Pederson v. Kennedy

Opinion

BARRY-DEAL, J.

Defendant-appellant, Bruce Kennedy, individually and doing business as Summit Properties, appeals from the portion of the judgment which awards plaintiff-respondent attorneys’ fees in the sum of $17,500 as compensatory damages.

The sole issue on appeal is a legal one: Does Civil Code section 3333

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authorize attorneys’ fees as an element of compensatory damages awarded in a judgment against a fiduciary based upon a finding of fraud? Appellant contends that Code of Civil Procedure section 1021

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precludes such an award. We agree.

[978]

The Facts

The parties have filed an agreed statement setting forth only the facts pertinent to this appeal. Respondent, the purchaser of improved real property in Los Gatos, filed an amended complaint seeking damages for negligence, negligent misrepresentation, intentional misrepresentation and concealment, and breach of fiduciary duty against appellant, the real estate broker, and others. None of the written documents pertaining to the real estate transaction contained an attorney’s fee clause. In prosecuting her action against appellant, respondent incurred reasonable attorneys’ fees in the amount of $17,500.

The issue of respondent’s claim for fees as part of her compensatory damages was reserved for court trial after a resolution of the other issues by jury. The jury returned a verdict for damages against the sellers and appellant, jointly and severally, for $10,466 for fraud, a verdict for damages against the contractor for $15,000 for negligence, and a verdict against appellant for $2,500 in addition to the joint and several award. The trial court determined that fees were a recoverable item of compensatory damages.

Appellant challenges only the award of attorneys’ fees. The other defendants are not parties to this appeal.

Discussion

The parties agree that if the defrauding party stands in a fiduciary relationship to the victim, the measure of damages governing compensation for torts generally will apply, rather than the more restricted measure set forth in Civil Code section 3343 relating to fraud in the sale of real property where the tortfeasor is not a fiduciary. (See