Court Opinion

ID: 6112862
Source: CourtListenerOpinion
Date Created: 2022-01-26 19:02:17.589844+00
Date Added: 2024-06-11T08:54:26.579002
License: Public Domain

Filed 1/26/22 Lafferty v. Fleetwood Motor Homes of Cal. CA3
                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                    (San Joaquin)
                                                            ----

 PATRICK LAFFERTY et al.,                                                                      C059562

                    Plaintiffs and Appellants,                                    (Super. Ct. No. CV030892)

           v.

 FLEETWOOD MOTOR HOMES OF CALIFORNIA,
 INC.,

                    Defendant and Respondent.

         This is the continuing saga of a Fleetwood motor home that has had a much longer
journey through the legal system than it did when plaintiffs Patrick and Mary Lafferty
drove it. In 2006, the Laffertys filed an action based on alleged motor home defects. We
have previously heard appeals relating to the lender for the vehicle. (Lafferty v. Wells
Fargo Bank (2013) 213 Cal.App.4th 545; Lafferty v. Wells Fargo Bank (Mar. 26, 2015,
C074843) [nonpub. opn.]; Lafferty v. Wells Fargo Bank, N.A. (2018) 25 Cal.App.5th

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398.) This appeal concerns the Lafferty’s action against the manufacturer of the motor
home, who they named as defendant “Fleetwood Motor Homes.”1
       The problem for the Laffertys was that “Fleetwood Motor Homes” did not exist.
Instead, there existed two separate legal entities: Fleetwood Motor Homes of Indiana,
Inc. (Fleetwood of Indiana) and Fleetwood Motor Homes of California, Inc. (Fleetwood
of California). The motor home in this case was manufactured by Fleetwood of Indiana –
a fact that the attorney for Fleetwood of California repeatedly pointed out to the
Laffertys. The Laffertys nonetheless maintained their action against Fleetwood of
California, which necessitated a motion for summary judgment by Fleetwood of
California. To recover the costs of preparing the motion for summary judgment,
Fleetwood of California moved for sanctions under former Code of Civil Procedure
section 128.5 (former section 128.5). (Stats. 1994, ch. 1062, § 1, pp. 6395-6396.) The
trial court granted monetary sanctions against the Laffertys and their attorney, Timothy
D. Murphy. Only Patrick and Mary Lafferty appeal.2
       On appeal, the Laffertys contend (1) former section 128.5 does not apply to this
case because this action was filed after December 31, 1994, (2) former section 128.5 does
not apply to “a failure to act” such as failure to dismiss a party, (3) Fleetwood of
California “waived sanctions by agreeing to its own voluntary dismissal,” (4) the record
does not support the trial court’s order for lack of any evidence that the sanctionable

1      This appeal was stayed for almost a dozen years – from March 2009 to February
2021 – while bankruptcy proceedings in federal court were pending for Fleetwood Motor
Homes of California, Inc. (which was listed in federal court as Fleetwood Enterprises,
Inc.). (11 U.S.C. § 362(a)(1) [automatically staying collateral judicial actions during the
pendency of a bankruptcy proceeding].)
2      Even though the sanctions order also applies to attorney Timothy D. Murphy
personally, he did not join in the notice of appeal and therefore cannot be afforded relief
on appeal. (Cf. In re J.F. (2019) 39 Cal.App.5th 70, 75 [jurisdiction of the reviewing
court is limited by the scope of the notice of appeal].)

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conduct involved “ ‘an action or tactic,’ ” was “ ‘totally without merit,’ ” or brought with
the “ ‘sole purpose to harass or delay,’ ” and (5) the trial court’s sanctions order relies on
inconsistent findings of fact.
       We conclude that former section 128.5 does not apply to this case because it was
filed in 2006. Accordingly, we reverse the sanctions order imposed under that
inapplicable section.
                                     BACKGROUND
       In 2006, the Laffertys filed a complaint alleging various causes of action arising
out of a defective motor home that was manufactured by “defendant Fleetwood Motor
Homes,” which the complaint alleged “was doing business in Riverside, California.” A
business called “Fleetwood Motor Homes of California, Inc.” (Fleetwood of California)
contacted the Laffertys. As the trial court would later find, Fleetwood of California
“provided [the Laffertys] with overwhelming evidence that it was not the manufacturer of
the subject motor home in this case, and, as such, was not a party to this action at all.
Further, [Fleetwood of California] made every reasonable effort to notify [the Laffertys]
of their improper inclusion of a wrong legal entity, by sending written correspondence to
[them] on or about March 28, 2007, June 5, 2007, June 20, 2007, July 19, 2007, and
January 3, 2008. Based on [the Laffertys’] refusal to dismiss Defendant [Fleetwood of
California] from their action, [Fleetwood of California] was forced to expend resources,
which included preparing a Motion for Summary Judgment.”
       On February 4, 2008, Fleetwood of California brought a motion for sanctions
solely under former section 128.5. Four days later, the Laffertys requested dismissal of
Fleetwood of California from the action. The Laffertys then opposed the motion for
sanctions. The trial court granted the motion for sanctions on grounds that the Laffertys
“knowingly pursued a frivolous action against [Fleetwood of California],” and ordered
the Patrick and Mary Lafferty and their attorney of record, Timothy D. Murphy, to pay

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$3,982.50 in attorney fees to Fleetwood of California. Thereafter, Patrick and Mary
Lafferty timely filed a notice of appeal.
                                       DISCUSSION

     Former Section 128.5’s Applicability to Actions Filed After December 31, 1994
        The Laffertys argue that former section 128.5 applies only to actions filed before
December 31, 1994. We note that the Laffertys’ argument dates to the filing of their
opening brief in March 2009 – the only appellate brief filed in this appeal. Thus, the
Laffertys’ argument preceded amendment of section 128.5 in 2014. (Stats. 2014, ch. 425,
§ 1.) In light of the subsequent amendment, we refer to the applicable version of the
statute as former section 128.5. Former section 128.5 provided in pertinent part:
        “(a) Every trial court may order a party, the party’s attorney, or both to pay any
reasonable expenses, including attorney’s fees, incurred by another party as a result of
bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary
delay. . . .
        “(b) For purposes of this section:
        “(1) ‘Actions or tactics’ include, but are not limited to, the making or opposing of
motions or the filing and service of a complaint or cross-complaint only if the actions or
tactics arise from a complaint filed, or a proceeding initiated, on or before December 31,
1994.” (Stats. 1994, ch. 1062, § 1, pp. 6395-6396, italics added.)
        The Laffertys correctly point out that this action was filed in 2006 and the
sanctions order was issued in June 2008. On this basis, they argue that the sanctions
imposed under former section 128.5 must be reversed. We agree. In Levy v. Blum (2001)
92 Cal.App.4th 625, the Fifth District explained that “[a] trial court may impose sanctions
pursuant to [former] section 128.5 against a party, the party’s attorney, or both, for ‘bad-
faith actions or tactics that are frivolous or solely intended to cause unnecessary delay,’
when the actions or tactics ‘arise from a complaint filed, or a proceeding initiated,’ prior

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to January 1, 1995. (§ 128.5, subds. (a), (b)(1); see also Malovec v. Hamrell (1999) 70
Cal.App.4th 434, 437-438.)” (Id. at p. 635; accord San Diegans for Open Government v.
City of San Diego (2016) 247 Cal.App.4th 1306, 1314 [“Former section 128.5 applied
only to complaints filed, or proceedings initiated, on or before December 31, 1994.”]
(San Diegans).)
       Although the current version of section 128.5 does not contain a date restriction, it
did not yet exist at the time the trial court imposed the sanctions order. (See San
Diegans, supra, 247 Cal.App.4th at pp. 1314-1315.) The only basis for the sanctions
order is former section 128.5. We conclude the trial court relied on an inapplicable
statute in issuing the appealed-from order. Accordingly, we reverse the sanctions order.
                                     DISPOSITION
       The order imposing sanctions under former Code of Civil Procedure section 128.5
is reversed only as to Patrick and Mary Lafferty. The Laffertys are entitled to their costs
on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)

                                                  /s/
                                                 HOCH, J.

We concur:

 /s/
RAYE, P. J.

 /s/
ROBIE, J.

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