Source: https://www.calattorneysfees.com/cases_sanctions/page/2/
Timestamp: 2019-04-25 15:42:49+00:00

Document:
--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Sanctions: Valtierra v. Weng’s Enterprises, Case No. G051837 (4th Dist., Div. 2 Aug. 22, 2016) (Unpublished)—CCP § 128.5 Does Not Allow Sanctions Against A Party’s Own Attorney Or Former Attorney.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Retainer Ageement: Bienert, Miller & Katzman PLC v. Patwardhan, Case No. G052667 (4th Dist., Div. 3 Aug. 22, 2016) (Unpublished)—Statute of Limitations For Attorney Fee Collection Does Not Commence Until Attorney-Client Relationship Ends.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.
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.
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.
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.
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.
· 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.
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.
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 (5th 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.
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.
Also, Lower Court Failed To Explain Basis For Sanctions.
If you are going to seek sanctions under CCP section 128.7, you must not only show the actions were frivolous but also make sure the lower court explains why they are frivolous. Because both of these important requirements were not met, a reversal of a sanctions award of $15,982 was necessitated in Samoa Pacific Group, LLC v. Crandall, Case No. A143172 (1st Dist., Div. 5 Nov. 25, 2015) (unpublished).
There, plaintiff did lose a writ petition challenging solid waste disposal requirements. The lower court dismissed the writ petition and imposed $15,982 in attorney’s fees and costs, without any express reasoning, under the theory the petition was frivolous. CCP § 128.7 was the articulated ground for sanctions. On appeal, the reviewing court reversed, finding that the arguments made by plaintiff were not frivolous (although they did not win on the merits) and that the lower court did not particularize the reasons for sanctions as required under section 128.7. Imposition of sanctions reversed.
Problem With Lower Court Ruling Was Relying On Time Deadlines And Analysis For Pre-judgment Costs.
In Zakarian v. Salumbides, Case No. B255237 (2d Dist., Div. 5 Oct. 2, 2015) (unpublished), the trial court was unhappy with post-judgment costs memoranda presented by the prevailing party, granting defense motions to tax costs (based primarily on timeliness of filing costs memoranda) and assessing $7,500 in CCP § 128.7 sanctions against plaintiff.
All of that went away on appeal, in a 3-0 decision (but with a concurring decision by Presiding Justice Turner) after plaintiff appealed both the tax costs order and the sanctions order.
The first challenge was that plaintiff did not properly appeal from the tax costs order. The appellate court did not disagree that another box could have been checked on the Judicial Council Form, but notices of appeal are liberally construed and the subject of appeal was clear based on the dated order being appealed from. (In Ellis Law Group, LLP v. Nevada City Sugar Loaf Properties, LLC, 230 Cal.App.4th 244, 251 (2014).) However, the lower court erred on the merits, applying a deadline to tax costs applicable to pre-judgment costs rather than post-judgment costs, with the latter having a deadline of up to two years after costs have been incurred. (Code Civ. Proc., § 685.070.) The lower court also was wrong in determining that plaintiff was seeking interest (true, but in a different part of the Judicial Council forms) and was seeking attorney’s fees (no fee claims were being made, just “hard” post-judgment costs).
Although reversal of the tax costs order was enough, the defense further failed to follow the strict § 128.7 sanctions dictates of filing a separate motion for sanctions. Concurring Justice Turner agreed completely, but separately wrote to express that there might be a different ground upon which to award sanctions, but the defense did not ask for this disposition and no help was going to come from the appellate court.
CCP § 575.2 So Allows, And Attorneys Beware That Sanctions Can Be Imposed Even Where Attorney Requested, But Was Denied, A Telephonic Appearance.
A former attorney failing to attend a mandatory pretrial issues conference and failing to file pretrial documents in Contra Costa Superior Court was hit with $6,178.26 in sanctions after the appellate court reversed more severe sanctions in an earlier opinion. Former attorney appealed, but to no avail in Uwadiale v. Makiyama, Case No. A143567 (1st Dist., Div. 5 Sept. 2, 2015) (unpublished).
. . . However, Imposition Of Sanctions On Individual Attorneys Is Just Fine.
Siding with the Seventh and Sixth Circuits, the Ninth Circuit Court of Appeals in Kaass Law v. Wells Fargo Bank, N.A., No. 13-56099 (9th Cir. Aug. 27, 2015) (published) reversed $8,480 in attorney’s fees sanctions imposed against a law firm. Section 1927 authorizes sanctions against “[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory.” The Ninth Circuit found this only applies to individual lawyers, not firms. In doing so, it did disagree with contrary reasoning in cases decided by Eleventh and Second Circuits.
Reason: One Claim Was Not Worthy Of Sanctions, Requiring A Remand.
For you readers wanting a primer of the scope of the res judicata doctrine, this one may be worth reading.
In Zone Sports Center LLC v. Red Head, Inc., Case No. F068984 (5th Dist. July 23, 2015) (unpublished), plaintiffs’ attorney was sanctioned for filing a frivolous complaint in state court after plaintiffs did not have much success at the federal level. The sanctions were levied under CCP § 128.7 against attorney to the tune of $13,685.44 involving a failed restaurant venture called Cabo Wabo Cantina.
The sanctions order was reversed because the entire complaint was not frivolous. Rather, one claim for duress based on death threats was dismissed by the federal court for lack of subject matter jurisdiction, which is not a “merits” ruling for res judicata purposes. So this one was remanded to determine the appropriate sanctions to be imposed on the other claims which were found to be frivolous based on federal “merits” rulings.
BLOG UNDERVIEW—This one brings a smile to co-contributors Marc and Mike. Jim DeMarco, founding partner of Jackson DeMarco Tidus & Peckenpaugh in Irvine, had a dispute where an opposing attorney wrote Jim a letter arguing that a pending lawsuit lacked merit based on the doctrine of “restituticati.” That provoked Mr. DeMarco to write a response letter asking whether that doctrine involved a “red or white sauce.” There you go!
Author: Giovanni JL from Singapore. Wikipedia. Creative Commons Attribution-Share Alike 2.0 Generic license.
Department of Corrections: Mr. DeMarco informs us that the correct reference should be to the doctrine of “restitutacata,” but that otherwise the story is correct.
Plaintiff Kept Going After Earlier Sanctions Tentative For $38,080 Was Dismissed For Procedural Defects.
This next post counsels litigants and their counsel that there is a point where the battle has been lost, under penalty of having sanctions imposed for further litigation—which is exactly what happened.
In Ledesma v. JPMorgan Chase, Case No. B254614 (2d Dist., Div. 7 June 15, 2015) (unpublished), plaintiff and his attorney were both sanctioned $60,000 under CCP §§ 128.7(b)(1) [improper litigation purpose] and (b)(3) [no evidentiary support for allegations in a pleading], after the trial judge had earlier indicated a tentative to impose $38,080 in 128.7 sanctions—but which tentative had to be denied without prejudice because of some procedural defects. Plaintiff and his counsel still kept going, with the record getting worse and worse, with years of efforts (including personal bankruptcies) being used to stymie foreclosure to a lender, waiting over 5 years post-default to seek a loan modification (hardly timely under the Homeowners Bill of Rights), requiring a buyer at a nonjudicial foreclosure to actually obtain an unlawful detainer eviction judgment (at considerable expense), and trying yet another personal bankruptcy in violation of a prior 2-year bankruptcy bar set by a prior bankruptcy judge (with comments on jurists confronting this issue being fairly caustic).
The $60,000 sanctions award was affirmed on appeal, with the appellate court chastising plaintiff/his counsel for not learning from the vacated prior tentative against them both. Guess this one could be summarized as “enough is enough” based on the tenor of the opinion.
Sanctions Order Was Appealable, With Substantial Evidence Supporting It.
Pulling tooth from elephant. Nov. 3, 1924. Library of Congress.
In Weaver v. Do, Case No. B254248 (2d Dist., Div. 8 April 6, 2015) (unpublished), patient obtained $935 in sanctions (attorney’s fees) after a dentist apparently gave her the “run-around” on producing dental records, after admitting he had them and then suggesting they went elsewhere.
That result was affirmed on appeal. The sanctions order was determined to be appealable given that CCP § 1985.7 has no limitation on appealability. Because the contested issue was custody, this question was factual in nature, with the trial court’s credibility calls against the losing dentist prevailing in patient’s favor on review.
No Flawed Pleading Being Pursued or Advocated, and Safe Harbor 21 Day Period Not Followed.
Justice Bedsworth, on behalf of a 3-0 panel, reversed a $10,443 sanctions award against plaintiff’s attorney of $10,443 under Code of Civil Procedure section 128.7 founded on the lower court’s perception that the attorney should have substituted out or moved for a withdrawal quicker than he did because two of the three causes of action were later found to be without evidentiary support.
Debutantes playing horseshoes. Harris & Ewing, photographers. 1923. Library of Congress.
Secondarily, section 128.7 is targeted at flawed pleadings or advocacy of them, something not at issue in the attorney’s decision to delay getting out of a case in order to not prejudice the client in the trial court’s eyes.
Infantryman prepares to hurl pineapple of inedible variety. “American soldiers make good grenade throwers.” Alfred T. Palmer, photographer. 1942. Library of Congress.
BLOG UNDERVIEW—Justice Bedsworth also noted that CCP § 128.5 (a statute which actually lapsed for a long period of time), as of January 1, 2015, is back in the picture, at least until its January 1, 2018 current sunset date.
Costs and sanctions are generally discretionary matters, even if the record might show a different conclusion could have been reached. Appellate courts are loathe to disturb a trial court’s conclusion in such matters, as Sdun v. Patterson, Case No. C070623 (3d Dist. Feb. 18, 2015) (unpublished) aptly illustrates.
There, plaintiffs won a quiet title/trespass case against defendant over a boundary line dispute involving Sacramento property. The lower court did award plaintiffs some costs for an uncalled expert witness and some sanctions for defendant bringing an untimely discovery sanctions motion claiming that the expert designation of the other side was “sham” in nature.
These determinations were affirmed on appeal. Given that defendant did not beat a CCP § 998 offer, it was no abuse of discretion for the lower court to award $250 for his expert witness fees, even though the expert was far from a great witness at deposition and was not called at trial. (Evers v. Cornelson, 163 Cal.App.3d 310, 317 (1984).) With respect to the sanctions award of $1,108.29 against defendant, this was justified because the defense discovery abuse sanctions motion was untimely, meaning plaintiff should be compensated for having to successfully oppose it—getting counter-sanctions against the defense.
Multiple Bases Supported Sanctions Award.
You gotta really look at the facts when appealing a discretionary sanctions award. If they bad, you might want to forego and go onto more productive ventures. Archer v. Archer, Case No. B254750 (2d Dist., Div. 4 Jan. 26, 2015) (unpublished) teaches that well.
This one involved a dispute between brothers over several real estate parcels jointly owned by them, with brother John getting the better of it in an arbitration against brother Jeff. Jeff apparently then attempted to avoid enforcement of the arbitration awards, forcing John to get a bankruptcy lift stay order and trying to only enforce selective portions in Jeff's favor—even though John clearly had net judgments in his favor. That provoked "dueling" 128.7 motions by both brothers. John won, and Jeff lost. The trial court awarded John $9,999.99 in sanctions against Jeff and his attorney.
The orders were affirmed. Although a frivolous argument ground for sanctions is usually only levied against the attorney, here the trial judge found that other sections based on misrepresentations, omissions, and repeated attempts to avoid enforcement of the arbitration award presented independent grounds justifying sanctions under 128.7 against both client and his attorney.
Civil Action Was Part of Bitter Dissolution Dispute.
Husband, during the pendency of apparent bitter dissolution proceedings with his former wife, filed multiple civil lawsuits against wife, her parents, and her parents’ trust. Earlier, in one of the actions, the assigned civil judge refused to deem the matter related to the family law matter. Then, later on, the civil judge imposed both terminating and monetary sanctions of $9,120 against husband and his counsel under CCP § 128.7, prompting an appeal by both.
They were successful in Scarlatelli v. Gamut Construction Co., Inc., Case No. B252435 (Jan. 20, 2015) (unpublished).
Although the reversal is based on the peculiar facts of record, the appellate court found no bad faith simply from the fact a number of lawsuits had been filed or the procedural manner in which the lawsuits were filed, attorney strategic decisions which could not be necessarily “imputed” to client husband. Furthermore, the earlier decision to not transfer the case to family law court as a related matter could well lead counsel to decide the filing in civil court was the proper course of action. Finally, joinder of the trust and the trust representatives was not improper given that a transfer of title to property was being challenged and an inter vivos trust is recognized as a “probate avoidance” device.
As far as success rate, we will note that 128.7 challenges appear to have a higher degree of success than appeal of discovery sanction orders. The terminating sanction was seen as too draconian in Scarlatelli, with that determination also making it necessary to overturn the monetary sanctions against husband and his attorneys.
False Statement By Lender's Defense Counsel Occurred in Superseded Pleading.
In Tyshkevich v. Countrywide Home Loans, Inc., Case No. C070764 (3d Dist. Dec. 26, 2014) (unpublished), homeowner lost both a challenge to a residential foreclosure and a request for sanctions against lender's defense counsel under Code of Civil Procedure section 128.7. The lender's counsel had made a false statement about the loan never having been sold on the secondary market in demurrer paperwork directed against a first amended complaint, a pleading which had been superseded via latter versions by the time the 128.7 request was made by homeowner.
The appellate court found no abuse of discretion in the lower court's denial of the 128.7 request. Given that the offending statement was found in a superseded complaint, lender and its counsel had no opportunity to correct the error in a pleading which was no longer in force.
$1 Million Fee Award Made to Two Law Firms Representing Med Mal Plaintiff.
Sweet Violet cigarettes. Globe Tobacco Co. 1886. Library of Congress.
According to an article in a recent on-line version of the ABA Journal, a Pennsylvania judge has ordered a Pennsylvania defense attorney to pay $1 million in fees back to two law firms prosecuting a medical malpractice claim on behalf of a plaintiff. The sanctions were imposed against the defense attorney for allegedly allowing an expert to refer to a lung cancer patient’s history of smoking in a first trial, which resulted in a mistrial—with the attorney claiming she instructed the expert not to reference smoking in the trial. In the second trial, the plaintiff eventually won a $2 million verdict. The defense attorney has vowed to appeal, has demanded an investigation into the sanctioning judge, and has indicated she might sue the two firms that were the beneficiaries of the fee sanction order.
Our August 6, 2014 Post On The High Water Mark Of The English Judges’ Contempt Powers Has Been Expanded And Published As An Article In California Litigation.
Thanks to the generous permission of California Litigation, The Journal of The Litigation Section, State Bar of California, “Summary Contempt and Due Process: England, 1631, California, 1888” is now available on our website by clicking here.
Court Adopts Broad Interpretation To Statutory Reference To When The “Motion Was Made”.
In a published decision, the Sixth District, Division 1, affirms and holds “that a trial court may impose sanctions under Code of Civil Procedure section 1987.2 against a litigant for pursuing a motion to quash that, even though legitimately filed, was rendered unnecessary by a subsequent amendment or withdrawal of the subpoena.” Evilsizor v. Sweeney, No. A140059 (1/1 Oct. 28, 2014).
Here, the motion to quash was filed in good faith. So what about the failure to withdraw the motion sooner? The case hinges on how broadly the statutory phrase “motion was made” may be interpreted. The answer here is “broadly” – for the phrase is interpreted to cover the failure to withdraw the motion sooner, once it became obvious that the motion to quash the subpoena was unnecessary because the subpoena had been amended.
FYI: The sanctions order was for $2,225 in attorney fees, half of what had been requested.
Deals With Third-Party Subpoena Compliance Sanctions.
In our August 27, 2014 post, we discussed Vasquez v. Calif. School of Culinary Arts (an unpublished decision at the time), involving sanctions against a non-party for failing to prevail in opposing a subpoena compliance motion. We can report that this opinion was certified for publication on September 26, 2014.
Some Should Have Been Sought In Federal Court, But Vexatious Litigant Sanctions And Addition Of Attorney As Judgment Debtor, Who Assisted Vexatious Litigant, Was Proper.
Kempton v. Clark, Case No. B248713 (2d Dist., Div. 2 Sept. 25, 2014) (unpublished) is a real imbroglio involving bankruptcy adversary and state court proceedings in which vexatious litigant orders and fee recovery orders were entered, eventually with an attorney for a vexatious litigant being added as a judgment debtor for purposes of certain vexatious litigant sanctions rulings.
The appellate court affirmed and reversed some of these orders.
Without getting into excruciating specifics, the reviewing court found that the superior court erroneously awarded certain fees for federal court (bankruptcy adversary) work, finding the power to do so rested with the federal court. (Charlie Y., Inc. v. Corey, 446 B.R. 384, 391-393 (9th Cir. BAP 2011).) The appellate court did affirm orders adding an attorney as a “judgment debtor” to vexatious litigant sanctions orders after finding he was the real power behind the throne as far as liability.
Postscript to Our June 25, 2014 Post.
On June 25, 2014, we posted on U.S. Magistrate Judge (N.D. Cal.) Paul Grewal’s $2 million sanctions award against Quinn Emanuel and Samsung for alleged disclosure of protected documents in the Apple smartphone litigation, payable to Nokia and Apple. Although a reconsideration motion was brought, Magistrate Judge Grewal on September 19, 2014 ruled that the sanctions were not excessive in nature.
Federal Judge Orders Money Paid to Prevailing Adversary Defendant, Reducing Requested Fees By About 34%.
In mid-August 2014, U.S. District Judge Colleen McMahon, in Madison 92nd Street Associates v. Courtyard Mgt. Corp., Case No. 13 Civ. 291 (S.D.N.Y.), sanctioned well-known firm Boies Schiller & Flexner LLP—dubbed as one of the top four “most feared” litigation firm to come up against in some past polls and dubbed as an “awesome opponent” in a recent poll—about $271,000 for bringing an antitrust suit on behalf of Marriott against Host Hotels & Resorts Inc. when it was evidence Boies had a conflict of interest in prosecuting the case. Host, represented by Proskauer Rose—itself a well-recognized firm, had requested $412,343 in fees and costs, but District Judge McMahon reduced the request by around 34%.
Estate of Johnson, Case Nos. A134733 et al. (1st Dist., Div. 3 Sept. 18, 2014) (unpublished).
An attorney was sanctioned for $7,290 (representing fees incurred by another litigant) for making a false allegation in a probate Third Amended Petition. The basis for the award was under CCP § 128.7. The award was reversed because the appellate court determined that the germane allegation was not without evidentiary basis.
T.R. & B Property, LLC v. Lincoln Best Hotel, Inc., Case No. B249168 (2d Dist., Div. 4 Sept. 18, 2014) (unpublished).
Plaintiff bringing a losing SLAPP motion was hit with $5,122.50 in attorney’s fees because the lower court decided the motion was frivolous. No change on appeal, because a contractual dispute over nonpayment of money is not protected activity, with many cases establishing this so that the motion was indeed frivolous.
Marriage of Smith, Case No. E056872 (4th Dist., Div. 2 Sept. 18, 2014) (unpublished).
Ex-wife was sanctioned $3,309 in actual fees incurred by the other side and $32,500 in sanctions for disobeying a prior court order prohibiting dissemination of third party, with ex-husband’s current wife being the third party and beneficiary of the sanctions order. Only the $3,309 component of the order held up, because it constituted actual reasonable fees incurred by the third party. However, the $32,500 component was pure “punishment,” not countenanced under the discovery statutes. (Welgoss v. End, 252 Cal.App.2d 982, 992 (1967).) No other bases justified the award, not the inherent authority of the court, Family Code section 271 (no proper notice provided), or CCP § 128.7 (which does not encompass discovery disputes).
Trial Judge Needed to Explore Impact of Sino Century Development Case.
In Bongan v. Kaiser Foundation Hospitals, Inc., Case No. A137303 (1st Dist., Div. 5 Sept. 12, 2014) (unpublished), the lower court had awarded $15,100 in attorney’s fees in favor of a defendant and against a plaintiff/her attorney under California Rules of Court, rule 2.30(b) which allows for “reasonable monetary sanctions” to be awarded to the court or an aggrieved person, or both, for failure without good cause to comply with applicable rules of court. The basis for the award was plaintiff’s late filing of an amended summary judgment opposition causing the defense to incur more costs because the defense reply was grounded in the initial opposition papers (rather than the amended ones). The appellate court reversed this award based on a case which came down after the sanctions were issued by the lower court, namely, Sino Century Development Limited v. Farley, 211 Cal.App.4th 688, 691 (2012). Sino held rule 2.30(b) did not authorize compensation of fees as sanctions without specific statutory authority or without an agreement of the parties otherwise. Because the lower court did not have the benefit of this decision and plaintiff had some statutory arguments (as well as the argument that fees should not be assessed against counsel), a remand was in order to consider the impact of Sino and develop a full record in light of this intervening published appellate decision.
Opposing Parties’ Failure to Raise the Issue in Opposition Was No Waiver.
Cooper v. Wedbush Morgan Securities, Inc., Case No. B241048 (2d Dist., Div. 3 Aug. 28, 2014) (unpublished) shows how important the “safe harbor” time period is under CCP § 128.7, a sanctions statute. In this one, a trial court denied a 128.7 sanctions request because the “safe harbor” time was not adequately allowed, even though the opposing parties did not raise the issue in their opposition. The requesting side argued that opposing parties waived the “safe harbor” issue. The appellate court disagreed, finding that the lower court had the ability to deny based on sua sponte consideration of the issue and that it as an appellate court could still consider the issue discretionarily given that it involved a pure question of law.
Federal Decisions Looked to in E-Discovery Area.
Vasquez v. Calif. School of Culinary Arts, Case No. B250600 (2d Dist., Div. 2 Aug. 27, 2014) (unpublished) is an example of how a litigant seeking documents from non-party Sallie Mae really set up a discovery battle very well. The litigant sent a first subpoena, drawing an objection to which the litigant responded by narrowing the requests via a second subpoena to target a very selective subset of documents, even offering to pay non-party reasonable costs of compliance. Sallie Mae once again objected to the second business document subpoena, moved to quash, and lost—and with the lower court awarding successful litigant $11,487 in attorney’s fees for having to deal with Sallie Mae’s unsuccessful opposition.
And . . . 998 Offer Silence On Fees And Costs Resulted In Fee Recovery By Accepting Plaintiff Under Labor Code Section 218.5.
Briscoe v. The Painted Nail, Case No. B252066 (2d Dist., Div. 7 Aug. 20, 2014) (unpublished) illustrates how a CCP § 998 offeror needs to be careful in the drafting of the offer, making sure to include terms it wants—including a formal standard release document to be signed at a designated time before entry of judgment and a waiver of fees/costs. The failure to include these terms can mean the offeror does not accomplish what it/he/she intended.
In this one, defendants presented this 998 offer to plaintiff suing for employment termination retaliation and final paycheck transmittal delay: “Defendants . . . jointly offer to have judgment entered again them in favor of plaintiff in the amount of $25,000 pursuant to Section 998. Payment of such shall include a complete release and dismissal of all claims by plaintiff. This offer may be accepted pursuant to the terms and conditions of Section 998, and if not timely accepted, it is permanently withdrawn.” Plaintiff timely accepted the offer this way through a signed acceptance by plaintiff’s counsel alone: “Plaintiff hereby accepts defendants’ 998 offer to allow judgment to be entered in Plaintiff’s favor and against Defendant for the sum of $25,000.” The defense never asserted that the acceptance was noncompliant. However, the defense mailed a lengthy general release and dismissal document, which plaintiff refused to sign based on the contention it contained terms and conditions inconsistent with the 998 offer. The defense filed a motion to enter judgment under CCP § 664.6 or alternatively to vacate the judgment pursuant to § 473(b), with plaintiff filing a separate motion for attorney’s fees as the prevailing party. The trial court denied the defense motion on the grounds that (1) the defense had failed to show that the 998 offer was signed by the client, and (2) no excusable neglect had been established under § 473. Also, plaintiff was awarded attorney’s fees under Labor Code § 218.5.
The defense appeal did not succeed; and, because the fee award was affirmed, plaintiff could seek fees for winning on appeal.
The appellate court also believed that 998 offer was complied with—defense offered to have judgment entered against it, and judgment was so entered. Although agreeing that the defense was entitled to a Civil Code section 1542 release, neither side had identified the effect of a dismissal after entry of judgment for the plaintiff; put another way, the dismissal would have been superfluous.
BLOG UNDERVIEW—If you want to review a discussion of some terms which will and will not pass muster under 998 jurisprudence, see our prior post of July 2, 2014.
Court Also Discusses Response Time When Leave Is Granted To Amend After Demurrer Hearing.
Carlton v. Dr. Pepper Snapple Group, Inc., Case No. E056566 (4th Dist., Div. 2 Aug. 14, 2014) (partially published; discovery sanctions reversal unpublished) has two nice takeaways for litigators.
First, although discussed in the unpublished portion, this opinion addresses the question: what happens to a discovery sanctions award for fees when the appellate court determines the underlying motion to compel was untimely filed? Answer: the discovery sanctions award falls too, because the motion to compel accomplished nothing and was unreasonable (meaning the sanctions award was also unreasonable).
Second, in the published section (and a blog bonus for readers), the appellate court discussed the vexing issue of when a litigant has to respond to an amended pleading after a demurrer hearing is sustained with leave—reconciling CRC 3.1320(j) and CCP § 471.5. This is how they were reconciled: if a party elects not to amend within the time set by the court or else by statute (10 days) to amend, the other side has 10 days to respond to the residual pleading; however, if the party elects to file an amended pleading, then the other side has 30 days to respond.
“Richardson, Chief Justice of C.B. at the assizes at Salisbury in the summer of 1631 was assaulted by a prisoner condemned there for felony, who after his condemnation threw a brickbat at the said Judge, which narrowly missed; and for this an indictment was immediately drawn by Noy against the prisoner, and his right hand cut off and fixed to the gibbet, upon which he was immediately hanged in the presence of the Court.” 73 Eng. Rep. 416 1378-1865.
Co-contributor Marc remembered reading about this case in law school. His legal textbook described the case as the high water mark of judicial contempt power. Upon graduating from law school, Marc sold the used textbook. We were unable to find the case on the internet, or anywhere else, because Marc incorrectly remembered that an axe had been hurled, when in fact it was a brickbat.
As to the Chief Justice, “Richardson was a capable lawyer and a weak man, much addicted to flouts and jeers.” Dictionary of National Biography, 1885-1900, Volume 48, p. 248.
The Old Bailey Advocate Bringing Off A Thief. Summary: “"A barrister in wig, gown, and bands, in profile to the right, tramples on the prostrate body of Truth, putting his foot in her mouth..." 1789? Library of Congress.
Counsel for Represented Party Has Special Risks in This Area.
In 1st American Warehouse Mortgage, Inc. v. Topa Ins. Co., Case No. 246716 (2d Dist., Div. 4 Aug. 4, 2014) (unpublished), attorney representing an insurance adjuster and agent was hit with a $27,334 sanctions award under CCP § 128.7. The defense set this one up perfectly; defense attorney sent a letter requesting a dismissal with legal support for its position (a letter disregarded) and then obtained an unopposed summary judgment on the grounds advanced in the warning directives (safe harbor motion also).
Flogging. c1840. Library of Congress.
Plaintiffs’ counsel appealed, but to no avail. Insurance agents usually do not get tagged with breach of contract/implied covenant theories, and that happened to be the case here. No colorable basis for the claims was presented by plaintiffs’ counsel, who had to bear the sanctions given that he represented a party presumably relying on his advice. Granted the sanctions award was a significant amount, but section 128.7 does allow for an award of “some or all” of the reasonable attorney’s fees and expenses incurred as a direct result of the violations of its provisions—with the “all” being the award made here.

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