CALIFORNIA ATTORNEY'S FEES

Appeal Sanctions, Sanctions, Settlement: No Abuse Of Discretion In Trial Court’s Order Sanctioning Plaintiffs $10,000 For Failure To Execute Settlement Agreement

The Record Reflected That The Parties Agreed In Open Court To Put The Oral Settlement Agreement In Writing And That Deadlines For Payment Of Settlement Funds Would Be Triggered By Full Execution Of The Written Settlement Agreement.

            In Tricoast Builders v. Frederick, Case No. B307825 (2d Dist., Div. 6 October 18, 2021) (unpublished), homeowner defendants/cross-complainants in a construction defect case moved ex parte for an order to show cause why the oral settlement agreement, which had been reached months earlier in open court during a mandatory settlement conference and subsequently reduced to writing, had not been signed by plaintiffs/cross-defendants builder and its principal (who also served as one of builder’s attorneys) and for $25,627.51 in monetary sanctions. At a continued hearing on homeowner’s motion, the trial court awarded $10,000 in Code Civ. Proc., § 128.5 sanctions against builder and its principal, jointly and severally, instructed the court clerk to execute the settlement agreement on behalf of builder and its principal, and ordered that the sanctions be paid from the portion of settlement that was to be paid to builder. 

            The 2/6 DCA rejected both arguments advanced by builder and its principal on appeal – that the trial court lacked jurisdiction to enforce the settlement agreement, and that the oral settlement agreement was not contingent upon the preparation of a written agreement.  First, although the MSC judge did not retain jurisdiction under Code Civ. Proc., § 664.6 because one of the parties to the case was not present at the MSC, that party subsequently signed the written settlement agreement  thereby making the settlement agreement enforceable against it – along with the other parties who were present at the MSC. Second, the record showed that the parties agreed that a written agreement would be prepared, that the written agreement was consistent with the oral settlement agreement’s terms made in open court, that the deadlines for making the settlement payments would be triggered by the date the written settlement agreement was fully executed, and that builder/its principal did not communicate with homeowners until after the OSC and motion for sanctions was filed. The panel found no abuse of discretion in the trial court’s imposition of sanctions given that builder’s and its principal’s unreasonable delay caused homeowners to incur the expense of applying for the OSC and obtaining a court order authorizing release of the $420,000 in settlement funds owed to them.

            Although finding builder’s/its principal’s arguments on appeal to be unsupported, the 2/6 DCA did not find their appeal to be so void of merit so as to justify granting homeowners’ request for $5,313 in appeal sanctions against builder/its principal.

Discovery, Sanctions: 1/3 DCA Affirms $7,550 Sanctions Award Against Defendant And Her Attorney

Unpublished Opinion Has Good Discussion Of Discovery Sanctions Burdens And Need To Reasonably Engage In Meet And Confer Discovery Sessions. 

            Price-Simms, LLC v. Gallegos (Fry), Case No. A160893 (1^st Dist. Div. 1 Oct. 6, 2021) (unpublished) is a situation where the appellate court affirmed a $7,550 discovery sanctions against defendant and her attorney (the attorney was representing her pro bono).  The factual backdrop was an embezzlement case where bank documents were sought through subpoenas, but with the defense not willing to meaningfully engage in meet and confer sessions by which plaintiffs offered to agree to a stipulated protective order regarding financial information.  The main plaintiff successfully resisted a defense protective order motion and sought $11,875 in sanctions.  The initial tentative was to issue $9,437.50 in sanctions, but the lower court lowered that to $7,550, awarded jointly and severally against defendant and her attorney (but with the reduction based on the attorney providing pro bono service and having his practice dip during the pandemic).  Here are some nice takeaways with respect to discovery sanctions:

• • Parties opposing a discovery sanctions request has the burden of proof in two situations:  where the opposition claims substantial justification for its actions and where an attorney resisting sanctions must demonstrate that he or she advised the client against the sanctionable conduct.  (Corns v. Miller, 181 Cal.App.3d 195, 200-201 (1986).)
  • Sanctions are mandatory where a party or attorney fail reasonably and in good faith to confer about a discovery dispute.   (Code Civ. Proc., § 2023.020.)
  • A party seeking financial discovery frequently can mitigate an opponent’s privacy concerns by offering to accept a protective order.  (Pioneer Electronics (USA), Inc. v. Superior Court, 40 Cal.4^th 360, 371 (2007).)
  • Nothing in the discovery statutes suggest that a party in a discovery dispute is entitled to “one free pass” before monetary sanctions can be imposed.  (Parker v. Wolters Kluwer United States, Inc., 149 Cal.App.4^th 285, 294 (2007).)

Discovery, Sanctions: Third District Reverses Deposition Discovery Sanctions Against Attorney Because Deposition Suspension Requirements Did Not Entail A Reasonableness Requirement

But Unique Facts, So Do Not Think You Can Suspend Without Repercussions.

            Because we have to report on cases as we come upon them, we will say that Mason v. YD Window, Inc., Case No. C091415 (3d Dist. Oct. 5, 2021) (unpublished) is a little hard to decipher, but we will try.  In essence, a plaintiff’s attorney was hit with discovery sanctions by a discovery referee of $9,087.55 for suspending a deposition unreasonably.  There was some evidence that the defense was being crazy.  The attorney appealed, with the Third District reversing.  It found that there was no reasonableness requirement, at the time, for suspension for a deposition under Code of Civil Procedure section 2025.460(c).  The appellate court concluded there was no reasonableness requirement, the law was unsettled, and there was some indication in the record that the other side was itself unreasonable.  There you go!

Appeal Sanctions, Discovery, Sanctions: Fifth District Denies Defendants’ Writ Petition Challenging The Trial Court’s Order To Produce Discovery Responses And Pay $13,680 In Sanctions.

Defendants’ Filing Of The Writ Petition Was Wholly Without Merit And, Under The Standards Set Forth In Flaherty, Was Frivolous And Filed Solely To Cause Delay – Warranting $6,965.00 In Sanctions Pursuant To California Rules of Court, Rule 8.492.

            After defendants failed to provide discovery responses for over three years, the trial court granted plaintiff’s motion to compel and sanctioned defendants and their attorneys a total of $13,680.00.  One month after their discovery responses were due, defendants filed a petition for writ of mandate challenging the discovery order and requesting production of discovery responses be stayed.

            The Fifth District was unimpressed in Pacifica Modesto v. Superior Court, Case No. F082869 (5^th Dist., October 4, 2021) (unpublished) and denied the petition for writ of mandate – finding it to be wholly without merit. Additionally, under the two standards set forth in In re Marriage of Flaherty, 31 Cal.3d 637 (1982) [No. 9 of our Leading Cases], the panel found the writ petition was frivolous and had been filed solely to cause delay.  As such, the panel imposed $6,965.00 in appellate sanctions – pursuant to California Rules of Court, Rule 8.492, which authorizes a Court of Appeal to impose sanctions on its own motion against a party filing a frivolous petition or filing a petition solely to cause delay – jointly and severally against defendants and their counsel, representing the amount of attorneys’ fees plaintiff had incurred in defending against the writ petition.

Discovery, Sanctions: No Abuse Of Discretion In Trial Court’s Imposition Of $12,250 In Sanctions Against Plaintiff For Abuse Of The Discovery Process.

Plaintiff Was Not Substantially Justified In Initially Providing Objection-Only Responses And Failed To Meet His Burden In Showing An Abuse Of Discretion In The Trial Court’s Finding That Defendants’ Sufficiently Engaged In Meet And Confer Efforts.

            In Kramer v. Dale, Case No. D077610 (4^th Dist., Div. 1 September 24, 2021) (unpublished), the 4/1 DCA found no abuse of discretion and affirmed a trial court’s order imposing $12,250 in sanctions against a plaintiff who abused the discovery process by initially providing objection-only responses to all discovery requests propounded by defendants . 

            The panel found plaintiff’s argument that he was substantially justified in initially providing objection-only responses because he feared that providing substantive responses and producing documents would constitute a waiver of his claim for disqualification of defendants’ counsel to be unsupported by authority.  Additionally, plaintiff’s objections to the discovery requests made no mention of this fear concerning waiver of his claim – which claim was not made until the day plaintiff served his objection-only responses.  Next, the panel concluded that plaintiff failed to meet his burden to show that the trial court abused its discretion in determining that defendants adequately engaged in meet and confer efforts before filing their motion to compel.  Plaintiff’s argument that the factors identified in Obergon v. Superior Court, 67 Cal.App.4^th 424 (1998) , were mandatory elements for the trial court to consider in making such a determination went nowhere – with the panel finding that plaintiff “gloss[ed] over the deferential abuse of discretion standard of review [it] must apply here.”  Rather the panel found that Obergon made clear that “[t]he level of effort at informal resolution which satisfies the ‘reasonable and good faith attempt’ standard depends upon the circumstances,” and that the trial court was to use its “broad powers and responsibilities to determine what measures and procedures are appropriate” in the circumstances presented. (Id. at 430.)

Sanctions: Pro-Trump Lawyers Sanctioned For Speculation And “Guesswork” Affidavit Filed In Election Fraud Suit, With Amount To Be Set In A Future Hearing

Opinion Has Some Eloquent Reasoning On Fiduciary Duties/Officer Of The Court Functions By Lawyers.

            We do not like to take political stances in this blog, and this post is no exception.  We have posted plenty of blogs, both pro and con, relating to court disputes involving former President Donald Trump. 

            However, U.S. District Judge Linda V. Parker of the U.S. District Court, Eastern District of Michigan, found that she had to sanction pro-Mr. Trump lawyers in an election suit which was based on speculation and “guesswork” affidavits.  Although the First Amendment does protect a large ambit of rights, it does not immunize lawyers from sanctions imposed by courts, which “are reserved for hearing legitimate causes of action.”  This 110-page decision is instructive reading for all litigators as far as reminding them of their “officer of the court” duties of lawyers when it comes to prosecuting and defending suits.

            BLOG FAVORITE OBSERVATION IN THE CASE—There was a reference to “kracken suits,” which refers to a sea monster in Scandinavian folklore that emerges from the sea to devour its enemies. 

Discovery, Sanctions: $17,427 In Sanctions Imposed In Connection With Second Special Interrogatory Objections Were Reversed As A Matter Of Law

The Second Special Interrogatories Were Duplicative Of First Special Interrogatories To Which No Motion To Compel Was Made, So The Lower Court Lacked Jurisdiction To Award Sanctions The Second Time Around.

            We post on this one to share a nifty older case for litigators embroiled in discovery battles to keep in their back pockets.

            What happened in Estate of Huang, Case No. B307671 (2d Dist., Div. 4 Aug. 17, 2021) (unpublished) is that a probate litigant served 723 special interrogatories—yes, you read right—to which no motion to compel was filed after some objections and responses were made.  Not to be deterred, the litigant served 54 special interrogatories in a second set discovery wave which, although smaller in number, were clones of prior special interrogatories in the first set.  The trial court felt shackled when facing some of the objections to the second set of special interrogatories which it deemed were unwarranted, awarding $17,427 in monetary sanctions against the objecting side.  However, the appellate court reversed all the sanctions based on Prof’l Career Colleges, Magna Inst. v. Superior Court, 207 Cal.App.3d 490, 492-493 (1989).  That case established that a trial judge is without jurisdiction to grant sanctions on a second discovery wave which is a “clone” of a first wave for which the time to bring a motion to compel has passed. 

            In a telling footnote, the 2/4 DCA panel also indicated the 723 special interrogatories were excessive and violated the L.A. County Superior Court Civility Guidelines (Local Rules Appendix 3.A(g)(1)), which states that interrogatories are to be used sparingly and not as harassment instruments. 

Appealability, Appeal Sanctions, Discovery, Sanctions: $4,900 In Monetary Discovery Sanctions Affirmed

However, Frivolous Appeal Sanctions Denied For Failure To Show The Appeal Was Brought For An Improper Motive.

            In Lazo v. Keller, Case No. G058765 (4^th Dist., Div. 3 July 29, 2021) (unpublished), two plaintiffs separately were ordered by the lower court to pay $4,900 in monetary discovery sanctions to defendant.  Plaintiffs’ appeal was dismissed in a 3-0 opinion authored by Justice Fybel.  The reason was that the sanctions order did not exceed $5,000 such that it was not appealable, requiring a dismissal of the appeal.  (Code Civ. Proc., § 904.1(a)(12).)  Defendant moved for frivolous appeal sanctions, but that request was denied because there was no evidence it was brought for an improper motive.  (In re Marriage of Flaherty, 31 Cal.3d 637, 650 (1982) [our Leading Case No. 9].)

Discovery, Sanctions: No Abuse Of Discretion In Trial Court’s Denial Of Plaintiffs’ Motion For $17,074 In Monetary Sanctions Against NonParty For Failure To Comply With Trial Court’s Discovery Order And For Order Requiring Further Production

The Trial Court’s Finding That Nonparty’s Amended Responses And Production Were Adequate And In Compliance With Its Discovery Order In Ruling On Plaintiffs’ Request For A Contempt Sanction Against Nonparty Sealed The Results.

            Husband and wife plaintiffs – suing over two loans, one for $11,327 and one for $427,000, they had made to defendants – filed a motion to compel against nonparty Wells Fargo when they were dissatisfied with Wells’ responses to a deposition subpoena for personal appearance and production of documents.  The trial court issued an order directing Wells to provide supplemental responses within 30 days, and Wells served an amended response to plaintiffs’ subpoena, along with additional responsive documents and a privilege log indicating that specified documents were withheld as attorney-client communications.  Still dissatisfied, plaintiffs filed another motion – seeking monetary sanctions of $17,074 against both Wells and its attorney for discovery misuse, a contempt sanction, and an order requiring Wells to produce unredacted documents responsive to the subpoena – alleging Wells had not complied with the trial court’s order as the order did not permit Wells to make objections or redactions.  The trial court found that Wells had complied with its order, which did not explicitly prevent Wells from producing redacted documents or a privilege log, by producing supplemental responses that appeared to be adequate, and denied plaintiffs’ motion.

            The 2/3 DCA affirmed these results in Dutton v. Marinescu, Case No. B305851 (2d Dist., Div. 3 June 22, 2021) (unpublished) – concluding there was no abuse of discretion with regard to the trial court’s order refusing plaintiffs’ requests for monetary sanctions and for an order requiring further production given the trial court’s finding that Wells had complied with its order.  As to the trial court’s order refusing to hold Wells in contempt, the panel dismissed given that such an order is not appealable as the only method of obtaining review is a petition for extraordinary writ.  (Wanke, Industrial, Commercial, Residential, Inc. v. Keck, 209 Cal.App.4th 1151, 1162, fn. 11 (2012).)

Sanctions, Section 1717, Special Fee Shifting Statutes: 2/7 DCA Reverses Sanctions Imposed Against Builder Defendants For Violation Of Stay Order Regarding A Development Project Of Four Homes In The Coastal Zone Of Venice.

Stay Order Was Vague And Did Not Provide Builder With Information As To How It Was Supposed To Act Or What Conduct Would Violate The Stay.

            In Rudisill v. California Coastal Commission, Case No. B299331 (2d Dist., Div. 7 June 22, 2021) (unpublished), two residents who opposed a development project consisting of four homes being constructed in the coastal zone of Venice – and which had been permitted by the City of Los Angeles and the California Coastal Commission – filed a petition for writ of mandate.  The trial court granted the petition, directed the Commission to set aside the permit, and stayed the project – a judgment reversed on appeal.  However, while the appeal was pending, builder performed certain work and obtained certificates of occupancy from the City of Los Angeles in its steps to enable residents to occupy the homes, which prompted plaintiffs to move for sanctions under Code Civ. Proc. § 177.5 for violation of the stay order.

            The trial court granted plaintiffs’ request and sanctioned builder defendants $1,500 each, and ordered City to revoke the certificates of occupancy – although City was no longer a party to the case as plaintiff had voluntarily dismissed City prior to the trial court’s judgment on the petition.  Additionally, the trial court denied plaintiffs’ motion seeking over $141,000 in attorneys’ fees under Code Civ. Proc. § 575.2 (statute governing failure to comply with local rules) and Code Civ. Proc. §1021.5 (California’s Private Attorney General Doctrine) – finding plaintiffs were not entitled under § 575.2 because builder had not violated a local rule, nor under §1021.5 because builder’s violations were “minor” and not “serious in nature” and the sanctions request did not concern an important right affecting public interest or confer a significant public benefit.  Everyone appealed.

            As to the trial court’s order that City revoke the occupancy certificates, the 2/7 DCA reversed – agreeing with City that the trial court lacked jurisdiction to issue the order because City was not a party to the case and not a representative of builder.  The panel also reversed the imposed sanctions under an abuse of discretion standard.  It found that builder’s conduct was excusable, and builder had not violated the stay by applying for permits or performing other minor corrective work at the already completed project, because the scope of the stay in the trial court’s original order was vague – not providing builder with how it was supposed to act or what conduct would violate the stay.  Finally, because the appellate panel concluded plaintiffs had failed to prove builder violated the stay order, and in light of the reversal of sanctions imposed against builder defendants, denial of plaintiffs’ fees request was affirmed.

Deadlines, Discovery, Sanctions: Class Action Debt Collector Defendant Unsuccessfully Argues On Appeal That Renewed Discovery Motion Was Untimely And 1/3 DCA Affirms Monetary Sanctions Of $8,400

The Trial Court Declared The Discovery Motion Moot When It Granted Summary Judgment To Plaintiff, But Motion Was Renewed After Remand, And Parties Were Returned To Same Positions They Would Have Been In If Plaintiff Had Defeated Summary Judgment In The First Instance.

            In Timlick v. National Enterprise Systems, Case No. A160110 (1^st Dist., Div. 3 June 22, 2021) (unpublished), class action defendant, being sued for violating the minimum type-size requirements in its consumer collection letters, obtained summary judgment in its favor for having cured the violation as to plaintiff.  At the time, plaintiff’s pending motion to compel further responses and for sanctions was declared moot in light of the summary judgment.  After successfully appealing the summary judgment on behalf of the class (but not on behalf of herself), plaintiff renewed her discovery motion, which the trial court granted in substantial part in addition to awarding $8,400 of the requested $11,115 in requested monetary sanctions against defendant. 

            Defendant appealed – arguing that the discovery motion was untimely as the 45-day deadline to compel further responses had passed by the time plaintiff renewed her discovery motion.  Not so, said the 1/3 DCA.  Plaintiff’s discovery motion was timely filed prior to the trial court’s grant of the summary judgment, and the trial court had not denied the discovery motion when it declared the motion to be moot and “dropped without prejudice.”  Rather, the trial court’s grant of the summary judgment created a loss of ability for the trial court to grant the relief plaintiff sought.  However, reversal of the summary judgment left the parties “in a position no different from that they would have occupied if they had simply defeated the defendants’ motion . . . in the trial court.” (Urbaniak v. Newton, 19 Cal.App.4^th 1837, 1844 (1993).)  As such, the trial court’s jurisdiction to rule on plaintiff’s motion was restored and it had the discretion to order precertification discovery – notwithstanding any adverse rulings as to plaintiff individually.  Additionally, the panel found no abuse of discretion in the award of sanctions – especially given the trial court reduced the amount requested to reflect defendant’s partial success. 

Family Law, Probate, Sanctions: Lower Court Properly Sanctioned Putative Spouse’s Attorney $3,617.50 Under CCP § 128.7 For Filing A Frivolous Putative Spouse Petition

Putative Spouse Failed To Show She Had A Legal Marriage With The Respondent Under Indian Law, Based On A Res Judicata Finding In A Prior Conservatorship Petition Proceeding.

            The problem for putative spouse and her attorney in Nijjar v. Nijjar, Case No. F078265 (5^th Dist. June 10, 2021) (unpublished) is that they earlier lost a conservatorship position by which she claimed to be the lawful spouse of the proposed conservatee under Indian law.  In the earlier proceeding, there were various inconsistencies in her and other witnesses’ testimony such that the trial judge found no competent evidence that a legal marriage took place between the two.  Losing putative conservator then filed a putative spouse petition, which triggered respondent (the winning putative conservatee in the previous proceeding) to send a Code of Civil Procedure section 128.7 motion.  The safe harbor period expired such that respondent filed the 128.7 motion, including a request for sanctions against petitioner’s attorney, and a request for dismissal of the putative spouse petition.  The lower court granted the 128.7 motion, dismissed the petition, and imposed monetary sanctions on petitioner’s attorney in the amount of $3,617.50.

            Even though no appeal was taken from the judgment of dismissal (given that the sanctions were below the $5,000 appealability threshold of CCP § 904(a)(11), (12)), the Fifth District went ahead as treating the appeal from the judgment of dismissal given that everyone briefed the merits and respondent did not move to dismiss the appeal.  Also, even though better practice was for the aggrieved attorney to appeal, notices of appeal are to be liberally construed to include the attorney who filed the appeal on behalf of a party.

            That brought the appellate court to the merits of the 128.7 sanctions order.  The principal problem was that the “no legal marriage” finding in the conservatorship proceeding had res judicata effect in the putative spouse petition proceeding.  But there was more.  Petitioner’s good faith belief in the validity of the marriage was not supported and, even under the “good faith” test of Family Code section 377.60(b), the evidence was not there, especially given the findings in the conservatorship proceeding.  With respect to showing improper purpose prong of section 128.7, documents showed that petitioner had a history of filing repetitive pleadings to reargue positions she had lost earlier.  The sanctions order was affirmed.

BLOG OBSERVATION—This unpublished opinion also had some instructive points on what should and should not be included in an appellant’s appendix, not to mention some formatting requirements.  (We would remind readers that e-filing is now mandatory in the DCAs, and you have to benchmark items in the appendix—which requires extra work and attention.)

Sanctions, SLAPP: $8,734.24 Mandatory SLAPP Fee Award Affirmed, But The $16,178.35 Sanctions Award Against Plaintiff And His Trial Attorney Reversed

Safe Harbor Provision Was Not Complied With.

            Despite the conclusion that plaintiff’s complaint was totally frivolous in nature (agreeing with a lower court’s assessment to the same effect), a Second District panel reversed a $16,178.35 sanctions award against plaintiff and his trial attorney, under CCP §§ 128.5 and 128.7, based on not satisfying the safe harbor provision governing these sanctions provisions.

            Forde v. Friedland, Case No. B299966 (2d Dist., Div. 4 May 19, 2021) (unpublished) involved a situation where a plaintiff’s action was SLAPP-ed and the defense was awarded mandatory fees of $8,734.24 (a fee award not challenged on appeal as far as amount).  The SLAPP award was upheld on appeal.  However, even though the defense won an ex parte application shortening time to file the SLAPP and sanctions motions, the trial judge never shortened the safe harbor period, setting the two sets of motions on the same date.  The lower court then sanctioned plaintiff and his attorneys $16,178.35 under sections 128.5 and 128.7.  The mandatory fees award was affirmed, but the sanctions awards were reversed.

            The problem here is that the defense did not give plaintiff or his attorney the safe harbor period, not even serving an unfiled sanctions motion but simply going on a “no day” notice for purposes of imposing sanctions—the appellate panel did so reluctantly because it did conclude that the action was frivolous in nature.  However, the importance of the safe harbor provision prevailed, as it has in many other sanctions appeals in the past few years.

Discovery, Sanctions: $4,423 Discovery Sanctions Affirmed Against Plaintiff And Its Attorney On Appeal

Reduced Sanctions Were Awarded, But Excuses For The Losing Side Were Not Credited.

            We would say that Heesung Investment, Inc. v. Karle, Case No. E074320 (4^th Dist., Div. 2 May 11, 2021) (unpublished) indicates that, like many other appeals, credibility reigns king.

            This one involved reduced discovery sanctions of $4,423 against a litigant and its counsel for failing to respond to four discovery requests.   The other side had requested $9,546 in discovery sanctions, but the lower court found this requested amount to be excessive so as to lead to the reduced amount as the ultimate award.

            The 4/2 DCA found the reduced sanctions order was no abuse of discretion.   A failure to respond to discovery, unless there is substantial justification, is one which automatically leads to sanctions.  No credible excuses were offered.   In fact, the attorney who was sanctioned as well promised responses, but did not deliver.  Discovery sanctions order affirmed.  (We always wonder why an appeal would be made from this type of lower monetary award, but one cannot speculate why.)

            This does give us a chance to inform practicing attorneys about CCP § 2023.50, which does allow a court to report to the State Bar document discovery sanctions above $250 in specified circumstances.   Just letting you all know ….

Deadlines, Sanctions: $1,500 In Code Civ. Proc. § 2023.030 Sanctions Issued Against Nonparty, For Failure To Comply With A Deposition Subpoena For Production Of Business Records, Reversed On Appeal

The Deposition Subpoena And Motion To Compel Compliance Were Not Properly Served On Nonparty, Plus The Motion To Compel and For Sanctions Was Untimely.

            In Yousif v. Alpine Orthopedic Medical Group, Case No. F078734 (5^th Dist., May 7, 2021) (unpublished), certain defendants in a malpractice action sought discovery from a nonparty doctor through a deposition subpoena for production of business records. (Code Civ. Proc. § 2020.010(a)-(b).)  Later, when defendants sought a motion to compel and sanctions, the trial court issued $1,500 in § 2023.030 sanctions against nonparty doctor for not fully complying with the deposition subpoena.

            Nonparty doctor appealed, and the Fifth District reversed – finding abuse of discretion.

            Neither the deposition subpoena, nor the motion to compel, had been properly served on nonparty doctor, and a subpoena for production of business records may not be enforced against an individual who was not personally served with the subpoena, nor against one who is not the custodian of records or a person qualified to make the attestation required by Evidence Code § 1561.

            The proof of service for the deposition subpoena indicated it had been personally served on “ANNA B,” with no evidence that she was an “officer, director, custodian of records, or . . . agent or employee authorized . . . to accept service of a subpoena.” ((§ 2020.220(b)(2).)   In fact, defendants did not dispute a declaration by Anna B., which stated that she worked in the front office, had the deposition subpoena thrown at her face while she was working, and that the custodian of records had not been served with the subpoena.  The motion to compel was also served on Anna B., instead of being personally served on doctor nonparty as required pursuant to Cal. Rules of Court, rule 3.1346.  As such, defendants were not entitled to sanctions as they failed to demonstrate a misuse of the discovery process warranting sanctions because they failed to prove that the subpoena was personally served on nonparty doctor or the custodian of his records.

            Additionally, the motion to compel and for sanctions was untimely pursuant to the mandatory 60-day deadline set forth in § 2025.480(b) and should have been denied by the trial court.

Requests For Admission, Sanctions: 2/8 DCA Reverses And Remands Trial Court’s Denial Of Costs Of Proof Sanctions To Plaintiff Association And Amends $75,190.98 Judgment Entered In Plaintiff’s Favor To Add Over $7.8 Million In Damages

Trial Court Was Required To Award Plaintiff Its Reasonable Fees And Costs Incurred In Proving Matters Defendants Failed To Admit Without Reasonable Grounds To Do So, And Plaintiff Association Had Standing To Seek Damages On Behalf Of Its Members.

            In Assn. for L.A. Deputy Sheriffs v. Macias, Case No. B295086 (2d Dist., Div. 8 April 30, 2021) (published), plaintiff Association for Los Angeles Deputy Sheriffs (a nonprofit mutual benefit corporation that represents LASD and the district attorney’s bureau of investigations employees in contract negotiations) sued two of its board members for breaches of fiduciary duty, fraud, constructive fraud, conversion, and declaratory relief.  The breaches occurred after the board’s director and president had been removed due to lack of eligibility to be director under the Association’s bylaws.  He and the board’s vice president fought the removal by causing Association great disruption in its management by creating confusion and informing staff that Macias was still president, conducting board meetings without the required quorum, obtaining a $100,000 cashier’s check without approval from an Association account to retain counsel to fight the removal, and so on.

            After four years of litigation and a 7-day trial, the trial court entered judgment for $75,190.98, plus postjudgment interest, in Association’s favor, but sustained defendants’ last-minute objection to Association’s requested $7.8 million in damages on behalf of its members for lost salary increases – concluding Association had standing to sue only if it brought a class action.  On appeal, the 2/8 DCA concluded the class action analysis was an improper test for associational standing as California follows the federal rule on an association’s standing to sue on behalf of its members. “[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” (Hunt v. Washington State Apple Advertising Com., 432 U.S. 333, 343 (1977).)  With substantial evidence supporting both causation and damages findings that Association members suffered $7,813,833 in lost salary increases due to defendants’ actions, the panel amended the judgment to add that amount.

            The trial court also denied Association’s postjudgment Code Civ. Proc. § 2033.420 motion for costs of proof sanctions, related to defendants’ failure to admit the truth of basic matters in their requests for admission responses, based on the following grounds: (1) lack of jurisdiction due to the parties’ pending appeals; (2) some denials were not unequivocal and Association had not identified the specific fees/costs incurred to prove those that were; and (3) defendants had reasonable grounds to believe they would prevail on the conversion claim and the breach of fiduciary duty claim as to the appointment of a member to the board without a quorum.

            The 2/8 DCA found abuse of discretion for each basis for denial stated by the trial court. 

            First, the trial court did retain jurisdiction to rule on the costs of proof motion as an appeal does not stay proceedings on “ ‘ancillary or collateral matters which do not affect the judgment [or order] on appeal’ even though the proceedings may render the appeal moot.” (Varian Medical Systems, Inc. v. Delfino, 35 Cal.4th 180, 191 (2005).) 

            Second, defendants’ claims of insufficient information to respond to matters they clearly knew or should have known constituted a “failure to admit” response as specified in §§ 2033.420(a) and (b)(4).  No motion to compel was necessary as the responses were complete, and Association did not waive its right to cost of proof fees.  Also, there is no statutory requirement that fees and costs must be separately allocated to each specific request for admission – especially where all the requests relate to a single issue as was the case here. 

            Third, nothing prevented defendants from admitting facts related to their taking of $100,000 and returning it 17 days later regardless of what they believed about Association’s standing was to recover funds taken from its own account, and defendants had no reasonable ground to deny that voting to appoint a board member without quorum was a breach of fiduciary duty based on their belief director/president should not have been removed.

            Finding the trial court was required by § 2033.420 to award Association its reasonable fees and costs incurred in proving matters defendants failed to admit without reasonable grounds to do so, the panel reversed and remanded for determination of those fees and costs. 

Reasonableness Of Fees, Sanctions: 50% Fee Recovery Award To Prevailing Party Was No Abuse Of Discretion

Denial Of $16,060 Sanctions Fee Request Was No Error Because It Was An Interim Ruling Not Impacting The Litigant’s Eventual Prevailing Party Status.

            In Aquino v. Klein, Case No. B301186 (2d Dist., Div. 3 Apr. 8, 2021) (unpublished), a dispute between friends, who went into business and then had a falling out romantically, resulted in a close to decades in litigation by which one party prevailed against a trustee to the tune of $422,669.93.  The prevailing party then moved for an initial recovery of $458,007.63 in fees, later reduced to $386,355.02 after the trial court asked for justification.  (BLOG HINT:  Always bad when you backpedal around $35,000 in a fee request, given that fees motions are always about credibility.)  Ultimately, the lower court only awarded $192,000.50 in fees, about 50% of the reduced request.  Prevailing party appealed this as well as the denial of an interim order denying sanctions and a $16,060 sanctions request.

            The 2/3 DCA affirmed.  The interim sanctions award was not reviewed because it was intermediate and the prevailing party obtained relief later, such that it was not reviewable under Code of Civil Procedure section 906.  With respect to the $192,000.50 appeal in which the prevailing party argued the fee award was not enough, appellant could not hurdle the abuse of discretion standard, especially given that the lower court scrutinized things and wanted further justification.  Appellant argued that a more specific basis for the fee award was warranted, but only cited federal civil rights cases which did not govern the law with respect to private parties (where no statement of decision is required, generally, under state law). 

            Judge Salter, an Orange County Superior Court Judge, sitting by assignment, authored the 3-0 decision.

Discovery, Sanctions: 1/3 DCA Affirms Trial Court’s Order, Entered After Plaintiffs Voluntarily Dismissed The Case, Setting Aside Monetary Sanctions Previously Imposed Against Defendant For Discovery Abuses.

Exceptions To The General Rule That Deprives Trial Courts Of Jurisdiction Following Voluntary Dismissal Of A Case Allow Trial Courts To Retain Jurisdiction To Determine And Enforce Collateral Statutory Rights – Such As Motions For Sanctions.

            In Manhan v. Gallagher, Case No. A158152 (1^st Dist., Div. 3 March 26, 2021) (published), plaintiffs filed motions to compel for further discovery responses and obtained monetary sanctions against defendant for discovery violations.  In support of their motions, plaintiffs’ counsel submitted a declaration stating his billing rate in the matter was $300 per hour.  Plaintiffs later dismissed their lawsuit against defendant without prejudice. On the same day, defendant filed a motion for reconsideration or to have discovery sanctions imposed against her set aside based on a declaration filed by plaintiffs’ lead attorney stating plaintiffs had incurred no legal fees and had been represented pro bono in their case against defendant. 

            It turned out that the associate attorney who filed the declaration claiming a $300 hourly billing rate for his work on the lawsuit was unaware that the firm had taken the case pro bono in light of plaintiffs’ long-standing relationship with the firm. 

            After the trial court granted defendant’s request and set aside the monetary sanctions imposed against her, plaintiffs appealed – arguing that the trial court lacked jurisdiction to consider and set aside the previously imposed sanctions following plaintiffs’ voluntary dismissal of the action.

            The 1/3 DCA affirmed – citing Pittman v. Beck Park Apartments Ltd., 20 Cal.App.5th 1009, 1022-1024.  While, as a general rule, voluntary dismissal of a case deprives the trial court of both subject matter and personal jurisdiction in that case, a number of exceptions have been carved out allowing a trial court to retain jurisdiction postdismissal and postjudmgent to determine and enforce collateral statutory rights – such as motions for sanctions. Further, the panel found no sound basis in logic or public policy to deny a remedy to a party burdened with sanctions obtained through misrepresentation (whether or not intentional) simply because a plaintiff dismisses an action – that disallowing reconsideration in cases such as this, where sanctions are based on misrepresentations, violates a reasonable sense of justice and fair play.

Discovery, Sanctions: Continued Deficiencies In Discovery Responses Resulted In Monetary And Evidentiary Sanctions Against Self-Represented Plaintiff, And Ended In Terminating Sanctions.

Affirmance Of The Terminating Sanctions Mooted Plaintiff’s Appeal Of The Trial Court’s Order Sustaining Defendants’ Demurrers And Motions To Strike.

            Following ten months of meet and confer correspondence, seven sets of amended discovery responses, and impositions of evidentiary and $8,000 in monetary sanctions, the trial court issued terminating sanctions with prejudice against self-represented plaintiff for his continued failure to correct persistent issues with his discovery responses.

            Plaintiff appealed in Soofi v. Contreras Law Firm, Case No. D076884 (4^th Dist., Div. 1 March 25, 2021) (unpublished) – alleging trial court bias and claiming his discovery deficiencies were the result of his misunderstanding of the discovery statutes – not willful noncompliance.  The 4/1 DCA affirmed – finding no abuse of discretion nor bias.  Plaintiff had been provided with ample time and opportunity to correct his errors of providing incomplete or nonresponsive information to defendants, and failed to meet his burden of showing the actual probability of bias by the trial judge.

            Because the panel affirmed the terminating sanctions – which the trial court issued with prejudice, resulting in the dismissal of the entire case – it did not reach plaintiff’s challenges to the trial court’s order sustaining defendants’ demurrers and motions to strike.

In The News, Sanctions: Attorneys In Voting Dispute Sanctioned For Not Being Candid With The Court

They Should Have Revealed That An Almost Identical Motion Was Made And Denied Before.

            As recently reported in the on-line ABA Journal, the Fifth Circuit Court of Appeals in Texas Alliance for Retired Americans v. Hughs, No. 20-40643 (5^th Cir. Mar. 11, 2021) (per curiam, 2-1 vote) issued sanctions against defendant’s attorney in a lawsuit seeking elimination of straight-ticket voting in Texas based on the theory it disproportionately affected minorities.  What happened is that defendant filed a second motion to supplement the appellate record even though a nearly identical first motion had been denied earlier.  As indicated by the majority, “This inexplicable failure to disclose the earlier denial of their motion violated their duty of candor to the court.”  It also was an improper motion for reconsideration filed outside of the fourteen-day window for such motions under appellate rules.  Even if the attorneys were confused about what was done earlier, all they had to do was disclose the earlier motion in their subsequent paperwork. The majority imposed double-barrel sanctions: (1) the fees and costs incurred by plaintiffs in connection the duplicative motion; and (2) “double costs.” 

Sanctions: $125,690.56 Section 128.5 Sanctions Order Against Plaintiff’s Class Action Attorneys, Hinged On Settlement Agreement Release Language, Reversed As A Matter Of Law

Also, Order Denying Sanctions Request Is Not Appealable In Itself, With A Writ Or Appeal After Final Judgment Being The Ways To Challenge Such An Order.

            Plaintiff’s class action attorneys, who represented a client arising out of spiraling events from a minor alleged debt by Capital One, were sanctioned $125,690.56 under CCP § 128.5 (full request plus “fees on fees”) for pursuing a frivolous class action suit against a law firm which sent a Capital One dunning letter, premised on the theory that earlier settlement agreement language expressly released “attorneys” inclusive of Capital One’s attorneys.  Attorneys appealed, and it is a good thing they did.

            The 4/1 DCA, in Smith v. Hunt & Henriques, Case No. D076278 (4^th Dist., Div. 1 Mar. 2, 2021) (unpublished), reversed as a matter of law.  That occurred because it was not crystal clear that Capital One’s attorneys sending the dunning letter were included within the scope of or were third beneficiaries under the “attorneys” language in the settlement agreement such that the class action litigation could not be viewed as frivolous based upon the released language theory.

            Attorneys also had requested that the lower court sanction the law firm for bringing its section 128.5 motion, a request which was denied.  No appeal could be had from the order denying sanctions because it was only reviewable through a mandate writ petition (which might be consolidated with the underlying appeal) or from a later appeal of a final judgment in the action. 

Sanctions: Ninth Circuit Reverses Six Sanctions Imposed By District Court Under Inherent Authority, Rather Than Pursuant To Statute Or Rule, Against Prevailing Plaintiff For Disobeying A Discovery Order

The District Court Did Not Have The Benefit Of The Goodyear Tire Decision At The Time It Issued The Sanctions Order So A Remand Was In Order.

            America Unites For Kids v. Rousseau, Case No. 16-56390 (9^th Cir. January 22, 2021) (published), has a nice discussion on the procedural requirements and substantive limitations that apply when a district court imposes sanctions under its inherent authority, rather than pursuant to any statute or rule.

            In this case, two nonprofit environmental organizations sued Santa Monica Malibu Unified School District administrators and board members to enforce the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601-2629.  Specifically, they sought remediation of several school buildings containing dangerous levels of polychlorinated biphenyls (PCBs).  PCBs, which the EPA concluded to be hazardous in concentrations of 50 parts per million or more, were used prior to 1978 to enhance pliability in products such as caulk, adhesives, and paint.

            To resolve a discovery issue between the parties, the district court limited plaintiffs’ testing for PCBs to air and wipe sampling – only allowing testing of caulk or more invasive testing if the air/wipe sampling revealed the necessity.  After the first nonprofit disobeyed the orders and conducted unauthorized testing, the district court, under its inherent authority, issued six separate sanctions against first nonprofit and five separate sanctions against second nonprofit for its attempt to profit from the unauthorized testing.  One of the imposed sanctions struck both nonprofits’ prayer for attorneys’ fees, expert witness fees, and costs, which otherwise likely would have been allowed under 15 U.S.C. § 2619(c).

            After conducting trial, the district court entered judgment in favor of first nonprofit, issued a permanent injunction against the district from using offices/classrooms built before 1979 unless they were remediated, dismissed second nonprofit for lack of standing, and ordered each party to bear its own costs and attorneys’ fees.

            The Ninth Circuit, through a 2-0 majority decision by District Judge Simon (District Judge for the District of Oregon, sitting by designation), vacated and remanded the district court’s sanctions order in its entirety and reversed the district court’s dismissal of second nonprofit for lack of standing. 

            As to the sanctions, the Ninth Circuit – recognizing that the district court did not have the benefit of Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017) [discussed in our April 23, 2017 post] when it issued its sanctions ruling under its inherent authority – found that the district court failed to apply the “but for” standard directed in Goodyear Tire for any sanctions it imposed as compensatory rather than punitive, failed to provide plaintiffs with the required criminal procedural safeguards for the punitive sanctions imposed, and failed to make explicit findings of either: (1) a willful violation of a court order; or (2) bad faith. 

            As to the district court’s dismissal of second nonprofit, the Ninth Circuit concluded that although second nonprofit did not have members per se, it had associational standing in the lawsuit.  A close connection exists between second nonprofit’s mission and the interests of its non-member teachers – enough to give the nonprofit a personal stake in the outcome of this lawsuit.

            Circuit Judge O’Scannlain dissented on the sanctions and lack of standing issues – finding that the Goodyear Tires framework did not apply to the district court’s denial of attorneys’ fees, that the denial was a proper exercise of the district court’s discretion under TSCA, and that other sanctions were not properly challenged by plaintiffs on appeal.  As to the lack of standing issue, Judge O’Scannlain found that second nonprofit failed to provide evidence it was an association or that teacher who supported the organization was the functional equivalent of a member.

Discovery, Sanctions: $6,954.95 Deposition Discovery Sanctions Award Was Appealable Even Though It Was Payable To Two Different Recipients, While $1,750 Sanctions Award Was Not Appealable

However, The Merits Appeal Of The $6,954.95 Sanctions Award Did Not Succeed Based On Failure To Appreciate The Nature Of The Deposition Process.

            Burke v. Newport-Mesa Unified School Dist., Case No. G058732 (4^th Dist., Div. 3 Jan. 21, 2021) (unpublished), authored by Justice Goethals of our local Santa Ana appellate court, has some interesting discussion points on discovery sanctions appealability thresholds and on the nature of the deposition process in civil litigation.

            In this one, plaintiff was sanctioned two times in relation to deposition conduct or non-conduct: (1) $6,954.95 in discovery sanctions for refusal to answer questions at a court-ordered deposition, although they were made payable to two different sets of recipients (one motion based on the same conduct); and (2) $1,750 in discovery sanctions for failing to sit for a subsequent deposition, payable to just one party.  Plaintiff, obviously upset, appealed.

            The $1,750 order was not appealable because it was one for sanctions below $5,000.

            However, the $6,954.95 order was appealable, because CCP § 904.1(a)(12) focuses on the amount to be paid, not the amount split between any diverse recipients.  All the more so because it was a single motion arising from the same deposition conduct.  Respondents argued that a removal of the matter to federal court somehow divested jurisdiction away from the state courts, but this did not resonate with the appellate court.  However, although getting past the crucial appealability and procedural hurdles, plaintiff could not prevail on the merits.   After all, he refused to answer 223 questions at his deposition and responded “I don’t know” to an additional 234 questions.  Plaintiff argued that he “cured” any transgressions by providing supplemental responses after the deposition in writing to many of the unanswered questions, but the appellate court indicated this misapprehended the difference between on-the-spot deposition cross-examination and an after-the-fact interrogatory type of answering process—no effective cure at all and a misunderstanding of the deposition process.  In the end, the larger sanctions order was affirmed, and the appeal from the lower sanctions order was dismissed.

Appealability, Discovery, Sanctions: Appeal Of Terminating Sanctions Does Not Necessarily Also Encompass Challenge To Discovery Monetary Sanctions

2/7 DCA Implicitly Suggests Disagreement With Other Decisions, But Finds Two Sanctions Orders Were Not Intertwined.

            OK, for you folks who love technical appealability issues, Taylor v. Forde, Case No. B298957 (2d Dist., Div. 7 Jan. 20, 2021) (unpublished), may be your forte, especially when it comes to appealability of discovery terminating sanctions orders and discovery monetary sanctions.  Be careful when you appeal a terminating sanctions order.

            What happened here is that both discovery terminating sanctions and monetary sanctions orders were entered, but no judgment was ever entered on the complaint or stricken cross-complaint—no default prove-up proceedings resulted in a final judgment.  Appellants appealed the terminating sanctions order, but they did not contest the monetary sanctions order.  The lack of a final judgment on the merits sealed the deal with respect to appealing the terminating sanctions order, except for appellant’s argument that the appeal of the monetary sanctions preserved the appeal of the terminating sanctions.  Appellant argued that the terminating sanctions order was “inextricably intertwined” with the monetary sanctions order over the $5,000 limit such that everything was good. 

            The 2/7 DCA disagreed, dismissing the appeal.  It questioned whether the “inextricably intertwined” exception in Nickell v. Matlock, 206 Cal.App.4^th 934 (2012) and Mileikowsky v. Tenet Healthsystem, 128 Cal.App.4^th 262 (2005) was valid.  However, the terminating sanctions and monetary sanctions orders were not intertwined given no suggestion the sanctions order was erroneous, all the more so because they serve different purposes.  Because the terminating sanctions order was nonappealable and not intertwined, the appeal was dismissed.    

Family Law, Sanctions: Trial Court’s Award To Attorney Husband Of $800 In Attorney Fees In The Nature Of Sanctions Under Section 271 Reversed As A Matter Of Law

Self-Represented Attorney Husband Incurred No Fees To Which The Section 271 Sanctions Must Be Tethered.

            Family Code § 271, subdivision (a), provides that “the court may base an award of attorney’s fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys. An award of attorney’s fees and costs pursuant to this section is in the nature of a sanction.”  However, as the 1/3 DCA concluded in the next case, “section 271 mandates that sanctions be ‘tethered’ to attorney fees and costs.”

            In Marriage of Erndt & Terhorst, Case No. A157876 (1^st Dist., Div. 3 January 11, 2021) (partially published – fees as sanctions discussion published), the trial court directed husband to prepare a stipulated judgment based on the settlement entered into between husband and wife as recited in open court.  The settlement agreement included an equal division of the community portion of wife’s retirement plan.  However, wife had omitted her retirement plan’s survivor benefits – believing that if the survivor benefit were not mentioned, husband’s right to it would terminate upon entry of the judgment of dissolution.  When husband learned of the omission, he included it as an omitted asset under Family Code § 2556 – awarding each party survivor benefits in relation to their share of the awarded community interest.  Wife refused to sign, so husband, who was now self-represented, went back to the trial court seeking a survivor benefit award – with the trial court granting husband’s request and directing the stipulated judgment to include the award. 

            When wife continued to refuse to sign the stipulated judgment, husband returned to the trial court seeking to have the stipulated judgment signed by the trial court elisor, $6,102 in attorney fees, $180 in costs, and § 271 sanctions against wife for her repeated refusal to follow court orders and sign the stipulated judgment.  Wife finally complied with the court’s direction and signed the stipulated judgment in open court.  The trial court then awarded husband sanctions of $180 in costs and $800 in reasonable attorney fees for husband’s preparation for and attendance at that day’s hearing.

            Wife appealed, and the 1/3 DCA reversed the $800 portion of the awarded sanctions – concluding that § 271 sanctions must be tethered to attorney fees and costs.  (Menezes v. McDaniel, 44 Cal.App.5^th 340, 350 (2019) [discussed in our January 16, 2020 post]; Sagonowsky v. Kekoa, 6 Cal.App.5th 1142, 1153 (2016) [misconduct over and beyond fees/costs actually incurred not within reach of section 271].)  Because husband was self-represented by the time he sought sanction, he incurred no fees in preparing for and attending the hearing.  Additionally, California courts have interpreted “attorney fees” to mean exactly what it says in the context of sanctions under Code of Civil Procedure section 128.7 and in the context of contractual attorney fees awarded under Civil Code section 1717 – with sanctions in the form of attorney fees and reasonable attorney fees not available to self-represented litigants who have not incurred or become liable for such fees.

Sanctions: Trial Judge’s Failure To Expressly Specify The Sanctionable Conduct Required A Remand And Do-Over

Appellate Court Found Basis Existed For Sanctions, But Required Greater Clarity Especially Given That Bar Discipline Could Be At Issue.

            An attorney in American Express Bank FSB v. Singh (Abdeljawad), Case No. E074042 (4^th Dist., Div. 2 Dec. 30, 2020) (unpublished) violated a court order to personally appear at a Fall 2019 hearing to address a possible forgery of a substitution of attorney.  Instead, the attorney telephonically appeared because he was in Chicago on a family visit, eschewing the option to come back one day earlier to comply with the lower court’s order.  The lower court was not impressed, setting a later hearing to impose sanction not to exceed $1,500 under “all remedies available to the court pursuant to CCP §§ 128.6, 177.5, 575.2, CRCs and Riverside Local Rules of Court, and/or other statute or existing case precedent.”  At the subsequent hearing, the lower court sanctioned attorney $1,000 for not making a personal appearance, payable to the clerk of the court, but did not specify the specific statute or the conduct giving rise to the sanctions in its written order.

            The 4/2 DCA reversed and remanded for a do-over on due process grounds.  Although it was inferable that the sanctions were imposed under CCP § 177.5 and there was cause for imposition of them, the failure to explain the conduct or circumstances justifying the order required a re-do—especially given that the explanation may be valuable in determining whether additional discipline was warranted (given that the sanction was reportable to the State Bar).  (See Caldwell v. Samuels Jewelers, 222 Cal.App.3d 970, 977 (1990).)

            The moral of the story here is to make sure you, as attorney practitioners, obey an edict to personally attend a hearing or get the matter continued so that you can comply. 

Discovery, Sanctions: Monetary Discovery Sanctions Improperly Denied Against Litigants Under “Unjust” Exception Simply Because Other Terminating Sanctions Granted Previously

However, Litigant’s Attorneys Were Not Subject To Sanctions Because No Evidence Indicated The Attorneys Advised The Clients To Engage In The Discovery Violations.

            Litigators need to read the Sixth District’s recent decision in Kwan Software Engineering, Inc. v. Hennings, Case Nos. H042715 et al. (6^th Dist. Dec. 2, 2020) (published) on sanctions available for discovery abuses.  In a very scholarly opinion, the Court of Appeal held that (1) monetary sanctions cannot be denied against litigants engaging in discovery abuses simply because terminating sanctions (in this case, dismissing some claims) had been previously granted, because this does constitute injustice under the “sanctions unjust” exception; and (2) litigant’s attorneys cannot be sanctioned under Code of Civil Procedure section 2023.030 unless there is evidence that they advised the clients to engage in the discovery violations.  Here is what the Sixth District had to say on the attorney issue: “We understand defendants’ observation about the difficulty of eliciting direct proof of such conduct in light of an attorney’s ethical obligations and privileges protecting attorney-client communications. However, the difficulty of carrying this burden stems from the statute itself, and we lack the authority to ignore its explicit statutory directive.”    

Bankruptcy, Sanctions: Ex-Partners In State Court Lawsuit Against Debtor With A Discharge Injunction Properly Not Sanctioned For Contempt Fees When They Had An Objective Belief The Debtor Had Returned To The Partnership State Court Dispute

Ninth Circuit Came To The Same Result, Even Under An Objective Standard Although SCOTUS Sent The Case Back Based On Denying Contempt Fees Under A Less Stringent Good Faith Belief Standard.

            On April 28, 2020, we posted on In re Taggart, a Ninth Circuit decision where two ex-partners in state court litigation against a debtor obtaining a discharge injunction were not hit with contempt fees when they took certain actions with a good faith belief that the debtor had re-entered into the state court fray—with the federal appeals court reversing a contrary lower court ruling.  SCOTUS, in Taggart v. Lorenzen, 139 S.Ct. 1795, 1799 (2019), vacated that prior Ninth Circuit decision and remanded after determining that an objective, rather than subjective, standard is more appropriate in determining whether the ex-partner creditors could be held in civil contempt for violating the bankruptcy discharge injunction.  On remand, in Taggart v. Lorenzen, No. 16-35402 (9^th Cir. Nov. 24, 2020) (published), the Ninth Circuit came to the same result based on applying the higher objective standard to the creditors’ conduct and knowledge of events. 

Sanctions: 2/3 DCA Affirms $16,111 In Discovery Sanctions Resulting From Attorney’s Violation Of Discovery Order For Which The Panel Overturned His Contempt Conviction

Misuse Of The Discovery Process Does Not Have To Be Willful Before Monetary Sanctions May Be Imposed, But Punishment For Contempt Rests Upon A Clear, Intentional Violation.

            We previously discussed the next case in our February 24, 2017 post.  At that time, the 2/3 DCA had dismissed minor’s appeal from an order that her attorney pay discovery sanctions to opposing party in the form of attorney’s fees and costs as the minor was not the aggrieved party.  The California Supreme Court reversed and remanded – holding the record was clear that minor’s attorney intended to participate in the appeal.

            In K.J. v. Los Angeles Unified School Dist., Case No. B269864 (2d Dist., Div. 3 November 11, 2020) (unpublished), the trial court determined that plaintiff minor’s attorney violated a discovery order – for which it found him guilty of contempt and sentenced him to 24 hours in county jail and a $750 fine.  Additionally, the trial court stated in its order that defendant could seek fees and costs associated with the contempt hearing. 

            Meanwhile, attorney filed a writ petition with the 2/3 DCA to challenge the contempt order, and the appellate court issued an order staying enforcement of the contempt order pending further order of the 2/3 DCA.  Attorney ultimately prevailed on the contempt order – with the appellate panel concluding substantial evidence establishing beyond a reasonable doubt that attorney had willfully disobeyed the trial court’s order did not exist.

            Before that determination was made, defendant moved for monetary sanctions of $100,000 from attorney and his law office, made up of $52,247.41 in fees and costs, and $47,752.59 in sanctions “to deter future misconduct” – with the trial court awarding $16,111 in discovery sanctions.  Attorney appealed – unsuccessfully challenging the sanctions order as void because it violated the temporary stay and, alternatively, as an abuse of discretion because it included fees and costs related to the contempt proceeding to which he ultimately prevailed, and was not authorized by statute because his client submitted to a neuropsychiatric exam as ordered.

            The 2/3 DCA found no violation of the temporary stay.  The temporary stay applied only to the contempt order, which did not include an award of monetary sanctions nor a decision on the merits of such a motion.  The trial court made clear that the monetary sanctions order was being issued for an obstruction of the discovery process, and was not dependent on the ultimate outcome on attorney’s contempt appeal.  The appellate panel agreed.  A contempt order requires a finding of willfulness, but a monetary sanctions order does not.  As a result, the trial court reasonably could find that although a party was not guilty of contempt, it was properly assessed monetary sanctions for misusing the discovery process. (Ellis v. Toshiba American Information Systems, Inc., 218 Cal.App.4^th 853, 878 (2013).)  

            The panel also found no abuse of discretion.  It was unable to conclude that the trial court awarded fees associated with the contempt hearing as the record did not clearly demonstrate whether the award included fees related to the contempt hearing, and the trial court awarded defendant only a fraction of the fees it sought.  As to the statutory authority to issue sanctions, the 2/3 DCA concluded “misuse” of the discovery process is not limited to a failure to appear at a court-ordered examination, but also may include an attorney’s actions that influence his client not to fully participate in such an examination after being ordered by a trial court to do so – for which the trial court has broad discretion to issue sanctions. 

Sanctions: Attorney Convicted On 4 Counts Of Civil Contempt, Fined $3,600 And Ordered To Pay Opposing Party’s Attorney Fees And Costs Wins Reversal Of Fees/Costs Order And Has 3 Of 4 Civil Contempt Convictions Overturned

Attorney Fees/Costs Order Was Not Supported By Statute And The Proper “Unit Of Prosecution” For Attorney’s Conduct At A Fifteen Minute Settlement Conference Was A Single Count Of Contempt.

            In Moore v. Superior Court, Case No. G058609 (4^th Dist., Div. 3 November 16, 2020) (published), while representing a client at a fifteen minute mandatory settlement conference, attorney displayed rude and unprofessional conduct.  In fact, the settlement conference lasted only 15 minutes as a direct result of attorney’s behavior.  The trial court conducted a contempt proceeding – finding attorney in contempt and fining him $900 each for four categories of misconduct: (1) yelling and interrupting the settlement officer and opposing counsel; (2) falsely accusing opposing counsel of lying without explanation; (3) refusing to engage in settlement discussions; and (4) blocking the settlement officer from invoking the aid and authority of the supervising judge by threatening that this would unlawfully divulge settlement information.  The trial court also ordered attorney to pay opposing party’s attorney fees and costs pursuant to Code Civ. Proc., § 1218(a).  Attorney appealed.

            In a 3-0 opinion authored by Justice Goethals, the 4/3 DCA found attorney’s conduct demonstrated a total lack of respect for the court, the settlement officer, opposing counsel and the opposing party, and “was a continuous insult to the dignity and process of the court that continued throughout the 15-minute course of the settlement conference.”  However, the panel overturned three out of four of the attorney’s civil contempt convictions, including the fees imposed for those three convictions, and reversed the trial court’s order on the attorney fees and costs.

            As to the civil contempt convictions, the appellate panel followed the analysis provided for “unit(s) of prosecution” in In re Keller, 49 Cal.App.3^rd 663, 667-669 (1975); Conn v. Superior Court, 196 Cal.App.3d 774, 788 (1987); and Koehler v. Superior Court, 181 Cal.App.4^th 1153, 1169-1170 (2010) – reasoning that attorney could not be punished for multiple counts of contempt stemming from his behavior at the 15-minute settlement conference, and that attorney’s due process rights were violated by convicting him of four, separate counts of civil contempt when only one was identified in the trial court’s order to show cause.

            As to the reversal of the attorney fees and costs ordered by the trial court pursuant to CCP § 1218(a), the appellate panel determined section 1218(a) did not apply in this case as the contempt at issue was not for violating a court order. 

            In a final statement by the 4/3 DCA, the panel noted, “[t]hough [attorney]’s petition is largely successful, that success should in no way be construed as an endorsement by this court of his behavior.”

Arbitration, Sanctions: $22,159.50 In § 128.7 Sanctions Affirmed Against Plaintiff’s Attorney Who Filed Motion Seeking To Stay Arbitration And Remit The Parties To Judicial Remedies Based On Defendants’ Failure To Pay Arbitration Fees

Attorney Was Notified By The American Arbitration Association That The Error In Applying Defendants’ Fees Had Been Corrected, And The AAA Simply Needed Plaintiff’s Confirmation Of Intent To Proceed.

            In McCluskey v. Henry, Case No. A158851 (1^st Dist., Div. 3 November 2, 2020) (partially published – fees discussion unpublished), plaintiff sued employees of Airbnb, Inc. for intentional infliction of emotional distress after her account was terminated.  Pursuant to an arbitration clause in the parties’ contract, the trial court granted defendants’ motion to stay the action and compel arbitration.  Plaintiff then filed her claim for arbitration with the American Arbitration Association, and each side paid their respective fees by the deadline set by AAA.  Unfortunately, due to an error in AAA’s system, defendants’ payment was not properly credited – resulting in AAA’s administrative closing of the case.  Once the error was rectified, AAA notified the parties and requested confirmation from plaintiff that she wished to continue so the case could be reopened.  After receiving no response from plaintiff’s counsel by AAA’s deadline, AAA sent out a second notice with a new deadline for responding.  Plaintiff’s counsel did not respond. 

            Instead, he went back to the trial court with an unsuccessful motion to lift the stay – asserting that, pursuant to Code Civ. Proc. § 1281.4, defendants had failed to timely pay their arbitration fee which “constituted a default, waiver, lack of good faith and fair dealing, or breach of the arbitration agreement.”  The defendants were successful, however, on their request for sanctions – with the trial court awarding $22,159.50 in fees incurred for opposing the motion to lift the stay.

            Attorney appealed, raising a slew of arguments – violation of his due process rights; section 128.7 “not drawn with sufficient clarity such that it properly[] informed” him as to what he must do to avoid sanctions; defendants’ motion papers failed to adequately inform him that sanctions were being sought for specific violating conduct; that section 128.7 requires a moving party to “incur” attorney fees and, since Airbnb was the entity paying defendants’ fees, defendants could not seek and be awarded sanctions; and other substantive challenges  – all of which failed.  The 1/3 DCA found the trial court properly based its frivolity decision  on its findings that the AAA had twice notified Attorney that the arbitration case would be reopened once Attorney confirmed plaintiff’s intent to proceed.

            Interestingly, Attorney made an argument that the trial court had exceeded its jurisdiction in issuing the sanctions order as Code Civ. Proc. § 1281.4 prohibited the trial court from hearing and ruling upon the sanctions motions during the stay.  Ironically, pursuant to Code Civ. Proc. § 1281.4, the trial court had no jurisdiction to lift the stay and set the case for trial on the basis that defendants’ conduct inhibited arbitration.  However, because Attorney’s violating conduct occurred before the trial court – not in the arbitration proceeding – and the trial court had retained jurisdiction over the original suit, the trial court had the jurisdiction and authority to address this situation.

 

Family Law, Sanctions: Sixth District Affirms $75,000 In § 271 Sanctions Against Ex-Wife With Mental Health Issues And Denial Of Her § 2030 Needs-Based Attorney Fees Request Despite Trial Court’s Failure To Make Express Findings

Wife Failed To Take Advantage Of Protections Afforded To Parties Suffering Mental Health Issues And She Suffered No Prejudice When Trial Court Failed To Make Express Findings Because It Considered And Addressed The Same Statutory Factors In Determining Spousal Support.

            Under California Rules of Court, Rule 1.100, parties can seek accommodations from the trial court, pursuant to the Americans With Disabilities Act of 1990 (ADA) (42 U.S.C. § 12101 et seq.), or other applicable state and federal laws.  Alternatively, a party can participate in the litigation through a guardian ad litem.  (Code Civ. Proc., § 372 et seq.)

            Husband made such a request for wife in Marriage of Taylor, Case No. H045227 (6^th Dist. October 30, 2020) (unpublished), requesting appointment of a guardian ad litem due to concerns about wife’s ability to participate in proceedings based on her claimed mental health issues.  However, husband dismissed request when wife opposed and stipulated to an independent evaluation along with the release of certain medical records.  This came back to bite him, in the form of delays and substantial, unnecessary attorney’s fees and costs, when wife failed to execute documents related to the parties’ agreement regarding the division of certain marital assets, began raising issues previously resolved, and requested a continuance of the final status conference – claiming her PTSD was causing her great difficulty in reviewing and comprehending documents, and completing tasks.

            When wife’s conduct prompted husband to seek Family Code § 271 sanctions against her, the trial court awarded him $75,000 – finding billing statements submitted by husband to be reasonable, and commenting that “[t]hat doesn’t nearly being to make [husband] whole, but I think it is a fair and appropriate ruling given the totality of the circumstances here.”  Additionally, the trial court denied wife’s request for needs-based section 2030 attorney’s fees without making express findings supporting the denial.

            On appeal, wife argued that the trial court abused its discretion in determining that she engaged in sanctionable conduct because her conduct was the result of her mental health condition and was not intentional.  However, the Sixth District disagreed – finding that sanctions are based on a party’s conduct that frustrates the policy of the law to promote settlement of litigation and reduction of litigation costs, not the party’s intent, and substantial evidence supported the sanctions.  Additionally, wife had the opportunity to take advantage of protections afforded to parties suffering mental health conditions, but failed to timely do so.

            As to wife’s needs-based fees request, the appellate panel found the trial court erred in not making the requisite express findings for its denial, but that the trial court’s error was not prejudicial to wife. Immediately preceding its consideration of wife’s section 2030 request, the trial court addressed each statutory factor it was required to consider and weigh in ordering long-term spousal support – the same factors considered when determining whether to award section 2030 fees – and determined wife had significant liquid or investable assets, and that the parties had relatively equal financial circumstances.

Sanctions: $5,310 Sanctions Order Against Attorney Under CCP § 128.5 And CCP § 1209 (Contempt) Affirmed On Appeal

Message From This One Is Be Candid With The Court—Do Not Tell Half-Truths!

            In Levine v. Berschneider (Richards), Case No. B300824 (2d Dist., Div. 6 Oct. 29, 2020) (published), an attorney was sanctioned $5,310 under CCP § 128.5 (bad faith tactics) and § 1209 (contempt) for playing coy on whether settlement checks had been received in a hearing before the lower court.  The sanctions order was affirmed, with the appellate court reiterating two key principles to guide all attorneys, especially litigators:  (1) attorneys have a duty of candor to the court; and (2) the duty of candor encompasses a duty to inform the court about important subsequent events so that “half-truths” are not made to the court. The 2/6 DCA also emphasized that a misrepresentation of material facts is subject to sanction under section 128.5, citing Young v. Rosenthal (1989) 212 Cal.App.3d 96, 128.)

Appealability, Family Law, Sanctions: $5,000 Sanctions Award Against Ex-Husband’s Attorney Found Not Appealable

Specific Appealability Provisions Governed The Result.

            In Marriage of Rattan & Prasad, Case No. A157880 (1^st Dist., Div. 3 Sept. 24, 2020) (unpublished), ex-husband’s attorney was disqualified and was assessed with a CCP §§ 128.5/128.7 sanctions motion of $5,000 for filing frivolous motions.  Attorney’s appeal of the sanctions order was unsuccessful because (1) CCP § 904.1(a)(12) only allows appeal of sanctions exceeding $5,000; and (2) CCP § 904.1(a)(12) did not rescue appeals of non-discovery sanctions below $5,000 because it only allowed a party to appeal from them.

Family Law, Sanctions: Section 271 Sanctions Affirmed But CCP § 128.7 Sanctions For Reconsideration Motion Reversed Based On Lack Of Appropriate Procedural Compliance

Failure To Follow 128.7 Procedural Requirements Doomed Part Of Sanctions Award.

            CCP § 128.7 sanctions are procedural in nature and rule bound.  Do not follow the procedural rules, and you will lose a sanctions order in the lower court.  Marriage of Nott, Case No. B293055 (2d Dist., Div. 5 Sept. 16, 2020) (unpublished), is a good illustration of what will result in a reversal when due process requirements are not satisfied.

            What happened here was that ex-wife was hit with a Family Code section 271 sanction of $2,500, which was affirmed because the record showed she did not cooperate with a QDRO attorney to get closure on the issue.  However, because she was hit with a $4,500 sanctions for filing a frivolous reconsideration motion (one governed by CCP § 128.7), that one had to be reversed because ex-husband failed to file a separate 128.7 sanctions motion and failed to serve it at least 21 days before filing the motion with the court.  That required a reversal on this aspect of the appeal.  (Martorana v. Marlin & Saltzman, 175 Cal.App.4^th 685, 698-700 (2009).)

Family Law, Sanctions: $4,290 Sanctions Against Wife’s Attorney Under CCP § 128.7 Reversed On Two Grounds

First, A Section 2030 Earlier Denial Request Is Not Subject To Reconsideration Limitations, And Husband Did Not Give Proper Section 128.7 Notice Of The Bases For Sanctions—Double Whammy Reversal On Appeal.

            The Fourth District, Division Two, in Marriage of Hull, Case No. E072222 (4^th Dist., Div. 2 Sept. 15, 2020) (unpublished) was a 3-0 panel decision reversing a $4,290 CCP § 128.7 sanctions award against wife’s attorney for renewing a needs-based motion after an earlier denial of attorney’s fees.  [The concurring justice did not disagree with some footnotes which he believed disparaged appealing attorney.}

            The bases for reversal was two-fold in nature:  (1) a section 2030 renewed motion cannot be sanctioned because it is not subject to reconsideration request limitations; and (2) the section 128.7 motion did not contain the precise grounds upon which sanctions were ultimately granted, something which cannot happen based on the “safe harbor” and due process strictures codified under this statute. 

Discovery, Sanctions: $5,684 Discovery Sanction Against Plaintiffs Affirmed Where They Could Not Produce A Written Confirmation Of A Discovery Extension

Beyond That, The Defense Did Not Pull The Trigger Too Hastily On Motions To Compel, Trying To Work It Out.

            Discovery frequently is the bane of both practitioners and judges, not to mention studies that confirm it has led to an increase in the costs of civil litigation for many, many cases.  California has a scheme allowing parties to stipulate to discovery extensions, but they must be confirmed in writing (although emails certainly satisfy this requirement).  The next case shows the importance of creating an adequate record where sanctions are being fought on the basis that a discovery extension was obtained from the other side.

            In Cantu v. Equinox Holdings, Inc., Case No. B295973 (2d Dist., Div. 5 Sept. 15, 2020) (unpublished), Plaintiffs failed to answer some paper discovery requests and failed to obtain a firm written confirmation of a discovery extension, although the propounding defense attorneys tried to work it out.  Plaintiffs finally propounded boilerplate objections to the requests and tried to argue that a blanket-type extension had been granted without evidence of a written confirmation.  The defense waited a little while longer, filing motions to compel and seeking $9,440 in attorney’s fees as discovery sanctions.  The trial judge used a blended hourly rate and reduced the number of hours to impose a sanction of $5,684 against plaintiffs.

            Plaintiffs’ appeal was not successful.  As a stark reminder to which we have posted on before, the failure to provide a reporter’s transcript of the relevant law-and-motion hearings was fatal, especially where a discretionary ruling was involved as opposed to one on legal issues.  Further, there was no clear proof of a written discovery extension such that there was no substantial justification for the opposition to the motions to compel.  The appellate court also observed that the defense did not file the motions to compel too soon, only doing so after receiving boilerplate objections and no plan by the other side as to providing real answers.

Family Law, Sanctions: 4/2 DCA Affirms $29,993 In Family Code §§ 271 and 2030 Sanctions Issued Against Ex-Husband, Plus Another $3,892.50 In Code Civ. Proc., § 1987.2(a) Fees And Costs For Ex-Wife’s Successful Motion To Quash

Self-Represented Ex-Husband Learned The Hard Way That Uncooperative Conduct, Unduly Delaying Resolution, And Refusal To Participate In RFO Hearing Can Be Incredibly Costly – And This Was On Top Of $13,200 In Sanctions Already Issued Against Him Earlier In This Case.

            In Marriage of Ehirim, Case No. E072397 (4^th Dist., Div. 2 September 14, 2020) (unpublished), husband and wife with no minor children were involved in a post-judgment dispute related to some community investment account balances held in wife’s name, and community credit card debt paid after separation by wife with her separate property funds.  The investment accounts and credit card debt had not been adjudicated in the earlier judgment – with the trial court reserving jurisdiction to determine the balance of those investments, as well as community bank accounts and debts.

            Self-represented husband was uncooperative in resolving the investment/credit card issues with wife.  As a result, both parties filed requests for orders related to the investment/credit card issues.  Husband then subpoenaed credit card companies and other financial institutions, where wife held accounts, seeking overly broad and irrelevant information – including requests for items such as signature cards – for dates extending well beyond the parties’ date of separation.  Additionally, husband subpoenaed wife’s employer seeking overly broad and irrelevant information that extended well beyond the date of separation.  When husband refused to scale back the scope of his subpoenas, wife successfully moved to quash or limit the subpoenas to relevant time frames and to information relevant to the parties’ dispute.  Afterward, the trial court awarded wife $3,892.50 in fees and costs pursuant to Code Civ. Proc., § 1987.2(a).  Section 1987.2(a) provides the trial court with the discretion to award reasonably incurred expenses, including reasonable attorney fees, to a party prevailing in a motion to quash.

            When trial on the remaining investment accounts and credit card debt came about, husband refused to participate and walked out.  Only wife testified and provided documentation.  After determining community division of the investment accounts, offsets from the paid community credit card debt and other unpaid equalization payments from husband to wife, the trial court issued $10,000 in Family Code § 271 sanctions against husband for his conduct – conduct which frustrated the policy of the law promoting settlement and reducing the cost of litigation.  The trial court additionally ordered husband to pay $19,993 of wife’s attorney fees “as and for additional sanctions” pursuant to Family Code §§ 271 and 2030.  These awards were on top of $13,200 in unpaid sanctions previously issued against husband in this case.

            The 4/2 DCA found no abuse of discretion and affirmed – concluding the trial court’s factual findings and awards of fees/costs and issuance of sanctions were amply supported by the record.

Discovery, Sanctions: Trial Court Cannot Impose Discovery Sanctions Once A Vexatious Litigant Motion Is Filed

Imposition Of Sanctions Was Error Because Filing Of Motion Stayed Further Proceedings Except A Ruling On The Vexatious Litigant Motion.

            In Hanna v. Little League Baseball, Inc., Case Nos. E070995 et al. (4^th Dist., Div. 2 Aug. 18, 2020) (partially published; sanctions discussion published), defendant filed a motion to have plaintiff declared a vexatious litigation under CCP § 391(b), requesting plaintiff post security and requiring plaintiff to obtain judicial prefiling permission for other pleadings—common requests in this type of motion.  Defendant also had moved to obtain discovery sanctions against plaintiff.  The lower court entertained all these motions at the same time, granting the vexatious litigant motion and ordering plaintiff to pay $1,200 in discovery sanctions.  Although affirming the vexatious litigant determination, the 4/2 DCA reversed the grant of discovery sanctions.  The reason was based on the clear statutory language of CCP § 391.6, which stays proceedings such that the lower court lacked jurisdiction to entertain and to impose discovery sanctions.

Costs, Sanctions: Trial Court Properly Denied CCP § 128.7 Sanctions Even Though Opposition Evidence Was Not Overwhelming; However, Costs Had To Be Awarded To Attorney Obtaining Dismissal Of Ex-Client’s Malpractice Complaint

Prevailing Attorney Fell Within Mandatory Category Of A Routine Costs Grant.

            This next matter involved a contentious domestic, non-divorce temporary restraining order situation where an attorney sued for recovery of unpaid fees by one side (a male in a relationship with an ex-girlfriend) where there were malpractice allegations that the attorney had an affair with a former girlfriend of client/provided confidential information to the former girlfriend.  In the end, client’s malpractice action was dismissed on a demurrer, but the superior court clerk refused to enter a routine costs award based on the dismissal—after the trial judge refused to award CCP § 128.7 sanctions against client based on the salacious allegations in the ex-client’s case.

            The 4/1 DCA, in Kelly v. Rutman, Case No. D076022 (4^th Dist., Div. 1 July 21, 2020) (unpublished), affirmed the sanctions denial but reversed the refusal to award routine costs.

            Without going into all the specifics, the inferences from the attorney-former girlfriend relationship—although not overwhelming—did allow discretion to the trial judge to deny section 128.7 sanctions based on the overall circumstances.  Not the same result on the routine costs issue.  Here, attorney was a prevailing party when the malpractice action was dismissed—ex-client obtained no relief and a dismissal was entered in attorney’s favor (Code Civ. Proc., § 1032(a)(2)), a precise category allowing attorney recovery of routine costs.