Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County. Teresa Sanchez-Gordon, Judge. Los Angeles County Super. Ct. No. BC23257
Law Offices of Roger C. Hsu and Vincent Chan for Cross-Complainants and Appellants.
Wasserman, Comden & Casselman, Mark S. Gottlieb and I. Donald Weissman for Cross-Defendant and Respondent.
ARMSTRONG, Acting P. J.
Cross-complainants Po-Tsung Tseng, Chun-Lang Tseng, Chun-Hsiung Tseng and Chun-Yang Tseng ("appellants") appeal the award of attorney fees to cross-defendant W&J Fox Realty ("Fox") following the entry of judgment in the latter's favor. Appellants maintain that the listing agreement entered into between the parties (the "Listing Agreement") is void because the fictitious business name "Fox Industrial Realty" did not appear on Fox's Department of Real Estate ("DRE") broker's license at the time Fox entered into the Listing Agreement. We find no merit to the argument, and so affirm the award of attorney fees.
Both parties request that we take judicial notice of certain matters not judicially noticed by the trial court. We deny the request.
As we recount in greater detail in the appeal of the underlying lawsuit (B192857), in August 2004, appellants retained Frank Kim, a licensed salesperson employed by Fox, to market and sell certain commercial real property located in San Pedro (the "Property").
In 1980, Fox first obtained a real estate broker's license through individual licensee William Fox. Fox was continuously licensed as a real estate broker during all times relevant to this transaction.
At some point in time, Fox added "Fox Industrial Realty" as a dba to its broker's license. However, it did not renew that dba, so that, as of August 2004 when the parties entered into the Listing Agreement, the dba "Fox Industrial Realty" did not appear on Fox's broker's license.
In their opening brief on appeal, appellants recite the history of Fox's registration of the fictitious business name "Fox Industrial Realty" with the Los Angeles County's Recorder's Office. In their reply brief, however, they caution that this appeal is concerned only with the registration of the fictitious name with the DRE. We therefore ignore all references to the fictitious business name statements, either filed or required to be filed, with the County Recorder's Office.
Appellants, represented by broker Fox, accepted the offer of Elias Real Estate LLC ("Elias") to purchase the Property. Appellants immediately disavowed the deal, and Elias sued appellants for specific performance of the real estate purchase agreement, which the trial court ordered.
Appellants cross-complained against Fox for broker negligence and indemnity. The trial court entered judgment in favor of Fox, and granted Fox's request for attorney fees based upon an attorney fee provision in the Listing Agreement. Appellants timely appealed that order.
CONTENTIONS
Appellants contend on appeal "that because Fox Industrial Realty was not registered as a dba with the Department of Real Estate at the time of the contract, that illegal contract's attorney's fees provision was and is unenforceable. Consequently, appellants submit that the attorney's fees award constitutes reversible error."
DISCUSSION
Appellants begin by noting that any person engaged in the real estate brokerage business must first obtain a real estate license from the DRE. (Bus. & Prof. Code, § 10130.) It has long been held that this licensing requirement precludes an unlicensed person from suing to enforce the provisions of a listing agreement. (See, e.g., Rench v. Harris (1947) 79 Cal.App.2d 125; Weber v. Tonini (1957) 151 Cal.App.2d 168.)
Appellants next cite DRE regulations which require a DRE licensee to refrain from using "a fictitious name in the conduct of any activity for which a license is required under the Real Estate Law unless the licensee is the holder of a license bearing the fictitious name." (10 Cal. Code Reg., § 2731, subd. (a).) Appellants then equate using a fictitious name not on file with the DRE with conducting a real estate brokerage business without a license, concluding that both the former and the latter are subject to criminal prosecution pursuant to Business and Professions Code section 10139. Additionally, they conclude that any agreement entered into by a licensed broker using an unregistered fictitious business name is "unlawful and void," citing Haas v. Greenwald (1925) 196 Cal. 236; Fellom v. Adams (1969) 274 Cal.App.2d 855; Estate of Prieto (1966) 243 Cal.App.2d 79; and Holm v. Bramwell (1937) 20 Cal.App.2d 332. These conclusions are not warranted.
Further statutory references are to this Code unless otherwise indicated.
Section 10139 provides: "Any person acting as a real estate broker or real estate salesperson without a license or who advertises using words indicating that he or she is a real estate broker without being so licensed shall be guilty of a public offense punishable by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment in the county jail for a term not to exceed six months, or by both fine and imprisonment; or if a corporation, be punished by a fine not exceeding fifty thousand dollars ($50,000)." However, Mr. Kim was a licensed real estate salesperson, and Fox was a licensed real estate broker, at all times relevant to this transaction. Thus section 10139 has no application to the facts of this case.
Moreover, none of the cases upon which appellants rely supports their conclusion that the Listing Agreement is "unlawful and void." Rather, they all concerned a person alleged to have acted as a real estate broker without being licensed by the DRE. Indeed, the last cited case, Holm v. Bramwell, supra, does not involve a real property transaction at all, but features a mechanic's lien based on services rendered by an unlicensed subcontractor. (20 Cal.App.2d at pp. 333-334.) In short, appellants cite no case which supports their assertion that the failure to add a fictitious business name to one's DRE license results in the voiding of a listing agreement entered into by a duly licensed real estate broker.
To the contrary, the case law supports Fox's position on this appeal. Thus, for example, in Schantz v. Ellsworth (1971) 19 Cal.App.3d 289, the court held that "Business and Professions Code section 10136 does not preclude maintenance of action for compensation by one who holds a valid real estate broker's license but who has failed to obtain a branch office license or a license for the use of a fictitious name." (Id. at p. 293; accord Heinfelt v. Arth (1933) 135 Cal.App. 445, 446-447 [fact that listing agreement named as broker an unregistered fictitious name rather than the individual licensed brokers did not invalidate agreement].) As the Schantz court noted, "The purpose of the licensing requirement is to protect the public from the perils incident to dealing with incompetent or untrustworthy real estate practitioners. The statutory purpose, insuring the competency and trustworthiness of real estate practitioners, is satisfied by proof of plaintiff's valid real estate broker's license. It was in connection with the application for and issuance of that license that his competency and trustworthiness were examined. Under the statutory scheme, licenses for branch offices and for the use of fictitious names appear to be granted routinely to one who already holds a valid real estate broker's license without further proof of competency or trustworthiness." (Id. at pp. 292-293, internal citations omitted.) Consequently, to adopt appellants' argument "would transform the statute into an 'unwarranted shield for the avoidance of a just obligation.'" (Id. at p. 292, internal citations omitted.) Thus, while failure to comply with the regulations governing its real estate license may subject Fox to disciplinary action, it will not result in a windfall to appellants.
In sum, we agree with the trial court that Fox is entitled to an award of attorney fees in the successful defense of appellants' cross-complaint, pursuant to the terms of the Listing Agreement.
DISPOSITION
The judgment is affirmed. Respondent to recover costs on appeal.
We concur: MOSK, J., KRIEGLER, J.