Judge Barbara M. Scheper, Case 21STCV33009 2023-01-09 Tentative Ruling

Judge: Barbara M. Scheper, Case: 21STCV33009, Date: 2023-01-09 Tentative Ruling

Case Number: 21STCV33009 Hearing Date: January 9, 2023 Dept: 30

Dept. 30

Calendar No.

Ohanian vs. Gardens of Paradise, LLC, et. al., Case No. 21STCV33009

Tentative Ruling re: Plaintiff’s Motion for Sanctions

Plaintiff Edmond Ohanian (Plaintiff) moves for an order striking the Answers of Defendants Gardens of Paradise, LLC, Ben and Reef Gardens, Inc., Shaul Yakovi, and Ronit Waizgen (collectively, Defendants), and imposing monetary sanctions in the amount of $16,620 against Defendants and their counsel. The motion is granted.

“A trial court may order a party, the party’s attorney, or both, to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.” (Code Civ. Proc. § 128.5, subd. (a).) “An order for sanctions pursuant to this section shall be limited to what is sufficient to deter repetition of the action or tactic or comparable action or tactic by others similarly situated.” (Code Civ. Proc. § 128.5, subd. (f)(2).) “[T]he sanction may consist of, or include, directives of a nonmonetary nature, an order to pay a penalty into court, or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of some or all of the reasonable attorney’s fees and other expenses incurred as a direct result of the action or tactic described in subdivision (a).” (Ibid.)

Plaintiff moves to strike Defendants’ answers, re-instate their defaults and award sanctions on the basis that Defendants’ counsel forged Plaintiff’s counsel’s signature on a stipulation to set aside Defendants’ defaults, and then filed that stipulation with the Court without Plaintiff’s counsel’s permission.

Plaintiff served Defendants with the summons and complaint in this action on October 10, 2021. Defendants did not respond, and on December 9, 2021, Plaintiff filed requests for entry of default against each of the four Defendants.

On December 29, 2021, counsel for Defendants, Mainak D’Attaray, contacted counsel for Plaintiff to seek a stipulation setting aside the defaults. (Derbarsegian Decl. ¶ 4.) Though Plaintiff’s counsel agreed and signed the stipulation, it was rejected by the Court on January 4, 2022, for failure to reference Defendant Ben and Reef Gardens, Inc. In the following months, Defendants’ counsel continually delayed in properly revising and filing the stipulation. (Derbarsegian Decl. ¶¶ 5-7.) This includes filing two subsequent stipulations that were also rejected by the Court, on January 24, 2022, and on February 8, 2022.

Plaintiff’s counsel states that defense counsel stopped responding to communications sometime in March 2022, until on August 5, 2022, still with no stipulation properly entered, Defendants filed an ex parte application seeking to set aside the defaults. (Derbarsegian Decl. ¶ 8.) The application was denied by the Court.

On August 16, 2022, Defendants filed a Stipulation to Set Aside Defaults signed by counsel for the parties, which was granted by the Court. Plaintiff’s counsel Aren Derbarsegian states that he did not sign this stipulation, and that his signature on the stipulation was fraudulently copied by D’Attaray from the previous stipulation filed in January 2022. (Derbarsegian Decl. ¶ 10.) Derbarsegian further represents that D’Attaray served notice of the stipulation on a different attorney at counsel’s firm who had not been involved in the case for some time, to evade notice by Derbarsegian, with whom D’Attaray had been communicating. (Ibid.)

Based on the foregoing, Plaintiff first moves to strike Defendants’ Answers filed August 18 and 25, 2022, pursuant to the Court’s inherent authority to dismiss an action. (Code Civ. Proc. § 583.150; Del Junco v. Hufnagel (2007) 150 Cal.App.4th 789, 799.) “Trial courts should only exercise this authority in extreme situations, such as when the conduct was clear and deliberate, where no lesser alternatives would remedy the situation [Citation] the fault lies with the client and not the attorney [Citation] and when the court issues a directive that the party fails to obey.” (Del Junco at 799.)] The Court does not believe dismissal on this basis is appropriate here. However, the Court is prepared to set aside the August 16 stipulation and reinstate the defaults. “A stipulation may be set aside ‘where special circumstances exist rendering it unjust to enforce the stipulation.’ [Citations.] In addition, a court, in the interest of fairness, may relieve a party from the effect of a stipulation.” (In re Marriage of Economou (1990) 224 Cal.App.3d 1466, 1477 [finding that trial court acted within its power when it “set aside the fraudulently induced stipulations, returning the parties to their pre-stipulation positions”]; see In re Marriage of Kerry (1984) 158 Cal.App.3d 456, 465 [“Relief from a stipulation or a judgment pursuant to a stipulation may be granted where there is fraud, mistake of fact, or other special circumstances rendering it unjust to enforce the stipulation”].)]

Pursuant to Code Civ. Proc. § 128.5, Plaintiff also seeks to impose sanctions for reasonable attorney’s fees and punitive sanctions against Defendants and their counsel. The Court agrees with Plaintiff that D’Attaray’s conduct between December of 2021 and the filing of the fraudulent stipulation in August of 2022 falls within the definition of “actions or tactics, made in bad faith, that are frivolous…” (Code Civ. Proc. § 128.5, subd. (a).) The Court notes that D’Attaray filed an ex parte application to set aside the defaults on August 5, 2022. This is entirely inconsistent with any alleged belief that Plaintiff’s agreement to set aside the defaults made in December of 2021 was effective in August of 2022. It is clear to the Court that D’Attaray’s conduct throughout his participation in this litigation was in bad faith and designed to cause unnecessary delay and expense.

Plaintiff requests attorney’s fees in the amount of $8,310, based on an hourly rate of $375, for 22 hours of work related to Defendants’ conduct described above. (Derbarsegian Decl. ¶ 13.) Plaintiff did not have to prepare a reply, so the Court reduces the hours to 19 and awards sanctions of $7,125 in favor of Plaintiff. Defendants and defendants’ counsel D’Attaray are ordered to pay Plaintiff’s counsel $7,125 within thirty (30) days of today’s date.

The Court may also impose punitive sanctions “limited to what is sufficient to deter repetition of the action or tactic or comparable action or tactic by others similarly situated.” (Code Civ. Proc., § 128.5, subd. (f)(2).) Plaintiff requests that the Court enter punitive sanctions against Defendants and D’Attaray in the amount of $8,310. (Derbarsegian Decl. ¶ 13.) The Court will order Defendants and defendants’ counsel D’Attaray to pay $5,000 to the Court within thirty (30) days of today’s date. The Court sets a non-appearance case review regarding payment of the sanctions to the Court for February 27, 2023. The Court will also report counsel D'Attaray to the State Bar as required by Business and Professions Code Section 6086.8(a).