CALIFORNIA ATTORNEY'S FEES

Appealability, Sanctions: Later Order Vacating Default Judgment Was Appealable But Stayed Where Prior Appealed Order Had Required $27,968.75 In Attorney’s Fees And Costs To Vacate Default Judgment

Result Was Defendant Had 25 Days After Remittitur To Pay Fee/Costs Vacate Award, With Dissenting Justice Believing That The Fees/Costs Award Should Be Reduced Down By Another $17,250.

            This next case, F&S Investment Properties v. Nguyen-Stevenson, Case Nos. B281031/B281973 (2d Dist., Div. 1 Oct. 9, 2018) (unpublished), is a 2-1 decision regarding stay appealability issues and how much discretion attends a lower court’s decision to condition a vacate of a default judgment based on payment of $27,968.75 in attorney’s fees and costs.

            Plaintiff obtained a default judgment against defendant, who moved to set aside under CCP § 473.5 (a section allowing this be done but with fee and cost shifting as the trial judge deems just and proper). The trial court granted the vacate of the default judgment on condition that defendant serve an answer and pay $27,968.75 in fees and costs. Defendant did not pay and appealed this order; later, the trial court ordered the vacate default and reinstatement of the default judgment, a second order appealed from by defendant.

            The 2/1 DCA majority agreed that the first order was appealable and that it was ambiguous—it either said the judgment will be set aside upon payment or was set aside no matter what, such that is was appealable. However, the majority decided that the conditional payment order was no abuse of discretion but that the lower court had no jurisdiction to make the second order given that the first order was not one for payment of money per se such that it was stayed on appeal.   The result was that the plaintiff had to pay the money 25 days after the remittitur issuance or else the default judgment would be reinstated.

            In dissent, Justice Johnson found the $27,968.75 amount was an abuse of discretion because there was no proper allocation of fees and costs for work to actually get the default judgment vacated; he would have reduced the amount of $17,250 at a minimum.

Sanctions: February 2017 Report By California Research Bureau On CCP § 128.5 and 128.7 Sanctions Motions Show They Are Not Filed In Very Many Cases

Report Also Shows That Reporting Attorneys Did Not Provide The “End Conclusions” To The Sanctions Requests.

            In February 2017, the California Research Bureau issued a mandatory report for 2015-2016 relating to the use of CCP § 128.5 motions (whether alone or combined with CCP § 128.7 motions) as required under section 128.5. Although attorneys are under a requirement to report to the California Research Bureau, its results show that even reporting attorneys do not provide the actual order on the 128.5 proceeding in 64.4% of matters for which initial motion submissions were made. However, we do give you a flavor for the conclusions reached by the Bureau:

• 128.5 requests, whether single or combined with 128.7 requests, totaled only .05% of all civil filings for 2015-2016;
• 129 sanctions motions were made during 2015-2016, as reported;
• Of those reported motions, 11.6% were granted, 24% were denied, and 64.4% of the motions never resulted in reporting the results on the sanctions requests;
• The county leaders as far as numbers of sanctions requests were, in order: Los Angeles; Orange; San Francisco; San Diego; Santa Clara;
• If one takes away the nonreporting anomaly, one-third of the frivolous action requests were granted (15 of 46), with 6 of 15 awarded for full attorney’s fees requests and with the average award being $8,833; and
• When one boils down both the Bureau and Judicial Council statistics, less than one-half of 1% of civil cases filings involved 128.5 requests (singular or combined with 128.7 requests).

Arbitration, Sanctions: After Compelling Arbitration And Then Failing To Pursue It, Fitbit And Its Litigation Attorneys Liable For Bad-Faith Sanctions In Heart-Tracking Devise Action

Fitbit Did Finally Agree To Arbitrate, But Only After District Judge Expressed Concerns Over Its Litigation Conduct, Which Will Result In Some Amount Of Sanctions And Other Prospective Actions Ordered By District Judge.

            Arbitration frequently is invoked by defendants because of the perception that it is more user friendly in many types of cases, including consumer disputes. U.S. District Judge James Donato of the Northern District of California put it this way in the case we post on next: “[The defense conduct in this case] has also bolstered the perception that arbitration is where consumer lawsuits go to die. While the merits of that view can be debated, it’s no surprise that many people, including judges, are skeptical about arbitration agreements in light of situations like this one. Fitbit’s conduct undermines the public’s confidence in getting a fair shake when arbitration is compelled.”

            In McClellan v. Fitbit, Inc., Case No. 3:16-cv-00036-JD (N.D. Cal. July 24, 2018 [Doc. 153 “Order re Arbitration Proceedings,” Dkt. No. 146]), Fitbit moved to compel arbitration against a plaintiff consumer in a suit alleging that the company made misrepresentations about the accuracy of its heart rate monitoring devices. District Judge Donato granted the request, but Fitbit failed to pay AAA arbitration fees and told plaintiff it had no intention of arbitrating her claims or the arbitrability issues delegated to the arbitration for determination, ostensibly because the AAA fees were way more than her actual claim was worth. One of plaintiff’s attorneys’ paralegal took notes of a phone call with Fitbit’s counsel Morrison & Foerster where this intention was announced, which spurred a conference with the district court and drew some concerns “in plain terms” at a hearing so as to cause Fitbit to pay its fees before the AAA suspended the case and then proceed with the arbitration.

            However, the story did not end there. District Judge Donato, although denying more draconian relief requested by Ms. McClellan, did find that Fitbit and its attorneys were going to have to pay sanctions for bad-faith litigation conduct as well as do filings in prospective actions and do 90-day update filings in the case before him.

            Ms. McClellan first argued that by failing to pay the arbitration fee, Fitbit had lost the right to arbitrate. The district court rejected that argument, because Fitbit had changed course and paid the arbitration fee before AAA suspended the case. She then suggested that the district court should find the arbitration agreement unenforceable for all of Fitbit’s customers as a punishment for its conduct in her case. District Judge Donato also rejected this suggestion, reasoning that the tactics in this one case did not necessarily undermine arbitration in future cases or inherently waive a consumer’s right to pursue statutory remedies under Fitbit’s terms of service with the arbitration provision.

            But, the district judge found that Fitbit and its attorneys would have to pay some amount of yet-to-be-determined sanctions for bad-faith litigation conduct under Chambers v. NASCO, Inc., 501 U.S. 32, 43, 45-46 (1991), which allows courts to assess fees against counsel where a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. Beyond that, he ordered that Fitbit was ordered to file a copy of his decision in all cases where it sought to compel arbitration with consumers for a period of one year from the order’s date and directed that the parties file joint status statements every 90 days until the arbitration proceedings were completed.

            The moral of the story is that if you elect to compel arbitration, you better stick with it or risk sanctions.  

           

Discovery/Sanctions: Plaintiff In Pro Per Attorney Properly Imposed With Discovery Sanctions Of $5,510 (Inclusive Of Attorney’s Fees) Under CCP § 2030.300(d)

Appellate Court Rejects In Pro Per’s Due Process Argument And Challenge To Temporary Judge’s Initial Assignment To Motion Matter.

            DeWitt v. HSBC Bank USA, N.A., Case No. A151545 (1^st Dist., Div. 2 June 22, 2018) (unpublished) is a situation where an in pro per attorney, representing himself as plaintiff, sued several defendants in a California Anti-Spam Act case. A superior court judge granted a motion to compel further responses against plaintiff and imposed monetary discovery sanctions of $5,510 against plaintiff/in Bank’s favor under CCP § 2030.300(d). Earlier, plaintiff had nixed having the motion matter heard by a temporary judge, which in hindsight was a mistake.

Plaintiff appealed the motion to compel and discovery sanctions, although only the sanctions award was appealable. (CCP § 904.1(a)(12); Doe v. U.S. Swimming, Inc., 200 Cal.App.4^th 1424, 1432 (2011).)

            Plaintiff’s two challenges on appeal did not succeed.

            First, plaintiff argued there were due process/equal protection violations in allowing discovery sanctions, inclusive of fees, to be awarded against an in pro per attorney, who could not gain fees as sanctions based on the attorney’s self-representation. The First District, Division 2 rejected this argument based upon the reasoning in Kravitz v. Superior Court, 91 Cal.App.4^th 1015, 1020 (2001). Kravitz first of all recognized that an in pro per plaintiff winning discovery sanctions can obtain reasonably identifiable expenses incurred such as computer-assisted legal research, photocopying, or transportation to/from court, just like lawyers representing parties can recover out-of-pocket costs. However, by definition, self-represented have incurred no attorney’s fees such that they are not similarly situated for due process/equal protection purposes. As far as the asymmetry argument made by plaintiff, the fact in pro per plaintiffs can recover out-of-pocket expenses is not that far askew because most lawyers representing parties ordinarily include such expenses in their hourly rates.

            Second, the record showed that the temporary judge did not hear the motion matter after plaintiff objected, with the matter going to a superior court judge who made an independent review. Plaintiff should have stuck with the temporary judge, whose tentative was to issue sanctions of only about 1/5^th of the amount eventually awarded by the superior court judge. Ouch! – this case reinforces the old adage “Be careful what you ask for.”

Sanctions: Moofly Productions Opinion Certified For Publication

Trial Court Must Provide 21-Day Safe Harbor Warning Before Imposing Sanctions For Improper Reconsideration.

            On June 1, 2018, we posted on Moofly Productions, LLC v. Favila, Case No. B282084 (2d Dist., Div. 1 June 1, 2018), unpublished at the time. It held that a trial court must follow CCP § 128.7 21-day safe harbor rules before imposing sanctions for an improper reconsideration motion under CCP § 1008. We can now report that the opinion was certified for publication on June 22, 2018. 

            Read our June 1, 2018 post here.

Discovery, Family Law, Sanctions: $5,500 Discovery Sanctions Award Against Ex-Client Attorney Reversed Where Attorney Not Given Notice She Was A “Sanctions Target”

Due Process Violation Was Reason For Reversal.

             In Marriage of Mehta & Grover, Case No. A146919 (1^st Dist., Div. 4 June 19, 2018) (unpublished), a $5,500 discovery sanction against an ex-attorney for wife was reversed on due process grounds. What happened was that before the discovery sanctions motion was decided, attorney was relieved as wife’s attorney, with nothing in the papers indicating she was the target of a discovery sanctions request (with only her client wife indicated as a target). The subsequent $5,500 sanctions order against ex-attorney was reversed on due process grounds, given the attorney had no notice that she was personally the subject of the sanctions request. Here is what the appellate court had to say on a broader basis with respect to sanctions request in moving or opposing papers: “To interpret [Code of Civil Procedure] section 2023.040 as imposing a notice obligation only on those who elect to include a sanctions motion in moving papers (i.e., in a discovery motion or in a separate sanctions motion), and not on those who include a sanctions motion in opposition papers, would defeat the obvious purpose of the statute and would lead to absurd consequences.” (Slip Op., p. 9.)

Sanctions: 2/1 DCA, In Unpublished Decision, Determines That Trial Court Must Comply With CCP § 128.7 Safe Harbor Rule Before Sanctioning Party For Violating CCP § 1008 Reconsideration Prohibitions

Trial Judge Did Not Notify Putative Sanctioned Party That It Would Be Sanctioned Sans A Withdrawal Of The Reconsideration Motion.

            Moofly Productions, LLC v. Favila, Case No. B282084 (2d Dist., Div. 1 June 1, 2018) (unpublished) demonstrates that trial judges, just like litigants, must satisfy CCP § 128.7 sanctions safe harbor requirements before doling out sanctions under statutes subject to section 128.7 strictures.

            Code of Civil Procedure section 1008(d) allows sanctions to be imposed for an improper reconsideration motion “as allowed by [s]ection 128.7.” In turn, section 128.7 does allow a court to impose sanctions on its motion, pursuant to subdivision (c)(2), if the court enters an order describing the specific conduct appearing to violate the sanctions statute and directing an attorney, law firm, or party to show cause why it has not violated section 128.7(b) unless within 21 days of service of the OSC there is a withdrawal/correction by the notified attorney, law firm, or party.

            In Moofly Productions, the trial judge did not notify Moofly that it would be subject to sanctions if it did not withdraw the motion for reconsideration. Instead, the court denied the motion for reconsideration at the same moment that it issued the OSC, mooting Moofly’s subsequent attempt to withdraw its motion. The appellate court held that the trial judge was subject to the 21-day safe harbor requirements of section 128.7 before imposing sanctions for an unwarranted motion for reconsideration under section 1008. This resulted in a reversal of a $10,499.51 sanctions award made payable to defense counsel by Moofly and one of its attorneys.

Sanctions: U.S. Magistrate Judge Issues $10,000 In 28 U.S.C. § 1927 Sanctions Against Class Action Attorney Giving Dishonest Excuse For Not Timely Filing Class Certification Motion

Instagram And Suspicious Plane Itinerary, Along With Attorney Admission, Led To Imposition Of Sanctions.

            When it comes to blowing deadlines which can be cured, counsel should be candid with courts in requesting relief, which can be granted if the circumstances are right.  The next situation, which has drawn quite a bit of publicity, illustrates the necessity for honesty in requesting such relief.

            What happened in Ha v. Baumgart Café of Livingston, Civil Action No. 2:15-cv-5530-ES-MAH (D.N.J. Apr. 26, 2018 (PACER Document No. 123) is that a class conditional certification motion deadline in a wage/hour case was blown by co-counsel who then filed a request for extension of time to file the motion.  Co-counsel said that she had to attend to a family emergency in Mexico City, and attached a copy of her plane itinerary as corroborating proof.  Her other co-counsel was unaware that the deadline had been blown or that she had a family emergency.  In opposition, defense counsel presented an Instagram account showing that plaintiffs’ attorney was not in Mexico City when the motion was due but was instead in New York City.  Also, the date on the flight itinerary supplied as corroboration listed a date which did correspond to the actual date of the week for that designated date.  The attorney first withdrew the class certification motion with prejudice, and then reversed course asking to change the withdrawal to be without prejudice.  This resulted in a rift between plaintiffs’ two attorneys, with the one attorney moving to withdraw as plaintiffs’ counsel.  U.S. Magistrate Judge Michael A. Hammer eventually found no prejudice from the delay in filing the motion, allowed the one attorney to withdraw, and ordered the remaining attorney to obtain new local counsel.  During the various hearings, the withdrawing attorney admitted she was not in Mexico City during the pertinent dates and the remaining counsel indicated he was unaware of the blown deadline until later. 

            The defense requested leave to apply for sanctions, which the magistrate judge granted.  He found that sanctions were justified under 28 U.S.C. § 1927 because the offending attorney misled the court and other attorneys in the case as shown by the Instagram account, flight itinerary, and her own admissions in open court.  However, remaining counsel was not sanctioned.  With respect to the amount of sanctions, the magistrate judge awarded $10,000 in favor of defense attorneys on a pro rata basis, but found that the $44,283 request was “unreasonably high.”

     

Bankruptcy/Sanctions: Contempt Sanctions Against Creditor For Knowingly Violating Discharge Injunction Could Not Stand Based On Creditor’s Subjective Good Faith Belief, Even If Unreasonable

Ninth Circuit Clarified Some Reasoning In Zilog Decision.

            In In re Taggart, Case No. 16-35402 (9^th Cir. Apr. 23, 2018) (published), the Ninth Circuit clarified some prior reasoning in In re Zilog, 450 F.3d 996, 1009 n.14 (9^th Cir. 2006) to reinforce that contempt sanctions cannot be assessed against a creditor for knowingly violating a discharge injunction based on creditor’s good faith belief, even if unreasonable in nature.  The bankruptcy judge found the creditor’s subjective intent was irrelevant, an erroneous determination resulting in the BAP’s prior decision to reverse the bankruptcy judge ruling—with the Ninth Circuit affirming the BAP’s reversal.

Sanctions: $34,000 In CCP § 128.5 Sanctions Affirmed Against Litigant Unsuccessfully Trying To Upset Earlier Adjudication Based Upon Extrinsic Fraud

Among Other Things, Damning Admissions In Debtor Exam Sealed The Deal.

            In Quadri v. Alkayali, Case No. G054914 (4th Dist., Div. 3 Apr. 19, 2018) (unpublished), the 4/3 DCA—in a panel decision authored by Justice Bedsworth—affirmed around a $ 34,000 sanction against a litigant losing an “extrinsic fraud” challenge to a prior verdict.  Among other things, the affirmance was justified because the appellant had made disavowals in earlier debtor examinations of having any ownership interest in a company which was contrary to the contention that he was indeed the controlling shareholder of the company years later. 

Sanctions: Third District Decides That An Asserted Nonfrivolous Claim Cannot Be Found To Be Brought For An Improper Purpose Under CCP § 128.7

Plaintiffs Advanced A Plausible Interpretation Of A Phrase In Prior Settlement Stipulation Such That Sanctions Were Not Warranted.

            In Ponce v. Wells Fargo Bank, 21 Cal.App.5^th 253, Case No. C080680 (3d Dist. Mar. 13, 2018) (published), a trial judge sanctioned plaintiffs who brought lender liability claims in a residential property dispute with terminating sanctions and also imposed over $25,000 in monetary sanctions (as against plaintiffs and their attorneys) under Code of Civil Procedure section 128.7.  The basis for the sanctions was that plaintiffs advanced a frivolous interpretation of “predecessor in interest” language in a release under a prior settlement stipulation in other proceedings. 

            The Third District, on appeal, reversed.  It was swayed by the fact that sanctioned plaintiffs presented a plausible interpretation of “predecessors in interest” under the prior settlement stipulation given that the defendants interpreting otherwise were not involved in the prior proceedings.  Put another way, one could say that the reviewing court believed the trial judge erred by pulling the “sanctions trigger” without hearing more on the threshold contractual interpretation issue.  After reaching the conclusion that plaintiffs’ contractual interpretation position was not frivolous in nature, it was no far stretch to conclude the claim was not brought for an improper purpose under section 128.5.   This decision does establish that a failure to show frivolity means there was a failure to show an improper purpose, with the appellate court adjudicating this issue de novo (as opposed to the more deferential abuse of discretion standard which is generally hard to surmount on appeal).

Appealability/Discovery/Sanctions: Separate Discovery Sanctions Cannot Be Aggregated For Purposes Of Meeting $5,000 Appealability Threshold

Two Separate Sanctions Below $5,000 Cannot Be Aggregated For Appealability Purposes.

            In Mitchell Anthony Productions, LLC v. Baron, Case No. B282974 (2d Dist., Div. 5 Mar. 28, 2018) (unpublished), the trial judge awarded $4,860 in discovery sanctions on separate motions to compel further discovery responses to the interrogatories and requests for production.  The sanctioned party appealed because the total sanctions came to $9,720, claiming that the $5,000 jurisdictional threshold for an appeal of monetary sanctions over $5,000 was met.  (CCP § 904.1(a)(11), (a)(12).) 

            The appellate court dismissed the appeal.  The reason?  A party cannot aggregate monetary sanctions for purposes of appealability purposes, fully endorsing the reasoning to the same effect in Calhoun v. Vallejo City Unified School Dist., 20 Cal.App.4^th 39, 44-45 (1993) [1^st Dist., Div. 5]), but indicating this did not foreclose an extraordinary writ petition if a true wrong was done through a sanctions order below. 

Sanctions: CCP § 128.7 And Family Code Section 271 Sanctions Improperly Imposed Against Attorney

$5,000 Sanctions Award Against Attorney Reversed.

            Attorney and client her were sanctioned for $5,000 under CCP § 128.7 and Family Code § 271 in Saidiner v. Jacobs-Jakubowicz, Case No. B275860 (2d Dist., Div. 7 Mar. 26, 2018) (unpublished).  Attorney appealed the sanctions award, which was reversed on appeal.

The CCP § 128.7 sanctions could not stand because it was imposed without giving attorney the benefit of the 21-day safe harbor protection.  The Family Code section 271 basis for the award was infirm, because sanctions can only be awarded against a party, not an attorney, with Division 7 endorsing the same result reached in Webb v. Webb, 12 Cal.App.5^th 876, 883 [an earlier 2/8 DCA decision discussed in our June 14, 2017 post].  Furthermore, the section 128.7 sanctions were improperly directed to be paid to party’s counsel, rather than the party.  (Webb v. Webb, 12 Cal.App.5^th at 878.) 

Sanctions: CCP § 128.5 Sanctions For 1/1/15 – 8/7/17 Time Frame Must Comply With Safe Harbor Section 128.7 Requirements

Second District Departs Company With Contrary Result In San Diegans for Open Government.

            San Diegans for Open Government v. San Diego, 247 Cal.App.4^th 1306, 1317 (2016) [reviewed in our June 9, 2016 post] held that a party filing a CCP § 128.5 sanctions motion does not need to comply with the safe harbor waiting period described in section 128.7(c)(1).

            We can now report that the Second District, Division 7, has expressly departed company with this view in Nutrition Distribution, LLC v. Southern SARMs, Case No. B280983 (2d Dist., Div. 7 Jan. 31, 2018) (published).  That led the appellate court to affirm a trial judge’s denial of sanctions based on moving party’s failure to satisfy section 128.7’s “safe harbor” protection where the motion for sanctions was based on a purportedly frivolous complaint, written motion or court filing that could be withdrawn or on some other alleged action or tactic that could be appropriately corrected.

Discovery/Sanctions: Yelp Properly Ordered To Disclose Documents Relating To Anonymous Reviewer Making Alleged Slanderous Comments

However, Sanctions Order Relating To Discovery Order Reversed As A Matter Of Law Based On Evolving, Unsettled Area Of The Law.

            In Yelp Inc. v. Superior Court, Case Nos. G054358/G054422 (4^th Dist., Div. 3 Nov. 13, 2017) (published), plaintiffs successfully obtained a discovery order against Yelp compelling it to disclose documents that might reveal the identity of an anonymous reviewer allegedly making slanderous statements (with plaintiffs proving a prima facie case of slander).  The lower court also imposed $4,962.59 in discovery monetary sanctions against Yelp.

            Although losing a standing argument, plaintiffs did obtain affirmance of the discovery order.  However, with respect to the sanctions order, the 4/3 DCA—in a 3-0 opinion authored by Presiding Justice O’Leary—reversed as a matter of the law given that this area of the law was evolving and unsettled such that Yelp’s challenge of the discovery order was substantially justified. 

            BLOG OBSERVATION—We noticed that Steve Krongold, who both contributors know, won the merits on behalf of plaintiffs.  Congratulation, Steve.

Sanctions: Trial Court’s “Vestigial Jurisdiction” When Case Ordered To Arbitration Justified CCP § 128.7 Sanctions Against Litigant’s Counsel

Continuing Jurisdiction And Waiver Principles Justified Sanctions Order.

Old Jail Whipping Post.  St. Augustine, Florida.  John Margolies, photographer.  Library of Congress.

            Windsor Mango Way LLC v. Taylor, Case No. B268967 (2d Dist., Div. 3 Sept. 28, 2017) (unpublished) is a case where an attorney was sanctioned under CCP § 128.7 for conduct relating to a case which had been ordered to arbitration.  Attorney challenged the order primarily on the theory that the trial court lacked jurisdiction to issue sanctions given the case had been ordered to arbitration.

            Not so, said the Court of Appeal in affirming the sanctions order.  Two reasons sealed this conclusion.  First, because the sanctions ordered related to activities after a motion to compel was granted, the trial court had “vestigial jurisdiction” to order sanctions and an erroneous order did not give rise to CCP § 473 relief.  Second, waiver principles precluded attorney’s efforts to vacate the sanctions order because attorney himself invoked the jurisdiction of the trial court when he moved for sanctions against the other party on his client’s own behalf. 

Probate Two-Fer/Sanctions: $440,000 Fee Award Based On A Common Fund Properly Awarded Against Entire Trust Res And $16,060 In CCP § 128.7 Sanctions Sustained For Failure To Remove Lis Pendens

Frye v. Collins, Case No. A143623 (1^st Dist., Div. 2 Aug. 9, 2017) (unpublished)

            In this one, a trustee lost certain trust challenges by other relatives, also saddled with a costs/fees award of $440,000.  This award was affirmed because the lower court decided that it should be paid out of the entire trust res, so that the successful parties had to bear some of the fees because of a common fund wrinkle in the case making it fair to spread the fee award over the res rather than simply paid out of losing trustee’s res share.

Leino v. Balkcom, Case No. C080950 (3d Dist. Aug. 9, 2017) (unpublished).

            The second decision was a situation where a trial judge granted CCP § 128.7 sanctions against a trustee and attorney, who challenged on many, many grounds.  None held up on appeal.  The interesting aspect of this opinion is the appellate court’s conclusion that trustee’s failure to remove a lis pendens after the probate action was dismissed for over a year justified imposition of sanctions.  The sanctioned parties argued that the recording of a lis pendens did not justify imposition of sanctions, but the appellate court disagreed based on the fact that a lis pendens needs to be procedurally filed with the court so to trigger section 128.7. 

Appealability/Sanctions: Client’s Appeal Of Sanctions Only Against Her Attorneys Did Not Confer Appellate Jurisdiction To Review Sanctions Award

Different Result Had Sanctions Been Imposed On Both Client And Attorney

 

            The probate court in In re Patrice Libaw Trust, Case No. B271815 (2d Dist., Div. 1 Aug. 3, 2017) (unpublished) awarded CCP § 128.7 sanctions against only a probate litigant’s attorneys, not the probate litigant (although sanctions were requested against both).  Litigant appealed the sanctions award against attorneys, but the appellate court determined it lacked jurisdiction because client alone did not have standing to appeal an adverse award against her attorneys.  The result would have been different had both client and attorneys been assessed with sanctions; however, this did not happen, so no appellate jurisdiction. 

Sanctions: Ninth Circuit Remands To District Court The Sanctions Issue In Haeger v. Goodyear “Inherent Power Of The Court” SCOTUS Decision

 

 

Dissenting Circuit Judge Would Have Affirmed Based On Waiver.

 

            On April 23, 2017, we posted on the U.S. Supreme Court’s decision in Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017), which found that a $2.7 million “inherent power of the court” sanctions award needed a restudy based on the correct “but for” causation standard albeit indicating that a waiver issue needed upfront adjudication.

            The Ninth Circuit, in Haeger v. Goodyear Tire & Rubber Co., No. 12-17718 (9^th Cir. June 8, 2017) (published), ruled through a 2-0 majority decision that the district court should revisit the sanctions issue.  Circuit Judge Milan D. Smith, Jr., in dissent, found that Goodyear had admitted that only $722,406.52 of the sanctions award was tainted, such that the remaining $2 million award should simply be affirmed rather than involve any further scrutiny by the district court. 

Family Law: $250,000 271 Sanction Affirmed In Contentious Divorce Case Between Two High Profile Attorneys

 

Abuse Of Discretion Standard Not Overcome By Appealing Ex-Wife.

     Marriage of Gregora and Feldman, Case No. B269587 (2d Dist., Div. 8 May 8, 2017) (unpublished) was a high profile divorce case involving Los Angeles attorneys, where ex-wife lost a key breach of fiduciary claim, prompting the trial court to impose a sanction against her to the tune of $250,000 under Family Code section 271 (the sanctions was an award of partial attorney’s fees incurred by ex-husband). Ex-wife appealed, but to no avail. The appellate court observed that the sanctions award was no abuse of discretion given that (1) ex-wife issued 450 subpoenas on third parties yielding over 100,000 pages of documents; (2) she deposed ex-husband’s ex-wife, several partners in his firm, and numerous accountants; (3) ex-wife spent $3.6 million on the case and ex-husband spent $2.1 million; and (3) ex-wife lost on the breach of fiduciary claim.

Equity, Sanctions, Section 998, Special Fee Shifting Statute, Allocation: Unpublished Decisions In Last Few Days Address Multiple Fee Issues

 

 

Equity—Gilotti v. Stewart, Case No. C075611 (3d Dist. April 26, 2017) (Unpublished):  Section 998 Offer, Typo Notwithstanding Valid, and Attorney’s Self Interest Disqualified Fee Recovery.

 

                In this construction defect lawsuit, plaintiff was ordered to pay a prevailing grading contractor expert fees under CCP § 998, even though the offer said $49,999 in the written part but a typo for $39,999 in the numerical (  ) explanatory part. The trial judge granted 998 fee-shifting expert witness expenses, but plaintiff argued the offer was vague – naught!, said the court, the written numerical part made it clear $49,999 was at issue typo notwithstanding.   Plaintiff challenged a denial of fee recovery to plaintiff’s husband/attorney, but this was affirmed because he had a pecuniary interest as a co-trustor of the trust owning the property subject to the action.  (Gorman v. Tassajara Development Corp., 178 Cal.App.4^th 44, 90, 95 (2009).)

Sanctions—Maxwell v. Deutsche Bank National Trust Co., Case No. A142562 (1^st Dist., Div. 2 April 27, 2017) (Unpublished):  128.7 Sanctions Against Represented Parties Were Appropriate.

 

            Represented parties appealed $17,685 in CCP § 128.7 sanctions based on the argument that they only followed the advice of their counsel.  The appellate court affirmed the trial judge award because 128.7 sanctions are authorized against represented parties, especially given that a judge warned the represented parties about what they were doing in the action.

Special Fee Shifting Statutes—Casas v. City of Baldwin Park, Case No. B275535 (2d Dist., Div. 5 April 27, 2017) (Unpublished):  Denial of Further CPRA Fees Was Correct.

 

            Here, plaintiff’s counsel in a California Public Records Act (CPRA) case already received about $40,000 in fees, but moved to get more.  Both the trial and appellate courts said no way, given that counsel did not properly authenticate billing records to show there was a connection with the CPRA compliance litigation work which was the subject of the additional fee request.

Allocation—IV Solutions, Inc. v. Health Net of California, Case No. B268816 (2d Dist., Div. 2 April 27, 2017) (Unpublished):  No Allocation Necessary Where Work Inextricably Intertwined.

 

            Defendants won a demurrer and judgment on the pleadings based on the statute of limitations, determinations affirmed on appeal on the merits.  The defense was awarded contractual attorney’s fees of $78,768, with plaintiff arguing that at least an allocation was needed between contract and other claims.  Nope, all of the claims were intertwined.

Sanctions: SCOTUS Decides Federal “Inherent Power Of The Court” Sanctions Must Satisfy A But-For Causal Connection Between The Misconduct And Fees Incurred By The Innocent Party

 

 

$2.7 Million Sanctions Against Goodyear Reversed And Remanded, But Waiver Issue Might Sustain $2 Million Of Sanctions Award.

 

           

Stripping tube on mandrel before sending to cure, Goodyear Tire Factory, Akron, Ohio.   c1928.  Library of Congress.

        The U.S. Supreme Court, in Goodyear Tire & Rubber Co. v. Haeger, No. 15-1406 (SCOTUS April 18, 2017), clarified the standard to be used by district judges in imposing “inherent power of the court to control judicial process” sanctions as far as setting an appropriate amount of sanctions, reversing a $2.7 million sanctions award in favor of plaintiff and against defendant Goodyear after a case was settled.  Determining that both the district judge and Ninth Circuit used the wrong standard, SCOTUS—in a decision authored by Justice Kagan—articulated that a “but-for” test was appropriate, where the award must have a causal connection between the sanctioned litigant’s misbehavior and the legal fees by the opposing party seeking the sanction.  The district judge did not use a “but-for” standard, and the Ninth Circuit erroneously used a temporal, rather than causal, limitation by sustaining a $2.7 million award for all legal fees incurred by plaintiff since the date of the misconduct.  Interestingly enough, the district judge made a $2 million “contingent” award based on some causation analysis, but SCOTUS was still concerned that it was not quite right.  However, Goodyear may have admitted that the $2 million award was causally related, setting up a waiver issue that SCOTUS observed “should be the initial order of business below” upon a remand. 

    Scotusblog analysis is available by clicking here.

Appealability/Sanctions: Sanctioned Attorney’s Failure To Appeal Sanctions Order Was Fatal

 

Appeal By Attorney's Client Did Not Get It Done.

 

    In K.J. v. Los Angeles Unified School District, Case No. B269864 (2d Dist., Div. 3 Feb. 23, 2017) (unpublished), a minor's attorney was ordered to pay attorney's fees and costs to LAUSD as a discovery sanctions. Minor appealed from the sanctions order.

 

    The appeal was dismissed. Because minor was not sanctioned, the failure to appeal by attorney was fatal given that minor was not an aggrieved party. (People v. Indiana Lumbermens Mutual Ins. Co., 226 Cal.App.4^th 1, 10 (2014).)

Equity/Sanctions: Attorney’s Fees Award Remanded To Recalculate To Account For Previously Awarded Discovery Sanctions

"Double Dipping" Was The Rationale.

    Earl & Reimer APC v. Klimek, Case No. H041638 (6^th Dist. Feb. 1, 2017) (unpublished) is a case where an attorney's fees award was reversed and remanded in order to prevent "double dipping": the trial judge previously awarded discovery sanctions, and those sanctions were not properly taken into account with respect to the fee recovery calculations. Reversed and remanded for a "re-do."

    Click here to see the famous "double dip" episode in Seinfeld.

In The News/Sanctions: Throwing A Cup Of Coffee At A “Heated” Deposition – What Does That Cup Cost You?

 

Answer: Roast Costs $250 In A Recent California Federal Magistrate's Ruling.

 

 

Pike Place Market, cup detail on sign. Seattle, Washington. Photographer: Carol M. Highsmith. Between 1980 and 2006. Library of Congress.

 

    As reported by Law360, an attorney who spilled — or perhaps threw — a cup of iced coffee on an opposing lawyer during a deposition must pay him $250 to cover his damages, according to U.S. Magistrate Judge Donna M. Ryu (N.D. Cal.) who apparently on January 26, 2017 scolded both attorneys for their behavior in a contentious trade secrets case. Hope the coffee was not a good latte!

Arbitration/Sanctions: $17,000 Trial Court Sanctions Order Against Defendant Failing To Pay Arbitration Fees Reversed And Remanded

 

Sanctions Order Did Not Have Adequate Specificity.

     Idewu v. Clark, Case No. B266573 (2d Dist., Div. 3 Jan. 24, 2017) (unpublished) is a situation where a trial judge likely was somewhat irked by the conduct of a defendant successfully moving to compel arbitration. After the matter was moved to arbitration, the arbitration proceeded for several days but was terminated when the defendant (who had moved to compel arbitration) failed to pay her share of arbitration fees. The matter returned to the trial court, who granted CCP § 128.5 sanctions against defendant to the tune of $17,000.

     This one was reversed on a procedural ground. The trial judge only issued a one-page minute order not detailing the conduct or circumstances justifying the sanctions order. The requirement that the offending conduct be specified in writing is existent in both the former and current versions of section 128.5. So, without passing on the merits at all, the appellate court remanded for the trial court either to enter a new sanctions order which details the offensive conduct or to vacate the imposition of sanctions absent a clarifying order.

Equity: Trial Court Erred In Not Giving Effect To Plaintiff’s Voluntary Dismissal, But That Did Not Deprive It Of Jurisdiction To Award Discovery Sanctions And Attorney’s Fees

Somewhat Of A Pyrrhic Victory For Plaintiff.

    Wilson v. Nationstar Mortgage LLC, Case No. D070965 (4^th Dist., Div. 1 Jan. 20, 2017) (unpublished) was somewhat of a pyrrhic victor for plaintiff on appeal. What happened below was that a trial judge erroneously failed to honor plaintiff's dismissal of an action, striking it and then going forward to award discovery sanctions and attorney's fees against plaintiff and in favor of the defendant. The appellate court agreed with appellant Wilson that the trial judge lacked jurisdiction to strike and dishonor the dismissal, but critically found the lower court retained jurisdiction to enter discovery sanctions and attorney's fees (the latter, subject to any Santisas limitations) post-dismissal anyway. So, those sanctions and fees award stuck on appeal.

Judgment Enforcement/Sanctions: $5,000 Sanctions Award Against Judgment Debtor’s Attorney For No Answer Instructions During Judgment Debtor Examination Was Vacated

 

Reason Is That Ground For Sanctions Was Statute Only Applying To Postjudgment Interrogatories And Document Requests, Not J/D Exams.

    A lower court sanctioned a judgment debtor’s attorney to the tune of $5,000 under CCP § 2023.030 for directing a client not to answer certain questions at a judgment debtor examination.  The appellate court, in Smith Bros. Constr. v. T.S. Stone and Title, Inc., Case No. D069212 (4th Dist., Div. 1 Dec. 9, 2016) (unpublished), reversed.  The reason was simple enough:  section 2023.030 does not apply to judgment debtor exams, but only postjudgment interrogatory and document request items.  The wrong ground for the sanction was raised, a ground not allowing for imposition of sanctions.

Sanctions: $10,000 128.7 Sanction Against Attorney Affirmed For Filing Of Second Amended Complaint With Allegations Similar To Prior Pleading To Which Demurrer Was Sustained

 

$10,000 Out Of $28,080 Sanctions Request Granted.

    In Concepcion Vinas v. Queen of the Valley Medical Center, Case No. A143541 (1st Dist., Div. 4 Oct. 20, 2016) (unpublished), attorney was sanctioned $10,000 under CCP § 128.7 for filing a second amended complaint which had the same allegations as a first amended complaint to which a demurrer had been sustained in many ways with prejudice.  His appeal was unsuccessful.  Filing an improper complaint can give rise to 128.7 sanctions.   (Eichenbaum v. Alon, 106 Cal.App.4th 967, 971-972 (2003).)  The amount was not unreasonable, given that only $10,000 out of a requested $28,080 in sanctions was imposed by the lower court.

Sanctions: Defense Motion To Vacate Sanctions After Plaintiff’s Voluntarily Dismissal Was Not Cognizable

 

Lower Court Lacked Jurisdiction To Consider Motion Post-Dismissal.

    Timing is everything, as illustrated in the sanctions area by Cerna v. Molina, Case No. B265272 (2d Dist., Div. 7 Oct. 17, 2016) (unpublished).

    There, defendants and their attorney were monetarily sanctioned in connection with certain discovery motions.  Plaintiff voluntarily dismissed the action.  However, defendants and their attorney moved to vacate the trial court’s orders imposing sanctions.  The lower court denied the motions to vacate, a determination affirmed by the 2/7 DCA.

    The reason was very fundamental:  the trial court lost jurisdiction to act on the case following the voluntary dismissal.  There was nothing else to do. 

Cases Under Review/Sanctions: SCOTUS Decides Whether “Inherent Authority Of Court” Sanctions Must Have Causal Connection To Sanctioned Conduct And Must Have Procedural Protections Applicable In Criminal Cases

 

Certiorari Granted With Consolidated Case On September 29, 2016.

    On September 29, 2016, the United States Supreme Court granted certiorari in The Goodyear Tire & Rubber Co. v. Haeger, No. 15-1406 (U.S.), a Ninth Circuit 2-1 decision [discussed in our July 21, 2015 post], and consolidated it with Musnuff v. Haeger, No. 15-1491 (U.S.).  The Ninth Circuit decision, over a dissent by Circuit Judge Watford, affirmed a $2.7 million sanction award granted under the “inherent authority of the court” without requiring a causal connection between the sanctioned conduct and civil monetary sanction imposed.  The Ninth Circuit majority decided that no precise linkage was required between the harm and compensatory sanctions awarded where the sanctionable conduct was frequent and severe. Here is the issue presented for review in this case:  Whether a federal court is required to tailor compensatory civil sanctions imposed under inherent powers to harm directly caused by sanctionable misconduct when the court does not afford sanctioned parties the protections of criminal due process.

Discovery: ESI Discovery Sanctions Are Going Downward In Federal Courts

 

First Half Of 2016 Saw A Large Decline.

     Gibson Dunn has published a mid-year 2016 review of electronically stored information (ESI) decisions in federal courts involving requests for sanctions.

     There has been a large decline. In the first half of 2016, there were only 32 reported decisions, 13 granting sanctions and 19 denying them for ESI violations. This compares to 150 reported decisions in 2011 and 120 in 2012 (federal courts). The authors of the review believe that some of the decline is related to the federal rule amendments requiring both relevancy and proportionality.

     Some of the most volatile decisions involve how to deal with text messages and mobile data.

4/3 DCA Trifecta: Appellate Court Issues Three Fee Unpublished Decisions

Source:  Wikipedia.  Article “Trifecta.”

Prevailing Party/Settlement: Goldenwest Plaza, LLC v. The Frank and Gertrude R. Doyle Foundation, Case No. G050766 (4^th Dist., Div. 3 Aug. 22, 2016) (Unpublished)

--Split Result Meant No Prevailing Party.

     This case was a messy partition case where differing ownership interests with disputes on management of a shopping center brought claims to either partition the property for sale or divide it in kind. In the end, the parties reached a settlement agreement by which one side agreed to buy out the other party for over $2 million but the partition in kind relief was not granted. The settlement agreement gave wide discretion to the trial court to determine if anyone prevailed. Plaintiff won a $2 million buyout, while the defense prevented a partition sale of the shopping center. Both sides moved for attorney’s fees under a contractual clause and under the partition statute. The lower court found no one prevailed, a determination affirmed on appeal. Under the settlement agreement, the lower court did not err by concluding this was somewhat of a “split” result, wrote Justice Fybel in a 3-0 panel decision, such that no side prevailed.

Sanctions: Valtierra v. Weng’s Enterprises, Case No. G051837 (4^th Dist., Div. 2 Aug. 22, 2016) (Unpublished)—CCP § 128.5 Does Not Allow Sanctions Against A Party’s Own Attorney Or Former Attorney.

     Here, a trial court granted a CCP § 128.5 sanctions award against a client’s attorney for failure to transfer files on a timely basis. The appellate court reversed because section 128.5 does not authorize a trial court to award a party sanctions against its own attorney or former attorney. However, this was not to say there are no other remedies, such as a State Bar complaint or a civil malpractice action. Justice Aronson authored this one.

Retainer Ageement: Bienert, Miller & Katzman PLC v. Patwardhan, Case No. G052667 (4^th Dist., Div. 3 Aug. 22, 2016) (Unpublished)—Statute of Limitations For Attorney Fee Collection Does Not Commence Until Attorney-Client Relationship Ends.

 

    “The Twist.”  Herman Hiller, photographer.  1962.  Library of Congress.

     In somewhat of a twist, a third-party payor for a client argued that a law firm sued too late because a four year period lapsed from the receipt of each monthly bill for legal services. Law firm countered that the limitations period expires four years after an attorney ceases to provide legal services to the client, notwithstanding the receipt of legal invoices during the representation. Law firm won based on California decisions—although many described as being “long in the tooth” or “venerable”—holding the SOL does not run until the relationship ends, with any contrary decision meaning the attorney would have to take adverse actions while still representing the client. The twist here was the third-party payor was not a client, but the appellate court—in a decision by Acting Presiding Justice Bedsworth—determined that the result did not change because of this wrinkle given that the client still might be involved in a conflict-ridden fee dispute.  Interestingly, the Court of Appeal could find no such statute of limitations case involving a law firm and a client’s third-party payor.  So this is an unpublished case of first impression.

In The News . . . . Ninth Circuit Reverses Sanctions Awards Against Attorney For Making Faces In Courtroom And No Attorney’s Fees Assessed Against The Wolfe Trust In Led Zepplin Copyright Infringement Case

 

Making Faces In Courtroom, Which Were Found Not To Be Made In Bad Faith, Was Not Sanctionable.

      Alice S. Kandell, photographer.  May 1971.  Library of Congress.

     The Ninth Circuit, in Hernandez (Boothe) v. City of Vancouver, No. 13-35131 (9th Cir. Aug. 9, 2016) (unpublished), reviewed a $145,765.43 sanctions award against a plaintiff’s attorney winning an eventual $1.284 million employment discrimination award for his client.  The sanctions were based on the attorney making faces in the courtroom during a trial (which led to a mistrial) and purported “witness coaching” of City’s in-house counsel in a hallway conference. The appeals court concluded the “making faces” sanction was infirm because the district judge found the conduct was not done in bad faith.  The “witness coaching” sanction was reversed and remanded to consider factors presented by the attorney on appeal as to why this too was erroneous.

Defendant In Led Zeppelin Copyright Infringement Case Denied Attorney’s Fees In $793,000 Request Against Losing Plaintiff.

    Defendant prevailed in a copyright case brought by the Wolfe Trust, which alleged that Led Zeppelin had “lifted” the introduction to the classic hit “Stairway to Heaven” from a song written by the late Randy Wolfe of the Spirit band.  The defense moved to recoup $793,000 in attorney’s fees based on the theory the case was frivolous.  C.D. California District Judge Klausner disagreed, find that the case was not frivolous (after all, it went to trial) and nothing showed that the plaintiff harbored “nefarious motives.”

Sanctions/Taxation: $5,000 Sanctions Against Losing “Top 500” State Income Tax Debtor Affirmed On Appeal

 

Income Tax Debtor Lost Federal Court Action, So Dismissal In State Court Was Justified And State Proceeding Was Unreasonable As A Matter of Law.

     In Franceschi v. Franchise Tax Bd., Case No. B267719 (2d Dist., Div. 2 July 8, 2016) (published), a plaintiff—who was on the Franchise Tax Board’s published list of “Top 500” income tax debtors—had his writ petition to remove his name from the list dismissed by the state court after he filed a federal action which was earlier dismissed with prejudice. The lower and appellate courts found that the state court dismissal was justified on res judicata grounds, or else a plaintiff could try to improperly “claim split” between federal and state courts. The lower court also imposed $5,000 in sanctions against plaintiff, finding the proceeding to be frivolous and groundless in nature.

     The sanctions award was affirmed. Revenue and Taxation Code section 19174 does allow the FTB or court to award sanctions in the amount of $5,000 against a taxpayer whose action is determined to be frivolous or with no merit. Plaintiff’s state court action was unreasonable and lacked merit given what occurred in federal court, with the appellate court engaging in a nice discussion of what a litigant should do in federal court to avoid a future res judicata ruling in a later state court action.

Sanctions/Special Fee Shifting Statute: 4/1 DCA Clarifies Scope Of “Revived” Code of Civil Procedure Section 128.5 Sanctions Statute

 

Appellate Court Reverses Denial Of Section 128.5 Sanctions, But Affirms Fee Recovery To Plaintiff Under California Public Records Act.

    San Diegans For Open Government v. City of San Diego, Case No. D068421 (4th Dist., Div. 1 June 7, 2016) (published) is a key decision on the timing, applicability, and scope of Code of Civil Procedure section 128.5, a sanctions statute which hit the sunset for a while but was revived effective January 1, 2015.  After a plaintiff non-profit organization dismissed a waste claim, City of San Diego moved for 128.5 sanctions, which was denied even though plaintiff was found to be the prevailing party under the California Public Records Act’s fee-shifting statute.

    A mixed result on appeal, with the 128.5 sanctions denial reversed but with the Public Records Act result affirmed.

    The appellate court found that the following points were salient with regard to the “revived” section 128.5 sanctions statute:  (1) it applies to activities in a case pending as of January 1, 2015 even though the predicate sanctioning activities occurred before January 1, 2015 (adopting, by analogy, a case holding that a fee entitlement statute adopted during the pendency of a case for prior events should be applied, see Olson v. Hickman, 25 Cal.App.3d 920, 922 (1972)); (2) the new 128.5 statute does not require compliance with section 128.7 “safe harbor” requirements; and (3) new section 128.5 requires a litigant to show objective unreasonableness, dispensing with the need to show subjective bad faith as necessary under the prior version of the statute.

    With respect to the California Public Records Act determination, the appellate court affirmed the award because the trial court could conclude that the governmental entity unreasonably attempted to narrow the requests rather than asking for clarifications so as to avoid a fee recovery.

    However, for all of you bringing a 128.5 motion, the appellate court noted a “housekeeping matter”—everyone bringing this motion must supply all papers on such a motion (including appellate paperwork) to the California Research Bureau of the California State Library.

Probate/Sanctions: $76,598.32 In Attorney’s Fees For Filing Of Frivolous Probate Petition Under CCP § 128.7 Affirmed On Appeal

 

Plethora Of Procedural Issues Considered In 2/1 DCA Unpublished Opinion.

     Enlisted men going through obstacle course.  Daniel Field, Georgia.  July 1943.  Jack Delano, photographer.  Library of Congress.

     In Kerkorian v. Mandekie, Case No. B252861 (2d Dist., Div. 1 Apr. 26, 2016) (unpublished), an attorney’s fees award of $76,598.32 (the full request) was granted as a CCP § 128.7 sanction for the filing of a frivolous probate petition. Despite numerous procedural challenges, the 2/1 DCA rebuffed them in affirming the order as follows:

· Safe Harbor Period. Because the rescheduled hearing did allow for running of the 21-day safe harbor period, there was no infirmity on this ground.

· Failure to Indicate Hearing Date and Time In Original Motion Papers. This requisite only needs to be met if a motion date and time are ascertainable; they were not at first, but the rescheduled motion papers were compliant in indicating a location, date, and time.

· Failure to Serve Judicial Notice Request Contemporaneously With Motion Papers. Failure to do this does not render the motion defective (because a judicial notice request is technically not among the required motion “papers”), but the trial court can decide not to consider them at the hearing.

· Refusing to Read Opposition Memorandum After Page 15. For most civil law and motions, practitioners in California state court know that opposition memoranda are limited to 15 pages unless one is dealing with certain particular motions or the lower court allows for greater page limits. The trial judge here refused to read after page 15 of an excessive opposition brief. The appellate court found this was no abuse of discretion, determining that the 15-page limit did apply to probate proceedings. See CRC, rule 3.10.

· 128.7 Motions Contemplate a Hearing With Oral Argument. This principle was found applicable given the severity of a sanctions request.

Sanctions/Special Fee-Shifting Statute: Sometimes One’s Choice Of A Fee Entitlement Basis Can Matter

 

Here, Prevailing Party Sought CCP § 128.5 Sanctions, Such That Fee Request Proper In Responding Papers—No Notice Of Motion Under Other Provisions Required.

     Meraz v. Coleman, Case No. B262725 (2d Dist., Div. 8 Mar. 3, 2016) (unpublished) illustrates that some successful fee awards may well depend upon the manner in which the fee requests procedurally are postured.

     In this one, a defendant successfully obtained a civil harassment restraining order against a next-door neighbor relating to a construction project dispute. Defendant also successfully resisted a motion for rehearing and reconsideration by the nonprevailing plaintiff, with defendant seeking CCP § 128.5 fees in his responding papers. The trial judge obliged, denying the reconsideration request and awarding defendant $2,000 in fees.

    The opposite side appealed, claiming that defendant had to bring a notice of motion for fees under CCP § 527.6(r)’s fee-shifting statute in the civil harassment context. The appellate court disagreed. Here, the request was under CCP § 128.5, which allows a fee request to be made in responding papers by the defendant—which was done. No separate notice of motion needed to be brought under a different statutory provision given that the defendant brought a fee request under a provision saying it could be raised through opposition papers. Fee award affirmed.

Arbitration/Discovery/Sanctions: Discovery Sanctions A Little Shy Of $6,500 Affirmed Against Plaintiff For Discovery Disputes Not Arising Out Of An Arbitration

 

Substantive Claims Were To Be Arbitrated, But Prior Discovery Disputes Before Motion To Compel Granted Remained In Superior Court.

     In Vlahopouliotis v. Vallarta Properties, LLC, Case No. G069832 (5^th Dist. Feb. 1, 2016) (unpublished), plaintiff did win a motion to compel arbitration of substantive claims under a settlement agreement, but lost preexisting discovery motions to compel brought by his opponent because the discovery disputes arose before arbitration was ordered and had been pending in the trial court for some time. The trial judge also awarded a little shy of $6,500 in discovery abuse sanctions (CCP § 2023.030(a)) against plaintiff and his counsel, jointly and severally.

     The appeal of this sanctions order was unsuccessful. The Fifth District agreed that the arbitration agreement was narrow, only applying to substantive claims. The discovery disputes producing the sanctions award occurred before arbitration was ordered such that it did not arise out of discovery disputes relating to the arbitration.

     BLOG POINTER—For you out-of-town practitioners litigating in Fresno County Superior Court, be aware that there is a local rule by which a litigant can ask for a pretrial discovery conference on disputed discovery issues which has the effect of tolling certain deadlines.

Sanctions: $12,800 Sanction Under CCP § 128.7(b)(2) Reversed Against Plaintiff

 

Given That Plaintiff Was Counsel Represented, This Particular Sanction Cannot Be Issued Against Represented Litigant.

     In Dunlap v. The Walt Disney Co., Case No. B261779 (2d Dist., Div. 1 Jan. 29, 2016) (unpublished), authored by Presiding Justice Rothschild for a 3-0 panel, plaintiff—who was represented by counsel—was hit with a sanction of $12,800 under Code of Civil Procedure section 128.7(b)(2) (a pleading certification requirement by litigants). The appellate court reversed. After determining that no facts were stated to support an award under section 128.7(b)(1), the reversing panel found that section 128.7(d) only allowed 128.7(b)(2) sanctions to be assessed against attorneys, not represented litigants.