Court Opinion

ID: 2679131
Source: CourtListenerOpinion
Date Created: 2014-06-18 21:01:08.842348+00
Date Added: 2024-06-11T08:45:44.005946
License: Public Domain

Filed 4/25/14 Whitehill v. Valente CA1/1
Opinion received for posting 6/18/14
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                       FIRST APPELLATE DISTRICT

                                                  DIVISION ONE

MICHAEL WHITEHILL,
         Defendant and Cross-Appellant,
                                                                     A137613
v.
SUZANNE VALENTE,                                                     (San Mateo County
                                                                     Super. Ct. No. CIV508978)
         Plaintiff and Appellant.

         In this appeal, Suzanne Valente challenges the trial court’s sustaining of Michael
Whitehill’s demurrer to her complaint without leave to amend. Valente argues that while
the one-year statute of limitations set forth in Code of Civil Procedure section 340.61 is
applicable to attorney malpractice actions, it does not apply to her claims because they
are not based on legal malpractice. Whitehill cross-appeals from the court’s ruling
denying his section 128.7 motion for sanctions. He claims the court erroneously ruled he
had not satisfied that statute’s 21-day safe harbor provision. We affirm the ruling on the
demurrer and reverse the ruling on the sanctions motion.

         1
        All further statutory references are to the Code of Civil Procedure except as
otherwise specified.
           FACTUAL BACKGROUND AND PROCEDURAL HISTORY
I. The Parties
       Whitehill is an attorney. Valente is a dentist who started her own practice in 1984.
She eventually became disabled and filed a claim with her insurer, which was denied in
2001. She then hired Whitehill to represent her in the disability insurance matter.
II. Allegations in the Complaint
       On October 12, 2011, Valente filed her complaint against Whitehill. We take the
following facts from the allegations stated therein and from judicially noticed material.
       In January 2003, the parties entered into a written contingency fee agreement.
Whitehill agreed to represent Valente in the case against her disability insurer,
UnumProvident Corporation (UnumProvident). Whitehill represented her continuously
from January 13, 2003 until February 11, 2008. The contingency fee agreement provided
that if UnumProvident appealed, or if Whitehill determined an appeal was proper and
Valente agreed, he would handle the appeal without additional charge.
       In November 2004, the case proceeded to trial and the jury found in favor of
Valente on the theories of breach of contract and breach of the covenant of good faith. It
awarded her damages in the sum of $1,143,793.33. (Valente v. UnumProvident Corp.
(2006) 2006 WL 2512507.) The jury, however, found in favor of UnumProvident on the
issue of punitive damages.
       UnumProvident paid the judgment and did not appeal the verdict. Whitehill did
not believe an appeal was appropriate. Valente did desire to appeal, and consulted with
other attorneys on the matter. They advised her that her trial counsel would be best able
to proceed with an appeal. Whitehill told Valente he would handle an appeal for the sum
of $65,000 to cover his services and costs, which would be reimbursed to her if she were
to win at a retrial on the punitive damages issue. She agreed to these terms and a
supplemental agreement was drafted confirming the parties’ understanding. The appeal
was filed, and Division Five of this court reversed the judgment on the punitive damages
issue. (Valente v. UnumProvident Corp., supra, 2006 WL 2512507.) The case was
remanded to the trial court.

                                             2
       Whitehill began preparing for the new trial and a trial date was set for October 15,
2007. Before trial, UnumProvident made a settlement offer. Whitehill advised Valente
to accept the offer, but she rejected it. Whitehill then informed her that she would have
to advance him $60,000 in costs for the new trial. She paid the sum in October 2007.
The trial was continued to February 11, 2008.
       In January 2008, Whitehill demanded another $30,000 to continue with the retrial.
Valente advised Whitehill that she wished to discontinue her relationship with him and
substitute new counsel. She hired a new attorney.
       Valente’s new counsel continued the trial to August 2008. Whitehill was
uncooperative with the new attorney and refused to fee share. Because of his
unwillingness to fee share, the new attorney was unable to settle the case. Though
Whitehill had already billed her for expert witness fees, the expert refused to testify in the
retrial. Whitehill failed to inform Valente that he had drafted a contract obligating the
expert to participate in the case only if Whitehill was still the attorney for Valente. She
was unable to retain a new expert in time for trial. The new trial ended in the same result
as the first case, with the jury ruling in favor of UnumProvident with respect to Valente’s
punitive damages claim.
III. Causes of Action
       Valente’s complaint contains two causes of action for breach of contract, along
with claims for unfair business practices, fraud, and breach of fiduciary obligations.
IV. The Demurrer and Motion for Sanctions
       On December 23, 2011, Whitehill’s attorney sent a letter to Valente’s counsel
explaining that the current action was time-barred. A telephone conversation concerning
this issue and an additional letter from Whitehill’s attorney followed.
       On February 29, 2012, Whitehill filed a demurrer to the complaint alleging the
action was time-barred under the applicable statutes of limitations (§§ 340.6, 338, subd.
(d)). That same day, Whitehill’s attorney sent a letter to Valente’s counsel informing him
that if he did not withdraw the complaint within 21 days, Whitehill would file a motion

                                              3
for sanctions pursuant to section 128.7, subdivision (c)(1). The letter enclosed a copy of
the proposed motion for sanctions. The motion states the hearing date as May 2, 2012.
       According to an e-mail message sent to Valente’s counsel by Whitehill’s counsel
on March 23, 2012, the May hearing date had been available per the superior court’s
Web site. Subsequently, the court clerk informed Whitehill’s counsel that the Web site
was incorrect, and the first available date for the hearing was actually July 3, 2012. The
e-mail goes on to state that the sanctions motion would shortly be filed. Whitehill’s
attorney indicated his belief that the safe harbor requirement contained in section 128.7
would be unaffected, as the hearing date was set more than three months into the future.
       On March 23, 2012, Valente filed a request for dismissal as to the fraud cause of
action only.
       On April 2, 2012, Whitehill filed and served his notice of motion for sanctions
pursuant to section 128.7. The date of hearing stated on the filed motion is July 3, 2012.
       On June 20, 2012, Valente filed her opposition to the motion for sanctions. In
support of her contention that her complaint was not frivolous, she relied heavily on an
unpublished Court of Appeal decision from the Second District as “a sound basis for
[Valente] to believe that her claims had merit.” She also asserted Whitehill’s motion was
procedurally flawed because it contained an incorrect hearing date when it was initially
served on her. After the hearing date was changed, Whitehill did not wait 21 days before
filing the corrected motion with the court, arguably failing to comply with section 128.7’s
notice requirements.
V. The Trial Court’s Rulings
       On July 2, 2012, the trial court issued its tentative ruling sustaining the demurrer
without leave to amend as to the entire complaint. The tentative ruling also indicates the
court’s intent to grant Whitehill’s motion for sanctions in the sum of $8,012 on the
ground that “it was not reasonable for [Valente] to rely on a single non-published
decision in filing a verified complaint which demonstrates, on its face, that [Valente’s]
claims are time-barred.”

                                              4
        On July 3, 2012, the trial court adopted its tentative ruling on the demurrer, but
reversed its ruling on the motion for sanctions. The court’s stated reason for denying the
sanctions motion was that Whitehill had failed to comply with the 21-day safe harbor
provision of section 128.7. The court noted the two motions served by Whitehill were
identical; yet the motion filed with the court had a hearing date for July 3, 2012, while the
hearing date on the mailed notice to Valente was stated as May 2, 2012. The court
viewed this discrepancy as constituting defective notice.
        On July 19, 2012, the trial court filed its order sustaining Whitehill’s demurrer
without leave to amend and denying the motion for section 128.7 sanctions.
        On November 28, 2012, the trial court filed its judgment in favor of Whitehill.
This appeal and cross-appeal followed.
                                       DISCUSSION
I. Standards of Review
        Valente’s appeal follows the sustaining of a demurrer. The application of the
statute of limitations to undisputed facts is a purely legal question (see Jolly v. Eli Lilly &
Co. (1988) 44 Cal.3d 1103, 1112); accordingly, we review the lower court’s rulings de
novo. We must take the allegations of the operative complaint as true and consider
whether the facts alleged establish Valente’s claims are barred as a matter of law. (See
Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810-811.) Additionally, on
appeal from a judgment of dismissal entered after a demurrer has been sustained without
leave to amend, “unless failure to grant leave to amend was an abuse of discretion, the
appellate court must affirm the judgment if it is correct on any theory. [Citations.] If
there is a reasonable possibility that the defect in a complaint can be cured by
amendment, it is an abuse of discretion to sustain a demurrer without leave to amend.
[Citation.] The burden is on the plaintiff, however, to demonstrate the manner in which
the complaint might be amended. [Citation.]” (Hendy v. Losse (1991) 54 Cal.3d 723,
742.)
        As to Whitehill’s cross-appeal, the standard of review on a motion brought under
section 128.7 is generally the abuse of discretion standard. (Guillemin v. Stein (2002)

                                               5
104 Cal.App.4th 156, 167.) “However, the proper interpretation of a statute relied upon
by the trial court as its authority to award sanctions is a question of law, which we review
de novo. [Citations.]” (Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685,
698; see Barnes v. Department of Corrections (1999) 74 Cal.App.4th 126, 130 [whether
party complied with safe harbor provision of sanction statute is “one of statutory
interpretation, which is a pure question of law”].)
II. The Demurrer Was Properly Sustained
       A. Affirmative Defense of the Statute of Limitations
       “An affirmative defense, the statute of limitations exists to promote the diligent
assertion of claims, ensure defendants the opportunity to collect evidence while still
fresh, and provide repose and protection from dilatory suits once excess time has passed.
[Citations.] The duration of the limitations period marks the legislatively selected point
at which, for a given claim, these considerations surmount the otherwise compelling
interest in adjudicating on their merits valid claims. [Citations.]” (Aryeh v. Canon
Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.)
       According to Valente, the gravamen of her complaint is that Whitehill’s “unlawful
demands for money when [he] legally represented [Valente], and [his] post-
representation misconduct, including misrepresenting his right to fees and unwillingness
to disclose billing records” caused her damages. It is undisputed that Valente incurred
her damages in August 2008, when the jury in the retrial decided against awarding her
punitive damages. Thus, her damages were incurred a little over three years before the
operative complaint was filed.
       B. Section 340.6
       Section 340.6 provides, in relevant part: “An action against an attorney for a
wrongful act or omission, other than for actual fraud, arising in the performance of
professional services shall be commenced within one year after the plaintiff discovers, or
through the use of reasonable diligence should have discovered, the facts constituting the
wrongful act or omission, or four years from the date of the wrongful act or omission,
whichever occurs first. . . .” In construing this statute, we apply the following well-

                                              6
established rules of statutory construction: “ ‘[We] ascertain the intent of the enacting
legislative body so that we may adopt the construction that best effectuates the purpose of
the law.’ [Citation.] ‘We first examine the words themselves because the statutory
language is generally the most reliable indicator of legislative intent. [Citation.] The
words of the statute should be given their ordinary and usual meaning and should be
construed in their statutory context.’ [Citation.] If the statutory language is
unambiguous, ‘we presume the Legislature meant what it said, and the plain meaning of
the statute governs.’ [Citation.]” (Whaley v. Sony Computer Entertainment America,
Inc. (2004) 121 Cal.App.4th 479, 484-485.)
       C. Breach of Contract Claims
       Valente contends that section 340.6 does not apply to her breach of contract claims
because the claims are not based on the quality of Whitehill’s professional services as an
attorney. We note our colleagues in the Fourth Appellate District, Division One, recently
stated: “The plain language of section 340.6 applies to all actions, with the exception of
those actions asserting actual fraud, that are brought against an attorney for that
attorney’s ‘wrongful act or omission . . . arising in the performance of professional
services.’ [Citation.] The phrase ‘ “wrongful act or omission” ’ is ‘used interchangeably
as a reference to both tortious and contractual wrongdoing.’ [Citation.] The words of the
statute are quite broad, but they are not ambiguous: any time a plaintiff brings an action
against an attorney and alleges that attorney engaged in a wrongful act or omission, other
than fraud, in the attorney’s performance of his or her legal services, that action must be
commenced within a year after the plaintiff discovers, or should have discovered, the
facts that comprise the wrongful act or omission.” (Yee v. Cheung (2013) 220
Cal.App.4th 184, 194-195 (Yee).)
       Valente asserts her case does not fall within section 340.6 because Whitehill
“breached his contract with [Valente] by taking more money from [her] than he was
entitled under a written contract,” referring to the combined additional $125,000 in fees
and costs that he demanded after the initial trial had concluded. She claims that here,
“the wrongful conduct arose not from any attorney-client relationship, but from the

                                              7
contract that [Whitehill] signed with [Valente].” Thus, she asserts the claims did not
arise “in the performance of professional services” within the meaning of section 340.6.
We disagree.
       It is undisputed that the contract was an integral part of the parties’ business
relationship. The contract was entered into solely as a means of securing Whitehill’s
legal services. Moreover, Valente’s allegations of breach of contract are based entirely
on his failure to perform legal services in accordance with the terms of these agreements.
For example, her first cause of action for breach of contract alleges: “Although the
Contingency Agreement required [Whitehill] to handle any appeal, [Whitehill] forced
[Valente] to pay $65,000 in order to have him handle the appeal.”2 Significantly, she
does not allege Whitehill breached the contract by failing to perform any nonlegal
services.
       Thus, the present case is distinguishable from the case Valente primarily relies on,
Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54 (Quintilliani). In that case, the Court
of Appeal held that section 340.6 did not apply to bar a cause of action for negligent
performance of administrative consulting services. (Quintilliani, at p. 67.) While the
court defined the term “professional services” as meaning “services performed by an
attorney which can be judged against the skill, prudence and diligence commonly
possessed by other attorneys” (id. at p. 64), the context of this remark shows that the
distinction the court sought to draw was between the provision of legal services by
attorneys, as opposed to the provision of nonlegal services undertaken by persons who
also happen to be attorneys. Unlike Valente here, the appellate court in Quintilliani was
not attempting to draw fine lines between functions that an attorney performs in actively
representing his client and those that occur naturally as a part of the business relationship
between lawyers and their clients. As the court observed: “[L]egal malpractice must be
limited to negligence in the providing of legal services. While some lawyers are

       2
           Similarly, her second cause of action for breach of contract alleges that Whitehill
breached the agreement “by forcing [Valente] to advance $60,000 for the costs of the
retrial . . . .”

                                              8
undoubtedly successful concert promoters, they are not held to the standard of a lawyer in
producing concerts because the standard is stated in terms of skills possessed by a lawyer
and the professional services provided by the lawyer, not the business standards by which
concert promoters are judged.” (Id. at p. 64, fn. omitted.)
       Valente asserts the four-year statute of limitations contained in section 337, which
pertains to “[a]n action upon any contract, obligation or liability founded upon an
instrument in writing” applies here. Where more than one statute might apply to a
particular claim, “ ‘a specific limitations provision prevails over a more general
provision.’ [Citation.]” (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153
Cal.App.4th 1308, 1316-1317.) Given that section 340.6 is a more specific statute of
limitations, applicable only to actions against attorneys for their wrongful acts or
omissions, its provisions prevail over the more general statute of limitations for claims
for breach of contract. (See also Levin v. Graham & James (1995) 37 Cal.App.4th 798,
805 [cause of action for refund of legal fees subject to section 340.6].)
       Based on the broad interpretation accorded to section 340.6, we conclude that
claims based on an attorney’s breach of a retainer agreement with a client are claims that
“aris[e] in the performance of professional services.” (§ 340.6, subd. (a).) As the
appellate court in Yee stated: “Yee’s contention that the phrase ‘a wrongful act or
omission’ in section 340.6 refers only to ‘malpractice’ is undermined by the fact that the
term ‘malpractice’ does not appear anywhere in the statute. If the Legislature had wanted
to limit section 340.6 to malpractice actions between clients and attorneys, it could have
done so by making it clear that the actions to which it applies are limited to those brought
by a client or former client against his or her attorney for malpractice. The Legislature
did not do this, and instead, enacted a broadly worded statute that limits the time within
which any plaintiff may bring an action against an attorney for the attorney’s conduct
‘arising in the performance of professional services.’ ” (Yee, supra, 220 Cal.App.4th at
p. 196; see also Vafi v. McCloskey (2011) 193 Cal.App.4th 874, 883 [section 340.6
applies to claims for malicious prosecution].) We conclude the breach of contract
allegations in Valente’s complaint are governed by section 340.6.

                                              9
       D. Unfair Business Practices
       The same result obtains as to Valente’s unfair business practices claim. Valente
alleges Whitehill’s wrongful business practices caused her to suffer damages when she
was compelled to retain new counsel and pay additional attorney fees. The complaint
states that Whitehill’s conduct “offends the established public policy that an attorney’s
representations to his/her client are accurate, and that a client can rely on his/her attorney
to not misrepresent the state of the law.” As the allegation demonstrates, the wrongful
conduct alleged clearly “[arose] in the performance of professional services.” (§ 340.6,
subd. (a).) While Valente argues that the conduct complained of occurred after Whitehill
ceased to represent her, there can be no dispute that the allegations all have their genesis
in the parties’ attorney-client relationship. Thus, this cause of action merely repackages
Valente’s allegations against Whitehill that are based on “wrongful act[s] or omission[s] .
. . arising in the performance of professional services,” (§ 340.6, subd. (a)), and therefore,
it comes within the one-year limitations period.
       In her opening brief on appeal, Valente relies solely on Levine v. Diamanthuset,
Inc. (N.D.Cal. 1989) 722 F.Supp. 579, 590 (reversed on other grounds in Levine v.
Diamanthuset, Inc. (9th Cir. 1991) 950 F.2d 1478) to support her position that her unfair
practices claim is governed by the four-year statute of limitations in Business and
Professions Code section 17208. That case held that an unfair practices claim against
attorneys was not barred by section 340.6. (Levine v. Diamanthuset, Inc., supra, 722
F.Supp. at p. 590.) We note the district court’s ruling on this point contains almost no
analysis and, of course, does not address subsequent California cases giving section 340.6
a broad interpretation. We decline to follow it.
       E. Breach of Fiduciary Duty
       Finally, Valente asserts section 340.6 does not apply to her breach of fiduciary
duty claim because the wrongful conduct (including Whitehill’s failure to disclose that
the expert witness would not be obligated to testify at retrial) arose after his professional
services were terminated. In her reply brief, she relies on David Welch Co. v. Erskine &
Tulley (1988) 203 Cal.App.3d 884, 893 (Welch). The court in Welch rejected the

                                              10
argument that section 340.6 was applicable to a breach of fiduciary duty claim: “[W]here
a cause of action is based on a defendant’s breach of its fiduciary duties, the four-year
catchall statute set forth in [section 343] applies.” But that case is inapposite because the
client there was not suing the attorney for acts that arose from the attorney-client
relationship, but instead for acts outside of that relationship, i.e., usurping the client’s
business. (Welch, at pp. 888-889.) Indeed, subsequent courts have refused to follow
Welch on the ground that it did not involve a breach of fiduciary duty in the context of
legal malpractice. (See Quintilliani, supra, 62 Cal.App.4th at p. 68 [“we agree that
Welch should not be followed, since it did not cite any authority dealing with a breach of
fiduciary duty in the context of attorney malpractice”]; Pompilio v. Kosmo, Cho & Brown
(1995) 39 Cal.App.4th 1324, 1329; Stoll v. Superior Court (1992) 9 Cal.App.4th 1362,
1369 [disagreeing with Welch because it did not cite any authority involving a breach of
fiduciary duty in the context of legal malpractice and did not discuss the legislative
history of section 340.6].) Here, we conclude Valente’s breach of fiduciary duty cause of
action is also governed by the one-year statute of limitations in section 340.6 because it
arises out of the parties’ attorney-client relationship. For all the reasons stated above, we
affirm the trial court’s ruling on the demurrer.3
III. Whitehill’s Motion for Sanctions
       Under section 128.7, “[a] party seeking sanctions must follow a two-step
procedure. First, the moving party must serve on the offending party a motion for
sanctions. Service of the motion on the offending party begins a [21]-day safe harbor
period during which the sanctions motion may not be filed with the court. During the
safe harbor period, the offending party may withdraw the improper pleading and thereby
avoid sanctions. If the pleading is withdrawn, the motion for sanctions may not be filed
with the court. If the pleading is not withdrawn during the safe harbor period, the motion
for sanctions may then be filed.” (Malovec v. Hamrell (1999) 70 Cal.App.4th 434, 440.)

       3
        We observe Valente does not argue that the defects present in her complaint can
be cured by amendment.

                                               11
       Section 128.7, subdivision (c)(1), provides, in part: “A motion for sanctions under
this section shall be made separately from other motions or requests and shall describe
the specific conduct alleged to violate subdivision (b). Notice of motion shall be served
as provided in Section 1010, but shall not be filed with or presented to the court unless,
within 21 days after service of the motion, or any other period as the court may prescribe,
the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or
appropriately corrected. . . .” (Italics added.) Section 1010 specifies that notices “must
be in writing, and the notice of a motion, other than for a new trial, must state when, and
the grounds upon which it will be made, and the papers, if any, upon which it is to be
based.” (Italics added.)
       As noted above, the notice of motion served on Valente on February 29, 2012
contains a hearing date of May 2, 2012. The motion was not filed until April 2, 2012,
which allowed for more time than required by the statutory safe harbor period. However,
the filed motion contains a July 3, 2012 hearing date. The trial court concluded that
because the copy of the notice of motion mailed to Valente did not reflect the correct
hearing date, the notice did not comply with section 127.8’s safe harbor provision. We
disagree.
       It is correct that “[a] formal noticed motion is required to begin the 21-day period.
[Citation.] Strict compliance with the statute’s notice provisions serves its remedial
purpose and underscores the seriousness of a motion for sanctions. [Citations.]”
(Galleria Plus, Inc. v. Hanmi Bank (2009) 179 Cal.App.4th 535, 538 (Galleria).) In
Galleria, the appellate court held that a notice served under section 128.7 is defective if it
does not include the date and time of the motion. The face page and body of the
document at issue in that case stated that the motion would come on for hearing “on AAA
at BBB.” (Galleria, at p. 537.) We do not disagree with the holding of Galleria,
however, the present case is clearly distinguishable.
       Unlike in Galleria, here Whitehill’s proposed motion, as required by law,
contained a hearing date for the motion: May 2, 2012. The proposed motion was served
on Valente’s counsel more than 21 days before it was actually filed, as provided by law.

                                             12
Valente received the proposed motion and did nothing. The fact that the hearing was
rescheduled for a later date, as reflected in the motion that was actually filed with the
court, does not detract from the purpose of section 128.7, which is to encourage parties to
withdraw meritless complaints early in the proceedings. In all other respects, the filed
motion was identical to the motion served on Valente. We also note it is not unusual for
motions to be heard subsequent to the date set forth in the initial moving papers.
Accordingly, we conclude the trial court’s justification for denying Whitehill’s motion
for sanctions fails and, therefore, the order must be reversed.4
IV. Motions for Sanctions on Appeal
       On November 1, 2013, Whitehill filed a motion for sanctions against Valente for
pursuing a frivolous and dilatory appeal. Whitehill requested $14,612.82 for the attorney
fees incurred in responding to Valente’s brief and preparing his motion for sanctions.
       On November 22, 2013, Valente also filed a motion for sanctions against
Whitehill for pursuing a frivolous and dilatory cross-appeal. Valente requested $19,000
for attorney fees incurred in responding to Whitehill’s brief and preparing her motion for
sanctions.
       Section 907 permits courts to impose sanctions when an appeal is frivolous or
taken solely for delay. (See also Cal. Rules of Court, rule 8.276(a)(1).) An appeal is
deemed frivolous under only two circumstances: when it is prosecuted for an improper
motive or when it is indisputably without merit. (In re Marriage of Flaherty (1982) 31
Cal.3d 637, 649-650.) Here, there is no evidence either party pursued their appeal for an
improper motive—to harass the other party or delay the effect of the adverse judgment.
Hence, the only ground for finding the appeal frivolous is lack of merit—that any
reasonable attorney would agree the appeal is completely without merit. (Ibid.)
       In determining whether an appeal is frivolous, courts recognize that appellate
counsel and their clients have a right to present issues that are arguably correct, even if it

       4
       We express no opinion on the merits of the motion for sanctions and decline
Whitehill’s request to reinstate the trial court’s tentative ruling granting sanctions in the
amount of $8,012.

                                              13
is extremely unlikely they will prevail. Further, sanctions pose a serious chilling effect
on the assertion of a litigant’s rights. Thus, an appeal that is simply without merit is not
by definition frivolous and should not incur sanctions. And courts should impose
sanctions sparingly to deter only the most egregious conduct. (In re Marriage of
Flaherty, supra, 31 Cal.3d at pp. 650-651.)
       That we have reversed the trial court’s ruling on Whitehill’s motion for sanctions
essentially moots Valente’s motion for sanctions on the cross-appeal. While we have
affirmed the lower court’s ruling on the demurrer to the complaint, we do not believe the
appeal justifies the imposition of sanctions against Valente. The parties’ motions for
sanctions on appeal are both denied.
                                       DISPOSITION
       The order sustaining the demurrer to Valente’s complaint without leave to amend
is affirmed. The order denying Whitehill’s motion for sanctions under section 128.7 is
reversed.

                                                   _________________________
                                                   Dondero, Acting P.J.

We concur:

_________________________
Banke, J.

_________________________
Becton, J.*

       *
        Judge of the Contra Costa County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.

                                              14