1

Filed 3/13/18

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Yolo)

----

HERIBERTO PONCE et al.,

Plaintiffs and Appellants,

v.

WELLS FARGO BANK et al.,

Defendants and Respondents.

C080680

(Super. Ct. No. CV131769)

APPEAL from a judgment of the Superior Court of Yolo County, Timothy F. Fall, 

Judge. Reversed.

United Law Center, Danny A. Barak, Stephen J. Foondos and Jonathan Sanders 

for Plaintiffs and Appellants.

Severson & Werson, Jan T. Chilton and Jon D. Ives for Defendants and 

Respondents.

Plaintiffs and appellants Antonio and Imelda Aranda and their son-in-law, 

Heriberto Ponce, (together, Ponce and Aranda) appeal from the trial court’s entry of a 

judgment of dismissal following an order imposing both terminating and monetary 
2

sanctions against them and their attorneys under Code of Civil Procedure section 128.7.

1

 

The trial court found that Ponce and Aranda’s complaint was presented primarily for an 

improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the 

cost of litigation. (§ 128.7, subd. (b)(1).) 

On appeal, Ponce and Aranda argue that the claims asserted in their complaint 

were not frivolous and therefore, could not have been asserted for an improper purpose. 

We agree. We therefore reverse the trial court’s entry of judgment based on terminating 

sanctions against Ponce and Aranda and entry of monetary sanctions against Ponce and 

Aranda and their attorneys. 

I. BACKGROUND

Ponce and Aranda obtained a $280,000 loan to purchase a home in Woodland 

(property). The loan was secured by a deed of trust recorded on February 14, 2008, in 

favor of respondent and defendant Wells Fargo Bank. 

Ponce and Aranda applied for a loan modification under the Home Affordable 

Modification Program (HAMP) in September 2009. Ponce and Aranda successfully 

completed a trial period plan and were offered a permanent loan modification. The 

permanent modification agreement contained several errors. Of greatest significance, the 

modification agreement failed to name Ponce as a party and called for higher payments 

than the trial period plan, which Ponce and Aranda could not afford. Ponce and Aranda

tried to resolve these issues with Wells Fargo, without success. Ponce and Aranda 

defaulted on the loan in June 2010. 

Wells Fargo transferred the note and deed of trust to Consumer Solutions 3, LLC 

(Consumer Solutions) in November 2010. Defendant and respondent Specialized Loan 

Services, LLC (Specialized) serviced the loan on behalf of Consumer Solutions. In the 

 

1

 Undesignated statutory references are to the Code of Civil Procedure. 
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meantime, Ponce and Aranda were still trying to work things out with Wells Fargo. One 

Wells Fargo representative told Ponce’s wife, Alma, that they should not make further 

payments until the mistakes were corrected. Other representatives called Ponce 

demanding payment. Wells Fargo refused to accept any reduced payment, and ultimately 

invited Ponce and Aranda to apply for another loan modification. 

Specialized recorded a notice of trustee’s sale in December 2010, while Ponce and 

Aranda’s second application was pending. A Wells Fargo representative told Ponce “not 

to worry about the notice because the trustee sale was scheduled by mistake.” Over the 

next several weeks, other Wells Fargo representatives reassured Ponce and Aranda that 

the property would not be sold because they had been approved for a loan modification. 

Despite these assurances, a trustee’s sale was held on January 18, 2011, at which 

Residential Investments LLC (Residential Investments) acquired title to the property. A 

trustee’s deed upon sale was recorded on March 8, 2011. On January 28, 2011, 

Specialized executed an assignment of deed of trust from Consumer Solutions to 

Residential Investments. The assignment was recorded on March 8, 2011. 

A. Unlawful Detainer Action and Ponce I

Residential Investments filed a complaint in unlawful detainer against plaintiffs in 

Yolo County Superior Court on April 1, 2011. Ponce and Aranda countered with a 

lawsuit of their own in Yolo County Superior Court, case No. YOSU-CVCV-2011-1120 

(Ponce I). We have not been provided with copies of the relevant filings in Ponce I. 

However, some of those filings appear to have been presented to the trial court in 

connection with Wells Fargo and Specialized’s motions for summary judgment or, in the 

alternative, summary adjudication, which were heard contemporaneously with the 

sanctions motions currently before us. 

We have been provided with copies of the memoranda of points and authorities 

filed in support of the motions for summary judgment, but not the separate statements of 

undisputed facts or accompanying exhibits. The memoranda describe the complaint filed 
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in Ponce I as having been styled as follows: “Complaint for fraudulent 

misrepresentation; fraudulent inducement; violation of the fair debt collection practices 

act; predatory lending practices; breach of trust contract; RICO violations; quiet title; 

declaratory relief; injunctive relief; conspiracy; Rosenthal Act; and illegal foreclosure” 

against Wells Fargo, Specialized, Residential Investments, and others. The memoranda 

state that Ponce I was dismissed in response to an order to show cause regarding

sanctions in which Ponce and Aranda were ordered to show cause “ ‘WHY THIS CASE 

SHOULD NOT BE DISMISSED WITH PREJUDICE.’ ” Specifically, the 

memoranda state that Ponce I was dismissed for “ ‘persistent failure to comply with the

CMC orders issued in this case, and for failure to show cause why the case should not be 

dismissed.’ ” 

B. Ponce II and Ponce III 

On June 23, 2011, Residential Investments obtained a judgment for possession of 

the property in the unlawful detainer action. Between June 28, 2011, and December 19, 

2012, Ponce and Alma filed four separate bankruptcy proceedings in the United States

Bankruptcy Court for the Eastern District of California.2 Residential Investments sought 

and obtained relief from automatic stay in each case. 

On February 15, 2013, Ponce and Alma commenced a pro se adversary proceeding 

against Wells Fargo, Specialized, Residential Investments and others in case No. 12-

41661 (Ponce II). We have not been provided with copies of the docket sheets or filings 

from any of the foregoing bankruptcy proceedings. However, Ponce and Aranda have 

asked us to take judicial notice of a motion to dismiss filed in another federal action 

(described momentarily), which we have done. That motion describes the adversary 

complaint as “almost identical” to the complaint to which the motion was directed. The 

 

2 We take judicial notice on our own motion of the dockets in each of the foregoing 

cases. 
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motion also indicates that Wells Fargo and Specialized filed a motion to dismiss the 

adversary complaint in Ponce II, which was set for hearing on April 29, 2013. It is not 

clear from the bankruptcy court’s docket sheet whether the motion to dismiss was heard, 

and if so, what the disposition of the motion may have been. The adversary proceeding 

was closed on May 20, 2013. 

On March 13, 2013, Ponce and Alma commenced a separate action, also pro se, in 

the United States District Court for the Eastern District of California in case No. 2:13-

CV-0498 LKK DAD PS (Ponce III). The complaint alleges that Ponce applied for a 

HAMP modification, successfully completed a trial period plan, and was offered a 

permanent modification agreement containing errors, including the omission of Ponce as 

a party and unaffordably high monthly payments. The complaint further alleges that 

Ponce tried to resolve the problems with Wells Fargo, but contradictory instructions by 

various representatives, including an invitation to apply for another loan modification and 

false assurances that the property would not be sold in foreclosure while the application 

was pending. The complaint alleges causes of action for breach of contract, breach of 

implied-in-fact contract, promissory estoppel, fraud, negligent misrepresentation, 

negligence, violations of the Unfair Competition Law, Business and Professions Code

section 17200, et seq. (UCL), and violations of Civil Code section 1632. 

C. The Stipulation

On March 29, 2013, plaintiffs, represented by John S. Sargetis of the United Law 

Center, signed a Stipulation to Hold Writ in exchange for $10,000 and the right to remain 

in possession of the property through May 2013. The stipulation was also signed by 

Alma, who lived at the property and was the most fluent English speaker in the group. 

The stipulation includes a release, which reads as follows: “In addition, 

Defendants [Ponce and Aranda], for themselves, their agents, invitees, joint ventures, 

partners, employees, and licensees release Plaintiff, its agents, including, but not limited 

to, American Residential Realty, predecessors in interest, successors in interest, partners, 
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or joint ventures and their officers, directors, agents, attorneys, employees and members 

from any and all claims, causes of action and liabilities they may possess, unknown and 

known, against Plaintiff and American Residential Realty, predecessors in interest or 

successors in interest, partners, and joint venturers and their officers, directors, agents, 

attorneys, partners, employees and members regarding the subject loan, Note, Deed of 

Trust, Foreclosure, Premises, the Separate Action [Ponce III], and this Unlawful Detainer 

Action.”

The trial court apparently entered an order on the stipulation on April 2, 2013.

3

 

Ponce and Alma filed a request for dismissal with prejudice of Residential 

Investment and another defendant, American Residential Realty, from Ponce III on 

March 29, 2013. Wells Fargo and Specialized filed a motion to dismiss Ponce III for 

failure to state a claim on April 4, 2013. Nothing in the record indicates the disposition 

of these motions. Ponce and Alma, now represented by Sargetis, filed a request for 

dismissal of Ponce III without prejudice on June 26, 2013. The case was dismissed 

without prejudice on July 8, 2013. 

D. The Present Case (Ponce IV)

Ponce and Aranda, represented by Sargetis, commenced the instant action against 

Wells Fargo and Specialized on October 3, 2013. The second amended complaint, which 

is the operative pleading, alleges that Ponce and Aranda successfully completed a trial 

period plan and were offered a permanent modification agreement that failed to name 

Ponce and called for unaffordably high monthly payments. The second amended 

complaint further alleges that Ponce and Aranda attempted to resolve the problems with 

Wells Fargo, but were given contradictory instructions and false reassurances that the 

property would not be sold in foreclosure. The second amended complaint asserts causes 

 

3 We have not been provided with a copy of the order. 
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of action for breach of contract, promissory estoppel, fraud, negligent misrepresentation, 

negligence, and violations of the UCL. 

Wells Fargo and Specialized asked Ponce and Aranda to dismiss Ponce IV in light 

of the stipulation. Ponce and Aranda did not respond. 

Wells Fargo and Specialized answered the second amended complaint on or about 

June 12, 2014. The original answer did not assert the release as an affirmative defense. 

Wells Fargo and Specialized amended their answer to assert the release as an affirmative 

defense on July 8, 2105. 

During the course of discovery, Ponce and Aranda authenticated the stipulation

and confirmed that they received the $10,000 payment from Residential Investments. 

Wells Fargo and Specialized also deposed Alma, who confirmed that the stipulation was 

intended to resolve the litigation regarding the property. Alma also testified that, at the 

time she signed the stipulation, she understood that Wells Fargo and Residential 

Investments were “connected.” Following the first day of Alma’s deposition, Wells 

Fargo and Specialized again asked Ponce and Aranda to dismiss the action in light of the 

stipulation. Ponce and Aranda indicated that they would consider the request, but did not 

respond further. 

Wells Fargo and Specialized served motions for sanctions pursuant to section 

128.7 on Ponce and Aranda on July 1, 2015, and filed them on July 27, 2015, more than 

21 days later. (§ 128.7, subd. (c)(1).) The motions sought monetary and terminating 

sanctions on the grounds that Ponce and Aranda’s “claims and legal contentions [were] 

not warranted by existing law and the facts, and because the action was filed for an 

improper purpose.” Ponce and Aranda opposed the motions, arguing, as they do here, 

that Wells Fargo is not a predecessor in interest and Specialized is not an agent to a 

predecessor in interest for purposes of the stipulation. Wells Fargo and Specialized also 

filed motions for summary judgment or, in the alternative, summary adjudication. 
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The trial court heard argument on the motion for sanctions on September 10, 2015. 

In anticipation of the hearing, the trial court issued a tentative ruling dropping the 

summary judgment motions from the calendar for failure to comply with the statutory 

notice period (§ 437c, subd. (a)) and stating, with respect to the sanctions motions: 

“Defendants’ motions for sanctions are GRANTED. ([§] 128.7, subd. (b)(1).) 

The Stipulation to Hold W[r]it executed by plaintiffs Heriberto Ponce, Antonio Aranda, 

and Imelda Aranda on March 29, 2013, released Wells Fargo, as predecessor in interest, 

from any and all claims, causes of action, and liabilities, known or unknown, regarding 

the subject loan, Note, Deed of Trust, and foreclosure proceedings. (Decl. of Hunter 

Robinson, Exh. J.) Plaintiffs and plaintiffs’ counsel, jointly and severally, shall pay 

monetary sanctions to Wells Fargo in the amount of $8,678.41 ([§] 128.7, subd. (d); Decl. 

of Thomas N. Abbott, ¶ 13.) Plaintiffs and plaintiffs’ counsel, jointly and severally, shall 

pay monetary sanctions to [Specialized] in the amount of $16,580.44. ([§] 128.7, subd. 

(d); Decl. of Thomas N. Abbott, ¶ 12.) [¶] Plaintiffs’ complaint is DISMISSED WITH 

PREJUDICE. ([§] 128.7, subd. (d).)” 

Following argument, the trial court adopted the tentative ruling as the order of the 

court. We have not been provided with the reporter’s transcript or minute order of the 

hearing on the motion. 

Ponce and Aranda filed a timely notice of appeal. 

II. DISCUSSION

Section 128.7 requires that all pleadings filed with the court be signed by an 

attorney of a represented party or, if the party is not represented by counsel, by the party. 

(§ 128.7, subd. (a).) The signing of a filed pleading constitutes a certification by the 

person signing it that after a reasonable inquiry, the pleading (1) is not being presented 

for an improper purpose; (2) contains positions that are not frivolous; (3) alleges factual 

matter having evidentiary support; and (4) contains denials of factual allegations having 

evidentiary support. (Id. at subd. (b).) The court, after proper statutory notice, may 
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impose sanctions upon the attorneys, law firms, or parties who have improperly certified 

a pleading in violation of the statute. (Id. at subd. (c).) 

“Under [section] 128.7, a court may impose sanctions for filing a pleading if the 

court concludes the pleading was filed for an improper purpose or was indisputably 

without merit, either legally or factually. . . . A claim is factually frivolous if it is ‘not 

well grounded in fact’ and it is legally frivolous if it is ‘not warranted by existing law or a 

good faith argument for the extension, modification, or reversal of existing law.’ 

[Citation.] In either case, to obtain sanctions, the moving party must show the party’s 

conduct in asserting the claim was objectively unreasonable. [Citation.] A claim is 

objectively unreasonable if ‘any reasonable attorney would agree that [it] is totally and 

completely without merit.’ ” (Peake v. Underwood (2014) 227 Cal.App.4th 428, 440.) 

Section 128.7 “ ‘must not be construed so as to conflict with the primary duty of an 

attorney to represent his or her client zealously. Forceful representation often requires 

that an attorney attempt to read a case or an agreement in an innovative though sensible 

way. Our law is constantly evolving, and effective representation sometimes compels 

attorneys to take the lead in that evolution.’ ” (Guillemin v. Stein (2002) 104 Cal.App.4th 

156, 167-168.) 

“The Legislature enacted section 128.7 based on rule 11 of the Federal Rules of 

Civil Procedure (28 U.S.C.), as amended in 1993 [(rule 11)]. [Citations.] Therefore, 

federal case law construing rule 11 is persuasive authority on the meaning of section 

128.7.” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 190; see also Optimal Markets, 

Inc. v. Salant (2013) 221 Cal.App.4th 912, 921 (Optimal Markets) [federal cases 

construing rule 11 are instructive for purposes of interpreting § 128.7, which is modeled 

on rule 11].)

“Ordinarily, a ruling on a motion for sanctions brought under section 128.7 is 

reviewed under a deferential abuse-of-discretion standard.” (Optimal Markets, supra,

221 Cal.App.4th at p. 921; see Cooter & Gell v. Hartmarx Corp. (1990) 496 U.S. 384, 
10

405 [“an appellate court should apply an abuse-of-discretion standard in reviewing all 

aspects of a district court’s Rule 11 determination”].) The standard is deferential due to 

“the importance of the trial court’s close familiarity with the case in evaluating the 

potential sanctionee’s litigation activity.” (Optimal Markets, supra, at p. 926.) However, 

some cases call for a less deferential standard of review. For example, “where a question 

of statutory construction is presented in the course of the review of a discretionary 

decision, such issues are legal matters subject to de novo review.” (Id. at p. 921.) 

Similarly, [t]he availability of sanctions under section 128.7 in connection with 

undisputed facts is a question of law subject to de novo review.” (Li v. Majestic Industry 

Hills LLC (2009) 177 Cal.App.4th 585, 591.)

Here, the trial court’s sanctions award was expressly based on section 128.7, 

subdivision (b)(1), which reaches claims “presented primarily for an improper purpose, 

such as to harass or to cause unnecessary delay or needless increase in the cost of 

litigation.” We would ordinarily review a trial court’s finding that a claim was presented 

for an improper purpose for abuse of discretion. (Optimal Markets, supra, 221 

Cal.App.4th at p. 921.) However, Ponce and Aranda also raise a legal question by 

arguing that, “if the attorney filed the papers at issue with a reasonably clear legal 

justification, no improper purpose exists.” We understand Ponce and Aranda to argue

that, as a matter of law, a nonfrivolous claim cannot be asserted for an improper purpose. 

We consider this question de novo. 

A. Frivolity 

Ponce and Aranda contend the trial court erred because a nonfrivolous argument 

can be made that Wells Fargo was not a “predecessor in interest” within the meaning of 

the stipulation. They note that Wells Fargo and Specialized were not parties to 

Residential Investment’s unlawful detainer action, did not participate in the negotiation of 

the stipulation, were not named in the stipulation, and did not rely on the stipulation in 

their motion to dismiss Ponce III. They also note that the phrase “predecessor in interest” 
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has not been defined by statute and has only been judicially construed in one published 

case, more than forty years ago. (See Tidewater Oil Company v. Workers’ Compensation 

Appeals Board (1977) 67 Cal.App.3d 950, 959-960 (Tidewater) [defining the phrase 

“predecessor in interest,” for purposes of Labor Code § 5500.5].) 

Ponce and Aranda also observe that Wells Fargo, as the original beneficiary of the 

deed of trust, only held a security interest in the property. (See generally Rossberg v. 

Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1491-1492.) By contrast, 

Residential Investments, as the purchaser at the trustee’s sale, succeeded to the same 

property interests and rights available to Ponce and Aranda, including the right to 

possession. (See generally 5 Miller and Starr, Cal. Real Estate (4th ed. 2015) Deeds of 

Trust, § 13:267, p. 13-1148 [“The purchaser at the trustee’s sale succeeds to the same 

property interests and rights as were available to the trustor, including the right to 

possession and collection of the rents”].) Thus, Ponce and Aranda conclude that Wells 

Fargo and Residential Investment’s interests in the property were fundamentally 

different. 

Wells Fargo and Specialized respond that the phrase “predecessor in interest” 

encompasses a wide range of stakeholders, including Wells Fargo. They note that 

Tidewater defines the phrase broadly by reference to its constituent terms. (Tidewater, 

supra, 67 Cal.App.3d at pp. 958-959.) Specifically, Tidewater defines “predecessor” as 

“ ‘ “one who goes before or precedes another in a given state, position, or office,” ’ ” 

adding that the term “ ‘does not necessarily express any relation of legal privity’ and that 

who is a ‘predecessor’ is a question of law and fact.” (Id. at p. 958.) Tidewater goes on 

to say, “The word ‘interest’ in its ordinary signification is broad enough to include every 

species of property right; it is broader and more comprehensive than the word ‘title’; and 

it may be used as synonymous with ‘estate’ or ‘title’ or it may be used to denote 

something less than an estate or title. [Citations.] Accordingly, by the employment of 

the word ‘interest’ in its broad sense the Legislature manifested an intent that it should 
12

include every species of property right.” (Tidewater, supra, at p. 959.) Applying this 

expansive definition, Wells Fargo and Specialized argue that the phrase “predecessor in 

interest” necessarily includes Wells Fargo. 

Wells Fargo and Specialized observe that the release specifically refers to claims 

“regarding the subject loan, Note, [and] Deed of Trust,” which would most likely be 

directed to Wells Fargo as the originating lender. They also observe that Ponce and 

Aranda’s narrow definition of “predecessor in interest” would produce absurd results, as 

the only predecessors in interest with a possessory interest in the property were Ponce 

and Aranda themselves. 

We need not decide whether Ponce and Aranda, on the one hand, or Wells Fargo 

and Specialized, on the other, have the better end of this argument. For present purposes, 

we need only decide whether Ponce and Aranda’s interpretation of the stipulation is 

“indisputably without merit, either legally or factually.” (Peake v. Underwood, supra, 

227 Cal.App.4th at p. 440.) Although the trial court concluded that Wells Fargo was a 

“predecessor in interest” within the meaning of the stipulation, the court does not appear 

to have considered whether a plausible, nonfrivolous argument could be made to the 

contrary. 

Without expressing any opinion on the merits, we conclude that a nonfrivolous 

argument can be made that Wells Fargo was not a “predecessor in interest” within the 

meaning of the stipulation. We acknowledge the dearth of authority interpreting the 

phrase “predecessor in interest,” and note the differing interests held by Wells Fargo, as 

the beneficiary of the deed of trust, and Residential Investments, as the purchaser at the 

trustee’s sale. We also note that the parties’ litigation conduct was arguably inconsistent 

with an intent to release claims against Wells Fargo. Specifically, we note that Ponce and 

Aranda signed the stipulation on March 29, 2013, thereby resolving their claims against 

Residential Investments. Wells Fargo and Specialized moved to dismiss the complaint in 

Ponce III less than one week later, on April 4, 2013. Arguably, the motion to dismiss—
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which does not mention the stipulation—would not have been necessary had the parties 

intended to release claims against Wells Fargo. (Employers Reinsurance Co. v. Superior 

Court (2008) 161 Cal.App.4th 906, 921 [“ ‘The conduct of the parties after execution of 

the contract and before any controversy has arisen as to its effect affords the most reliable 

evidence of the parties’ intentions’ ”].) We also note that Wells Fargo and Specialized 

did not raise the release as an affirmative defense until July 8, 2015, suggesting some 

degree of uncertainty as to whether or not they were entitled to claim the benefits of the 

stipulation. Under the circumstances, we conclude that a plausible, nonfrivolous 

argument can be made that Wells Fargo was not a “predecessor in interest” within the 

meaning of the stipulation. Having so concluded, we next consider whether the 

complaint may nevertheless have been presented for an improper purpose. 

B. Improper Purpose

As noted, the trial court’s sanctions award was expressly based on section 128.7, 

subdivision (b)(1), which reaches claims “presented primarily for an improper purpose, 

such as to harass or to cause unnecessary delay or needless increase in the cost of 

litigation.” Ponce and Aranda do not challenge the sufficiency of the evidence to support 

the finding that their claims were presented primarily for an improper purpose. Instead, 

they argue that the nonfrivolous nature of the claims asserted in Ponce IV necessarily 

establishes their good faith. We agree. 

The parties have not directed our attention to any California case directly on 

point.4 In the absence of any applicable California authority, we look to federal law for 

guidance. (Optimal Markets, supra, 221 Cal.App.4th at p. 921.) The Ninth Circuit has 

explained that, “Rule 11 addresses two separate problems: ‘first, the problem of 

frivolous filings; and second, the problem of misusing judicial procedures as a weapon 

 

4 Ponce and Aranda direct our attention to Patel v. Crown Diamonds, Inc. (2016) 247 

Cal.App.4th 29, 41, but that case does not address the question before us. 
14

for personal or economic harassment.’ [Citation.] The plain language of Rule 11 

suggests that the frivolous filings clause and the improper purposes clause are 

independent; that is, a signer can violate the Rule by filing a frivolous paper even though 

not done for an improper purpose or, conversely, a signer can violate the Rule by filing a 

harassing paper even though it is not frivolous on the merits. Despite the language of the 

Rule, we have held that the two clauses are not totally independent. In Zaldivar [v. City 

of Los Angeles (9th Cir. 1986) 780 F.2d 823, 828 (Zaldivar), overruled on other grounds 

by Cooter & Gell v. Hartmarx Corp., supra, 496 U.S. at p. 399] we held that a nonfrivolous complaint can never violate Rule 11, even if it was filed for an improper 

purpose. [Citation.] However, Zaldivar expressly left open the question whether an 

improper, harassing motion that is not frivolous violates the Rule.” (Aetna Life Ins. Co. 

v. Alla Medical Services, Inc. (1988) 855 F.2d 1470, 1475-1476; see also Zaldivar, supra, 

780 F.2d at p. 832 [“a defendant cannot be harassed under Rule 11 because a plaintiff 

files a complaint against that defendant which complies with the ‘well grounded in fact 

and warranted by existing law’ clause of the Rule”]; and see Townsend v. Holman 

Consulting Co. (9th Cir. 1991) 929 F.2d 1358, 1362 [“complaints are not filed for an 

improper purpose if they are non-frivolous”].)5 

 

5 The Ninth Circuit has recognized that “successive complaints based upon propositions 

of law previously rejected may constitute harassment under Rule 11.” (Zaldivar, supra, 

780 F.2d at p. 832; see also Warren v. Guelker (9th Cir. 1994) 29 F.3d 1386, 1390 

[Complaints filed in the face of previous dismissals involving the same legal issues or the 

same parties warrant sanctions under Rule 11].) “For a claim of harassment to be 

sustained on the basis of successive filings, there must exist an identity of parties 

involved in the successive claim, and a clear indication that the proposition urged in the 

repeat claim was resolved in the earlier one.” (Zaldivar, supra, at p. 834, italics added.) 

Here, the record reveals that Ponce filed at least three prior complaints against Wells 

Fargo and Specialized prior to commencing the instant action. However, nothing in the 

record suggests that any of those complaints were adjudicated. As a result, we cannot say 

that the propositions urged in the present case were resolved in Ponce I, Ponce II or 

Ponce III, even assuming arguendo that there were an identity of the parties in each 

action. 
15

Here, the sanctions motions were directed to Ponce and Aranda’s second amended 

complaint, rather than any allegedly improper motion. Having concluded that the claims 

presented in the second amended complaint were nonfrivolous, we must also conclude 

that they were not presented for an improper purpose. (Aetna Life Ins. Co. v. Alla 

Medical Services, Inc., supra, 855 F.2d at pp. 1475-1476; Zaldivar, supra, 780 F.2d at p. 

832; Townsend v. Holman Consulting Co., supra, 929 F.2d at p. 1362; see also Sheets v. 

Yamaha Motors Corp. (5th Cir. 1990) 891 F.2d 533, 538 [noting that courts have held 

that the filing of a complaint that is well grounded in fact and warranted by existing law 

cannot, as a matter of law, constitute harassment for purposes of rule 11].) Because the

claims presented in the second amended complaint were nonfrivolous, and because a 

nonfrivolous complaint cannot be presented for an improper purpose under section 128.7, 

the trial court erred in granting the motion for terminating and monetary sanctions.6 

 

6

In light of our decision, we decline to address Ponce and Aranda’s remaining argument 

that the trial court failed to comply with section 128.7, subdivision (e). 
16

III. DISPOSITION

The judgment and the trial court’s sanctions order are reversed. Appellants 

Heriberto Ponce, Antonio Aranda and Imelda Aranda are entitled to their costs on appeal. 

(Cal. Rules of Court, rule 8.278(a)(1) & (2).)

/S/

 

RENNER, J.

We concur:

/S/

 

RAYE, P. J.

/S/

 

MAURO, J.