Judge: Holly J. Fujie, Case: 21STCV13788, Date: 2022-11-07 Tentative Ruling

Case Number: 21STCV13788    Hearing Date: November 7, 2022    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: Defendant Huhtamaki, Inc. (“Huhtamaki”)

RESPONDING PARTY: Plaintiff

            The Court has considered the moving, opposition and reply papers.

BACKGROUND

This action arises out of an employment relationship.  On April 12, 2021, Plaintiff filed a complaint (the “Complaint”) alleging seven causes of action for violations of the Fair Employment and Housing Act (“FEHA”).  The third through seventh causes of action were alleged against Huhtamaki, Plaintiff’s employer.  On April 13, 2022, the Defendants in this action jointly filed a motion for summary judgment (the “MSJ”).  In its ruling on the MSJ, the Court found that Defendant Benjamin Madrigal (“Madrigal”) established that the first cause of action was barred by the statute of limitations, and at the July 19, 2022 hearing on the MSJ, Plaintiff dismissed Madrigal from the action.

On October 14, 2022, Huhtamaki filed a motion for sanctions against Plaintiff and Plaintiff’s counsel (the “Motion”) pursuant to California Code of Civil Procedure (“CCP”) section 128.5 on the grounds that Plaintiff’s counsel prosecuted frivolous claims based on Madrigal’s time-barred conduct.  The Motion requests sanctions in the amount of $760,276.12 for the time expended by Huhtamaki’s counsel and Madrigal’s separate counsel defending against Plaintiff’s time-barred allegations.

DISCUSSION

CCP section 128.5 provides for sanctions against a party who is guilty of “actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.”  (CCP § 128.5, subd. (a).)  “Actions or tactics” include, but are not limited to, the making or opposing of motions or the filing and service of a complaint, cross-complaint, answer, or other responsive pleading.  (Id., subd. (b).)  A reasonable interpretation is that CCP section 128.5 also applies to entire actions not based on good faith that are frivolous or cause unnecessary delay in the resolution of a dispute.  (Lesser v. Huntington Harbor Corp. (1985) 173 Cal.App.3d 922, 930.)  CCP section 128.5 authorizes trial courts to order payment of reasonable expenses, including attorney fees, incurred as a result of a litigation opponent’s tactics or actions not based on good faith which are frivolous, or which cause unnecessary delay.  (Olmstead v. Arthur J. Gallagher & Co. (2004) 32 Cal.4th 804, 809.) 

CCP section 128.5, subdivision (f)(1) provides, in part:

(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.

(B) 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 [CCP] 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.

(CCP § 128.5, subd. (f)(1)(A)-(B).) 

The safe harbor provision applies to frivolous pleadings but does not apply to other types of alleged sanctionable conduct.  (See In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 147; Nutrition Distribution, LLC v. Southern SARMS, Inc. (2018) 20 Cal.App.5th 117, 127-30.)

            The Motion argues that Plaintiff was on notice that the claims regarding Madrigal were time-barred when Huhtamaki and Madrigal filed their answers to the Complaint and that a reasonable attorney would have been aware that the claim against Madrigal was time-barred due to Plaintiff’s failure to exhaust her administrative remedies before filing the Complaint with respect to his alleged conduct.

Safe Harbor Requirement

The Motion describes conduct that is encompassed within the safe harbor provision, such as the filing of the Complaint and the opposition to the MSJ—as well as conduct that does not require compliance with the safe harbor provision—prosecuting the time-barred claim against Madrigal despite its lack of merit.  Huhtamaki was therefore required to comply with the safe harbor provision in order to seek sanctions in connection to the filing of the Complaint and opposition to the MSJ and the Court finds that Huhtamaki is not entitled to sanctions for this conduct due to its failure to comply with the provision. 

Evidence of Bad Faith

            Plaintiff primarily argues that the Motion must be denied because Huhtamaki has not presented sufficient evidence that she acted in subjective bad faith.  While a finding of subjective bad faith is required, a court may infer subjective bad faith where a claim is clearly without merit.  (See In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 139.)   Plaintiff provides no arguments or evidence that pursuing the time-barred claim against Madrigal was justified.

            The Court finds that it is reasonable to infer bad faith with respect to Madrigal, since as early as filling the Complaint, Plaintiff alleged that Madrigal was terminated in 2018 and that she did not exhaust her administrative remedies until April 2021.  Madrigal’s personal conduct was therefore clearly barred by the statute of limitations, and Plaintiff presented no basis for holding him personally liable under FEHA for conduct that occurred after his termination from Huhtamaki. 

            The Court declines to infer subjective bad faith with respect to Huhtamaki, however.  First, the first cause of action was not alleged against Huhtamaki.  Moreover, evidence of Madrigal’s conduct is relevant to establishing a pattern of behavior to establish that the alleged harassment to which Plaintiff was subjected was sufficiently severe and harassing to establish liability under FEHA, as alleged in the third cause of action against Huhtamaki.

Reasonableness of Attorney’s Fees

Labor Code section 2802 provides that an employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.  (Lab Code § 2802, subd. (a).)  The statute merely requires the employer to indemnify the employee for all that the employee necessarily expends in direct consequence of the discharge of the employee's duties.  (Grissom v. Vons Companies, Inc. (1991) 1 Cal.App.4th 52, 58 (emphasis in original).)  In general, an employer has no obligation to indemnify a sexual harasser.  (See Jacobus v. Krambo Corp. (2000) 78 Cal.App.4th 1096, 1102.)  Numerous factual issues could be presented in an effort to enforce indemnity rights in the discrimination context, and the prospect of indemnity is by no means certain.  (See Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 74-75, fn. 24.)

            Huhtamaki has paid for Madrigal’s separate representation during this litigation.  (Declaration of Meredith Shoop (“Shoop Decl.”) ¶ 2.)  Huhtamaki contends that it incurred fees on Madrigal’s behalf because of its duty to defend its former employee and is therefore entitled to recover the fees incurred by Madrigal’s counsel in defending against the first cause of action.[1]  The Court is not persuaded that Huhtamaki has established its entitlement to sanctions on this basis.  Huhtamaki has not presented evidence that it reasonably or necessarily incurred fees to defend Madrigal.  First, to the extent that Plaintiff’s claims concern Madrigal’s conduct after his termination, Huhtakaki is not required to indemnify him, as he was no longer an employee.  Second, notwithstanding Huhtamaki’s strict liability under FEHA for any supervisory harassment, Huhtamaki has presented evidence neither that the claims against Madrigal fall within the ambit of Labor Code section 2802, nor that it was necessary to hire separate counsel for Madrigal. 

The Court therefore DENIES the Motion.

Moving party is ordered to give notice.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative. If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person. The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date. This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the

hearing, the motion will be placed off calendar.

           Dated this 7th day of November 2022