Judge Cynthia A Freeland, Case 37-2019-00048141-CU-BC-NC 2024-03-01 Tentative Ruling

Judge: Cynthia A Freeland, Case: 37-2019-00048141-CU-BC-NC, Date: 2024-03-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - February 29, 2024

03/01/2024 01:30:00 PM N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited Breach of Contract/Warranty Motion Hearing (Civil) 37-2019-00048141-CU-BC-NC FASTHORSE VS. KIA MOTORS AMERICA INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Sanctions, 11/14/2023

Plaintiff Marilyn Fasthorse ('Plaintiff')'s motion for sanctions is denied.

Factual Background and Procedural History On September 12, 2019, Plaintiff commenced this action by filing a Complaint against Defendant for breach of the implied warranty of merchantability and breach of express warranty under the Song-Beverly Consumer Warranty Act. See ROA No. 1. The parties reached a settlement of their dispute in March 2022. On April 27, 2022, Plaintiff and her attorney executed a Settlement and Release Agreement (the 'Settlement Agreement'). A representative for Defendant signed the Settlement Agreement on May 5, 2022. The Settlement Agreement requires Defendant to pay Plaintiff, Plaintiff's counsel, and the subject vehicle lienholder a sum certain. In exchange, Plaintiff must return the vehicle to Defendant 'in good condition, without collision damage, bumper damage, windshield damage, or vandalism, save the alleged nonconformities, with all factory equipment, as on the date of the loan, present on or in the Subject Vehicle when it left Kia America, Inc. or its authorized representatives.' On July 15, 2022, Plaintiff returned the vehicle to Defendant's third-party vendor, Morley VSPC ('Morley'), for processing customer-returned vehicles. That same day, Morley informed Defendant that Plaintiff had returned the vehicle with exterior body damage, namely 'a ripple of dents on the upper fender along with a few minor damages.' The damage to the vehicle totaled $2,173.57. Plaintiff's counsel subsequently inquired as to whether Defendant would be willing to accept the vehicle in an 'as-is' condition.

Defendant indicated that it would be unwilling to do so and requested that Plaintiff either: (1) repair the vehicle before returning it, or (2) pay Defendant the amount necessary to repair the vehicle.

On February 15, 2023, Defendant filed a motion to enforce the Settlement Agreement. See ROA No. 86.

Defendant, among other things, sought an order that Plaintiff comply with the Settlement Agreement to the extent she was required to return the vehicle in good condition and without certain nonconformities.

Plaintiff opposed the motion, arguing that the provision in the Settlement Agreement requiring that Plaintiff return the vehicle in good condition was void as against public policy and should not be enforced as there was not a meeting of the minds between the parties regarding the term 'good condition'. See ROA No. 95. On May 19, 2023, the court granted Defendant's motion to enforce the Settlement Agreement (the 'May 2023 Order'). See ROA No. 98; Barry Decl., Ex. 1. In relevant part, the court ordered as follow: The court directs Plaintiff to return the vehicle to Morley within sixty (60) days of this Order 'in good condition, without collision damage, bumper damage[], windshield damage, or vandalism, save the alleged nonconformities, with all factory equipment, as on the date of the loan, present on or in the Calendar No.: Event ID: TENTATIVE RULINGS

3051624 CASE NUMBER: CASE TITLE: FASTHORSE VS. KIA MOTORS AMERICA INC [IMAGED] 37-2019-00048141-CU-BC-NC Subject Vehicle when it left Kia America, Inc. or its authorized representatives.' Consistent with the foregoing, Plaintiff must return the vehicle: (1) in an 'as-is' condition and pay Defendant $2,173.57 for the damage repairs, or (2) after having repaired the vehicle elsewhere without the damage noted by Morley when Plaintiff originally attempted to return the vehicle on July 15, 2022.

Ibid.

Between July and September 2023, Plaintiff's counsel sent Defendant's counsel a series of e-mails inquiring as to the status of the vehicle surrender and exchange of funds as set forth in the Settlement Agreement. See Barry Decl., Ex. 2. Most of Plaintiff's counsel's communications appear to have gone unanswered. The last e-mail from Defendant's counsel, dated September 28, 2023, explains that certain delays were occasioned by 'changes at KA, including the case handler for this case.' Ibid. However, Defendant's counsel assured Plaintiff's counsel that the check was being processed and that the case would be completed shortly.

On October 9, 2023, Plaintiff filed her own motion to enforce the Settlement Agreement arguing, among other things, that Defendant has refused to accept the return of the vehicle and pay the amounts specified in the Settlement Agreement. See ROA No. 104. Defendant did not oppose Plaintiff's motion to enforce the Settlement Agreement. On November 17, 2023 – three days after Plaintiff filed and pending motion – the court granted Plaintiff's motion to enforce the Settlement Agreement (the 'November 2023 Order'). See ROA No. 116. In relevant part, the court ordered as follows: The parties are directed to meet and confer regarding a mutually agreeable time, date, and place for Plaintiff to surrender the vehicle, which surrender shall take place no later than sixty (60) days from the date of this hearing. Plaintiff shall remit to Defendant, at or before the time of surrender, the sum of $2,173.57 to cover the necessary repairs for the vehicle. Defendant, for its part, shall: (1) cooperate with Plaintiff in coordinating the surrender of the vehicle, and (2) remit to Plaintiff, Plaintiff's counsel, and ACA, within thirty (30) days of Plaintiff accomplishing the foregoing, all sums owed by Defendant under the Settlement Agreement.

Ibid.

Plaintiff now seeks monetary sanctions under California Code of Civil Procedure ('CCP') § 128.5 against Defendant and its attorney for Defendant's failure to comply with the Settlement Agreement. See ROA No. 114.

Legal Analysis CCP § 128.5(a) permits a court to '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.' Cal. Code Civ. P. § 128.5(a).

'Actions or tactics' under CCP § 128.5(a) 'include, but are not limited to, the making or opposing of motions or the filing and service of a complaint, cross-complaint, answer, or other responsive pleading.' Cal. Code Civ. P. § 128.5(b)(1). 'Frivolous' is defined as 'totally and completely without merit or for the sole purpose of harassing an opposing party.' Cal. Code Civ. P. § 128.5(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. [Citations.] There must also be a showing of an improper purpose, i.e., subjective bad faith on the part of the attorney or party to be sanctioned.' In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal. App. 5th 124, 135 (quoting Levy v. Blum (2001) 92 Cal. App. 4th 625, 635). The party seeking sanctions bears the burden of demonstrating that the alleged offending conduct was objectively frivolous and subjectively in bad faith. See Campbell v. Cal-Gard Surety Services, Inc. (1998) 62 Cal. App. 4th 563, 573-574.

If the court grants a motion under CPC § 128.5(a), 'the court may . . . impose an appropriate sanction upon the party, the party's attorneys, or both, for an action or tactic described in subdivision (a). In Calendar No.: Event ID: TENTATIVE RULINGS

3051624 CASE NUMBER: CASE TITLE: FASTHORSE VS. KIA MOTORS AMERICA INC [IMAGED] 37-2019-00048141-CU-BC-NC determining what sanctions, if any, should be ordered, the court shall consider whether a party seeking sanctions has exercised due diligence.' Cal. Code Civ. P. § 128.5(f)(1). The prevailing party may also be awarded the reasonable expenses and attorney's fees incurred in presenting or opposing the motion for sanctions. See Cal. Code Civ. P. § 128.5(f)(1)(C). Sanctions 'shall be limited to what is sufficient to deter repetition of the action or tactic or comparable action or tactic by others similarly situated . . . [T]he sanction may consist of, or include, directives of a nonmonetary nature, an order to pay a penalty into the 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).' Cal. Code Civ. P. § 128.5(f)(2).

The court notes that Defendant has not opposed the motion, which constitutes Defendant's concession of the motion's merits. See San Diego Rules of Court, Rule 2.1.19.B. However, the court also must independently review the motion and determine whether Plaintiff is entitled to an award of monetary sanctions. Having done so, the court concludes that Plaintiff has failed to meet her burden of demonstrating that Defendant's conduct has been objectively frivolous and subjectively in bad faith.

Plaintiff, in essence, argues that Defendant went 'radio silent' after entry of the May 2023 Order, has failed to comply with the terms of the Settlement Agreement, and filed a motion to enforce the Settlement Agreement (which motion resulted in the May 2023 Order) despite having no intention of performing promptly under the Settlement Agreement. The foregoing is insufficient. To start, the court respectfully must disagree with Plaintiff that sanctions are warranted for Defendant's failure to comply with the May 2019 Order. A careful review of that Order reveals that the court, in fact, did not order Defendant to do anything. The court merely: (1) disagreed with the arguments set forth in Plaintiff's opposition; (2) determined that the Settlement Agreement was enforceable; and (3) directed Plaintiff to return the vehicle to Morley (either with a $2,173.57 damages payment or after repairing the vehicle elsewhere) within 60 days, or by July 18, 2023. Consequently, to the extent Plaintiff argues that Defendant failed to comply with the May 2023 Order, the court disagrees. An argument certainly could be made that Defendant has not complied with the November 2023 Order, which order did include directions for Defendant to comply. However, Defendant's alleged violation of the November 2023 Order is not properly before the court and Plaintiff has not provided Defendant with notice that Plaintiff is seeking sanctions in connection with the November 2023 Order.

Additionally, Plaintiff fails to provide sufficient evidence that Defendant's conduct has been objectively frivolous and subjectively in bad faith. To the extent Plaintiff argues that Defendant's motion to enforce the Settlement Agreement was frivolous and/or brought in bad faith, such contention is not well taken.

Plaintiff fails to explain how that motion warrants monetary sanctions under CCP § 128.5 considering that the motion plainly had merit and was granted. Furthermore, the court finds that Plaintiff has not demonstrated that Defendant's failure to respond to numerous e-mails over a four-month period was an action or tactic taken in bad faith or with the intent to cause unnecessary delay. While the court certainly does not condone Defendant's failure to participate actively in completing the terms of the Settlement Agreement, such 'radio silence' on Defendant's part does not rise to the level of subjective bad faith or an improper purpose. Indeed, the e-mail communications themselves demonstrate a legitimate reason for Defendant's silence, namely that Defendant has undergone certain personnel changes. The court appreciates Plaintiff's counsel's frustrations; however, his belief that Defendant's reasons for delay are inadequate and/or unreasonable, without more, is insufficient to merit the imposition of monetary sanctions under CCP § 128.5.

Plaintiff also appears to ask the court to impose a monetary penalty against Defendant under CCP § 177.5 as well as contempt sanctions under CCP § 1218(a). The court declines to do so. First, CCP § 177.5 provides that: A judicial officer shall have the power to impose reasonable money sanctions, not to exceed fifteen hundred dollars ($1,500), notwithstanding any other provision of law, payable to the court, for any violation of a lawful court order by a person, done without good cause or substantial justification. This power shall not apply to advocacy of counsel before the court. For the purposes of this section, the term 'person' includes a witness, a party, a party's attorney, or both.

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3051624 CASE NUMBER: CASE TITLE: FASTHORSE VS. KIA MOTORS AMERICA INC [IMAGED] 37-2019-00048141-CU-BC-NC Sanctions pursuant to this section shall not be imposed except on notice contained in a party's moving or responding papers; or on the court's own motion, after notice and opportunity to be heard. An order imposing sanctions shall be in writing and shall recite in detail the conduct or circumstances justifying the order.

See Cal. Code Civ. P. § 177.5.

In this case, the court finds that sanctions under CCP § 177.5 are not appropriate because Plaintiff has not identified a lawful court order that Defendant violated. As set forth above, the May 2023 Order did not include a direction that Defendant comply with the terms of the Settlement Agreement. Although the November 2023 Order did include such directions, Plaintiff has not given Defendant proper notice that she is seeking monetary sanctions in conjunction with that Order. Moreover, Defendant's failure to meet and confer sufficiently with Plaintiff to complete the terms of the Settlement Agreement does not constitute a violation of a court order.

The same is true as to Plaintiff's request for contempt sanctions. To demonstrate that a party is guilty of contempt, the moving party must establish, beyond a reasonable doubt that: (1) a valid court order exists; (2) Defendant had knowledge of the order; (3) Defendant had the ability to obey the order; and (4) Defendant willfully disobeyed the order. See Cal. Code Civ. P. § 1209(a)(5); In re Koehler (2010) 181 Cal. App. 4th 1153. Again, Plaintiff has not identified a valid court order that Defendant has violated that is properly before the court. Even if she did, however, the court nevertheless would find that Plaintiff has not proven beyond a reasonable doubt that Defendant's conduct was willful.

Conclusion In light of the foregoing, the court denies Plaintiff's motion for sanctions.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, March 1, 2024. If no party appears at the hearing, this tentative ruling will become the order of the court as of March 1, 2024. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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