Filed 7/23/15 Zone Sports Center v. Red Head CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

ZONE SPORTS CENTER LLC et al.,

Plaintiffs and Appellants,

v.

RED HEAD, INC.,

Defendant and Respondent;

RICHARD HAMLISH,

Objector and Appellant.

F068984

(Super. Ct. No. 13CECG01935)

OPINION

APPEAL from an order of the Superior Court of Fresno County. Jeffrey Y. 

Hamilton, Jr., Judge.

Rummonds Thornton, Douglas V. Thornton; Law Offices of Paul M. Smith II, 

Paul M. Smith II; Law Offices of Richard Hamlish and Richard Hamlish for Plaintiffs 

and Appellants.*

Kinnear Law Firm and James Wesley Kinnear for Defendant and Respondent.

Richard Hamlish, in pro. per., for Objector and Appellant.

-ooOooPlaintiffs’ attorney, Richard Hamlish, appeals from an order imposing sanctions 

against him for filing a frivolous complaint. Because we find the complaint was not 

 

* Plaintiffs/Appellants appeared for oral argument but subsequently dismissed their appeal. 
2.

entirely frivolous, we reverse the order for sanctions against appellant and direct that the 

trial court redetermine the appropriate sanctions to be imposed for seeking to relitigate 

certain causes of action of the complaint.

FACTUAL AND PROCEDURAL BACKGROUND

2009 Confidential Settlement Agreement

Red Head, Inc. (Red Head) and Fresno Rock Taco, LLC (FRT) entered into a 

license agreement by which Red Head authorized FRT to use its trademarks and other 

intellectual property in connection with FRT’s development and operation of a restaurant 

and night club called the Cabo Wabo Cantina. Red Head subsequently notified FRT that 

it was in breach of the license agreement and the license agreement was terminated. Red 

Head filed an action against FRT in federal court, alleging causes of action including 

trademark infringement and breach of contract. In 2009, the parties entered into a 

confidential settlement agreement (CSA) and stipulated judgment resolving their dispute 

and ending the litigation.

2010 Federal Action

In October 2010, Hamlish, on behalf of FRT, Zone Sports Center, LLC (Zone), 

and Milton Barbis, filed a complaint against Red Head and others in federal court,

alleging various causes of action arising out of the license agreement and the construction 

and operation of the cantina. It also sought to rescind the license agreement and the CSA 

on multiple grounds. On September 1, 2011, the federal court granted the Red Head 

defendants’ motion to dismiss all of the claims in the complaint. Claims other than those 

that sought rescission of the CSA were dismissed on the ground they were barred by res 

judicata. The federal court granted the motion to dismiss the claims for rescission of the 

CSA, but granted plaintiffs leave to amend as to the claim for rescission on the ground 

FRT and Barbis signed the agreement as a result of duress or undue influence. The 

federal court dismissed all other claims with prejudice.
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Plaintiffs amended their complaint, but the federal court again granted Red Head’s 

motion to dismiss, granting leave to amend to allege only a claim for rescission of the 

CSA on the ground FRT and Barbis agreed to it under duress due to alleged death threats. 

A different judge was later assigned to the case and issued an order to show cause why 

the action should not be dismissed for lack of subject matter jurisdiction. In response, the 

plaintiffs submitted a proposed third amended complaint, alleging both a cause of action 

for rescission of the CSA on the ground of duress and a cause of action for rescission of 

the stipulated judgment in the prior federal action on the same ground. The federal court 

treated the third amended complaint as the operative pleading. 

On May 22, 2013, the second judge in the federal action entered an order 

dismissing the remaining causes of action. It found it lacked subject matter jurisdiction 

of the claim for rescission of the CSA. The court entered judgment in favor of Red Head 

and against FRT, Zone and Barbis.

2013 Superior Court Action

Subsequently, Hamlish, on behalf of FRT, Zone, and Barbis, initiated this action

against Red Head, alleging essentially the same causes of action as those alleged in the 

2010 federal complaint, including causes of action for rescission of the license 

agreement, rescission of the CSA, and breach of the license agreement.1 Red Head 

demurred to each cause of action of the first amended complaint on the ground each one 

was barred from relitigation by res judicata and collateral estoppel. At the same time, 

Red Head filed a motion for sanctions against plaintiffs and Hamlish, asserting the first 

amended complaint was frivolous in that the federal court had already dismissed virtually 

identical causes of action on the ground they were barred by res judicata. Plaintiffs 

 

1 Paragraph 3 of the first amended complaint even alleges: “This matter was originally 

filed on October 4, 2010, in the United States District Court for the Eastern District of 

California” and “contained both federal and state claims.”
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opposed the demurrer and the motion for sanctions, asserting res judicata did not bar their 

claims because the federal court lacked subject matter jurisdiction to hear them. 

The trial court sustained the demurrer as to all causes of action without leave to 

amend. It granted the motion for sanctions, and awarded defendant $13,685.44 in 

attorney fees as sanctions against both plaintiffs and Hamlish. Plaintiffs appealed from 

the judgment and the order awarding sanctions, but subsequently dismissed their appeal. 

Hamlish appeals from the order imposing sanctions against him.2

DISCUSSION

I. Appealability

Hamlish appeals from the order granting Red Head’s motion for sanctions. An 

order imposing monetary sanctions in excess of $5,000 against a party or an attorney for 

a party is an appealable order. (Code Civ. Proc., § 904.1, subd. (a)(2); Golightly v.

Molina (2014) 229 Cal.App.4th 1501, 1520.) 

II. Award of Sanctions

Red Head sought an award of attorney fees as sanctions pursuant to Code of Civil 

Procedure section 128.7, subdivision (b)(2), (3). A trial court’s award of sanctions is 

reviewed under an abuse of discretion standard. (Burkle v. Burkle (2006) 144 

Cal.App.4th 387, 399 (Burkle).) If, however, interpretation of a sanctions statute is 

required, it presents a question of law which we review de novo. (See, Morgan v. United 

Retail, Inc. (2010) 186 Cal.App.4th 1136, 1142.)

The sanctions statute provides, in pertinent part:

“(b) By presenting to the court, whether by signing, filing, 

submitting, or later advocating, a pleading, petition, written notice of 

motion, or other similar paper, an attorney or unrepresented party is 

 

2 On February 25, 2015, we entered an order construing the notice of appeal to include 

notice by Hamlish of his appeal of the sanctions order and permitting him to appear at oral 

argument and argue the issue of sanctions, although he had withdrawn from representation of 

plaintiffs after filing briefs on their behalf.
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certifying that to the best of the person’s knowledge, information, and 

belief, formed after an inquiry reasonable under the circumstances, all of 

the following conditions are met: [¶] ... [¶]

“(2) The claims, defenses, and other legal contentions therein are 

warranted by existing law or by a nonfrivolous argument for the extension, 

modification, or reversal of existing law or the establishment of new law.

“(3) The allegations and other factual contentions have evidentiary 

support or, if specifically so identified, are likely to have evidentiary 

support after a reasonable opportunity for further investigation or 

discovery.” (Code Civ. Proc., § 128.7, subd. (b)(2), (3).) 

“‘The purpose of [Code of Civil Procedure] section 128.7 is to deter frivolous 

filings.’” (Kojababian v. Genuine Home Loans, Inc. (2009) 174 Cal.App.4th 408, 421.) 

Whether an action is frivolous is determined by an objective standard, that is, whether the 

challenged conduct was objectively unreasonable. (Burkle, supra, 144 Cal.App.4th at 

p. 401.) “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 (Peake).)

The trial court concluded Hamlish’s conduct in filing this action was objectively 

unreasonable. It stated the majority of the first amended complaint was barred by res 

judicata. The first amended complaint was indistinguishable from the complaint in the 

2010 federal action, and the federal court made clear and specific rulings, finding that the 

claims alleged there were already barred by res judicata based on the 2009 stipulated 

judgment or they failed to state a viable claim for relief. As to the claim of duress, the 

trial court interpreted the federal court’s decision as determining there was insufficient 

evidence to support it. The trial court stated “the defect [was] in the complaint as a whole 

and not attributed to any specific detail therein.” Because the matter had already been 

determined in federal court, the trial court held the subsequent filing of the complaint in 

this action was objectively unreasonable and warranted sanctions. It imposed sanctions 
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against plaintiffs and Hamlish in the amount of Red Head’s attorney fees incurred in the 

defense of the action.

We conclude that, while the federal court orders and judgment finally disposed of 

certain causes of action, so that any reasonable attorney would have concluded res 

judicata barred further litigation of those claims, the orders did not finally dispose of one

claim, which was dismissed for lack of jurisdiction, and were ambiguous in other 

respects. Accordingly, sanctions for frivolousness were appropriate only as to some of 

plaintiffs’ causes of action. 

A. Res judicata

“‘The doctrine of res judicata precludes parties or their privies from relitigating a 

cause of action that has been finally determined by a court of competent jurisdiction.’” 

(Warga v. Cooper (1996) 44 Cal.App.4th 371, 377.) “‘A valid final judgment on the 

merits in favor of a defendant serves as a complete bar to further litigation on the same

cause of action.’” (Castro v. Higaki (1994) 31 Cal.App.4th 350, 357.) Thus, the basic 

requirements for application of res judicata are the same parties or their privies, the same 

cause of action, and a valid final judgment on the merits. 

B. Lack of subject matter jurisdiction

Hamlish asserts the judgment in the 2010 federal action was not on the merits, and 

therefore was not barred by res judicata, because the action was dismissed based on lack 

of subject matter jurisdiction. A dismissal on the ground of lack of subject matter or 

personal jurisdiction is not a judgment on the merits. (Nichols v. Canoga Industries

(1978) 83 Cal.App.3d 956, 967.) The records from the 2010 federal case, of which the 

trial court took judicial notice, demonstrate that only one claim asserted in plaintiffs’ 

complaint—the claim for rescission of the CSA on the ground plaintiffs executed it under 

duress after a defendant in that action made death threats against Barbis—was dismissed 

for lack of subject matter jurisdiction.
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In its September 1, 2011, order on the defendants’ motion to dismiss the original 

complaint in the 2010 federal action, the federal court determined all claims asserted in 

the plaintiffs’ complaint, with the exception of the three causes of action requesting 

rescission of the CSA, were “barred by res judicata and dismissed with prejudice.” The 

federal court also concluded the claims for rescission of the CSA, with the exception of 

the claims based on coercion and undue influence, failed to state an actionable claim. 

The federal court dismissed with prejudice all claims alleged in the complaint, with the 

exception of the plaintiffs’ claim for rescission on the ground Barbis and FRT were under 

duress or unduly influenced, which the plaintiffs were granted leave to amend. In a 

subsequent order after amendment of the complaint, the court again granted the 

defendants’ motion to dismiss, granting leave only to amend the claim seeking rescission 

of the CSA on the ground FRT and Barbis were under duress based on alleged death 

threats by the defendants.

After further amendment, a newly assigned judge dismissed for lack of subject 

matter jurisdiction the remaining cause of action for rescission of the CSA on the ground 

of coercion by death threats. In his May 22, 2013 order of dismissal, he concluded a 

federal court does not have jurisdiction of an action to enforce or invalidate a settlement 

agreement unless it expressly reserved that jurisdiction or there is an independent basis 

for federal jurisdiction. The CSA did not expressly retain the federal court’s jurisdiction 

of a subsequent action to enforce or invalidate the CSA, so the court could not base 

jurisdiction on that ground. The third amended complaint did not allege facts supporting 

federal diversity jurisdiction. The cause of action for rescission of the CSA due to 

coercion was based on California law and did not support federal question jurisdiction. 

The judge declined to exercise pendent jurisdiction, concluding there was no substantial 

federal claim before the court, arising out of a common nucleus of operative fact, because 

the federal claims were all barred by res judicata. Thus, the third amended complaint did 

not allege any independent basis for federal jurisdiction. The federal court dismissed the 
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remaining cause of action for rescission of the CSA for lack of federal subject matter 

jurisdiction.

“Absent complete diversity of citizenship among the parties, the federal court 

ordinarily has no jurisdiction over claims based on state law. [Citations.] An exception 

to this rule exists where a claim based on state law forms a separate but parallel ground 

for relief also sought in a substantial claim based on federal law. In such a case, the 

federal court can exercise ‘pendent jurisdiction’ over the state law claim.” (Boccardo v. 

Safeway Stores, Inc. (1982) 134 Cal.App.3d 1037, 1044-1045 (Boccardo).) Pendent 

jurisdiction is discretionary. (Id. at p. 1046.) “Where a federal court has exercised 

pendent jurisdiction, it can proceed to dispose of the state claim even after dismissal of 

the federal claim.” (Id. at p. 1045.) 

The first judge in the 2010 federal action dismissed all of the federal claims and 

almost all of the state claims on the ground of res judicata, implicitly exercising pendent 

jurisdiction of the state law claims. The second judge dismissed the remaining claim for 

rescission of the CSA, finding the federal court did not have jurisdiction to hear it. 

Nonetheless, he did not revisit or reconsider the earlier dismissal orders; he made no 

finding regarding jurisdiction of the claims already dismissed, nor did he vacate the 

earlier dismissal orders or change them in any way. Thus, the judgment entered by the 

second federal judge addressed only the claim to rescind the CSA based on death threats. 

It did not address any of the claims previously dismissed by the first judge. 

In federal court, a judgment is final only if it (1) adjudicates all the claims of the 

parties or (2) expressly determines there is no just reason for delay and expressly directs 

the entry of judgment on fewer than all of the claims. (Fed. Rules Civ. Proc., rule 54(b); 

Jetco Electronic Industries, Inc. v. Gardiner (5th Cir. 1973) 473 F.2d 1228, 1231 

(Jetco).) If, however, an order dismissing some of the claims presented by the complaint 

is followed by a later order disposing of the remainder of the claims, the “two orders, 

considered together, terminate[] [the] litigation just as effectively as would have been the 
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case had the district judge gone through the motions of entering a single order formally 

reciting the substance of the earlier two orders.” (Jetco, supra, 473 F.2d at p. 1231.) 

This result is consistent with the United States Supreme Court’s “command that practical, 

not technical, considerations are to govern the application of principles of finality.” 

(Ibid.)

 Neither the judgment nor the earlier dismissal orders in the 2010 federal action 

adjudicated all the claims of the parties or expressly directed entry of judgment on fewer 

than all the claims in the action. Together, however, the orders and judgment disposed of 

all of the claims alleged in the plaintiffs’ complaints. Accordingly, together they had the 

effect of a final judgment on all causes of action alleged. 

Consequently, Hamlish’s argument that the judgment in the 2010 federal action 

was not on the merits because the court dismissed the entire action for lack of subject 

matter jurisdiction is not supported by the record. The dismissal orders dismissed the 

various causes of action on the merits, either because they were barred by res judicata or 

because they failed to state a claim upon which relief could be granted. Only the last 

remaining claim for rescission of the CSA on the ground of duress was dismissed for lack 

of subject matter jurisdiction.

C. Claims based on the licensing agreement

The complaint in the 2010 federal action was filed by FRT, Zone and Barbis 

against Red Head and others. The current action was filed by FRT, Zone and Barbis 

against Red Head. Thus, for purposes of res judicata, the parties were the same.

The complaint in the 2010 federal action alleged substantially the same claims as 

those alleged in the first amended complaint in the current action; the federal law claims 

asserted in the 2010 action were omitted from the current action and some of the claims 

that were stated jointly by Zone and FRT in the federal complaint were separated into 

two causes of action in the current complaint. Nonetheless, the substance of all the 

claims made in the current complaint is contained in the causes of action alleged in the 
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2010 federal complaint. Thus, for purposes of res judicata, the two actions presented the 

same causes of action.

The federal court, in its orders and judgment dismissing the 2010 federal action, 

determined all the claims plaintiffs alleged in that action that arose out of the trademark 

licensing agreement (that is, all of the causes of action except the three that sought 

rescission of the CSA) were res judicata because they duplicated causes of action alleged 

in the prior federal action and settled in the CSA and 2009 stipulated judgment. The 

federal court dismissed those causes of action with prejudice and a final judgment was 

entered in the 2010 federal action. A judgment determining a claim is barred by res 

judicata is a judgment on the merits, even if erroneous. (Smith v. Smith (1981) 127 

Cal.App.3d 203, 209.) Plaintiffs did not appeal the judgment in the 2010 federal action. 

Thus, the claims in the current action arising out of the trademark licensing 

agreement were brought by and against the same parties and presented the same claims as 

causes of action in the 2010 federal complaint. Those claims were finally determined 

adversely to plaintiffs by a judgment on the merits in the 2010 federal action. Because 

the determination that the claims based on the licensing agreement were barred by res 

judicata was clear when the final dismissal order and judgment in the 2010 federal action 

was entered, we conclude any reasonable attorney would agree those causes of action 

could not be relitigated in a subsequent state court action. Accordingly, the award of 

sanctions against Hamlish for refiling the claims arising out of the license agreement was 

proper. 

D. Claims for rescission of the CSA 

Five causes of action of the current first amended complaint allege claims for 

rescission of the CSA. These causes of action seek rescission on multiple grounds, 

including lack of consideration, consent to the agreement was given as a result of 

economic duress, and consent to the agreement was given under duress due to death 

threats to Barbis. 
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The same grounds for rescission of the CSA were alleged in the 2010 federal 

action. The federal court dismissed with prejudice the causes of action seeking rescission 

of the CSA, with the exception of the claim for rescission of the CSA based on death 

threats, on the ground they failed to state a viable claim for relief. A dismissal for failure 

to state a claim in a federal action is ordinarily treated as an adjudication on the merits. 

(Boccardo, supra, 134 Cal.App.3d at p. 1042.) Such a judgment “‘is on the merits if it is 

based on the substantive law, and determines that the plaintiff has no cause of action .... 

The judgment is not on the merits if it is based merely on rules of procedure, and 

determines only that the plaintiff is not entitled to recover in the particular action,’” as in 

a dismissal for lack of jurisdiction. (Ibid.) 

The federal court concluded the claims for rescission of the CSA, with the 

exception of the claim based on duress due to death threats, failed to allege all the 

essential elements of the cause of action the plaintiffs attempted to allege. Thus, the 

federal court determined these claims were insufficient on the basis of substantive law, 

not procedure or jurisdiction. Accordingly, the judgment of the federal court in the 2010 

action is res judicata as to the claims for rescission of the CSA, with the exception of the 

claim based on duress due to death threats; the judgment barred further litigation of those 

claims in the current action.

The claim for rescission of the CSA based on duress due to death threats to Barbis 

was not adjudicated on the merits. The second federal judge, when he made his May 22, 

2013, order of dismissal, concluded the court lacked subject matter jurisdiction of the 

claim for rescission of the CSA, and dismissed it on that ground. Thus, there was no final 

judgment on the merits of the claim for rescission of the CSA based on death threats.

The third amended complaint in the 2010 federal action also sought rescission of 

the 2009 stipulated judgment (a claim that was not included in the Superior Court action). 

The federal court concluded it had subject matter jurisdiction of that claim because 

jurisdiction was expressly reserved in the stipulated judgment. The federal court treated 
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the request to rescind the stipulated judgment as an independent action in equity to set 

aside the judgment under Federal Rule of Civil Procedure 60. The federal court stated a 

judgment may be set aside in an independent action only “‘to prevent a grave miscarriage 

of justice,’” where the injustice is “‘deemed sufficiently gross to demand a departure 

from rigid adherence to the doctrine of res judicata’” (citing United States v. Beggerly

(1998) 524 U.S. 38, 46-47). It added: “Courts generally will not set aside a judgment 

unless the party seeking relief shows that it is free of fault or negligence and that it has 

not delayed in seeking relief” (citing 12 Moore et al., Moore’s Federal Practice (3d ed. 

1997) ¶ 60.82).

The federal court reviewed the evidence then available and concluded the 

plaintiffs probably would not be able to muster enough evidence to prove duress by death 

threats. On that basis, as well as because of the delay in seeking to set aside the 

stipulated judgment, it concluded plaintiffs had not demonstrated the stipulated judgment 

should be set aside to avoid a grave miscarriage of justice. 

The trial court in this action apparently applied collateral estoppel to conclude the 

federal court had already determined plaintiffs could not prove duress, so they were 

foreclosed from pursuing a cause of action for rescission based on duress. Collateral 

estoppel, also known as issue preclusion, “prevents ‘relitigation of issues argued and 

decided in prior proceedings.’ [Citation.] The threshold requirements for issue 

preclusion are: (1) the issue is identical to that decided in the former proceeding, (2) the 

issue was actually litigated in the former proceeding, (3) the issue was necessarily 

decided in the former proceeding, (4) the decision in the former proceeding is final and 

on the merits, and (5) preclusion is sought against a person who was a party or in privity 

with a party to the former proceeding.” (Castillo v. City of Los Angeles (2001) 92 

Cal.App.4th 477, 481.) 

The federal court did not make any factual finding regarding whether Barbis acted 

under duress in executing the CSA or stipulated judgment, or whether plaintiffs could 
13.

prove he did so. The issue before the federal court was whether it should vacate the 

stipulated judgment to avoid a grave injustice. The federal court considered the apparent 

lack of evidentiary support in determining that issue. While it expressed doubt about 

whether plaintiffs would be able to prove the alleged duress, it made no final and binding 

determination of that issue. Thus, the issues in the two proceedings were not identical; 

the issue of duress by death threats was not actually litigated in the federal court action. 

There was no final adjudication of the absence of duress to collaterally estop relitigation 

of that issue in the present action.

The award of sanctions against Hamlish for filing the claim for rescission of the 

CSA on the ground of duress by death threats was inappropriate; that claim was not 

barred by res judicata or collateral estoppel. Further, because of significant ambiguities 

in the federal court’s dismissal orders and judgment as to the other claims for rescission 

of the CSA, substantial evidence does not support the trial court’s conclusion that “‘any 

reasonable attorney would agree’” the other claims for rescission of the CSA were 

“‘totally and completely without merit.’” (Peake, supra, 227 Cal.App.4th at p. 440.) 

The federal court, through the first judge assigned to the case, dismissed with 

prejudice all the claims in the federal complaint except the claim for rescission of the 

CSA on the ground of duress by death threats. The claims were dismissed based on res 

judicata and failure to state a claim for relief, not on the ground of lack of jurisdiction. 

The second judge in the 2010 federal action, however, entered an order dismissing the 

final remaining claim for rescission of the CSA on the ground the federal court lacked 

subject matter jurisdiction of the claim. The second judge did not address the prior 

dismissal orders which, regarding the claims for rescission of the CSA, appear 

inconsistent on their face with the statements made in the second judge’s order 

dismissing the remaining claim for lack of jurisdiction. The second judge did not set 

aside or modify the prior dismissal orders to make them consistent with its determination 
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that the federal court lacked subject matter jurisdiction of the remaining claim for 

rescission of the CSA based on death threats.

The second federal judge then entered a judgment that did not reflect a resolution 

of all the claims that had been raised in the action. Rather, it referred to the second 

judge’s May 22, 2013, “order dismissing Plaintiffs’ claim to rescind a settlement 

agreement in a prior action for lack of subject matter jurisdiction,” then entered judgment 

in favor of Red Head and against plaintiffs. The judgment does not address the claims 

arising out of the license agreement at all; it is not clear whether the judgment was 

intended to reflect a determination that all of plaintiffs’ claims for rescission of the CSA 

were dismissed due to lack of subject matter jurisdiction, or whether the determination of 

lack of jurisdiction pertained only to the claim before the federal court at the time of the 

May 22, 2013, dismissal order: the claim for rescission of the CSA on the ground of 

duress by alleged death threats.

The federal court’s order denying the defendants’ motion for attorney fees in the 

2010 federal action is similarly confusing. The order states: “Here, the Court dismissed 

for lack of subject matter jurisdiction the only claim in the complaint premised on a 

contract, namely Plaintiffs’ claim to rescind the settlement agreement reached by the 

parties in the prior action.” It adds: “accordingly, because no ‘action on a contract’ was 

ever properly before the Court, the Court cannot award fees and costs in accordance with 

[Civil Code] section 1717.”

The federal court’s order on attorney fees is ambiguous and confusing. It appears 

to address only the two causes of action alleged in the third amended complaint: one 

seeking rescission of the CSA on the ground of duress by alleged death threats and one 

seeking to set aside the 2009 stipulated judgment on the same ground. Yet the order 

more broadly states that “no ‘action on a contract’ was ever properly before the Court,” 

suggesting the court was concluding the claims for rescission of the CSA on all grounds 

were not “properly before the Court” due to lack of subject matter jurisdiction.
15.

Because of the confusion in the federal court’s dismissal orders and judgment, we 

conclude the trial court’s findings that the federal court made clear and specific rulings, 

and therefore Hamlish’s subsequent refiling of the same claims for rescission of the CSA 

was objectively unreasonable, are not supported by substantial evidence. Accordingly, 

the award of sanctions, which included sanctions against Hamlish for refiling the claims 

for rescission of the CSA, met the “abuse of discretion” standard.

DISPOSITION

The order imposing sanctions against attorney, Richard Hamlish, is reversed. The 

matter is remanded to the trial court with directions to review the materials submitted in 

support of and opposition to the motion for sanctions and redetermine the appropriate 

amount of sanctions, if any, to impose against Hamlish, based on the attempt to relitigate 

the claims arising out of the license agreement (the first through sixth and twelfth through

eighteenth causes of action). No sanctions against Hamlish shall be included for refiling 

the claims for rescission of the CSA. The parties are to bear their own costs on appeal.

_____________________

HILL, P.J.

WE CONCUR:

_____________________

LEVY, J.

_____________________

DETJEN, J.