Judge: Elaine Lu, Case: 20STCV37429, Date: 2022-08-08 Tentative Ruling
Case Number: 20STCV37429 Hearing Date: August 8, 2022 Dept: 26
|
PATRICIA
MALDONADO, Plaintiff, v. SHERBANK
AZIZI DENTAL CORPORATION; AZIZI DENTAL CORPORATION dba GREEN DENTAL
& ORTHODONTICS, et al., Defendants. |
Case No.: 20STCV37429 Hearing Date: August 8, 2022 [TENTATIVE] ORDER RE: MOTION FOR ORDER TO LIFT STAY AND TERMINATE
BINDING ARBITRATION PROCEEDINGS; FOR LEAVE TO FILE CROSS-COMPLAINT; AND FOR AWARD
OF MONETARY SANCTIONS |
Background
On
September 30, 2020, Plaintiff Patricia Maldonado (“Plaintiff”) filed the
instant wrongful termination action. On
June 14, 2021, Plaintiff filed the operative First Amended Complaint (“FAC”)
against Defendants Sherbank Azizi Dental Corp. and Azizi Dental Corporation dba
Green Dental & Orthodontics (jointly “Defendants”). The FAC asserts four causes of action for (1)
Wrongful Termination in Violation of Public Policy, (2) Retaliation in
Violation of Labor Code § 1102.5, (3) Intentional Infliction of Emotional
Distress, and (4) Unfair Business Practices in Violation of Business &
Professions Code §§ 17200 et seq.
On
July 30, 2021, Defendants filed a motion to compel arbitration. On October 21, 2021, the Court granted the
parties’ stipulation to submit to this matter to binding arbitration with the
American Arbitration Association (“AAA”).
On
June 27, 2022, Defendants filed the instant motion: (1) to lift the stay and
terminate binding arbitration proceedings, (2) for leave to file a
cross-complaint, and (3) for monetary sanctions. On July 11, 2022, Plaintiff filed a motion to
terminate the arbitration proceedings pursuant to Code of Civil Procedure
section 1281.97. On July 13, 2022,
Plaintiff filed an ex parte application to advance the hearing on Plaintiff’s
motion to terminate the arbitration proceedings. At the hearing for the ex parte application,
the parties stipulated in open court to terminate the arbitration proceedings
and to lift the stay on litigation, which the Court granted. (Minute Order 7/19/22.) On July 26, 2022, Plaintiff filed an
opposition to the instant motion. On August
3, 2022, Defendants filed a reply.
Improperly Combined Motions
As
a preliminary matter, the Court notes that there is no legal authority or rule
of Court permitting Defendants to improperly combine three separate motions to
be heard together absent a Court order permitting such. The California Rules of Court permit only the
combining of the papers in support of the same motion. (Cal. Rules of Court, Rule 3.1112(c).) Each motion requires a separate notice, motion,
and memorandum in support. (Cal. Rules
of Court, Rule 3.1112(a).) Here, Defendants
have improperly combined three motions for terminating arbitration, for leave
to file a cross-complaint, and for monetary sanctions under Code of Civil
Procedure sections 128.5 and 128.7 into one motion.
Further,
requests for sanctions under Code of Civil Procedure sections 128.5 and 128.7
are required by statute to be filed in a separate motion. (CCP § 128.5(f)(1)(A), [“A motion for
sanctions under this section shall be made separately from other motions or
requests and shall describe the specific alleged action or tactic, made in
bad faith, that is frivolous or solely intended to cause unnecessary delay.”],
[italics added]; CCP §128.7(c)(1), [“A motion for sanctions under this
section shall be made separately from other motions or requests
and shall describe the specific conduct alleged …”], [italics added].)
Finally, the combination of what is
essentially three motions into one is in violation of the Court’s standing
order that each motion requires its own separate reservation through the online
Court Reservation System (“CRS”)
The Court would ordinarily strike
the instant improperly combined motions as an improper filing in light of the
deficiencies identified above. However,
two of the three improperly combined motions are now moot. Defendants’ request for termination of the
arbitration proceedings is moot in light of the parties’ July 19, 2022 stipulation
to terminate arbitration and lift the stay.
(Minute Order 7/19/22.) Defendants’
request for leave to file a cross-complaint is moot because Defendants note in
their reply papers that they have withdrawn the motion for leave to amend. (Reply at p.2:8-10, [“Defendants hereby withdraw
without prejudice their Motion for Leave to Amend to file a Cross-Complaint
…”].)
Accordingly, the Court turns to Defendants’
remaining request for sanctions.
Sanctions
under Code of Civil Procedure § 128.7
Code of Civil Procedure section 128.7 provides that “[n]otice of motion
shall be served as provided in Section 1010, but shall not be filed with or
presented to the court unless, within 21 days after service of the motion, or
any other period as the court may prescribe, the challenged paper, claim,
defense, contention, allegation, or denial is not withdrawn or appropriately
corrected. (CCP § 128.7(c)(1).) “The purpose of the safe harbor period is to
allow a party to withdraw an objectionable document and thereby conserve
judicial resources as well as save the parties the time and expense of
litigating sanctions.” Broadcast
Music, Inc. v. Structured Asset Sales, LLC (2022) 75 Cal.App.5th 596,
605.) “A sanctions motion cannot be
filed until the 22nd day after service of the motion, i.e., after the 21-day
safe harbor period expires.” (Ibid.)
Here, Defendants have failed to
provide any evidence of an attempt to fulfill the safe harbor requirements for
sanctions under Code of Civil Procedure section 128.7. The proof of service reflects that Defendants
served the instant motion on June 24, 2022 -- only 3 days Defendants filed the
motion. Defendants have failed to comply
with the safe harbor requirements of Code of Civil Procedure section 128.7, and
the instant motion for sanctions must be DENIED on this ground.
Sanctions
under Code of Civil Procedure § 128.5
Defendants’ request for sanctions
also fails on the merits.
“A trial court may 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.” (CCP §128.5(a).) “‘Frivolous’ means totally and completely
without merit or for the sole purpose of harassing an opposing party.” (CCP § 128.5(b)(2).) “[Code of Civil Procedure] section 128.5
empowers a trial court to manage the proceedings conducted before it and to
grant sanctions in the appropriate situations where proceedings are instituted
in bad faith, are frivolous or brought for purposes of delay.” (Ellis v. Roshei Corp. (1983) 143
Cal.App.3d 642, 648.)
Here, Defendants fail to identify
any conduct warranting of sanctions. The
moving papers fail to specify any action or conduct by Plaintiff that was frivolous
or solely intended to cause unnecessary delay.
The only evidence presented is a timeline of the events in the instant
action. However, this timeline – if
anything – indicates that Defendants were the cause of any delay.
“On October 21, 2021, the
Court signed the Order granting the Parties stipulation to submit this matter
to Arbitration.” (Goldstein Decl. ¶
6.) “On November 11, 2021,
Plaintiff submitted an executed demand for arbitration to AAA.” (Goldstein Decl. ¶ 7; see Martin Decl.
¶ 9, Exh. C.) “On December 9, 2021,
the AAA sent correspondence to the Parties which stated in pertinent part, ‘On
November 29, 2021, Claimant was notified that the filing requirements for
the above matter have not been met. As of this date, we have not received
the requested filing fee. Accordingly, we have administratively closed
our file without prejudice.’” (Goldstein
Decl. ¶ 8.) “On January 28, 2022,
the Parties attended a private mediation in hopes of resolving the case in its
entirety. Unfortunately, the Parties were unable to resolve the case at
mediation.” (Goldstein Decl. ¶ 9; see
Martin Decl. ¶ 10.)
As a resolution did not appear possible, “Plaintiff demanded that the
Parties continue forward with Arbitration pursuant to the Parties’ stipulation
and the Court’s Order.” (Martin Decl. ¶
10, Exh. E.) On February 14, 2022,
Plaintiff paid her share of the arbitration fees to the AAA. (Martin Decl. ¶ 11, Exh. F.)
“On February 15, 2022, the AAA sent correspondence to the
Parties’ that stated in pertinent part, ‘We have received the employee’s
portion of the filing fee in the amount of $300.00. Accordingly, we request
that the employer pay its share of the filing fee in the amount of $1,900.00 on
or before March 1, 2022. Upon receipt of the balance of the filing fee, the AAA
will proceed with administration. This letter shall serve as the invoice
pursuant to California Code of Civil Procedure Sections 1281.97. Payment is due
on upon receipt of this letter. As this arbitration is subject to California
Code of Civil Procedure 1281.97, payment must be received by March 17, 2022
or the AAA will close the parties’ case. Pursuant to California Code of Civil
Procedure 1281.97, the AAA cannot grant any extensions to this payment deadline.” (Goldstein Decl. ¶ 10; see Martin
Decl. ¶ 12, Exh. G.)
“On March 3, 2022, the AAA
sent correspondence to the Parties that states in pertinent part, ‘We have not
yet received payment from the employer to cover their portion of the filing
fee, as described in our letter dated February 15, 2022. Please note in
accordance with California Code of Civil Procedure 1281.97 and 1281.98, the
AAA will close its case on March 17, 2022 if payment is not received.” (Goldstein Decl. ¶ 11; see Martin
Decl. ¶ 13, Exh. H.)
“On March 9, 2022, counsel
for Respondent sent an email to the AAA at 12:16 pm that stated in pertinent
part, ‘To the Employment Filing Team, My client is currently severely ill
with COVID19. She is requesting an extension of time to pay the filing amount
of $1,900.00 due in this case on behalf of the Employer until a new date
set towards the middle of April 2022. Please confirm a new date for the
Employer to pay in mid-April 2022 due to my client's extenuating circumstances
and extremely poor health condition at this time. Thank you.’” (Goldstein Decl. ¶ 12.)
“On March 9, 2022, the AAA
sent correspondence to all Parties at 1:11 pm that stated in pertinent part,
‘We are in receipt of the parties’ correspondence. Please note that in order
to comply with the CA Statute, payment must be received by March 17, 2022.
Absent receipt of the respondent’s share of the filing fee on this date, the
AAA will close this file….’”
(Goldstein Decl. ¶ 13.)
“On March 21, 2022, the AAA
sent a correspondence to all Parties at 7:28 am that stated in pertinent part,
‘Please note that as we cannot provide an extension due to the CA statute,
the AAA has closed this file. This case can be re-opened within 90 days of this
date upon receipt of the balance of the filing fee and the Claimant’s
consent to move forward as originally filed.” (Goldstein Decl. ¶ 14; see Martin Decl. ¶ 14,
Exh. I.) Defendants’ Counsel represented
that Defendants were insolvent and could not financially take on the cost of
arbitration. (Martin Decl. ¶ 14.)
“On April 7, 2022, Plaintiff
accepted Defendants’ offer to resolve this matter. However, since then,
Defendants have failed to finalize the terms of the agreement, leaving
Plaintiff with no choice but to move this matter forward with litigation.” (Goldstein Decl. ¶ 15; Martin Decl. ¶
15.) “On June 2, 2022, counsel for
Plaintiff sent an email at 1:40 pm that stated in pertinent part, “Please see
attached proposed Stipulation to Terminate Order to Arbitrate and Proceed in
State Court pursuant to CCP 1281.97. Please sign and return. If I do not
hear from you by Friday, I will be filing a motion which will only increase
the costs of attorney’s fees and sanctions that is required by the
statute.” (Goldstein Decl. ¶ 16; see
Martin Decl. ¶ 16, Exh. J.)
The Court has repeated the
declaration of Defense Counsel, Jonathan A. Goldstein, above nearly verbatim. The chronology that Defendants themselves provide
clearly indicates that Defendants are the party that failed to timely pay the
arbitration costs as required under Code of Civil Procedure section 1281.97. Pursuant to Code of Civil Procedure section
1281.97, Defendants’ conduct permits Plaintiff to return to litigate in this
Court and results in the imposition of mandatory sanctions on the
employer. (CCP §§ 1281.97(b),(d.).)
In fact, as Defense Counsel concedes,
it was also Defendants’ failure to finalize the settlement terms that left
Plaintiff with no choice but to move this matter forward in this Court. (Goldstein Decl. ¶ 15.) In sum, there is no basis whatsoever for Defendants
to move for sanctions.
CONCLUSION AND ORDER
In
light of the age of the case and the unnecessary delays, the Court expects the
parties to expeditiously complete discovery and prepare for trial. The Court hereby sets a case management
conference for August 11, 2022 at 8:30 am.
All parties are ordered to file and serve a case management statement in
advance of the August 11, 2022 case management conference. The October 21, 2022 post-arbitration status
conference is taken off calendar as moot.
The Moving Parties are ordered to provide notice of this
order and
file a proof of service of such.
DATED: August 8, 2022 ___________________________
Elaine
Lu
Judge
of the Superior Court