Judge Daniel M. Crowley, Case Number: BC643861, Date: 2024-11-18 Tentative Ruling

Cross-Defendants ACA LLC (“ACA”) and Damian Akhavi (“Akhavi”) (collectively “Cross-Defendants”) move for sanctions against Cross-Complainants and their counsel, Dennis P. Riley, jointly and severally, in the amount of $12,570, including reasonable attorney’s fees and costs incurred in preparing this motion and all such fees that have been incurred as a direct result of Cross-Complainants’ filing of their Motion for Reconsideration of the Court’s Verbal Order Reopening Discovery and May 31, 2024 Order Continuing Trial Pursuant to Code of Civil Procedure §1008” (“Motion for Reconsideration”). (Notice Motion, pg. 1; C.C.P. §128.7.) Specifically, Cross-Defendants move for sanctions on the ground the Motion for Reconsideration is frivolous, not warranted by existing law, and the factual allegations contained therein lack evidentiary support. (Notice Motion, pg. 1; 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 At the end of the waiting period, if the pleading is not withdrawn, the moving party may then file the motion.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, Cross-Complainants’ motion for reconsideration was based on facts that arose in connection with the Minute Order issued by the court after the briefing and hearing on the motion for leave to amend as follows: (1) The Minute Order made express factual findings that precluded a finding of prejudice to support a continuance of the trial; (2) A Minute Order continuing trial after the discovery cut-off does not operate to automatically reopen discovery; (3) Pursuant to CCP §2024.050 a formal motion was required to be brought to re-open discovery after the discovery cut-off; and (4) To the extent the court intends to reopen discovery, the scope of such discovery must be narrowly tailored to the circumstances.

Cross-Complainants’ motion was made after this Court, sua sponte, continued the trial and Cross-Defendants thereafter took the position that continuance “reopened discovery.” C.C.P. §2024.050 contains specific mandatory requirements that must be met to continue trial, which were not argued before the court because Cross-Defendants did not seek that relief in their opposition. This court was not presented with the required analysis set forth in C.C.P. §2024.050(b)(3) that states in ruling on a motion to reopen discovery a court must consider the “likelihood that permitting the discovery . . . will prevent the case from going to trial on the date set.”

Therefore, Cross-Complainants’ motion for reconsideration was not objectively unreasonable. (See Bockrath, 21 Cal.4th at pg. 82; Marriage of Sahafzadeh-Taeb & Taeb, 39 Cal.App.5th at pg. 135; Peake, 227 Cal.App.4th at pg. 440.)

Hon. Daniel M. Crowley

Judge of the Superior Court