Milman

project, Mark and Valeria Milman and Leonid and Katrin Stolyarov brought an action against Josif Dubrovsky, Victor and Helen Shukhat, and others, alleging breach of contract, fraud, constructive fraud, and breach of covenant of good faith and fair dealing. Insofar as it related to the Shukhats, the plaintiffs sought declaratory relief concerning the rights of the parties under two notes and two deeds of trust which, on their face, appeared to have been signed by the Shukhats. During discovery, however, it was established that the Shukhats’ signatures had been forged on the documents by Dubrovsky’s employee, Vladimir Shapiro. Based on that fact, the Shukhats successfully moved for summary judgment. The Shukhats’ motion for attorney fees pursuant to Civil Code section 1717 was denied.

The Shukhats appeal from the order denying attorney fees. We reverse.

I. Facts

Josif Dubrovsky, a real estate broker for S & J Realty Investments, was involved a real estate development project in the Strawberry Point area of Marin County, which entailed the development of four lots and the building and selling of four luxury homes. Vladimir Shapiro was employed as a licensed salesperson by…