Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

 

BACKGROUND 

 

This is theft of trade secrets case.  Plaintiff Network Experts, Inc. provides computer sales, consulting and IT services.  Defendant Mostafa Karbalei Ahmad Baboli aka Stephen Parsa (“Baboli”) was employed by Plaintiff to serve as an IT specialist/director.   

Baboli later formed Beverly Hills IT Services and Beverly Hills Services (the “Entity Defendants” and together with Baboli, “Defendants”) which then contracted with Plaintiff to perform IT services.  Baboli informed Plaintiff that the Entity Defendants would contract with Plaintiff as an independent contractor, servicing Plaintiff’s clients, while also servicing the Entity Defendants’ own clients as well.   

Plaintiff claims Defendants misappropriated its trade secrets to poach Plaintiff’s clients.  Plaintiff also claims Baboli borrowed $9,540 pursuant to a promissory note which he has failed to repay.   

The operative complaint (the “First Action”) alleges claims for (1) misappropriation of trade secrets, (2) breach of promissory note, (3) breach of fiduciary duty, (4) breach of duty of loyalty, (5) unfair competition, (6) intentional interference with prospective economic relations, (7) negligent interference with prospective economic relations, (8) conversion and (9) trespass to chattel. 

Baboli previously sought leave to file a cross-complaint against Plaintiff, Doris M. Boudaie (Plaintiff’s CEO, CFO, Director and Agent for Service of Process), and Kourosh Isaac Boudaie (Plaintiff’s Secretary and Director), alleging employment-related causes of action.  Baboli originally filed the cross-complaint as an independent action in LASC Case No. 23STCV31366 (the “Second Action”).  Network Experts filed a demurrer, arguing Baboli’s claims are compulsory counterclaims and must be heard in this action.  The Court in the Second Action agreed with Network Experts, sustained the demurrer without leave to amend, and dismissed the case without prejudice on May 6, 2024.   

This Court denied Baboli’s motion for leave to file a cross-complaint as it concluded Baboli engaged in bad faith in seeking to forum shop by filing the Second Action in another court.  Baboli then filed a motion for relief from mistake and request for leave to file cross-complaint, arguing that his counsel’s mistake in believing that the claims were permissive instead of compulsory warrants relief from this Court’s prior order denying leave to amend. 

This hearing is on Plaintiff’s motion for sanctions.  Plaintiff argues that Baboli’s motion for relief from mistake was (1) filed primarily for an improper purpose -- to harass, cause delay and increase the costs of litigation, (2) contains arguments that are not warranted by existing law or contain frivolous argument, (3) contains factual contentions that do not have evidentiary support and are not reasonably likely to have evidentiary support and/or (4) contains denials of factual contentions that are not warranted by the evidence.   

LEGAL STANDARD 

Code Civ. Proc. § 128.7 states that a court may impose¿sanctions¿on a party or attorney that presents a pleading, petition, motion, or other similar papers in the following circumstances: 

1) the document is presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. 

2) the claims, defenses, and other legal contentions therein are not warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. 

3) the allegations and other factual contentions have no evidentiary support; 

4) the denials of factual contentions are not warranted on the evidence. 

 

Section 128.7 permits the Court to impose monetary sanctions on an attorney or an unrepresented party that violates any one of these requirements.¿(Eichenbaum v. Alon (2003) 106 Cal App 4th 967, 976.)  In addition,¿section 128.7¿does not require a finding of subjective bad faith; instead it requires only that the Court find that the conduct be objectively unreasonable.¿ (In re Marriage of Reese & Guy (1999) 73 Cal. App. 4th 1214, 1221.)   

A claim is objectively unreasonable if “any reasonable attorney would agree that [it] is totally and completely without merit.”¿(Id.)  However, “section 128.7¿sanctions should be ‘made with restraint’ [Citation], and are not mandatory even if a claim is frivolous.”  (Peake v. Underwood (2014) 227 Cal.App.4th 428, 448.)   

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.  (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 189-190.)  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.” (Id.)¿ 

 A motion for sanctions under¿Code Civ. Proc., section 128.7¿must be made separately from other motions and “shall describe the specific conduct alleged to violate subdivision (b).” (Code Civ. Proc., § 128.7(c)(1).)¿ 

After notice and a hearing, a court may impose sanctions on an attorney, law firm, or party that violates¿section 128.7(b), subject to the “safe harbor” conditions specified in the section.  (Id.;¿Optimal Markets, Inc. v. Salant (2013) 221 Cal.App.4th 912, 920.)¿ A party seeking sanctions under¿Code Civ. Proc., section 128.7, follows a two-step procedure. (Optimal, 221 Cal.App.4th at 920.) 

First, the moving party serves notice of the motion for sanctions on the offending party. (Code Civ. Proc., § 128.7(c)(1).)  Service of the motion starts a safe harbor period during which the motion cannot be filed with the court. (Id.)  If the challenged paper, claim, defense, contention, allegation or denial is not withdrawn or corrected within 21 days, the second step is to file or present the motion for sanctions to the court (i.e., presentment). (Code Civ. Proc., § 128.7(c)(2).) 

“This permits a party to withdraw a questionable pleading without penalty, thus saving the court and the parties time and money litigating the pleading as well as the sanctions request. [Citations.]” (Optimal, 221 Cal.App.4th at 920.) “While¿section 128.7¿does allow for reimbursement of expenses,¿including attorney fees, its primary purpose is to deter filing abuses, not to compensate those affected by them.  It requires the court to limit sanctions ‘to what is sufficient to deter repetition of [the sanctionable] conduct or comparable conduct by others similarly situated.’ [Citations.]” (Id. at 920-921.) 

DISCUSSION 

Plaintiff argues that Baboli’s motion for relief from mistake is a motion for reconsideration and fails to satisfy the requirements of § 1008 which makes it frivolous and subject to sanctions.  The Court agrees. 

Baboli’s motion for relief from mistake is one for reconsideration, as he challenges the Court’s finding that he engaged in bad faith forum shopping.  Pursuant to¿Code Civ. Proc. § 1008, subdivision (a), a motion for¿reconsideration¿must be brought “within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order.” (New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212.)   

Baboli was mail-served with notice of the Court’s ruling on July 25, 2024.  Under¿Code Civ. Proc. § 1008, Baboli had 10 days plus an additional five days for mail service (or by August 9, 2024) to move for reconsideration.  Baboli moved for reconsideration on September 5, 2024.  Thus, Baboli’s motion is untimely, and must be denied.  (Cox¿v. Bonni (2018) 30 Cal.App.5th 287, 312 (“A trial court may not grant a party’s motion for reconsideration that does not comply with¿section 1008.”).) 

However, even setting aside the issue of untimeliness, Baboli has not set forth any new law or facts that would justify a reconsideration of this Court’s ruling.  His counsel’s affidavit that he believed in good faith that Baboli’s employment claims were permissive and could be filed in a separate action is not different than was previously argued.  At the hearing on the motion for leave to amend, counsel argued “that was a mistake on my part” and “arguably there were permissive counter-claims and not compulsory counterclaims.”   

Baboli attempts to style his motion as one for relief from his counsel’s mistake.  But the basis of the Court’s prior ruling was that there was no mistake but a deliberate attempt to forum shop.  In re-arguing that there was a mistake, Baboli is seeking reconsideration, and his motion must meet the requirements of section 1008.   

Even assuming the Court were to analyze the motion under § 473, rather than § 1008, it would still conclude the motion is meritless.  An attorney’s mistake of law is charged to the client and is not a ground for relief when the “mistake” is “simply the result of professional incompetence, general ignorance of the law, or unjustifiable negligence in discovering the law.”  (Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1206.)  

Baboli claims the filing of the motion for relief under § 473 is mere “zealous advocacy”. But repetitive filings that waste the court’s time and resources are not “zealous advocacy”.  Baboli’s authorities do not say that recycling arguments that have already been rejected by the Court constitute zealous advocacy.  (See Kumar v. Ramsey (2021) 71 Cal.App.5th 1110, 1121, fn. 9; Guillemin v. Stein (2002) 104 Cal.App.4th 156, 167-168; Operating Engineers Pension Trust v. A–C Co. (1988) 859 F.2d 1336, 1344.) As these cases describe it, “zealous advocacy” is the “forceful representation” involving the reading of “a case or an agreement in an innovative though sensible way.” (Id.)  There is nothing sensible or innovative about continually arguing that the decision to file the cross-complaint in a separate action was a mistake because his counsel believed the employment claims were permissive not compulsory. 

The Court turns now to the amount of sanctions to award.  Plaintiff seeks sanctions in the amount of $18,396.50 in attorneys’ fees representing 37.1 hours “spent by [Plaintiff’s counsel] in defending and enforcing this Court’s default judgment.”  The Court concludes this amount is excessive, and Plaintiff should only be able to seek fees and costs in connection with making this motion which Plaintiff represents to be six hours.  Using Mr. Novian’s hourly rate of $575, the Court will award sanctions of $3,450.     

CONCLUSION 

For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Plaintiff’s motion for sanctions.  The Court grants sanctions in the amount of $3,450 against Baboli and his counsel. 

DATED:  November 8, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court