Court Opinion

ID: 4664225
Source: CourtListenerOpinion
Date Created: 2021-03-02 20:02:35.003295+00
Date Added: 2024-06-11T08:02:34.858554
License: Public Domain

Filed 3/2/21 Smith v. Hunt & Henriques CA4/1

                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                 DIVISION ONE

                                         STATE OF CALIFORNIA

 RUSSELL SMITH,                                                       D076278
           Plaintiff,
           v.                                                         (Super. Ct. No. 37-2017-0001062-
                                                                      CU-NP-CTL)
 HUNT & HENRIQUES,
           Defendant and Respondent;

 ABBAS KAZEROUNIAN et al.,
           Objectors and Appellants.

         APPEAL from an order of the Superior Court of San Diego County,
Richard L. Strauss, Judge. Reversed with directions.
         Kazerouni Law Group, Robert L. Hyde and Mike Kazerouni for
Objectors and Appellants.
         Simmonds & Narita, Tomio B. Narita and Jeffrey A. Topor for
Defendant and Respondent.
         No appearance for Plaintiff.
      Abbas Kazerounian, Matthew Loker, Joshua Swigart, and Daniel Shay
(collectively, Attorneys) appeal from an order imposing $125,690.56 in

sanctions against them under Code of Civil Procedure1 section 128.5 for
prosecuting litigation the superior court found to be frivolous and in bad
faith. On appeal, Attorneys contend: (1) the finding that the action was
frivolous is not supported by substantial evidence; (2) the superior court
applied an incorrect legal standard of bad faith; (3) the moving party, Hunt &
Henriques (H&H), failed to comply with safe harbor provisions in section
128.5, subdivision (f)(1)(B); (4) sanctions are improper because Attorneys
sought to dismiss and later to amend the complaint; (5) the order lacks
required specificity; and (6) the sanctions “violate California public policy.”
      We conclude that an essential finding—that the challenged action be
objectively frivolous—is not supported by substantial evidence. Accordingly,
we reverse with directions to deny sanctions, making it unnecessary to
consider Attorneys’ remaining contentions.
      In addition to granting H&H’s sanctions motion, the trial court also
denied Attorneys’ request for sanctions against H&H for their filing the
sanctions motion. We dismiss that aspect of Attorneys’ appeal for lack of
jurisdiction. (McCluskey v. Henry (2020) 56 Cal.App.4th 1197, 1210, fn. 2
(McCluskey).)
                FACTUAL AND PROCEDURAL BACKGROUND
A.    H&H Sends a Collection Letter to Smith
      H&H is a law firm representing clients seeking to recover delinquent
consumer debt. In August 2016, H&H wrote to Russell Smith stating that
Capital One Bank (USA), N.A. (Capital One) had engaged the firm to collect

1     Undesignated statutory references are to the Code of Civil Procedure.
                                        2
$2,871.45 on his account (the Letter). The Letter informs Smith he may
dispute the debt “by mailing a notice” to H&H within 30 days.
B.    Smith Sues Capital One
      About three weeks later, Smith filed a limited civil action against
Capital One, Smith v. Capital One Services, LLC (Super. Ct. San Diego
County, 2016, No. 37-2016-00030378-CL-MC-CTL) (the Cap One action).
Smith alleged that Capital One violated the Rosenthal Fair Debt Collection
Practices Act (Civ. Code, § 1788 et seq.) (the Rosenthal Act) and other laws by
repeatedly contacting him about his accounts despite knowing he was
represented by counsel. In the Cap One action Smith was represented by
Abbas Kazerounian (Kazerouni Law Group), Daniel G. Shay (Law Office of
Daniel G. Shay), and Joshua Swigart (Hyde & Swigart). Capital One was
represented by Doll, Amir & Eley, LLP—not by H&H.
C.    Smith Settles the Cap One Action with a Broadly Worded Release
      In December 2016, Smith settled the Cap One action. Capital One paid
Smith $6,000 and waived amounts due on his accounts. Kazerounian signed
the settlement agreement (Agreement) as Smith’s attorney, agreeing to “form
and confidentiality.”
      The Agreement contains a broadly worded provision releasing Smith’s
claims against Capital One and its “attorneys” (the Release):
         “[Smith] . . . hereby releases and forever discharges
         [Capital One and other enumerated entities] and each of
         their respective past, present, and future employees,
         stockholders, officers, directors, partners, agents, brokers,
         contractors, servants, affiliates, subsidiaries, parents,
         departments, divisions, insurers, attorneys, predecessors,
         successors and assigns . . . from any and all claims or
         counterclaims, causes of action, remedies, damages,
         liabilities, debts, suits, demands, actions, costs, expenses,
         fees, controversies, set-offs, third party actions or
         proceedings of whatever kind or nature . . . whether known

                                       3
         or unknown, foreseen or unforeseen, accrued or unaccrued,
         suspected or unsuspected, which [Smith] . . . may now
         have, have ever had, or in the future have against [the
         released parties], without exception or limitation, including
         but not limited to any and all claims arising directly or
         indirectly from or in any way related to [Smith’s Capital
         One accounts] and/or [the Cap One action] . . . .” (Italics
         and bold added.)

D.    Smith Files a Putative Class Action Against H&H
      In January 2017, Smith filed a putative class action against H&H
entitled Smith v. Hunt & Henriques, Inc. (Super. Ct. San Diego County, 2017,

No. 37-2017-00001062-CU-NP-CTL ) (the Class action).2 Represented by the
same lawyers who had represented him in the Cap One action (plus Matthew
Locker of the Kazerounian firm), Smith alleged that the Letter unlawfully
limited his ability to dispute the debt by “mail only.” Smith filed the action
individually and on behalf of a class generally defined as those to whom H&H
had sent such demand letters within one year prior to filing the action.
      Apparently H&H’s involvement with Smith was limited to sending the
Letter. As a result, H&H and its defense counsel were unaware of the Cap
One action. Moreover, Smith deflected H&H’s attempts to elicit such
information in discovery. For example, H&H propounded interrogatories
asking Smith to identify writings “reflecting any dispute relating to the
financial obligation” identified in the demand letter. Although the Cap One
action would be responsive, Smith (through counsel) responded that he

2      Smith originally filed the action in district court; however, after
proceedings not relevant to this appeal, the case was ultimately filed in state
court.

                                       4
“ ‘lacks sufficient information to respond to this Interrogatory.’ ”3 In another
interrogatory, H&H asked Smith if he “contacted” Capital One “at any time
to dispute” his account. Again Smith responded he “lacks sufficient
information to respond to this Interrogatory.” H&H also requested that
Smith produce documents “reflecting any dispute” regarding his Capital One
accounts. Although the Agreement is responsive, Smith stated he “lacks

responsive documents.”4
E.    H&H’s Lawyers Obtain the Cap One Settlement
      While preparing for Smith’s deposition in September 2018, H&H’s
lawyers learned of the Cap One action, and that the same firms representing
Smith there also represented him in the Class action. In October 2018,
counsel for H&H issued a subpoena to Capital One to produce certain
documents, including the Agreement. Capital One objected on the grounds
that the Agreement was confidential, and also asserted several “general
objections”—including attorney-client privilege. After Smith’s lawyers
refused to stipulate to a protective order, the court entered a protective order
and Capital One produced the Agreement.

3     A footer on each page of Smith’s interrogatory responses states,
“Plaintiff Caleb Long’s responses to defendant Ditech Financial, LLC’s
special interrogatories, set one.” Apparently, Smith’s lawyers reused
responses from some other client’s case.
4     Evasive discovery responses are sanctionable under section 2023.010,
subdivision (f), not under section 128.5. (See § 128.5, subd. (e) [“This section
shall not apply to disclosures and discovery requests, responses, objections,
and motions.”] Whether Attorneys’ conduct is sanctionable under the Civil
Discovery Act (§ 2016.010 et seq.) is not before us and we express no opinion
on that issue.
                                        5
F.    Smith Unsuccessfully Attempts to Dismiss the H&H Action and Files
      a Bankruptcy Petition
      In January 2019, Attorneys filed a request for dismissal without
prejudice of the Class action. In an accompanying declaration, counsel stated
the action was being dismissed because the court had denied a motion to
compel H&H to produce financial records, and as a result, “the superiority
element will be unmet.” However, the clerk declined to enter the dismissal
without a court order. (Cal. Rules of Court, rule 3.770(c); Fidelity National
Home Warranty Company Cases (2020) 46 Cal.App.5th 812, 826 [a putative
class action may be dismissed without notice to the class members if the
court finds that the dismissal will not prejudice them].)
      Later the same month, Smith filed a bankruptcy petition. His asset
schedules include the Class action; however, Smith stated he “wishes to
dismiss the class case via a ‘mutual walkaway.’ ”
G.    H&H Serves and Later Files a Motion for Sanctions
      In February 2019, H&H served Attorneys with an unfiled motion
seeking $112,653.50 in sanctions against Attorneys (but not against Smith).
Purporting to comply with section 128.5’s safe harbor provisions, H&H
indicated the motion for sanctions would be filed unless Smith dismissed the
Class action and paid $112,635.50 as H&H’s attorneys’ fees and costs
incurred in defending the Class action.
      After Attorneys failed to pay the $112,653.50, H&H filed the sanctions
motion. The thrust of the motion was that Smith had released H&H, as
Capital One’s attorneys. Because the same law firms who filed the Class
action also represented Smith in the Cap One action, H&H asserted that
Attorneys “had to know that this case was legally unfounded from the start.”
H&H further asserted that Attorneys acted in bad faith—evidenced by their
attempt to conceal the Release by evasive discovery responses.

                                       6
      Citing San Diegans for Open Government v. City of San Diego (2016)
247 Cal.App.4th 1306, 1316 (San Diegans), H&H asserted that under section
128.5, the court should apply an “ ‘objective reasonable attorney standard’ ”

and “[n]o showing of subjective bad faith is required.”5 Without citing any
law, H&H’s lawyers further asserted that the “wholly improper” Class action

“cannot be cured by . . . substitution of a new named plaintiff.”6
      Attorneys opposed the motion on several different grounds, one of
which was that H&H was not a party to the Release. They asserted that
H&H “would need to . . . prove that the Release . . . was made for its benefit
and that the intent to do so appears in the language of the [A]greement.”
According to Attorneys, there was no evidence that Smith and Capital One
had intended to include H&H among the unnamed “attorneys” released:

5      This misstates the law. In response to San Diegans, urgency
legislation effective August 2017 amended section 128.5 “ ‘clarif[ying] that
the standard applied in section 128.5 is subjective bad faith.’ ” (In re
Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 134 (Taeb).)
As a result of these amendments, “no vestige remain[ed] of the holdings in
[San Diegans, supra,] 247 Cal.App.4th 1306 . . . concerning the requirements
of section 128.5.” (Taeb, at p. 128.)
       In their opposition, Attorneys also overlooked the urgency legislation,
and did not even cite San Diegans.(1CT173-192)! As a result, both sides
failed to fulfill their obligation to inform the trial court of the applicable law.
6      This also misstates law. “ ‘If . . . the [trial] court concludes that the
named plaintiffs can no longer suitably represent the class, it should at least
afford plaintiffs the opportunity to amend their complaint, to redefine the
class, or to add new individual plaintiffs, or both, in order to establish a
suitable representative.” (CashCall, Inc. v. Superior Court (2008) 159
Cal.App.4th 273, 288.)

                                         7
         “H&H is a law firm that is retained by creditors to recover
         delinquent debts; nothing more, and H&H were [sic] not
         involved in the [Cap One] action in any way, and
         consequently was never referred to in the Release
         Agreement.”
      Attorneys further noted that the Release uses the term “attorneys,” not
law firms. Citing cases distinguishing between attorneys and law firms in
applying the Rosenthal Act, they contended that even if H&H’s attorneys

were released, the Release did not include the H&H firm.7
H.    The Court Grants H&H’s Motion for Sanctions
      After conducting a hearing, the court granted H&H’s sanctions motion
in a minute order that was later attached to a separate written order:
         “[H&H] has proffered evidence showing sanctionable
         conduct. (See [San Diegans, supra, 247 Cal.App.4th at
         p. 1320].) Some, but not all, of the evidence [H&H] has
         tendered includes the following: Plaintiff’s
         counsel . . . represented [Smith] in an earlier separate
         action in this court. Plaintiff executed a [general release]
         in that case and agreed to release claims against Capitol
         One, its attorneys, and regarding claims relating to his
         account . . . . Attorney Kazerounian signed the release
         agreement.
         “These same attorneys, plus Matthew Loker of the
         Kazerouni Law Group, are listed as attorneys of record and
         filed the present action against [H&H], alleging claims that
         [H&H] violated the . . . Rosenthal Act by attempting to
         collect an unpaid balance on [Smith’s] Capital One account
         ending in 1039.

7     Attorneys also argued that by demanding they pay H&H’s fees to avoid
sanctions, H&H had not complied with section 128.5’s safe harbor provisions.
They “reaffirm[ed] Smith’s willingness to dismiss this [a]ction” and asked
H&H to “stipulate to a dismissal.” Alternatively, they suggested filing “a new
amended complaint . . . with a different plaintiff proposed to be substituted
into the case, one that never entered into the [r]elease [a]greement.”

                                       8
           “Plaintiff did not present adequate evidence to rebut
           [H&H’s] showing. Plaintiff did not provide any
           declarations or other admissible evidence in support of its
           opposition. The court is unpersuaded by [Smith’s]
           alternative arguments that the alleged conduct should not
           be sanctionable.”

      The court awarded H&H the entire amount sought ($112,653.50) plus
additional amounts H&H incurred after filing the motion, for a total award of

$125,690.56.8 In July 2019, Smith appealed from the order imposing

sanctions.9 In September 2019, the court ordered the action dismissed

without prejudice.10
                                  DISCUSSION
A.    The Sanctions Order Is Not Supported by Substantial Evidence.
      1.      Overview of Section 128.5
      Under section 128.5, a trial court may sanction certain frivolous actions
and tactics undertaken in bad faith. (CPF Vaseo Associates, LLC v. Gray
(2018) 29 Cal.App.5th 997, 1000 (CPF Vaseo).) “[C]onduct must be both
frivolous and in subjective bad faith to support sanctions under section
128.5.” (Taeb, supra, 39 Cal.App.5th at p. 141, fn. 8.)

8     Smith also filed a motion for sanctions, asserting that H&H’s motion
was itself sanctionable. The court denied Smith’s motion.
9      Where, as here, a notice of appeal from a sanctions order is brought
only in the client’s name, we may construe it to include the client’s sanctioned
attorney(s) where it is reasonably clear that the attorneys intended to join in
the appeal and the respondent was not mislead or prejudiced by the omission.
(K.J. v. Los Angeles Unified School District (2020) 8 Cal.5th 875, 885.) We do
so here.
10    On its own motion, the court takes judicial notice of the superior court’s
order entered September 27, 2019 dismissing the action without prejudice.
(Evid. Code, §§ 452, subd. (d); 459, subd. (a).)
                                          9
      “ ‘Frivolous’ means totally and completely without merit or for the sole
purpose of harassing an opposing party.” (§ 128.5, subd. (b)(2).) “Whether an
action is frivolous is governed by an objective standard: any reasonable
attorney would agree it is totally and completely without merit.” (Taeb,
supra, 39 Cal.App.5th at p. 135.) “Bad faith” as used in section 128.5 means
an action or tactic undertaken for an improper purpose or motive. This is a
subjective inquiry. (Taeb, at pp. 134‒135.)
      Section 128.5 is remedial, not punitive. Where the action or tactic is
the filing and service of a complaint that can be “withdrawn or appropriately
corrected,” section 128.5 affords a 21-day period during which a party may
correct or withdraw the challenged pleading “ ‘without any penalty.’ ” (CPF
Vaseo, supra, 29 Cal.App.5th at p. 1003.) Strict compliance with the safe
harbor provisions is a prerequisite to a sanctions award. (Id. at p. 1007.)
      We review an award of section 128.5 sanctions for abuse of discretion.
(Wallis v. PHL Associates, Inc. (2008) 168 Cal.App.4th 882, 893 (Wallis).) A
ruling resting on a finding unsupported by substantial evidence is an abuse
of discretion. (People v. Superior Court (1998) 18 Cal.4th 667, 681.)
      2.    The Finding that the Class Action Was Frivolous Is Not
            Supported by Substantial Evidence.
      Two factual determinations are the foundation for the court’s
conclusion that every reasonable attorney would have agreed Smith’s claims
were frivolous. The first is that Smith had already released the claims
asserted. The second is that every reasonable attorney would agree that
Smith had released those claims. The evidence on these points is deceptively
straightforward:
      • The Agreement releases Smith’s claims against Capital
        One’s “attorneys.”

                                      10
      • Capital One engaged H&H as attorneys to send Smith the
        Letter.
      The problem, however, is that H&H is not a party to the Release. In
addition to being a nonparty to the Release, H&H is not identified by name in
the Agreement, is not referred to anywhere as an intended third-party
beneficiary of the Agreement, and did not represent Capital One in the
litigation giving rise to the Agreement.
      The issue in the sanctions motion, therefore, is not whether Capital
One engaged H&H as attorneys to send Smith the Letter. Rather, the issue
is one of contract interpretation. The Class action was frivolous under
section 128.5 only if every reasonable lawyer would know that “attorneys”—
as that term appears in the Release—was intended to include H&H as a third-

party beneficiary. (Vahle v. Barwick (2001) 93 Cal.App.4th 1323, 1328.)11
      H&H cannot sustain that burden by merely pointing to the word
“attorneys” in the Release. “Because the court must consider the
circumstances of the contracting parties’ negotiations to determine whether a
third party not named in the release was an intended beneficiary, it will
seldom be sufficient for the third party simply to rely on a literal application
of the terms of the release. ‘The fact that . . . the contract, if carried out to its
terms, would inure to the third party’s benefit[,] is insufficient to entitle him
or her to demand enforcement. [Citations]. However broad may be the terms
of a contract, it extends only to those things concerning which it appears that
the parties intended to contract. [Citation]. Whether a third party is an

11    The Agreement provides that it is to be “construed in accordance with
and governed by the laws of the United States of America and by the internal
laws of the Commonwealth of Virginia.” However, in the superior court and
on appeal the parties have consistently assumed that California law governs;
therefore, we apply California law. (Glickman v. Collins (1975) 13 Cal.3d
852, 857, fn. 1.)
                                         11
intended beneficiary . . . to the contract involves construction of the parties’
intent, gleaned from reading the contract as a whole in light of the
circumstances under which it was entered.’ ” (Neverkovec v. Fredericks (1999)
74 Cal.App.4th 337, 349.)
      H&H offered no extrinsic evidence of the contracting parties’ intent in
negotiating the terms of the Release. Its motion is supported by a single
declaration, executed by one of the attorneys representing H&H in the Class
action. With respect to the Release, apart from authenticating the document,
the declaration merely notes that it contains the word “ ‘attorneys.’ ”
      Perhaps in some other case that might be enough, but not here. In
response to H&H’s subpoena, Capital One objected to producing the
Agreement on numerous grounds, including confidentiality and attorney-
client privilege. Those objections make sense only if H&H was not considered
Capital One’s attorneys in the Cap One action. Further, other parts of the
Agreement identify Capital One’s attorneys as Doll, Amir & Eley LLP.
Arguably, Smith and Capital One intended “attorneys” as used in the Release
to refer to the Doll, Amir firm. Additionally, for several years while
defending this case, H&H did not even know about the Cap One litigation,
nor its settlement. A jury could reasonably question the veracity of H&H’s
claim to be an intended third-party beneficiary of a release in a case it knew
nothing about.
      Finally, H&H is a business entity, a law firm. That Smith released his
claims against Capital One’s “attorneys” might include law firms, but it
might not. It depends on the parties’ intent, and here there is no evidence of
the parties’ intent other than their use of the word “attorneys.” As Attorneys
emphasized at the hearing, in some legal contexts courts have distinguished

                                        12
law firms from the attorneys comprising them.12 For example, in Abels v.
JBC Legal Group, P.C. (N.D.Cal. 2005) 227 F.R.D. 541, the court noted that
in defining a “ ‘debt collector,’ ” the Rosenthal Act excludes “an attorney or
counselor at law.” (Abels, at p. 547.) Because the Legislature specifically
excluded attorneys but was silent as to excluding law firms, the court held
that the law firm defendant is a “ ‘debt collector’ ” within the meaning of that
statute.
      In deciding this case, it is not necessary for us to definitively decide
whether “attorneys” as used in the Release excludes law firms, and we
express no opinion on that issue. Rather, the outcome determinative point is
that a lawyer could reasonably contend that the business entity, H&H, was
not an intended third party beneficiary of this Release, only its individual
attorneys were.
      Apparently recognizing that the sanctions order is vulnerable on these
grounds, H&H also asserts that it is released as Capital One’s “agents” and
“independent contractors”—terms also in the Release. However, H&H did
not make this argument in its moving papers in the trial court, but rather
raised it for the first time in its reply. The trial court did not consider this
reply argument in its ruling—and properly so. (See Golden Door Properties,
LLC v. Superior Court (2020) 53 Cal.App.5th 733, 774.) The ruling is based
solely on Smith having released “claims against Capital One, [and] its
attorneys.”

12     “Mr. Hyde: And this issue has been litigated many times. And I would
like to cite a case that’s called Graziano [v.] Hunt & Henriques. Mr. Narita
was on that case. The issue on that case was: Is an attorney and a law firm
the same thing or are they separate entities? [¶] He argued what he’s
arguing today. He said they are the same thing. We, as we always say, no,
they’re not the same thing. They’re separate entities. The [c]ourt ruled in
our favor.”
                                        13
        For similar policy reasons, we likewise decline to consider the point
because a party “may not change his theory of the case for the first time on
appeal.” (Flatley v. Mauro (2006) 39 Cal.4th 299, 321, fn. 10.) That rule is
especially apt here because agency and independent contractor status are
ordinarily factual issues, and neither was litigated in the sanctions motion.
Moreover, even if we did consider the argument, it suffers from the same
fatal defect: without evidence of Capital One’s and Smith’s intent in entering
into the Release, “agents” and “independent contractors” are just as
ambiguous as “attorneys” with respect to whether the parties intended to
include H&H within those broad categories.
        In sum, a reasonable attorney could assert that Smith did not release
H&H under the Agreement. That argument may perhaps lack merit and
may even be extremely unlikely to prevail. However, “ ‘sanctions should be
used sparingly in the clearest of cases to deter the most egregious conduct’ ”
and “ ‘an action that is simply without merit’ ” or is “ ‘extremely unlikely to
prevail, should not incur sanctions.’ ” (Wallis, supra, 168 Cal.App.4th 882,
893.)
        Therefore, the order imposing sanctions must be reversed with
directions to deny the motion. (See Cardinal Health 301, Inc. v. Tyco
Electronics Corp. (2008) 169 Cal.App.4th 116, 153‒154 [directions to enter
defense judgment where reversal for insufficient evidence].) In light of this
disposition, it is unnecessary to consider Attorneys’ other contentions about
the sanctions order.
B.      Attorneys’ Appeal from the Order Denying Their Cross Motion for
        Sanctions Is Dismissed.
        In addition to challenging the order imposing sanctions, Attorneys also
contend the court erroneously denied their motion seeking sanctions against
H&H for filing the sanctions motion. However, an order denying a motion for

                                        14
section 128.5 sanctions is not an appealable order, nor is it cognizable on
appeal from an order granting sanctions in the same case. (McCluskey,
supra, 56 Cal.App.5th at p. 1201, fn. 2.) Attorneys’ remedy was to promptly
file a petition for a writ of mandate and move to consolidate that petition
with this appeal, or alternatively raise the issue in a timely appeal from the
later judgment of dismissal. (Kurwa v. Kislinger (2013) 57 Cal.4th 1097,
1105 [dismissal without prejudice is an appealable judgment unless there is a
stipulation facilitating potential future litigation of the dismissed claims].)
      “The appealability of the judgment or order is jurisdictional and an
attempt to appeal from a nonappealable judgment or order will ordinarily be
dismissed.” (Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289,
297.) Accordingly, we dismiss Attorneys’ appeal to the extent it is taken from

the order denying sanctions for lack of appellate jurisdiction.13

13    Although H&H did not seek to dismiss Attorneys’ attempted appeal
from the order denying sanctions, we advised the parties we were considering
that disposition and provided an opportunity to address the point at oral
argument. Both sides indicated they had no objection to the proposed
resolution.
                                        15
                                 DISPOSITION
      The order imposing sanctions is reversed with directions to enter a new
order denying the motion.
      Attorneys’ appeal from the order denying sanctions is dismissed.
      In the interest of justice, the parties to bear their own costs on appeal.
(Cal. Rules of Court, rule 8.278(a)(5).)

                                                                       DATO, J.

WE CONCUR:

McCONNELL, P. J.

IRION, J.

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