CALIFORNIA ATTORNEY'S FEES

Sanctions: Discovery Sanctions Ordered After Removal To Federal Court Reversed For Lack Of Jurisdiction

$6,900 Was The Sanctions Order Amount.

            In Kitami v. Sabrah, Case No. A164399 (1^st Dist., Div. 2 Dec. 13, 2022) (unpublished), plaintiff was hit with an adverse $6,900 discovery sanctions order.  But that order was after the case had been removed to federal court.  As a result, it had to be reversed for lack of jurisdiction.  (28 U.S.C. § 1446(d); Roman Catholic Archdiocese of San Juan, Puerto Rico v. Acevedo Feliciano, 140 S.Ct. 696, 700 (2020).)

Family Law, Sanctions: $73,000 Fee Award, $220,952 Expert Fee Award, And $200,000 Sanctions Award Under Family Code Section 2107(c) Were Not Erroneous

Statutory Provision Allows For These Awards Where An Ex-Spouse/Ex-Partner Fails To Satisfy His/Her Disclosure Violations In A Dissolution Proceeding.

            Family Code section 2107(c) allows a family law judge to award fees, costs, and sanctions for disclosure violations during a dissolution proceeding, with certain disclosure obligations triggered by the service of the divorce action.  In Marriage of Matkovic, Case No. H047406 (6^th Dist. Nov. 14, 2022) (unpublished), ex-wife was hit with $73,000 in attorney’s fees, $220,952 in expert costs, and $200,000 in deterrence sanctions under section 2107(c).  Although hefty, the Sixth District found the awards were no abuse of discretion by the lower court.  The appellate court affirmed these rulings, but it did remand for a reduction in an award under Family Code section 1101(g) [limiting misappropriation awards to an ex-spouse’s community interest in an undisclosed or transferred asset]. 

Family Law, Sanctions: Husband’s Dismissal of Joinder Complaint Involving Wife’s Brother Did Not Divest Lower Court Of Jurisdiction To Impose Sanctions Against Brother And In Favor Of Husband For Frivolous Motion Under Family Code Section 271

$58,400 In Sanctions Were Imposed.

            In In re Marriage of Blake & Langer, Case No. B311966 (2d Dist., Div. 4 Nov. 10, 2022) (published), husband filed a joinder complaint against wife’s brother and wife’s father in wife’s dissolution action.  Wife’s brother filed a frivolous motion to disqualify husband’s attorneys.  Husband filed a Family Code section 271 sanctions motion against wife’s brother, with the lower court requesting supplemental documentation and with husband voluntarily dismissing his joinder complaint against both wife’s brother and father.  Later, the lower court awarded husband $58,400 in sanctions as against wife’s brother.

            The appellate court rejected brother’s argument that husband’s voluntary dismissal of the joinder complaint divested the lower court of jurisdiction to impose 271 sanctions, because the sanctions proceeding was a collateral one and the procedural posture of the dismissal was inconsequential.  (See Day v. Collingwood, 144 Cal.App.4^th 1116, 1125-1126 (2006).)

Discovery, Sanctions: 2/5 DCA Concludes $2.5 Million In Monetary Sanctions Awarded For Egregious Discovery Abuse, Under Code Civ. Proc. §§ 2023.010 and 2023.030, Was Not Statutorily Authorized And Reverses

Citing Legal Precedent, Dissenting Justice Would Have Affirmed – Seeing No Basis For “The Majority’s Unprecedented Statutory Analysis.”

            Nine months after plaintiff dismissed with prejudice its case in City of Los Angeles v. PricewaterhouseCoopers, LLC, Case No. B310118 (2d Dist., Div. 5 October 20, 2022) (published), PricewaterhouseCoopers (“PWC”) moved for monetary sanctions pursuant to Code Civ. Proc. §§ 2023.010 and 2023.030 for the ongoing discovery abuses committed by City of Los Angeles.  The trial court awarded PWC $2.5 million of the $8,356,852 it sought as a baseline amount – apparently declining PWC’s suggestion that an increase of $1 million or more over the baseline amount would be an appropriate exercise of the trial court’s discretion based on the egregious nature of City’s discovery abuse.  City appealed.

            The appellate panel concurred in its disagreement as to two of City’s contentions – that the trial court had no jurisdiction to rule on the sanctions motion after the case was dismissed with prejudice, and that the sanctions motion was untimely.  First, when the trial court is authorized to impose monetary sanctions, it retains jurisdiction after the lawsuit is dismissed to rule on the issue as a collateral matter.  Second, City showed no abuse of discretion as to the trial court’s implicit finding that PWC’s sanctions motion was timely.

            However, it was with City’s third contention that there was a split in the panel’s conclusion.  The majority agreed with City – that §§ 2023.010 and 2023.030 are definitional statutes that, standing alone or read together, do not authorize the trial court to impose sanctions.  Finding that the trial court abused its discretion by awarding monetary sanctions outside its statutory authority, the majority reversed and remanded for the trial court to enter a new order on the monetary sanctions under provisions of the Discovery Act other than sections 2023.010 and 2023.030.  Specifically, the majority concluded that section 2023.010 merely describes general categories of discovery abuse, but does not authorize the trial court to impose sanctions for discovery abuse, and that section 2023.030 describes the type of sanctions available under the Discovery Act when another provision authorizes a sanction, but does not independently authorize the trial court to impose monetary sanctions for discovery abuse. 

            Justice Grimes (Division 8 justice sitting by assignment) dissented from Presiding Justice Rubin’s and Justice Moor’s conclusion on this issue – finding no basis “in statutory law, case law, or common sense” for “the majority’s unprecedented statutory analysis.”  Citing legal precedent, Justice Grimes concluded that the “[t]o the extent authorized” language of section 2023.030 relates to type of sanction – giving authority to impose the type of sanction in question, and that legal precedent supports the imposition of various types of sanctions under section 2023.030 for discovery abuse without regard to the requirements of other Discovery Act provisions.  (Kwan Software Engineering, Inc. v. Hennings, 58 Cal.App.5th 57 (2020) [discussed in our December 3, 2020 post]; London v. Dri-Honing Corp., 117 Cal.App.4th 999 (2004).) Additionally, Justice Grimes found no principle of appellate review to require a trial court to recite the specific statutes it found were violated – so long as the trial court adequately explains its analysis and findings in support of an order.  Given that the trial court described at length the discovery abuses for which sanctions were imposed – which Justice Grimes described as being “egregious discovery abuse that is unmatched in my experience” – remanding the case back to the trial court for the purpose of fleshing out the separate discovery statute for each particular discovery violation was adverse to the Legislative intent.

Appealability, Sanctions: $2,000 Sanctions Order Against Attorney For Filing A Second Amended Cross-Claims With New Claims Is Affirmed On Appeal

Prior Dismissal Of A Premature Appeal Did Not Retard Consideration Of This Appeal, Plus Be Careful To Observe Memorandum Page Limits!

            Bush v. Cardinale, Case No. A158757 (1^st Dist., Div. 4 Sept. 27, 2022; posted on Sept. 28, 2022) (unpublished) involved an appeal of a $2,000 CCP § 128.7 sanctions order against an attorney for filing a second amended cross-complaint in derogation of a prior lower court order requiring a motion for leave if new claims were added, as they were.  The Court of Appeal affirmed the sanctions order.

            Initially, it had to resolve a thorny appealability issue.  A prior appeal of the order was dismissed (not indicating without prejudice) because it was premature.  Normally, that dismissal would have been considered “with prejudice” if there is no indication otherwise, but there is an exception that allows an appellate court to consider a second appeal even though a prior appeal was dismissed as premature, the case here.  The appeal could be considered on the merits.

            However, there was no basis to overturn the sanctions award on the merits.  But there is cautionary tale in this one.  The sanctions opposition motion was 17 pages long which, under CRC 3.1113, can be considered a late-filed brief subject to being disregarded.  (CRC 3.113(d), (g).)  The trial court did not consider the excessive brief, and that decision was affirmed—so, litigators, be warned!

Sanctions: $960 Sanctions Order Issued For A Frivolous Motion For Reconsideration Is Affirmed On Appeal

Decision Also Has A Colorful Quote On A Confusing Appellant’s Brief.

            If a motion for reconsideration is meritless, frivolous, or filed in bad faith, the trial court may order sanctions against the movant pursuant to section 128.7 of the Code of Civil Procedure. (Code Civ. Proc., § 1008, subd. (d); Young v. Rosenthal (1989) 212 Cal.App.3d 96, 123; In re Marriage of Green (1989) 213 Cal.App.3d 14, 26.)  A lower court in Banks v. Mastorakos, Case No. B309937 (2d Dist., Div. 2 Aug. 16, 2022) (unpublished) imposed $960 in sanctions against plaintiff for bringing a frivolous motion for reconsideration after an adverse summary grant, a result affirmed on appeal because the reconsideration motion did not mention any new facts and cited improper statutes/ordinances.

            BLOG OBSERVATION:  We also enjoyed Justice Ashmann-Gerst’s observation about the quality of appellant’s briefing on appeal, which should remind us all of how real care needs to be devoted to developing arguments on appeal or whether to appeal in the first place: “On appeal, Banks raises a confusing miasma of arguments.  As another court observed of a similarly perplexing opening brief, ‘this document is strongly reminiscent of those magazine puzzles of yesteryear where the reader was challenged to “guess what is wrong with this picture.”’ (People v. Dougherty (1982) 138 Cal.App.3d 278, 280.)”

Appeal Sanctions, Sanctions: $950 Sanctions For Violating Pre-Trial Preparatory Local Rules Affirmed On Appeal

Panel Also Issues Cautionary Warning For Badly Written, Nonpersuasive Appellate Briefs In The Future.

            The 1/2 DCA, in Shiheiber v. JPMorgan Chase Bank, N.A., Case No A160188 (1^st Dist., Div. 2 July 25, 2022) (published), affirmed a $950 sanctions award against an attorney for violating local pre-trial preparatory filing rules under Code of Civil Procedure section 575.2, even noting the trial judge was generous in awarding only this amount which was below State Bar reporting requirements.  Attorney, on appeal, advanced arguments rejected by the appellate panel:  that section 575.2 was limited only to pre-trial proceedings (no), and there was a necessity to have a bad faith demonstration (no).  It also published to indicate that appellant’s appellate briefing was dismissed and totally unpersuasive, warning practitioners that the Division will award appeal sanctions in the future for this type of briefing.  (The Division also indicated that respondent did not properly ask for sanctions in a separate noticed motion, only in respondent’s brief, which is in violation of CRC directives, so it would have been disingenuous to award sanctions given this error by the other side.)

Sanctions: CCP §§ 128.5 And 128.7 Sanctions Motions Are Noncompliant Unless Filed 22 Days After Service Of The Unfiled “Safe Harbor” Motion

4/2 DCA Followed Broadcast Music Opinion From Earlier This Year.

            It looks like we are getting a gathering consensus from the intermediate appellate courts on the compliant timing for filing a CCP § 128.5 or 128.7 sanctions motion after service of the “unfiled, but served” safe harbor motion.  Agreeing with the conclusion of the 2/2 DCA in Broadcast Music, Inc. v. Structured Asset Sales, LLC, 75 Cal.App.5^th 596, 605 (2022) [reviewed in our March 12, 2022 post], the 4/2 DCA in Transcon Financial, Inc. v. Reid & Hellyer, APC, Case No. E076728 (4^th Dist., Div. 2 July 22, 2022) (published), reversed 128.5 and 128.7 sanctions because the motion was filed one day early.  Put another way, the true sanctions motion after expiration of the “safe harbor” period can be filed no earlier than 22 days after service of the unfiled, safe harbor pleading to be compliant.

Sanctions: $7,725 In CCP § 128.7 Sanctions Affirmed For Filing A Frivolous Complaint

Justice Perren References The Pierian Spring In His Authoring Of The Opinion.

            Here is how the opinion in Ben-Yashar’el v. Kirschbaum, Case No. B315184 (2d Dist., Div. 6 July 15, 2022) (unpublished) starts out:

          "A little learning is a dangerous thing;

           Drink deep, or taste not the Pierian spring:

           There shallow draughts intoxicate the brain,

           And drinking largely sobers us again.”

                --Alexander Pope, An Essay on Criticism, 1711.

            This quote segues nicely into both a lower and appellate court’s conclusion that dismissal of a quiet title action and award of $7,725 in CCP § 128.7 sanctions against an in pro per plaintiff was proper, where plaintiff tried to claim that a cashed check in the amount of $800 to a trustee on a Thousand Oaks property worth $30 million, stemming from a goofy ad, somehow created a binding real estate purchase agreement.  Trustee tried to dissuade plaintiff from pursuing the action, even sending out the section 128.7 “safe harbor” warning notice to no avail.  Both the demurrer grant without leave dismissal and sanctions order were affirmed in a 3-0 decision authored by Justice Perren based on the frivolous nature of the pleading.

            BLOG EXPLANATION:  In Greek mythology, the Pierian Spring in Macedonia was sacred to the Muses (the inspirational goddesses of literature, science, and the arts) and the Pierides (the nine sisters defying the Muses into a song contest which the sisters lost, with the defeat meaning they were turned into birds).  The spring was believed to be a fountain of knowledge for whoever drank from it.  Justice Perren’s writing style in this one shows that his other colleagues on the panel, Justices Gilbert and Yegan, are inspiring him.

Laffey Matrix, Probate, Sanctions, SLAPP: Lower Court Did Not Err In Fixing SLAPP Defense Fees In Two Defendants’ Favor

Also, A Probate Court Properly Sanctioned Attorney For Violating Local Rule Page Limitations.

            In Tukes v. Richard, Case Nos. B307242 et al. (2d Dist., Div. 8 July 12, 2022) (published), plaintiff lost SLAPP motions against two defendants, with the lower court awarding mandatory prevailing party fees of $49,071.50 and $26,905, respectively, after making some downward adjustments for duplicative work by the firms representing different defendants.  Also, a litigant’s counsel was sanctioned $4,000 (out of a requested $8,085) for failing to comply with local rule page limitations in filing certain pleadings.  Different appeals were taken, but these two results were affirmed.

            As to the SLAPP fees, here were the takeaways: (1) fees expended in monitoring another action are compensable when necessary to prosecute the SLAPP motion; (2) prevailing on a standing issue does mean that a defendant prevailed for SLAPP fee recovery purposes; and (3) a trial court has discretion to use the Laffey Matrix when it comes to establishing attorneys’ reasonable hourly rates in California state courts even though some courts decline to utilize it (Syers Properties III, Inc. v. Rankin, 236 Cal.App.4^th 691, 702 (2014)).

            On the sanctions order, California Rule of Court, rule 2.30 does authorize a probate court to impose sanctions for failure to comply with applicable rules without good cause, including an award of “fees on fees” for bringing the sanctions motion.  The award was no abuse of discretion under the circumstances.

            BLOG OBSERVATION—Appellant on the fees awards misquoted and mischaracterized attorney declarations on appeal, which we believe led to a loss of credibility before the panel—which only gently chided Appellant on this transgression.

Sanctions: $11,300 In CCP § 128.7 Sanctions Affirmed Against Client’s Attorney Based On Relitigating Grounds Lost Before

However, Because No Improper Purpose Shown By Client Independent Of Following Counsel’s Advice, Sanctions Against Client Reversed.

            Showers v. Matthews, Case No. A163900 (1^st Dist., Div. 1 June 29, 2022) (unpublished) is a reminder that CCP § 128.7 sanctions cannot be sustained under subdivision (b)(1) if the underlying conduct by a client was reliance on what counsel did.  In this case, the trial court awarded 128.7 sanctions of $11,300 against both client and client’s attorney for relitigating a second probate petition which had been dispositively decided under grounds raised in a first petition.  Because the conduct was objectively without merit and no subjective bad faith needs to be shown, the award was affirmed against the attorney.  However, because the order did not show that client had an improper motive other than relying on the actions of client’s attorney, the award had to be reversed as against client.  

Sanctions: Sixth District Affirms Imposition Of Section 128.7 Sanctions Against Plaintiff Who Filed Second Amended Complaint With Factually And Legally Frivolous Allegations

Plaintiff’s Filing Of A Third Amended Complaint Did Not Render Defendant’s Sanctions Motion Moot Because Third Amended Complaint Was Filed After Defendant Filed Sanctions Motion, Not Beforehand During The 21-Day Safe Harbor Period

            Under Code of Civil Procedure section 128.7, an attorney or self-represented party makes an implied “certification” as to the legal and factual merit of pleadings, motions or similar papers he or she submits.  A violation of this certification subjects the attorney or self-represented party to sanctions.  “[T]here are basically three types of submitted papers that warrant sanctions: factually frivolous (not well grounded in fact); legally frivolous (not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law); and papers interposed for an improper purpose.” (Guillemin v. Stein, 104 Cal.App.4th 156, 167 (2002).)

            In Kravchuk v. Taylor Morrison of California, LLC, Case No. H048858 (6^th Dist. June 27, 2022) (unpublished), plaintiff’s original complaint against the developer/seller with which she had entered into a written contract for the purchase and sale of real property contained one cause of action for breach of contract.  Two-and-a-half years into the litigation, plaintiff filed a second amended complaint containing six additional causes of action and eight additional defendants.  In response, developer/seller filed a partially successful motion to strike and partially successful demurrer.  Additionally, developer/seller filed a motion for sanctions under section 128.7 – claiming that allegations in plaintiff’s second amended complaint lacked factual or legal support and were contradicted by exhibits plaintiff herself had attached to the second amended complaint and by deposition testimony. The trial court granted defendant’s request for the $8,220 it incurred in preparing the sanctions motion, but denied without prejudice the $12,552 defendant incurred preparing and filing the demurrer and motion to strike.

            Plaintiff appealed, but the Sixth District found no abuse of discretion and affirmed.  Plaintiff’s argument that her filing of a third amended complaint rendered the sanctions motion moot failed based on the timeline of the filings.  Plaintiff filed her third amended complaint after the sanctions motion was filed – not during the 21-day safe harbor period she had to rectify the sanctionable conduct before defendant filed the sanctions motion.  (See Eichenbaum v. Alon, 106 Cal.App.4th 967 (2003).)  Additionally, the appellate panel found substantial grounds existed for the trial court’s conclusion that plaintiff – in her second amended complaint – made a number of factually frivolous allegations, and a prayer for attorney fees that was legally frivolous based on the written contract between the parties as well as a stipulation signed by plaintiff’s former attorney that each side was to bear her/its own attorney fees. 

Family Law, Sanctions: No Abuse Of Discretion In Trial Court’s $37,500 Attorney Fees Award, Which Included A $7,500 Deduction Based On Wife’s Conduct, Against Husband In The Form Of Section 271 Sanctions

Trial Court Had Ensured Against Financial Burden On Husband By Ordering Payment Of The Sanctions Through $200 Monthly Increments, And Its Statement Of Decision Made Clear That The Trial Court Had Considered The Behavior Of Both Parties.

            Family Code section 271(a) – the purpose of which is to promote settlement and encourage cooperation – authorizes a trial court to “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.”  These attorneys’ fees and costs are imposed as a sanction under the broad discretion afforded the trial court.

            In Marriage of Bonner, Case No. D078148 (4^th Dist., Div. 1 April 22, 2022) (unpublished), husband appealed the $37,500 attorney fees award issued against him as a § 271 sanction, as well as the trial court’s ruling on his own dueling request for § 271 sanctions against wife. 

            Husband’s attempt to relitigate on appeal the issue of whether his conduct warranted sanctions, his claim that some of the $73,000 in attorney fees wife claimed to have incurred were unnecessary, and his claim that the sanctions order placed an unreasonable financial burden on him all proved unsuccessful.  Determination as to husband’s conduct fell within the trial court’s broad discretion and was not subject to reversal absent a showing that the trial court exceeded the bounds of reason. (In re Marriage of Rosevear, 65 Cal.App.4th 673, 682 (1998).)  Additionally, section 271 does not limit the trial court’s sanctions award by the type of attorney fees incurred by the other party (In re Marriage of Corona, 172 Cal.App.4th 1205, 1226 (2009)), and the trial court awarded wife considerably less than the $73,000 she claimed.  Finally, there was no merit to husband’s financial burden claim as the trial court ensured against such burden by ordering the sanctions to be paid in monthly increments of $250. 

            The trial court declined to issue $12,000 in section 271 sanctions against wife, but, based on wife’s conduct, did reduce by $7,500 the sanctions amount it would have otherwise awarded wife. Husband argued he was entitled to a higher amount, but the trial court’s Statement of Decision made clear that the trial court had considered the behavior of both parties.  Additionally, husband failed to demonstrate the reasonableness of the attorney fees he sought, and was not entitled to costs – such as travel costs – incurred during the litigation for which he was mostly self-represented. A self-represented litigant attorney is not entitled to fees recovery under § 271 because sanctions must be tethered to attorney fees and costs (In re Marriage of Erndt and Terhorst, 59 Cal.App.5th 898, 904 (2021) [discussed in our January 13, 2021 post), and a party’s travel costs are not attorney fees or costs that may be awarded under § 271 (Menezes v. McDaniel, 44 Cal.App.5th 340, 351 (2019) [discussed in our January 16, 2020 post].

            The 4/1 DCA did remand for recalculation, however, as the trial court had reduced the $37,500 sanctions award by $19,016.30 to account for an equalization payment the trial court determined wife owed to husband, but the record did not support the $19,016.30 calculation. 

Probate, Sanctions: Sanctions Issued Against Beneficiary Contesting Trustee’s Account, Which Included $72,699 In Attorneys’ Fees, Affirmed On Appeal

Appellant’s Conclusionary Statements Were Not Sufficient To Meet Appellant’s Burden To Overcome Deferential Substantial Evidence Standard On Appeal.

            This next case provides a cautionary tale and affirms what we’ve said before – fee shifting statutes can be a real game changer.

            Appellant in Cavanagh v. Cavanagh, Case Nos. B294140/B299039 (2d Dist., Div. 6 April 18, 2022) (unpublished) incurred an alleged $105,021.48 in sanctions, which included $72,699 in attorneys’ fees, pursuant to Probate Code § 17211(a) – which allows for an award of the compensation and costs of the trustee and other expenses and costs of litigation, including attorney’s fees, against a beneficiary contesting the trustee’s account if the probate court determines that the contest was without reasonable cause and in bad faith.

            Appellant argued that the probate court did not have the authority to award sanctions because he did not contest Trustee’s account within the meaning of section 17211(a), but the appellate panel found the argument to be without merit based on appellant’s written objections to Trustee’s first draft account.  Appellant’s additional arguments – that he had not acted without reasonable cause and in bad faith, and that he had no reasonable alternative but to object – also went nowhere.  Determination as to reasonable cause – where the facts are disputed as they were in this case – and bad faith is made under the deferential substantial evidence standard.  As such, appellant had the burden of affirmatively showing that the record did not contain substantial evidence supporting the probate court’s findings.  (Denham v. Superior Court, 2 Cal.3d 557, 564 (1970).) However, appellant instead relied on conclusionary statements to prove his case on appeal.  Finally, as to appellant’s claim that he had no alternative but to object to Trustee’s account, he failed to show that Trustee’s account was facially defective.  In addition to the six-figure sanction award imposed on appellant, the 2/6 DCA also awarded Trustee his costs on appeal.

Sanctions: 2/2 DCA Establishes A “Bright Line” Rule That A CCP § 128.5 Motion Cannot Be Heard Any Sooner Than 22 Days After Motion Service So The Full 21-Day Safe Harbor Period Is Honored

Also, The Appellate Court Denied Request For Substantial Appellate Fees Based On The Law Of The Case/Waiver Doctrines.

            Broadcast Music, Inc. v. Structured Asset Sales, LLC, Case Nos. B304809/B306245 (2d Dist., Div. 2 Feb. 24, 2022) (published) has two interesting additions to jurisprudence in the appellate fees and 128.5 sanctions areas, tethered to the procedural history of the case.

            In prior lower court proceedings, Currency Corp., a party in an interpleader action involving a musical royalty dispute, obtained summary judgment against Structured Asset Sales, later moving for contractual attorney’s fees under Civil Code section 1717 and sanctions under former Code of Civil Procedure section 128.5 in a requested amount of $176,869.09.   The lower court awarded the full amount under section 128.5, with Currency not taking any action on the contractual fee request which was not ruled upon.  The appellate court reversed the sanctions award on technical grounds in a prior appeal by Structured, further denying Currency’s request for appellate fees under Civil Code section 1717 because no lower court fee award had been entered under section 1717. 

            That, unfortunately, did not end things.  Currency filed a motion in the lower court seeking $209,385 in appellate fees under section 1717 relating to the results achieved in the prior appeal.  This request was denied by the trial court.  In an effort to obtain a withdrawal of Currency’s fee motion, Structured served and then subsequently filed a section 128.5 sanctions motion based on the theory that the fee request was frivolous based on the appellate court’s refusal to award appellate fees in its resolution of the prior appeal.  The sanctions motion was denied based on the trial court’s perception that the fee motion had been resolved on the 2lst day of the “safe harbor period” such that the full 21 days for Currency to withdraw its fee motion had not transpired.

            The 2/2 DCA, in an opinion authored by Justice Ashmann-Gerst, affirmed both orders in appeals brought separately by Currency and Structured.  The fees motion was precluded by the law of the case and waiver principles, given that Currency never pressed the lower court for a hearing on section 1717 fees and put “all of its eggs in one basket” by only pursuing the sanctions motion—with the appellate court rejecting the 1717 appellate request in the first appeal, which was law of the case.

            With respect to the sanctions motion, the appellate panel established a “bright line” rule for the timing on the hearing of a section 128.5 motion.  In line with an advisory comment by the Rutter Group civil procedure treatise, the 2/2 DCA held that a 128.5 sanctions motion cannot be heard until 22 days after the motion is served.  Structured was close, but the resolution of the Currency’s fees motion on the 21^st day was a little short of what was required.

Sanctions: Monetary Sanctions Of $11,562.50 Imposed Against Plaintiff’s Counsel For Frivolous Motion To Recall Remittitur To Clarify That SLAPP Defendants Were Precluded From Recovering Appellate Fees Because Each Party Was Ordered To Bear Its Own Costs

The 2/4 DCA Found That Any Reasonable Attorney Would Have Expected It To Follow Its Decision In Stratton Which Specifically Held That An Appellate Court’s Directive That Parties Are To Bear Their Own Costs On Appeal Does Not Preclude Award Of Appellate Attorney Fees.

            In a previous appeal filed by both plaintiff and defendants, the 2/4 DCA affirmed the trial court’s order granting in part and denying in part an anti-SLAPP motion filed by defendants. In its opinion, the panel ordered that the parties bear their own costs on appeal – an order that was repeated in the subsequently issued remittitur.  However, the panel did not address the issue of attorney fees because it had not been raised by the parties. Afterward, defendants filed a motion in the trial court to recover appellate attorney fees under the anti-SLAPP statute – arguing the 2/4 DCA’s costs order did not preclude their recovery of appellate attorney fees, and citing the 2/4 DCA’s decision in Stratton v. Beck, 30 Cal.App.5th 901 (2018) [discussed in our December 9, 2018 post] which held that, under California Rules of Court, Rule 8.278(d)(2),  an appellate court’s directive that parties are to bear their own costs on appeal does not preclude an award of appellate attorney fees.

            In response to defendants’ fee motion, Plaintiff’s counsel filed an unsuccessful motion to recall the remittitur so that plaintiff would not “have to address” the claim of attorney’s fees in Anabi Oil Corp. v. iFuel, Case No. B301899 (2d Dist., Div. 4 February 24, 2022) (unpublished).  Speculating that the panel intended its costs order to resolve the unbriefed issue of fee entitlement against defendants, plaintiff’s counsel argued that “it would not make sense” to allow defendants to recover appellate attorney fees while denying them costs, but did not address Stratton – something that did not bode well for plaintiff’s counsel when defendants’ request for monetary sanctions was addressed.

            Although admitting to having reviewed Stratton before filing the recall motion, plaintiff’s counsel claimed he thought it was distinguishable from this case as it involved fees under the Labor Code. The panel was not impressed - finding that any reasonable attorney would have expected it to follow Stratton despite “the different underlying basis for the attorney fee award . . . .” Additionally, addressing the importance of candor toward the court, the panel found that plaintiff’s counsel violated the Rules of Professional Conduct by failing to address Stratton (Rules Prof. Conduct, rule 3.3(a)(2) (rule 3.3)), and that he continued to exhibit a lack of candor in addressing the sanctions issue by misrepresenting the motion to recall the remittitur as a neutral request for clarification.  Plaintiff’s counsel and his firm were hit with $11,562.50 in monetary sanctions for filing a frivolous motion. (California Rules of Court, Rule 8.276(a)(3).)

Sanctions: 1/5 DCA Affirms $11,900 In CCP 128.5 and 128.7 Sanctions Against Defendants In Partition Action Who Pursued Quiet Title Despite Having Previously Lost Quiet Title Action At Appellate And Lower Levels

Pursuant To The Law Of Preclusion, Defendants’ Conduct Was Sanctionable Where They Filed A New Complaint, Based On The Same Facts, To Relitigate Issues They Had Already Lost Through Previous Litigation.

            In U.S. Bank Nat. Assn. v. Rosenblum, Case No. A161511 (1^st Dist., Div. 5 February 23, 2022) (unpublished), the trial court issued Code Civ. Proc. §§ 128.5 and 128.7 sanctions in the amount of $11,900 against husband and wife defendants who filed a counter-complaint for quiet title and cancelation of a deed of trust, encumbering 50% of their real property, in a partition action brought by plaintiff trustee seeking to have the real property sold and the proceeds divided between it and defendants.

            The problem for defendants was that the 1/5 DCA had already made a determination, in favor of trustee, as to these issues in a previous action brought by wife and based on the same set of facts. As a result, the trial court found defendants’ cross-complaint was “objectively and subjectively unreasonable” and filed for an improper purpose whereby defendants were trying to relitigate issues they had already lost.

            The 1/5 DCA found no error in the trial court’s conclusion that the cross-complaint was frivolous and affirmed. The panel’s decision in the appeal from the previous action barred defendants’ cross-claims in the partition action pursuant to the law of preclusion – which helps to ensure that a dispute resolved in one case is not relitigated in a later case. ” (Samara v. Matar, 5 Cal.5th 322, 326 (2018); see also Bucur v. Ahmad, 244 Cal.App.4th 175, 191 (2016) [“Filing a new complaint based on the same facts to evade a ruling made in a previous litigation constitutes sanctionable conduct.”].)

Discovery, Sanctions: No Abuse Of Discretion In Trial Court’s Order Issuing $6,150 In Sanctions Against Defendant For Failure To Timely Respond To Two Sets Of Discovery Requests Served By Email.

Defendant Did Not Claim Email Service Was Improper Or That Discovery Requests Had Not Been Received, And Did Not Demonstrate That It Acted With Substantial Justification Or That The Sanctions Were Unjust Or Unreasonable.

            Personal injury defendant appealed the trial court’s order issuing $6,150 in sanctions against it – $3,075 each for defendant’s failure to timely respond to two sets of discovery requests – based on the method plaintiff used to serve the requests in Adams v. STN Builders, Case No. G059926 (4^th Dist., Div. 3 January 31, 2022) (unpublished).  The discovery requests had been served only by email, apparently due to COVID-19 protocols, but defendant argued they should have also been served by U.S. Mail.

            In a 3-0 opinion, authored by Justice O’Leary, the 4/3 DCA found defendant’s argument to be without merit. For starters, defendant did not claim that the email service was improper or that the requests had not been received.  Rather, defendant had failed to open the email and its attachment.  Additionally, a previous set of discovery requests had also been served only by email. Finally, plaintiff attempted to resolve the discovery issues through meet and confer efforts even after filing the motions to compel, but defendants failed to comply with plaintiff’s terms for resolution – that full responses be delivered by a specific date/time, and that defendant provide available deposition dates and a compromise on the monetary sanctions.

            Based on defendant’s failure to demonstrate that it acted with substantial justification, or that the sanctions were unjust or unreasonable, the panel affirmed. (Code Civ. Proc., §§ 2030.290(c) and 2031.300(c).)

Sanctions: Imposition of Sanctions Under Former CCP § 128.5 Reversed Where Sanctions Imposed In 2006 Case Because Former Provision Applied to Pre-1995 Cases

Small Sanctions Award Reversed As To Plaintiffs, But Not As To Their Attorney Who Failed To Join The Appeal.

            There is a lesson for litigation attorneys in this one, with respect to making sure you join an appeal by a client who is hit with statutory sanctions.

            Plaintiffs and attorney were hit with CCP § 128.5 sanctions in a 2006 case, with the sanctions awarded in 2008.  Only plaintiffs appealed, raising several arguments for overturning the order in Lafferty v. Fleetwood Motor Homes of California, Inc., Case No. C059562 (3d Dist. Jan. 26, 2022) (unpublished).  The appellate court reversed, because the sanctions were awarded under former section 128.5 which applied to pre-1995 cases and with section 128.5 not being amended again until 2014.  It simply did not apply.  However, attorney’s failure to join the appeal meant no relief could come his way—a practitioner tip to follow in order to avoid a bad result. 

Sanctions: $1,050 CCP § 177.5 Sanctions For Disobeying A Lawful Court Order Is Affirmed

Order Can Be Based On An Oral Pronouncement.

            Plaintiff’s attorney in Marriage of Stupp and Schilders, Case Nos. A161177 et al. (1^st Dist., Div. 2 Jan. 25, 2022) (unpublished) was hit with a $1,050 sanctions order under CCP § 177.5, which authorizes a judicial officer to impose monetary sanctions “for any violation of a lawful court order by a person, done without good cause or substantial justification.”  The basis was disobeying a judge’s ruling by which a discovery sanctions order against the other side was stayed, triggered by plaintiff’s attorney seeking a writ of execution on the stayed discovery sanctions order.  The section 177.5 sanctions were affirmed on appeal.  There was no need for a written order; an oral pronouncement was sufficient given attorney was in court.  (Seykora v. Superior Court, 232 Cal.App.3d 1075, 1078, 1084 (1991); People v. Ward, 173 Cal.App.4^th 1518, 1529-1530 (2009).)

Family Law, Sanctions: Sixth District Affirms Trial Court’s Imposition Of $2,520 In Section 271 Sanctions Against Husband And Denial Of Husband’s Request For $100 Million In Sanctions Against Wife And Her Attorney

Husband’s Conclusory Assertions Of Trial Court Error With No Record On Appeal, No Supporting Argument Nor Legal Authority, And His Failure To Have Followed Statutory Procedure In The Lower Court Doomed His Appeal.

            In Marriage of Joe and Lee, Case No. H047392 (6^th Dist., January 7, 2022) (unpublished), the trial court awarded wife $2,520 in Family Code § 271 sanctions for attorney fees she incurred in defending against a set-aside motion brought by husband – finding husband’s set-aside motion was submitted without supporting factual or legal basis. Additionally, the trial court denied husband’s request for section 271 and Code Civ. Proc. § 128.5 sanctions against wife and her attorney due to husband’s failure to satisfy procedural prerequisites and to substantiate his claims.  Husband appealed, but the Sixth District affirmed.

            As to the § 271 sanctions awarded to wife, the panel found no abuse of discretion. Husband failed not only to provide meaningful argument or legal authority to support his claims of trial court error, but also failed to provide the panel with a record on appeal that would allow review of the chain of events underlying his claim of error by not including the set-aside motion nor the documentation for the underlying fees and costs order he sought to set aside. As the panel explained, “a conclusory assertion of error is inadequate to satisfy the appellant’s burden to establish prejudicial error warranting reversal and will not prevail on appeal.” (Jameson v. Desta, 5 Cal.5th 594, 608–609 (2018); Ewald v. Nationstar Mortgage, LLC, 13 Cal.App.5th 947, 948 (2017).)

            With regard to the $100 million husband sought in sanctions, plus another $5 million in punitive damages, against wife and her attorney for bad faith behaviors, perjury, forgery, and libeling and defaming husband, the appellate panel found the trial court’s decision was “amply” supported by the record. Husband’s sanctions request, embedded in a responsive declaration to wife’s motion for sanctions failed to comply with the “safe-harbor” Code Civ. Proc. § 128.7(c)(1) provision, and exhibits attached to his responsive declaration did not support his allegations.

Sanctions: $28,882.29 CCP § 128.7 Sanctions Award Reversed On Appeal

Plaintiff Made A Plausible, Nonfrivolous Argument That The Statute Of Limitations Did Not Bar An Action.

            In Kumar v. Ramsey, Case No. C092610 (3d Dist. Nov. 29, 2021) (published), plaintiff was socked with CCP § 128.7 sanctions of $28,882.29 because the lower court believed that the action clearly was time barred under the applicable statute of limitations (SOL).  The appellate court saw things differently, believing a plausible, nonfrivolous argument was made as to why the SOL did not bar the action.  Given that determination, it was an abuse of discretion to dispense sanctions against plaintiff. 

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.