the encumbrance. (Ibid.) The creditor sued the realtor for wrongfully causing the extinguishment of his security interest. The matter “proceeded to trial on a number of theories,” but the trial court “rendered judgment for [the creditor] strictly on negligence grounds.” (Ibid.) On appeal the realtor denied that he owed any duty to the creditor, noting the absence of privity or a special relationship between them. (Id. at pp. 41—42.) While the court’s analysis of this issue is germane to Mozart’s general negligence theory (see pt. I.I., post), the decision is irrelevant to any duty of disclosure owed by a buyer/lessee’s realtor to a seller/lessor.

In Hale v. Wolfsen, supra, 276 Cal.App.2d 285 , a realtor cooperating with the sellers’ agent sued for a commission after the sellers withdrew from a purchase agreement upon discovering that the plaintiff realtor had fraudulently misrepresented the condition and value of a property to be conveyed to them under the agreement. (See id. at p. 291.) Not surprisingly, the trial court ruled that the realtor’s misrepresentations vitiated the sellers’ obligations not only to perform the purchase agreement but also to pay a commission to the realtor. The court also found that the realtor “was a subagent of [the sellers] and owed them a duty of utmost good faith, which she breached by failing to ascertain all of the pertinent facts about the [exchange] property and by making statements and representations to them that she did not know were true.” (Id. at pp. 289-290.) On appeal the realtor unsuccessfully attacked the latter finding (id. at pp. 290-291) and the finding that she had breached her fiduciary duties to the sellers (id. at pp. 291-292). Mozart apparently cites the case for its passing dictum that “real estate brokers are under a duty to deal fairly with all parties, and be well informed on current market conditions.” (Id. at p. 292.) Again, the case has no tendency to show the existence of any particular duty of disclosure on the part of a buyer/lessee’s agent toward a seller/lessor.

In Lingsch v. Savage, supra, 213 Cal.App.2d 729 , 732-733 (Lingsch), the trial court sustained a demurrer by the sellers’ broker to a complaint by buyers who alleged that the defendants had sold them a building without disclosing, among other things, that the building had been condemned. The broker contended that no cause of action was stated because the form purchase agreement recited that the property was purchased as is and that no

Of the four cases cited by Mozart, Lingsch is the only one imposing a duty of disclosure, as such, on one who was not the plaintiff’s agent at the time of the alleged concealment. The holding there rested on a duty peculiarly imposed upon the seller’s agent to disclose inobvious facts affecting the value of the property. The case was later cited for the proposition that “where a real estate broker or agent, representing the seller, knows facts materially affecting the value or the desirability of property offered for sale and these facts are known or accessible only to him and his principal, and the broker or agent also knows that these facts are not known to or within the reach of the diligent attention and observation of the buyer, the broker or agent is under a duty to disclose these facts to the buyer.” (Cooper v. Jevne (1976) 56 Cal.App.3d 860 , 866 [ 128 Cal.Rptr. 724 ] (Cooper), citing Lingsch, supra, 213 Cal.App.2d at pp. 735-736, italics added.) This “Cooper-Lingsch rule” was later held to implicitly obligate the agent for a residential seller to disclose “reasonably discoverable defects” to the buyer, and to “conduct a reasonable investigation” to that end. (Easton v. Strassburger (1984) 152 Cal.App.3d 90 , 99, 100 [ 199 Cal.Rptr. 383 ]; see id. at p. 102 [“affirmative duty to conduct a reasonably competent and diligent inspection” and to disclose facts affecting value to buyer].) This holding was ultimately codified in Civil Code section 2079, subdivision (a), which declares that a broker who is engaged by a seller, or who acts in cooperation with a broker engaged by a seller, has a duty “to a prospective purchaser of residential real property ... to conduct a reasonably competent and diligent visual inspection of the property offered

Here the duty imposed by these authorities never came into existence because (1) Mozart was a seller (lessor), not a buyer; (2) BTC represented a buyer, not a seller; (3) the transaction involved commercial, not residential, property; and (4) the matter allegedly concealed went not to the value of the property, or even the desirability of the transaction, but to facts learned by the broker after the transaction had been consummated, at least to the extent of executing an agreement binding on the parties.

Nor do we see any reason to extend the duty described above to the situation before us. As the Easton court observed, the primary purposes of burdening a seller’s broker with disclosure duties running to the buyer are “to protect the buyer from the unethical broker and seller and to insure that the buyer is provided sufficient accurate information to make an informed decision whether to purchase.” (Easton v. Strassburger, supra, 152 Cal.App.3d at p. 99.) The duty is justified not only by the broker’s likely superior knowledge of facts affecting the value of the property, but by the risk that the residential purchaser will suppose the broker to be adequately representing his interests. Thus the court observed that “in residential sales transactions the seller’s broker is most frequently the best situated to obtain and provide the most reliable information on the property and is ordinarily counted on to do so.” (Id. at p. 100, italics added.) “ ‘The real estate broker’s relationship to the buyer is such that the buyer usually expects the broker to protect his interests.’ ” (Ibid., quoting Comment, A Reexamination of the Real Estate Broker-Buyer-Seller Relationship (1972) 18 Wayne L.Rev. 1343 , 1343; see Easton, supra, 152 Cal.App.3d. at p. 101, fn. omitted [“Not only do many buyers in fact justifiably believe the seller’s broker is also protecting their interest in securing and acting upon accurate information and rely upon him, but the injury occasioned by such reliance, if it be misplaced, may well be substantial”]; id. at p. 101, fn. 5, quoting Sinclair, The Duty of the Broker to Purchasers and Prospective Purchasers of Real Property in Illinois (1981) 69 IlLBar.J. 260, 263-264 [“ ‘In the typical residential real estate transaction . .., the buyer, in particular, may be intentionally or inadvertently led . . . to believe the broker will represent his interest even where he is aware the broker has a listing agreement with the seller. Since the broker’s commission is generally paid as a percentage of the sales price, the broker’s interest is more closely identified with that of the seller than of the buyer. Where the buyer is unappreciative of the potentially divided loyalty of the broker, he may be lulled into relying on the broker to his significant detriment. Misplaced reliance by the buyer can extend beyond the issue of price to questions regarding quality of title, condition of the premises, and proration of closing costs, property taxes, recording fees, and other expenses.’ ”].)

Here there is no allegation that Mozart was ever led to believe, or did believe, or rationally could have believed, that BTC was representing its interests. On the contrary, recognition pervades the cross-complaint that each party in the transaction was represented by its own agent—Mozart by CPS, Handspring by BTC. Thus Mozart affirmatively alleged that Snider and BTC represented Handspring, not Mozart, in the lease transaction, i.e., Snider was BTC’s “authorized agent representing Handspring in the transaction,” and that he made statements to Mozart “on Handspring’s behalf, and as a representative of BT[C].” Mozart further alleged that it shared the understanding with CPS that the latter would “continue to act on \Mozart’s] behalf, with respect to any leases to be executed, until such time as the duties and obligations of [Mozart] and any tenant were fulfilled;” that BTC similarly understood that it would “continue to represent [its] client until such time as the building(s) is/are finished, tenant improvements complete, and rent is to commence;” that Mozart expected and intended CPS, and any cooperating broker or procuring agent, to “continue to represent their respective clients after the Leases were executed, until such time as rent commenced;” and that CPS and BTC understood as between themselves “that they would continue to represent their respective clients until rent commenced . . . .”

Nor does Mozart allege any conflict of interest tempting BTC to perniciously favor Handspring’s interests over Mozart’s. If anything, both stood to lose from a termination of the lease agreement—Mozart would lose its expectation of rents and other payments called for by that agreement, while BTC would lose the second half of its commission, or at least a clear claim to that sum. Nowhere does the cross-complaint suggest any facts comparable to the natural alignment between broker and seller arising from the correlation between sales price and commission.

The record suggests no basis for any expectation by Mozart that BTC would disclose matters regarding Handspring other than as its “respective client[],” Handspring, might direct. The only factor in common with Easton is BTC’s presumably superior knowledge of its client’s financial condition. But so far as this record indicates, BTC had that knowledge only by virtue of its confidential relationship with Handspring. Mozart alleges that beginning in late 2001 and continuing to mid-2002, “Snider and BT[C] were advised

In sum, none of the cases cited by Mozart, and no other authority known to us, supports the imposition of a duty on a lessee’s agent in a commercial real estate transaction to disclose to the lessor information, acquired after execution of a lease, concerning the lessee’s finances. Mozart has offered no reason to impose such a duty. We therefore decline to do so. Insofar as Mozart’s cross-complaint rested upon such a duty, it failed to state facts sufficient to constitute a cause of action.

F. Duty Arising from Prior Statements

A duty to disclose can arise from the making of affirmative representations with knowledge of undisclosed facts that “ ‘materially qualify the facts disclosed, or . . . render [the disclosed facts] likely to mislead . . . .’ ” (Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115 , 132 [ 61 Cal.Rptr.3d 221 ] (Linear Technology), quoting Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285 , 294 [ 85 Cal.Rptr. 444 , 466 P.2d 996 ].)

Mozart seeks to invoke this theory, but the allegation on which this attempt rests does not supply an adequate foundation for it: “Prior to Handspring’s entering into the Leases for Buildings 2 and 3, Snider, on Handspring’s behalf, and as a representative of BT[C], had made affirmative representations to Cross-complainants regarding Handspring’s ability to pay the rent into the future. At all times, as a result, he not only had a duty to disclose all material facts known to him as a real estate agent, but also a duty to correct any information which, if previously true, had become false or had changed. These duties continued as long as Snider and BT[C] continued to act as agent and broker in the transaction, including following execution of the Leases.” (Italics added.) This allegation, and the cross-complaint as a whole, fail to identify any statement that was rendered false or inaccurate, then or later, by any failure of disclosure. Instead the pleading is pregnant with potentially fatal ambiguity. It asserts that Snider made unspecified statements on an identified topic—“Handspring’s ability to pay rent in the future.”

Indeed, Mozart seems to have retreated from the comparative specificity of an earlier version of the cross-complaint, which was itself challenged for vagueness. In its original cross-complaint Mozart alleged, “After February 18, 1999, and prior to February 14, 2001, cross-defendants’ authorized agent, Thomas Snyder [wc], represented to John Mozart, either directly or through representations to Mozart’s real estate agents . . . that Handspring was fully qualified as a tenant, financially stable, creditworthy, and otherwise willing and financially able to meet its obligations under the Leases . . . .” In its demurrer to this pleading, BTC attacked the quoted allegation as unduly vague. Mozart reiterated the allegation in its first amended cross-complaint. In demurring to that pleading, BTC did not renew its attack on this particular allegation, perhaps because, as stated in its supporting memorandum, counsel for Mozart had “recently advised BT[C] that they will be dropping their claims against BT[C] for fraud and negligent misrepresentation, as well as their claims for rescission based on fraud and concealment . . . .” In Mozart’s second amended cross-complaint, the allegation appeared in its present form, i.e., Snider “made representations to cross-complainants regarding Handspring’s financial and other qualifications as a tenant.” In demurring to this pleading, BTC apparently overlooked this allegation, stating that “BT[C] and Snider are not alleged to have spoken at all to Mozart,” and therefore “cannot be liable for active concealment.” Similarly, in demurring to the third amended cross-complaint, BTC stated that it “cannot be liable for active concealment” because it was “not alleged to have had any communication at all with Mozart. . . .”

BTC’s failure to acknowledge the quoted allegation cannot blind us to Mozart’s conduct in the face of the original vagueness objection: After apparently expressing an intent to abandon the claim altogether, Mozart reasserted it in a far more nebulous form than the original. Whatever the history of this theory, the cross-complaint in its present form utterly fails to plead any affirmative representation on which a duty to disclose might be predicated.

Mozart does not directly assert otherwise. Instead it treats the pleading as if it contained such an allegation, nesting the relevant assertion within an assertion on some other point, perhaps to avoid a direct misstatement of the record. Thus Mozart writes that cross-defendants “knew their assurance that

Nor do we see any evidence that Mozart could truthfully plead an affirmative representation by BTC if given yet another chance (their fifth) to do so. The centrality of the point to their theory of recovery can hardly be doubted. They refer to the concept of a “ready, willing and able” tenant at least 11 times in their opening brief. Yet nowhere do they flatly allege any representations by BTC, or for that matter Handspring itself, concerning the latter’s financial condition, present or future. We may suppose that in a transaction of this magnitude some kind of financial data was provided to the lessor. But we must also suppose that Mozart was satisfied with those data, and indeed finds no fault with them now, since it has apparently never suggested that its entry into the leases was procured by fraud. Its apparent inability to attribute an affirmative representation to BTC is reflected in such constructions as its reference to the concealment of information that “contradicted the basic notion that Handspring was a ready, willing and able tenant.” (Italics added.) It offers no authority for a theory of fraud by “basic notion.” And like much of Mozart’s presentation below and here, this statement seeks to blur the distinction between two critically different points of time: the point when the leases were executed, at which time all parties apparently believed Handspring was ready, willing, and able to perform; and the time beginning eight months later, when that supposition became clouded by doubt. The question is not what “basic notion” might have been shared by the participants at an earlier time, but whether Mozart has alleged facts sufficient to impose a duty of disclosure on BTC at the later time alleged in the cross-complaint. Insofar as Mozart seeks to predicate such a duty on statements initially made by BTC, the failure to actually plead such statements, dooms its theory to failure.

In Koch v. Williams (1961) 193 Cal.App.2d 537 [ 14 Cal.Rptr. 429 ] (Koch), two couples who purchased subdivision homes sued the developer over a drainage easement that he granted to the local government while the properties were in escrow. As relevant here, the opinion states, “One who learns that his statements, even if thought to be true when made, have become false through a change in circumstances, has the duty before his statements are acted on to disclose the new conditions to the party relying on his original representations.” (Id. at p. 541, italics added.) This rule applied there because the effect of the nondisclosure was to deprive the plaintiffs of “the opportunity to reject the proposal or sale of the property under these conditions.” (Ibid.) Thus, “[h]ad [the buyers] known of [the sellers’] act in the placing of record an easement across the properties in dispute, they might have elected to rescind the escrow and purchase agreement which clearly indicated the property was not subject to such an easement.” (Id. at p. 542.) Here there is no suggestion that BTC should or could have made clarifying disclosures at a time when Mozart might yet “reject the proposal” or unilaterally rescind the lease agreement. Once that agreement was signed, whatever damage might be done was—so far as the cross-complaint shows—done. Mozart’s vague suggestion that post-execution disclosure might have permitted it to “mitigate” its supposed injuries in some unspecified manner hardly brings the case within the rationale of Koch.

Similar divergences preclude application here of Kretzschmar v. Janss Investment Co. (1932) 126 Cal.App. 698 [ 14 P.2d 1069 ]. There the plaintiff buyers secured an option to purchase a lot from the defendant sellers. Two

In Dyke v. Zaiser (1947) 80 Cal.App.2d 639 [ 182 P.2d 344 ], the lessee of an amusement center brought an action to rescind the lease after the center was essentially closed by the police. The trial court found that the lessor had made certain representations about the income from the premises; that these statements were intended and understood to mean “that there existed no reason known to said defendant why the business should not continue to operate profitably in the future”; that the lessee was induced by these statements to enter into the lease; and that the statements were “false and fraudulent in that defendant knew that said representations were untrue and knew that law enforcement officers of the County of San Diego contemplated and intended, within a period of twenty-four hours after the execution of said lease, to compel the closing of a substantial portion of the business . . . .” (Id. at p. 644.) Among the lessor’s contentions on appeal was that the lessee had failed to prove that the lessor knew of the impending police action at the time the parties orally agreed on the lease, as distinct from the time of its formal execution several days later. (Id. at p. 648.) In rejecting this contention, the court observed that, at the time of execution, the lessee “was [still] relying upon [the lessor’s] representations, and that . . . incidents had transpired rendering the representations no longer true. [The lessor] knew that

In Black v. Shearson, Hammill & Co. (1968) 266 Cal.App.2d 362 [ 72 Cal.Rptr. 157 ], a stock brokerage house and its senior partner were held liable to certain customers to whom they sold stock in a corporation in which the partner was also a director. The sales had been induced by glowing reports of the corporation’s prospects when, as known to the partner, internal communications described its situation as “ ‘drastic.’ ” (Id. at p. 365.) On appeal the defendants argued that the evidence failed to show that the partner knew any statement by him was false when made. (Id. at p. 367.) The court rejected this premise, but went on to declare that even if it had not, scienter would be adequately established by his having “permitted [the statements] to stand after he learned the truth and before respondents relied on them.'’’ (Ibid., italics added.)

In all of these cases (1) a seller made affirmative representations concerning the condition or value of property; (2) the seller knew of (in three cases he actively brought about) changed circumstances that rendered his representations deceptive; (3) the seller was aware of the changed circumstances at a time when the buyer could have declined to complete the purchase; (4) other circumstances justified the buyer’s reliance on the seller to correct the misimpression it had created; and (5) the seller remained silent, thereby depriving the buyer of the opportunity to forego the purchase. Comparing these factors to the present case reveals the incoherence of Mozart’s “duty to correct” theory. Mozart stands in the position of a seller, not a buyer, and the representations had nothing to do with the value of the property. More essentially, the harm for which Mozart seeks compensation is not its entry into the lease with Handspring, but its failure to withdraw from that agreement some time after executing it. As we have said, this assumes the undemonstrated and highly doubtful proposition that Mozart could have withdrawn from that agreement in any manner other than the one it ultimately chose: a mutual agreement with the other contracting party. It may be theoretically conceivable that the supposed delay in disclosure caused it some injury. But this is nowhere competently alleged and, more to the immediate point, none of the cited decisions rests a duty to disclose on such a slender reed.

Mozart fails to plead a cause of action on a theory of affirmative statements giving rise to a duty to disclose. Because it also fails to adequately allege a

The parties thus seem intent on thrusting us into a rather dizzying paradox. Mozart asserts a cause of action that depends on BTC’s successful pursuit of at least a part of its claims; but those claims stand adjudicated adversely to BTC, and thus to Mozart’s hypothesized cause of action; but that adjudication is exposed to reversal by BTC’s cross-appeal; but BTC asks us to contemplate such a disposition only if we find some part of Mozart’s appeal meritorious. The upshot of this logical merry-go-round seems to be that in order to trigger the condition on which the second cause of action depends—or more precisely, to leave the door open for that condition to be triggered—we would have to first find that some part of Mozart’s appeal is meritorious, and then sustain BTC’s cross-appeal (or enough of it that a finding of agency would again be possible).

This reasoning apparently precludes us from relying on the posited impossibility of the condition as a basis to affirm the judgment on the cross-complaint. We must therefore conduct a closer examination of the allegations of the second cause of action. Confined to their literal meaning and logical effect, they certainly do not set out the factual foundation for a cause of action. In essence they say that if the court makes a particular finding, Mozart will make a particular argument. Such a statement may be appropriate in a trial brief, but it is ineffectual in pleading a cause of action because it asserts no facts that would subject the defendant to liability. At its core it expresses nothing more than the pleader’s intent to assert a particular theory under specified conditions. That is hardly the same thing as stating a claim.

The more difficult question is whether this deficiency is such that Mozart could not have cured it by amendment. BTC pointed out the deficiency in the trial court, though on different terms. It quoted the above allegation and wrote, “That is not an allegation of fact; it is a mere legal conclusion.” However, instead of analyzing its sufficiency in terms of the law of pleading, BTC went off on the substantive soundness of the proposition that a procuring or cooperating agent is the subagent of the listing agent with a fiduciary duty to the seller. BTC correctly observed that such a relationship does not necessarily arise, and that the payment of compensation, or an agreement to pay, is not necessarily determinative of the existence of an

But an allegation of agency is deemed an allegation of ultimate fact. (Skopp v. Weaver (1976) 16 Cal.3d 432 , 437, 439 [ 128 Cal.Rptr. 19 , 546 P.2d 307 ].) BTC acknowledged this rule below but implied that it was inapplicable because “where the essential facts are not contested, the question whether an agency relationship existed may be decided as a matter of law.” This is a rule applicable to the assessment of evidence, not to determining the sufficiency of a pleading. In the latter context, the existence of an agency relationship is the “essential fact[],” and where alleged must be accepted as true. (See id. at pp. 436-437.) BTC also asserted that Mozart “has not alleged the requisite agency relationship between itself and BT/Snider, but has instead alleged that its agent was CPS, while BT/Snider represented Handspring. Those facts do not show an agency relationship between BT/Snider and Mozart—much to the contrary.” This assertion rests on the premise that one cannot “represent” one party in a real estate transaction and still be an agent for the other party. If that were true this case would be very easy indeed. But it is not true. (See 2 Miller & Starr, Cal. Real Estate, supra, § 3.12, pp. 64-69.)

Thus if the cross-complaint unequivocally alleged that BTC acted as the agent of Mozart, we would have no difficulty in holding this an adequate pleading of such a relationship. Instead, however, Mozart has elsewhere denied any such relationship, and alleges in the cross-complaint only that if the court finds such a relationship to have existed, despite Mozart’s denial, then Mozart will contend that a duty of disclosure arose. This is, so far as we know, a novel mode of pleading. But it does not necessarily follow that it is improper. In substance, Mozart attempted to plead that BTC claims to have been a procuring or cooperating agent; that Mozart denies the existence of such a relationship; that if it did exist, then BTC was Mozart’s agent and fiduciary; that BTC thus owed Mozart a duty of disclosure; and that BTC breached that duty by failing to inform Mozart of Handspring’s financial difficulties. Although we know of no precedent for hypothetical pleading of precisely this type, it resembles the pleading of mutually inconsistent bases of liability or defense, which the law permits so long as the differing grounds are separately stated and free of self-contradiction. (See Steiner v. Rowley (1950) 35 Cal.2d 713 , 718-719 [ 221 P.2d 9 ].) Tolerance for such pleading rests on the principle that uncertainty as to factual details or their legal significance should not force a pleader to gamble on a single formulation of his claim if the facts ultimately found by the court, though diverging from those the pleader might have considered most likely, still entitle him to relief.

The same rationale applies here: Mozart denies that BTC ever became its agent, but acknowledges BTC’s contrary assertion, and asserts that if this

H. Duty of Agent with Conflicting Obligations

We have already noted several dubieties in Mozart’s claims that it suffered compensable harm as a result of BTC’s failure to disclose Handspring’s financial condition. In particular we have observed that the cross-complaint affords no basis to suppose that an earlier disclosure of those matters would in fact have spared Mozart the harm, if any, it ultimately sustained. So long as Mozart remained bound by the lease, Handspring was entitled to explore, as it did, alternative means of extricating itself from the financial burdens imposed by the lease. Earlier notice might have enabled Mozart to threaten and bluster; it might have placed it in a different bargaining position in a renegotiation of the parties’ relationship; but the premise that Mozart could actually establish these or any other liability-producing hypotheses of causation and damage is not supported by anything alleged in the cross-complaint or otherwise brought to our attention.

BTC, however, has not objected to the pleading on this ground. Rather, its chief contention is that, assuming its role as procuring agent engendered an agency relationship between it and Mozart, that relationship terminated upon the presentation of a qualified buyer. This argument delineates a chief subject of contention between the parties. The cross-complaint contains page after page of allegations intended to support the conclusion that BTC’s role in the transaction was understood by all parties to continue beyond the execution of the lease at least until construction reached the agreed stage at which Handspring would commence the payment of rent.

In our view this issue is largely, if not entirely, beside the point. BTC’s argument conflates the duration of an agency relationship with the persistence of the duties arising from such a relationship. While an agent’s duty of disclosure ordinarily ends upon termination of the agency relationship, this is by no means automatic; the agent may remain under such a duty “when it is foreseeable to the agent that the principal will continue to rely on the agent for information and the agent does not inform the principal that no further information will be provided.” (Rest.3d Agency, § 8.11, com. c., p. 376) “For example, if an agent arranges a transaction on behalf of a principal that is ongoing at the time their agency relationship ends, it may be

BTC also challenged the third cause of action on the ground that BTC owed no duty to Mozart at the time of its alleged breach “because the leases had been executed when the alleged breach occurred.” But once the premise is accepted that the cross-complaint alleges an arguably negligent omission, it seems highly doubtful that the duty on which such allegation depends can be categorically declared to have been extinguished or terminated by Mozart’s execution of the lease. If it was foreseeable that Mozart could be harmed by the posited nondisclosure, and the facts are otherwise conceded to support a claim for negligence, it is difficult to see how we could categorically conclude that BTC and Snider ceased to owe Mozart a duty of care merely because Mozart had signed a contract with another party.

Again, however, it seems to us that the cross-complaint suffers from far more fundamental defects. The essence of negligence is carelessness or inadvertence. (See Solv-All v. Superior Court (2005) 131 Cal.App.4th 1003 , 1010 [ 32 Cal.Rptr.3d 202 ] [“ ‘negligence’ implies a careless, but unintentional, failure to act with due care”]; Davis v. Hearst (1911) 160 Cal. 143 , 172 [ 116 P. 530 ] [“Negligence necessarily implies an absence of intent or purpose,” or is at least independent of either]; Chetwood v. California Nat. Bank (1896) 113 Cal. 414 , 422 [ 45 P. 704 ] [allegation that defendant bankers allowed cashier to run bank so as to render it insolvent charged conduct “not . . . committed inadvertently or carelessly, which would amount to negligence pure and simple, but to have been wrought against the corporation through contrivance and collusion, with a design to injure it—a charge which establishes that the pleader must have considered that he was dealing with a case of willful tort, partaking of the nature of a fraud”].)

The cross-complaint alleges no conduct that appears, or is alleged to be, careless or inadvertent. There is no suggestion that BTC forgot to disclose the

Nor do the facts alleged resemble those on which courts have imposed liability for negligence in comparable situations. In Earp, supra, 122 Cal.App.3d 270 , the court pervasively referred to the defendant broker’s conduct as negligent. (See id. at pp. 277-278, 276 [“negligence as a real estate broker”], 281 [trial court’s finding of negligence], 289 [“breach of an oral contract and . . . negligence”], 290 [“negligent interference with prospective economic advantage”].) But the gist of that case was a kind of realtor malpractice. As most pertinent here, it involved not the withholding of information but a series of incompetent judgments about what to communicate, how, and to whom. Most pertinently, the defendant neglected to tell the buyer that his offer did not meet the minimum conditions the seller had said he was willing to accept. The defendant compounded this error by encouraging the buyer to stand on a nonexistent contract. Nothing like this is alleged in Mozart’s cross-complaint.

The case most nearly supportive of Mozart’s attempt to state a negligence cause of action is Krug, supra, 220 Cal.App.3d 35 , 40, where a realtor was held liable to the holder of an unrecorded deed of trust for causing its extinguishment in the course of a sale of the encumbered property. The court noted that a realtor is under a “fundamental duty” to “deal honestly and fairly with all parties in the sale transaction.” (Id. at p. 42.) It then noted that defining the reach of that duty in a given case depends on “weighing a number of factors, including the extent the transaction was intended to affect the third party, the foreseeability of harm, the degree of certainty the third party suffered injury, the moral blame attached to the broker’s conduct, and the policy of preventing future harm.” (Id. at p. 42.) It noted that the imposition of a duty to disclose an unrecorded security interest was “supported by standards already existing in the industry.” (Ibid.) It then observed, “The most important step in determining if a broker owes a duty of care to a third party is to examine ‘whether a reasonable person would have foreseen an unreasonable risk of harm to the third person and whether in view of such risk the broker exercised ordinary care under the circumstances.’ [Citation.]” (Id. at pp. 42-43.) The imposition of a duty of care on the realtor there was justified because, among other things, he knew or should have known that there was a significant risk that the plaintiff’s security would be destroyed if the sale went through without its disclosure to the buyer. (Id. at p. 43.)

J. Negligent Supervision

In its fourth cause of action, Mozart alleges that BTC negligently supervised Snider, its agent, by “allowing him to commit fraud and conceal the facts previously set forth from Cross-complainants including but not limited to his knowledge of facts which became available to him after the leases were signed including his knowledge of Handspring’s financial condition, financial stability, and ability to honor the Lease agreements and abide by their terms; his knowledge that Handspring was considering either subleasing the buildings and/or terminating their leases; his knowledge that Handspring was interviewing brokers to negotiate a termination, and all of the information within his possession, custody and control from October, 2001 through July, 2002, previously set forth.” We have already concluded that the fraud on which this cause of action rests is not adequately alleged. This cause of action therefore necessarily fails as well.

In sum, the trial court did not err by sustaining the demurrer to Mozart’s third amended cross-complaint or by doing so without leave to amend.

A. Background

Around January 19, 2006, after the trial court granted summary adjudication against BTC on the remaining causes of action of its complaint, Mozart

The trial court denied the motion for fees and granted the motion to tax them from the cost bill.

B. Party Prevailing on the Contract

A request for an award of attorney fees is largely entrusted to the discretion of the trial court, whose ruling “will not be overturned in the absence of a manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence. [Citations.]” (Yield Dynamics, Inc. v. Tea Systems Corp. (2007) 154 Cal.App.4th 547 , 577 [ 66 Cal.Rptr.3d 1 ].) The trial court exercises a particularly “wide discretion” in determining who, if anyone, is the prevailing party for purposes of section 1717(a). (Sears v. Baccaglio (1998) 60 Cal.App.4th 1136 , 1158 [ 70 Cal.Rptr.2d 769 ], quoting Nasser v. Superior Court (1984) 156 Cal.App.3d 52 , 59 [ 202 Cal.Rptr. 552 ].) To overturn that determination on appeal, the objecting party must demonstrate “a clear abuse of discretion.” (Sears v. Baccaglio, supra, 60 Cal.App.4th at p. 1158.) However, the “determination of the legal basis for an award of attorney fees” is a “question of law” which the reviewing court will examine de novo. (Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th 671 , 677 [ 101 Cal.Rptr.2d 127 ] (Sessions).)

As framed by the parties, the dispositive question is whether the cross-complaint was an action “on a contract,” i.e., the commission agreement containing the fee clause. Thus Mozart asserts that its claims in the cross-complaint “did not arise out of the Commission Agreement but instead out of a real estate agent’s duties as a matter of law.” As so framed, we have no difficulty in resolving this issue in favor of the trial court’s finding that the cross-action was “on [the] contract,” such that each party prevailed on the other’s “action on a contract” and neither prevailed on the matter as a whole.

“. . . California courts liberally construe the term ‘ “ ‘on a contract’ ” ’ as used within section 1717. [Citation.] As long as the action ‘involve[s]’ a contract it is ‘ “on [the] contract” ’ within the meaning of section 1717. [Citations.]” (Dell Merk, Inc. v. Franzia (2005) 132 Cal.App.4th 443 , 455 [ 33 Cal.Rptr.3d 694 ]; see Hastings v. Matlock (1985) 171 Cal.App.3d 826 , 841 [ 217 Cal.Rptr. 856 ], quoting Care Constr., Inc. v. Century Convalescent Centers, Inc. (1976) 54 Cal.App.3d 701 , 706 [ 126 Cal.Rptr. 761 ] [“ ‘as long as the action here involved a contract it was “on a contract” and within Civil Code, section 1717’ ”].)

Mozart asserts that BTC’s failure to seek fees on its own behalf after securing the dismissal of Mozart’s cross-complaint was a tacit concession that “the Cross-Complaint did not arise out of the Commission Agreement and that [BTC] was not entitled to any attorney’s fees based thereon.” But BTC never had an opportunity to pray for fees in a pleading, because having successfully demurred to the cross-complaint, it never submitted a pleading in which such a prayer might have been allowed. As for BTC’s failure to seek fees by motion, the sequence of relevant events strongly suggests, and the trial court could certainly find, that such failure reflected not a disbelief by BTC in its potential right to fees, but a well-justified belief that the trial court would not find it to be a prevailing party entitled to them.

On June 28, 2005, the court eliminated BTC’s first cause of action, for breach of the commission agreement, by summary adjudication. Once that occurred it should have been obvious that the trial court was not likely to designate BTC the prevailing party on the contract. It was only on July 14, 2005—some two weeks after disposing of BTC’s contract claim—that the court formally disposed of Mozart’s cross-complaint by sustaining BTC’s demurrer. Under section 1717(a), attorney fees “shall be an element of the costs of the suit.” Costs are to be claimed after entry of judgment or dismissal. (See Cal. Rules of Court, rule 3.1700(a)(1).) More specifically, attorney fees are to be sought by noticed motion “served and filed within the time for filing a notice of appeal . . . .” (Cal. Rules of Court, rule 3.1702(b)(1).) Here no judgment was entered until December 22, 2005, at which time the court decreed that neither party should take anything by its respective pleading. For BTC to move for fees at that time would obviously have been quixotic at best; the odds of its being found a prevailing party were

C. Applicability of Fee Clause

We find much merit in BTC’s contention below—not pursued in its responding brief on appeal, but addressed by Mozart in its opening brief— that Mozart had no reciprocal right to fees under section 1717(a) because, given the terms of the fee provision in the commission agreement, BTC would not have been entitled to fees even if it had prevailed on its own complaint.

The fee provision at issue allowed fees in “any litigation between the parties hereto to enforce any provision of this Agreement . . . .” By its plain terms, the italicized phrase limits fees to litigation between the signatories, Mozart and its broker CPS. It does not appear that CPS was ever a party to either BTC’s action or Mozart’s cross-action. On the face of it, therefore, no part of this proceeding constituted “litigation between the parties hereto,” and no part of it fell within the fee clause. It follows that neither party could assert a right to fees under section 1717(a).

This view is supported by a sizable body of case law. In Sessions, supra, 84 Cal.App.4th 671 , a payroll management company alleged that a subcontractor had failed to reimburse it for wages it paid to the subcontractor’s employees. The company sued the general contractor on the theory that it was a third party beneficiary of the contract between the subcontractor and the general contractor, which contained a provision authorizing recovery of attorney fees by the prevailing party “ ‘[i]n the event it becomes necessary for either party to enforce the provisions of this Agreement....’” (Id. at p. 676, original italics.) The contract also contained recitals that it created “ ‘absolutely no enforceable rights’ ” and did not “ ‘create any rights of or confer any benefits upon’ ” third parties. (Ibid., italics omitted.) The trial court sustained the general contractor’s demurrer and then granted its motion for fees. (Id. at pp. 676-677.) The reviewing court noted that in Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124 , 128 [ 158 Cal.Rptr. 1 , 599 P.2d 83 ] (Reynolds), the Supreme Court had “interpreted section 1717 to ‘provide a reciprocal remedy for a nonsignatory defendant, sued on a contract as if he were a party to it, when a plaintiff would clearly be entitled to attorney’s fees should he prevail in enforcing the contractual obligation against the defendant.’ ” (Sessions, supra, 84 Cal.App.4th at p. 679.) In Reynolds the plaintiff had alleged that the nonsignatory defendants were alter egos of the corporations that executed the contracts and, on that basis, had sought attorney fees. Because the plaintiff would have been entitled to such an award had he

In Reynolds the court concluded that where a nonsignatory is sued on the ground that he stands in the shoes of a party to the contract, and where he would be liable for fees if that claim succeeded, he may recover fees under section 1717 if he defeats the claim. In Sessions the situation differed in two respects. First, the positions were reversed in that a nonsignatory had sued a signatory, claiming a right to recover fees; and second, the basis for the nonsignatory’s claims was that he was a third party beneficiary, i.e., not one who stood in the shoes of a contracting party, but one for whose benefit the contract was made. After the signatory defeated this claim, the court found its right to fees constrained by two principles. The first is that a prevailing signatory defendant is entitled to fees only if the losing nonsignatory plaintiff “ ‘would have been entitled to its fees if [he] had prevailed.’ ” (Sessions, supra, 84 Cal.App.4th at p. 679, quoting Real Property Services Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375 , 382 [ 30 Cal.Rptr.2d 536 ] (Real Property Services).) The second is that a nonsignatory seeking relief as a third party beneficiary may recover fees under a fee provision only if it appears that the contracting parties intended to extend such a right to one in his position. (Sessions, supra, 84 Cal.App.4th at pp. 680-681.) The contract there did not reflect such an intent; on the contrary, it expressly disclaimed any conferral of rights on third parties, and the fee provision was expressly limited to enforcement actions by “ ‘either party.' " (Id. at p. 681.) Accordingly the nonsignatory plaintiff would not have been entitled to fees had it prevailed, and the signatory defendant had no reciprocal right under section 1717. (Sessions, supra, 84 Cal.App.4th at p. 682.)

This approach has been embraced in a number of decisions and at least one leading treatise. (See California Wholesale Material Supply, Inc. v. Norm Wilson & Sons, Inc. (2002) 96 Cal.App.4th 598 , 608-609 [ 117 Cal.Rptr.2d 390 ] (California Wholesale); Leach v. Home Savings & Loan Assn. (1986) 185 Cal.App.3d 1295 , 1307 [ 230 Cal.Rptr. 553 ] (Leach,); Wegner et al., Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2007) H 17:154.28 to 17:154.37, pp. 17-111 to 17-112.) However, a competing body of decisions may be understood to hold, with various qualifications and reservations, that even where the contract asserted by the losing party would not have allowed him fees had he prevailed, his merely having claimed fees will entitle his prevailing opponent to them when he loses. (See Manier v. Anaheim Business Center Co. (1984) 161 Cal.App.3d 503 , 505-507 [ 207 Cal.Rptr. 508 ]; Jones v. Drain (1983) 149 Cal.App.3d 484 , 489 [ 196 Cal.Rptr. 827 ] (Jones).) This approach has been repeatedly criticized and rejected. In Leach, supra, 185 Cal.App.3d at page 1306, it was described as resting on an “equitable estoppel theory” that “was first announced in Pas v. Hill (1978) 87 Cal.App.3d 521 [ 151 Cal.Rptr. 98 ], a case that was criticized by legal writers

But the estoppel view, or its equivalent, has also been repeatedly, if perplexingly and sometimes equivocally, resurrected. In International Billing Services, Inc. v. Emigh (2000) 84 Cal.App.4th 1175 , 1189 [ 101 Cal.Rptr.2d 532 ] (International Billing), the court opined that rejecting estoppel while adhering to contract language “ma[de] little sense” because, as the court offered interrogatively, “Why would any party need to estop another party, where the provision actually—clearly—provided for fees?” We answer this question with one of our own: Why would a court predicate a holding, let alone a rule of law, on a party’s “need[s]?” As the court there acknowledged, equitable estoppel generally “entails detrimental reliance” by one party on the words or conduct of the other. (Id. at p. 1190.) Merely praying for relief to which one is not entitled cannot ordinarily engender either reliance or detriment. Because an equitable estoppel cannot normally arise from such conduct, the court justified its rejection of Leach and similar cases on “ ‘[¡judicial estoppel,’ ” which it defined no more clearly than “ ‘play[ing] fast and loose with the court.’ ” (International Billing, supra, 84 Cal.App.4th at p. 1191, quoting Schulze v. Schulze (1953) 121 Cal.App.2d 75 , 83 [ 262 P.2d 646 ].) But all the offending party had done there was plead for attorney fees to which it was not entitled, and then, after its opponent prevailed on the underlying issues, erect its lack of entitlement as a defense to a claim for fees. This was hardly the kind of “ ‘ “fraud on the court” ’ ” to which the doctrine of judical estoppel is directed. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995 , 1017 [ 79 Cal.Rptr.2d 544 ], quoting Ryan Operations G.P. v. Santiam-Midwest Lumber Co. (3d Cir. 1996) 81 F.3d 355 , 363; see Gottlieb v. Kest (2006) 141 Cal.App.4th 110 , 131 [ 46 Cal.Rptr.3d 7 ].) The court also found the losing party’s attempt to avoid fees “unfair” because it would permit a pleader to “threaten a litigant with the prospect of an adverse attorney fees award and avoid the same fate if unsuccessful.” (International Billing, supra, 84 Cal.App.4th at p. 1191.) But this happens every time a party prays for relief to which he is ultimately held not to be entitled. Thus it might be said with equal justice that a plaintiff who prays for $100,000 in damages to which he was not entitled acted “unfair[ly]” by “threaten[ing]” his opponent with the prospect of an adverse award. Yet no one would suggest that this entitles the defendant to a judgment for $100,000.

We conclude that BTC could not have recovered its fees had it prevailed on its claims. Therefore Mozart had no reciprocal right to fees under section 1717.

In t

he later of its two notices of appeal, Mozart expressed an intention to appeal from the order denying its motion to vacate the judgment of dismissal on its cross-complaint. However, while that order is mentioned at several points in Mozart’s opening brief, no separate argument and no distinct ground of reversal are directed to it. BTC points out this omission in its brief and asserts that Mozart has thus “waived” any objection to that order. It goes on, however, to argue that the order was correct because of procedural defects in the motion. Mozart takes issue with the latter argument but does not address the effect of its own failure to argue the point in its opening brief. We agree that the failure to proffer argument in support of this severable portion of the appeal constitutes an abandonment of it. In any event we detect no error in the order denying the motion to vacate. The premise of the motion appears to have been that local real estate practice obligated BTC to continue acting as an agent in the transaction until Handspring took possession of the premises or began paying rent. For reasons stated at length in connection with the order sustaining the demurrer, acceptance of this premise would not have warranted overruling BTC’s demurrer to the cross-complaint.

As noted above, BTC has explicitly made its cross-appeal conditional upon our sustaining some part of Mozart’s appeal. Since we have rejected that appeal in its entirety, we view BTC’s statements on this point as an abandonment of the cross-appeal, which we will therefore dismiss.

The judgment is affirmed. The order denying attorney fees is affirmed. The appeal from the order denying the motion to vacate is dismissed. The cross-appeal is dismissed.

Respondents and cross-appellants shall recover their costs on appeal.

Premo, J., and Elia, J., concurred.