Superior Court of California 

County of Los Angeles – West District 

Beverly Hills Courthouse / Department 205 

 

 

 

BACKGROUND 

This case arises from claims of discrimination, harassment, and retaliation.  Plaintiff Aurice Veloso was employed by Defendant Leo David as a caregiver for his wife.  Veloso alleges that David asked her to sleep with him in exchange for improved working conditions and other financial incentives including a house, car and tuition.  Veloso further alleges that despite her working around the clock, she was not compensated for overtime or provided rest and meal breaks.  David then terminated Veloso when she opposed his alleged discrimination and harassment.   

Defendant paid Plaintiff’s wages through various companies he owned, including XCVI, LLC (“XCVI”) and Construction for Less, Inc. (CFL).  Plaintiff alleges these corporate defendants ratified and adopted the conduct of David.   

On November 3, 2022, Veloso filed a complaint against David, XCVI and CFL asserting (among others) claims under the Fair Employment and Housing Act (“FEHA”) for (1) sex discrimination, (2) sex harassment (hostile work environment), (3) sex harassment (quid pro quo), (4) retaliation and (5) failure to prevent/investigate (the “FEHA Claims”). 

On August 14, 2023, XCVI and CFL filed a demurrer to the FEHA claims based on Veloso’s failure to exhaust her administrative remedies.  On October 11, 2023, David filed a separate demurrer, challenging the FEHA claims on similar grounds as XCVI and CFL but with the additional ground that David was not subject to FEHA because there was no allegation in the complaint that he employed five or more persons.  

On November 15, 2023, the Court issued an order sustaining David’s demurrer to the FEHA claims without leave to amend holding that Plaintiff has not sufficiently plead David employed five or more persons and has not set forth facts demonstrating that she could successfully amend to cure this defect.   

Six days later, on November 21, 2023, the Court issued a separate order sustaining XCVI and CLF’s demurrer to the FEHA claims without leave to amend reasoning that Plaintiff has not exhausted her administrative remedies prior to filing her complaint. 

On December 1, 2023, Veloso filed a motion for reconsideration, which the Court denied on January 8, 2024.   

David filed a cross-complaint.  On January 26, 2024, Veloso filed a cross-complaint to David’s cross-complaint, asserting six FEHA claims against David, XCVI and CFL (“Cross-Defendants”).  These are the exact same claims against the same parties that the Court already dismissed without leave to amend.   

 

This hearing is on Cross-Defendants’ motion for terminating sanctions and for monetary sanctions pursuant to Civ. Proc. Code §§ 128.5 and 128.7 and 177.5.  Cross-Defendants seek terminating sanctions as to all cross-claims filed by Veloso, and monetary sanctions against Veloso and her counsel, jointly and severally, in the amount of $5,000.  Cross-Defendants argues that Veloso’s cross-complaint, filed after the Court dismissed her FEHA claims without leave to amend, is a meritless pleading subject to sanctions.   

LEGAL STANDARD 

Sanctions Under Code Civ. Proc. §128.5 

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Code of Civil Procedure § 128.5 permits a trial court to “order a party, a 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).)  Actions or tactics include, but are not limited to, filing or opposing motions, complaints, answers, or other responsive pleadings. (Code Civ. Proc., § 128.5, subd. (b)(1).) “‘Frivolous’ means totally and completely without merit or for the sole purpose of harassing an opposing party.” (Code Civ. Proc., § 128.5, subd. (b)(2).)  Bad faith is determined using a subjective standard.  (In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 139, 134-35.)¿¿ 

Expenses pursuant to Section 128.5 cannot be imposed unless noticed in a party’s moving or responding papers, or on the court’s own motion after providing the offending party notice and an opportunity to be heard.  (Code Civ. Proc., § 128.5, subd. (c).)  An order imposing expenses must be in writing and must recite in detail the action, tactic, or circumstances justifying the order.  (Id.)¿¿ 

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Sanctions under this section may also be awarded if the offending party is provided a 21-day safe harbor to withdraw or correct an offending document or pleading and declines to do so. “If the alleged action or tactic is the making or opposing of a written motion or the filing and service of a complaint, cross-complaint, answer, or other responsive pleading that can be withdrawn or appropriately corrected, a notice of motion shall be served as provided in Section 1010, but shall not be filed with or presented to the court, unless 21 days after service of the motion or any other period as the court may prescribe, the challenged action or tactic is not withdrawn or appropriately corrected.” (Code Civ. Proc., § 128.5, subd. (f)(1)(B).)   

In addition, the court may, on its own motion, “enter an order describing the specific action or tactic, made in bad faith, that is frivolous or solely intended to cause unnecessary delay, and direct an attorney, law firm, or party to show cause why it has made an action or tactic as defined in subdivision (b), unless, within 21 days of service of the order to show cause, the challenged action or tactic is withdrawn or appropriately corrected.”  (Code Civ. Proc., § 128.5, subd. (f)(1)(D)(1).)   

An award of sanctions may include an award of attorney’s fees incurred as a direct result of the offending party’s bath faith action or tactic.  (Code Civ. Proc., § 128.5, subd. (f)(1)(D)(2).)¿¿ 

Sanctions Under Code Civ. Proc. §128.7¿ 

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An attorney or unrepresented party who presents a motion to the court makes an implied certification as to its legal and factual merit, which is subject to sanctions for violation of this certification under Code of Civil Procedure § 128.7.  (Murphy v. Yale Materials Handling Corp. (1997) 54 Cal.App.4th 619, 623.)  The Court may impose sanctions for conduct that violates any one of the requirements set forth in Code of Civil Procedure section 128.7, subdivision (b). (Eichenbaum v. Alon (2003) 106 Cal.App.4th 967, 976.)¿¿¿ 

Code of Civil Procedure section 128.7, subdivision (b) provides:¿¿ 

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(b)¿By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, petition, written notice of motion, or other similar paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met:¿ 

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(1)¿It is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.¿ 

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(2)¿The claims, defenses, and other legal contentions therein are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.¿ 

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(3)¿The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.¿ 

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(4)¿The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.¿ 

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Only “an attorney or unrepresented party may be sanctioned” under the statute.  (In re Marriage of Reese & Guy (1999) 73 Cal.App.4th 1214, 1221.)¿¿ 

“Under section 128.7, a court may impose sanctions if it concludes a pleading was filed for an improper purpose or was indisputably without merit, either legally or factually. [Citation.]” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 189.) “A claim is factually frivolous if it is ‘not well grounded in fact’ and is legally frivolous if it is ‘not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.’ [Citation.]  In either case, to obtain sanctions, the moving party must show the party’s conduct in asserting the claim was objectively unreasonable. [Citation.]  A claim is objectively unreasonable if ‘any reasonable attorney would agree that [it] is totally and completely without merit.’ [Citations.]” (Id.)  No showing of bad faith is required.  (In re Marriage of Reese & Guy, supra, 73 Cal.App.4th at p. 1221.)¿¿ 

“The California Legislature essentially sought to replicate rule 11 [of the Federal Rules of Civil Procedure] when it enacted section 128.7.” (Musaelian v. Adams (2009) 45 Cal.4th 512, 518, fn. 2.)  As a result, federal case law construing rule 11 is persuasive authority on the meaning of Code of Civil Procedure section 128.7. (Guillemin v. Stein (2002) 104 Cal.App.4th 156, 167.)  Under rule 11, even though an action may not be frivolous when it is filed, it may become so if later-acquired evidence refutes the findings of a prefiling investigation and the attorney continues to file papers supporting the client’s claims.  (See Childs v. State Farm Mutual Automobile Insurance Company (5th Cir. 1994) 29 F.3d 1018, 1024-1026.)  As a result, a plaintiff’s attorney cannot “just cling tenaciously to the investigation he had done at the outset of the litigation and bury his head in the sand.”¿ (Id. at 1025.)¿¿ 

In addition, Code of Civil Procedure section 128.7 “contains a safe harbor provision.  It requires the party seeking sanctions to serve on the opposing party, without filing or presenting it to the court, a notice of motion specifically describing the sanctionable conduct. Service of the motion initiates a 21-day ‘hold’ or ‘safe harbor’ period. [Citations.] During this time, the offending document may be corrected or withdrawn without penalty. If that occurs, the motion for sanctions ‘‘shall not’’ be filed. [Citations.]  By mandating a 21-day safe harbor period to allow correction or withdrawal of an offending document, section 128.7 is designed to be remedial, not punitive. [Citation.]” (Li v. Majestic Industry Hills, LLC (2009) 177 Cal.App.4th 585, 590-591.)¿ 

Sanctions under Code Civ. Proc. §177.5 

Code Civ. Proc. §177.5 provides the following: 

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. 

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. 

(Code Civ. Proc., § 177.5.) 

“The imposition of monetary sanctions under¿section 177.5¿is within the discretion of the trial court.” (People v. Ward (2009) 173 Cal.App.4th 1518, 1527¿(quoting¿Winikow v. Superior Court (2000) 82 Cal.App.4th 719, 726).)  “That discretion must be exercised in a reasonable manner with one of the statutorily authorized purposes in mind and must be guided by existing legal standards as adapted to the current circumstances.”¿(Id. (quoting¿Winikow, 82 Cal.App.4th at 726).) 

REQUEST FOR JUDICIAL NOTICE 

Veloso requests judicial notice of her DFEH administrative charge filed on January 26, 2024.  The Court grants the request pursuant to Cal. Evid. Code §§ 452(c) and 453.¿¿ 

DISCUSSION 

If the alleged sanctionable conduct is the filing and¿service of a complaint, both¿Code Civ. Proc. §§ 128.5 and 128.7 have a safe harbor provision, which¿requires that the moving party serve the motion on the sanctionable party at least¿21-days before it is filed with the Court.¿(Code Civ. Proc., §§ 128.5, subd. (f)(1)(B);¿128.7, subd. (c)(1).)  This affords the party an opportunity to cure the improper pleading.  (Id; see¿Li v. Majestic Industry Hills LLC¿(2009) 177 Cal.App.4th 585, 591¿(“By mandating a 21-day safe harbor period to allow correction or withdrawal of an offending document,¿section 128.7¿is designed to be remedial, not punitive.”).) 

The 21-day “safe harbor” provision is strictly enforced.  “Substantial compliance” is insufficient.  (See¿Cromwell v. Cummings¿(1998) 65 Cal.App.4th Supp. 10, 15¿(“Correspondence to opposing counsel which threatens sanctions of an unknown nature at an unspecified time against unidentified persons, and which lacks citation to controlling authority, does not fulfill these statutory purposes.”).) 

The motion provided to the opposing party must be the same as the motion that is filed with the court.  (Hart v. Avetoom¿(2002) 95 Cal.App.4th 410, 414.)  The notice served must contain a hearing date and must comply with all the requirements of¿Code of Civil Procedure § 1010, including the time and place of the motion hearing.  (Code Civ. Proc., §§ 128.5, subd. (f)(1)(B);¿128.7, subd. (c)(1);¿GalleriaPlus, Inc. v. Hanmi Bank¿(2009) 179 Cal.App.4th 535, 538¿(document served stating sanctions motion would be filed “on or after” specified date did not provide notice of hearing date and did not satisfy “safe harbor” requirement).) 

Cross-Defendants have not shown they complied with the 21 safe harbor provision.  Accordingly, the Court denies their motion for sanctions under §§128.5 and 128.7. 

As to Cross-Defendants’ motion under §177.5, that section does not allow for terminating sanctions, and any monetary sanctions are limited to $1,500 and are payable to the Court, not the parties.  Accordingly, §177.5 also does not provide support for Cross-Defendants’ motion.   

Notwithstanding, courts have inherent authority to dismiss an action.  (Code Civ. Proc., §§ 581, subd. (m),¿583.150;¿Lyons v. Wickhorst¿(1986) 42 Cal.3d 911, 915;¿Progressive Concrete, Inc. v. Parker¿(2006) 136 Cal.App.4th 540, 551.)  Trial courts should only exercise this authority in extreme situations, such as when the conduct was clear and deliberate and where no lesser alternatives would remedy the situation (Lyons v. Wickhorst, 42 Cal.3d at 917),¿the fault lies with the client and not the attorney, and when the court issues a directive that the party fails to obey.  (Del Junco v. Hufnagel (2007) 150 Cal.App.4th 789, 799).) 

Here, the Court sustained a demurrer on Veloso’s FEHA claims without leave to amend and denied her motion for reconsideration of its ruling.  Notwithstanding the Court’s orders, Veloso filed a cross-complaint alleging the same FEHA claims in the same action.  Veloso’s cross-complaint is also procedurally improper – Veloso cites no authority that she can file a cross-complaint to a cross-complaint to her own action.  The proper procedure was to file a motion for leave to amend her complaint, which Veloso failed to do.           

Veloso’s opposition to the motion for sanctions is essentially a motion for reconsideration, outlining reasons Veloso believes the Court got it wrong.  But the motion for reconsideration is not based on any new facts or law.  (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500 (“a court acts in excess of jurisdiction when it grants a motion to reconsider that is not based upon “new or different facts, circumstances or law”).)  Veloso’s January 26, 2024 administrative charge is based on the same facts as her original complaint.  The charge cannot be a new fact.  If it were otherwise, then each time the Court issued an order that Veloso disagrees with, she could re-file a new administrative complaint to create a “new” fact for reconsideration.   

CONCLUSION 

Based on the foregoing, the Court GRANTS IN PART and DENIES IN PART Cross-Defendants’ motion for sanctions.  Pursuant to Code Civ. Proc. §177.5, the Court orders Veloso and her attorney to pay $1,500 to the Court within 30 days of the date of this Order.  The Court also denies as moot Cross-Defendants’ motion to strike the Cross-Complaint set for hearing on April 25, 2024.   

 

IT IS SO ORDERED. 

 

DATED: April 17, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court