Judge Daniel M. Crowley, Case Number: 21STCV45088, Date: 2025-01-27 Tentative Ruling

All parties are urged to meet and confer with all parties concerning this tentative ruling to see if they can reach an agreed-upon resolution of their matter.  If you are able to reach an agreement, please notify the courtroom staff in advance of the hearing if you wish to submit on the tentative ruling rather than argue the motion by notifying the court by e-mailing the court at: SMCDEPT71@lacourt.org. Do not click on the email address, either copy and paste it or type it into your email. Include the word "SUBMITS" in all caps and the Case Number in the Subject line. In the body of the email, please provide the date and time of the hearing, your name, your contact information, the party you represent, and whether that party is a plaintiff, defendant, cross-complainant, cross-defendant, claimant, intervenor, or non-party, etc.

            Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may still appear at the hearing and argue the matter, and the court could change its tentative based upon the argument.  Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If you submit, but still intend to appear, include the words "SUBMITS, BUT WILL APPEAR" in the Subject line.

            If you elect to argue your matter, you are urged to do so remotely, via Court-Connect. If the moving party fails to appear and/or submit to the Court’s tentative ruling, the Court will take the matter off calendar.

            Note that once the Court has issued a tentative, the Court has the inherent authority not to allow the withdrawal of a motion and to adopt the tentative ruling as the order of the court.

If you submitted a courtesy copy of your papers containing media (such as a DVD or thumb drive), unless you request the return of the media in your papers, the court will destroy it following the hearing of your matter.

Plaintiff Allstate Insurance Company’s motion for sanctions against Defendants 11 Funding, LLC, R.O.A.R. Management Company, Inc., and Ari and their counsel Larson LLP is denied.

Plaintiff Allstate Insurance Company (“Allstate”) (“Plaintiff”) moves for sanctions against Defendants 11 Funding, LLC (“11 Funding”), R.O.A.R. Management Company, Inc. (“ROAR”), and Ari Resnik (“Resnik”) (collectively “Resnik Defendants”) and its counsel, Larson LLP. (Notice Motion, pg. 2; C.C.P. §128.7.)

An attorney or unrepresented party who presents a pleading, motion or similar paper to the court makes an implied “certification” as to its legal and factual merit; and is subject to sanctions for violation of this certification. (C.C.P. §128.7.)

A C.C.P. §128.7 motion involves a two-step process. The moving party first serves the sanctions motion on the offending party without filing it. The opposing party then has 21 days to withdraw the improper pleading and avoid sanctions (the so-called “safe harbor” waiting period). At the end of the waiting period, if the pleading is not withdrawn, the moving party may then file the motion. (C.C.P. §128.7(c)(1); Primo Hospitality Group, Inc. v. Haney (2019) 37 Cal.App.5th 165, 173-174; Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698-699.)

Whether the certificate is violated is tested objectively—i.e., whether the paper filed is frivolous, legally unreasonable or without factual foundation. “The actual belief standard . . . requires a well-founded belief. We measure the truth-finding inquiry’s reasonableness under an objective standard, and apply this standard both to attorneys and to their clients.” (Bockrath v. Aldrich Chemical Co., Inc. (1999) 21 Cal.4th 71, 82; Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 135; Peake v. Underwood (2014) 227 Cal.App.4th 428, 440 [“A claim is objectively unreasonable if any reasonable attorney would agree that [it] is totally and completely without merit.”].)

Under §128.7, “it is not necessary to show the party acted with an improper motive or subjective bad faith. But the fact that a party does not actually believe in the merits of his or her claim is relevant to the issue whether sanctions are warranted in the particular case.” (Peake, 227 Cal.App.4th at pg. 449.)

There is no violation of the certification unless the “primary” purpose is to harass or cause needless delay or expense. If a claim is “nonfrivolous,” then as a matter of law it is “not presented for an improper purpose.” (Ponce v. Wells Fargo Bank (2018) 21 Cal.App.5th 253, 265.)

Here, the Resnik Defendants’ motion for sanctions was not made for the primary purpose of harassment. A reasonable attorney could conclude that an agreement existed between Plaintiff and the Resnik Defendants. Further, the Resnik Defendants’ belief that they were improperly named Doe Defendants in this matter after Plaintiff had them “already on Allstate’s radar” in early 2023 could lead a reasonable attorney to conclude Plaintiff’s lawsuit abused the Doe Defendant procedures and therefore was made for an improper purpose.

Hon. Daniel M. Crowley

Judge of the Superior Court