Judge: Joseph Lipner, Case: 22STCV13243, Date: 2023-12-07 Tentative Ruling

Case Number: 22STCV13243    Hearing Date: December 7, 2023    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant Real Time Staffing Servies, LLC d/b/a Select Staffing (“Select Staffing”) moves for sanctions against Plaintiff Maria Cristina Soto (“Plaintiff”). Select Staffing requests $1,915.00 in deposition costs and $4975.50 in attorney’s fees.

The Court DENIES Select Staffing’s motion.

Background

Plaintiff filed this action on April 20, 2022 against Select Staffing, St. Clair Plastics, Inc. (“St. Clair”), and Novel Alamilla. Plaintiff seeks relief against Select Staffing for (1) gender based harassment; (2) sexual harassment; (3) failure to prevent discrimination and harassment; (4) failure to correct and remedy discrimination and harassment; (5) retaliation for complaints of discrimination and harassment; (6) violation of whistle-blowing law; (7) wrongful termination; (8) hostile work environment; (9) intentional infliction of emotional distress; (10) negligent infliction of emotional distress; and (11) failure to permit inspection of personnel and payroll records in violation of Labor Code section 1198.5.

          Following a thorny meet and confer process to set Plaintiff’s deposition, the Court granted an ex parte application by Select for an order compelling Plaintiff to appear for deposition on September 6, 2023 and continuing trial to June 24, 2024.

          On September 5, 2023, the night before Plaintiff’s deposition, Plaintiff’s counsel contacted Select Staffing’s counsel and offered to dismiss the action against Select Staffing with prejudice in exchange for a waiver of costs. (Runge Decl. ¶ 15, Exh. N.) Select Staffing’s counsel emailed Plaintiff’s counsel seeking confirmation that Plaintiff agreed and stated that Select Staffing would get a settlement agreement together. (Runge Decl. ¶ 15, Exh. N.) Plaintiff’s counsel confirmed that those were the terms of the offer. (Runge Decl. ¶ 15, Exh. N.)

          Later that evening, Select Staffing’s counsel sent an email to Plaintiff’s counsel and the other parties stating “[w]e apologize for the late notice, but tomorrow’s deposition is off.” (Agadzhanyan Decl. ¶ 3; Exh. B.)

          On September 7, 2023, Select Staffing’s counsel sent Plaintiff’s counsel a draft settlement agreement. (Runge Decl. ¶ 16, Exh. O.) Plaintiff characterizes this agreement as a counteroffer because it sought release with prejudice of all known and unknown claims Plaintiff may have against Select Staffing, as well as a waiver of Civil Code section 1542. (Agadzhanyan Decl. ¶ 4, Exh. C.) Plaintiff’s counsel responded to Select Staffing’s counsel objecting to both of the foregoing clauses. (Agadzhanyan Decl. ¶ 5.)

          On September 11, 2023, Select Staffing’s counsel sent Plaintiff’s counsel a revised agreement, this time only seeking a dismissal with prejudice of all known claims and a covenant not to sue over any events or conduct that were the subject of this action. (Agadzhanyan Decl. ¶ 6.)

          On September 12, 2023, Plaintiff’s counsel emailed Select Staffing’s counsel, saying that he had just learned of new information and the dismissal would be without prejudice. (Agadzhanyan Decl. ¶ 7.) Later that day, Plaintiff’s counsel emailed Select Staffing’s counsel again, stating that the offer of dismissal was only for the causes of action alleged, and that Plaintiff was willing to stipulate to a dismissal with prejudice for the alleged causes of action only. (Agadzhanyan Decl. ¶ 7.) Defendant did not accept this offer. (Agadzhanyan Decl. ¶ 8.)

          On September 15, 2023, Select Staffing served Plaintiff with a new notice of deposition for October 18, 2023. (Runge Decl. ¶ 20.) Select Staffing also sent Plaintiff’s counsel a letter requesting reimbursement for the $1,915.00 that was incurred as a result of cancelling the September 6, 2023 deposition. (Runge Decl. ¶ 20, Exh. S.)

On September 15, 2023, Select Staffing’s counsel sent Plaintiff’s counsel an email requesting that Plaintiff seek leave to amend her complaint regarding the purported new information. (Runge Decl. ¶ 21.) Plaintiff did not amend her complaint. (Runge Decl. ¶ 21.)

          Select Staffing filed this motion on October 20, 2023. Plaintiff filed an opposition and Select Staffing filed a reply.

Legal Standard

Code of Civil Procedure section 128.5, subd. (a) authorizes the Court to sanction a party or the party’s attorney for “[1] actions or tactics, [2] made in bad faith, [3] that are [a] frivolous or [b] solely intended to cause unnecessary delay.” (Ibid.)

“‘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. The mere filing of a complaint without service thereof on an opposing party does not constitute ‘actions or tactics’ for purposes of this section.” (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).) Intention to harass or cause unnecessary delay is measured by a subjective standard. (Wallis v. PHL Associates, Inc. (2008) 168 Cal.App.4th 882, 893.)

The award of sanctions for a frivolous action under Code of Civil Procedure section 128.5 is within the sound discretion of the trial court. (Bach v. McNelis (1989) 207 Cal.App.3d 852, 878.)

Discussion

Select Staffing argues that Plaintiff improperly reneged on the proposed agreement to dismiss the action with prejudice as to Select Staffing, forcing Select Staffing to incur deposition cancellation fees in cancelling the deposition and attorney’s fees in bringing this motion. (Motion at p. 9:5-7.)

As a general matter, sanctions do not appear to be warranted because, at most, this appears to be a case where the parties believed they had a settlement of the case but differences arose when they attempted to draft the agreement.  This is unfortunate, but it is not grounds for sanctions.

Analyzing the legal and factual issues briefed by the parties in more depth, the Court concludes as follows.

First, it appears that Plaintiff’s characterization of Select Staffing’s September 7, 2023 draft settlement as a counteroffer is correct.

“[A] dismissal with prejudice is the equivalent of a final judgment on the merits, barring the entire cause of action” under the doctrine of res judicata. (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 793.) “To determine whether two proceedings involve identical causes of action for purposes of claim preclusion, California courts have consistently applied the ‘primary rights' theory.” (Id. at p. 797 [internal quotations and citation omitted].) “Under this theory, a cause of action arises out of an antecedent primary right and corresponding duty and the delict or breach of such primary right and duty by the person on whom the duty rests.” (Id. at pp. 797-798 [internal quotations and citation omitted] [cleaned up].) “[U]nder the primary rights theory, the determinative factor is the harm suffered. When two actions involving the same parties seek compensation for the same harm, they generally involve the same primary right.” (Id. at p. 798.)

Plaintiff’s settlement offer was dismissal of this action, with prejudice. Under the primary rights doctrine, that offer extended to any causes of action arising out of the same harms alleged here – i.e., gender based harassment (under multiple theories); sexual harassment (under multiple theories); discrimination (under multiple theories); failure to prevent and correct the foregoing; wrongful termination; intentional and negligent infliction of emotional distress; whistleblowers’ rights, and failure to permit inspection of personnel and payroll records.

Select Staffing contends that “any claims that Plaintiff may raise against Select Staffing in a subsequent lawsuit would presumably arise from their employment relationship” and that any new lawsuit would therefore be barred by the primary right doctrine. However, the Court sees no basis to assume that Select Staffing’s first assumption – that any further claims raised by Plaintiff would necessarily arise out of Plaintiff’s employment relationship with Select Staffing – is correct. There are a plethora of other types of claims that exist. The inclusion of “unknown” causes of action in Select Staffing’s draft agreement further supports this concern. Furthermore, even if any other claims Plaintiff could have against Select Staffing would categorically arise out of the parties’ employment relationship, that does not mean that they arise out of the same primary right. For example, if Select Staffing failed to provide meal and rest breaks or pay overtime wages, those causes of action would potentially arise out of a separate right from the ones here, which generally involve gender-based discrimination and harassment. Thus, Select Staffing’s draft agreement was a counteroffer, and Plaintiff behaved reasonably in negotiating against it.

Furthermore, even if Select Staffing’s draft agreement were consistent with Plaintiff’s offer, Select Staffing’s cancellation of the deposition was still its own decision. Select Staffing cancelled the deposition on its own initiative. Plaintiff did not request that Select Staffing cancel the deposition, nor did Select Staffing’s counsel communicate to Plaintiff’s counsel that he would cancel the deposition if Plaintiff confirmed her offer to dismiss Select Staffing from the case. Although Select Staffing’s counsel may have subjectively believed that Select Staffing’s role in the case had reached its end, the fact is that the parties had not, in fact, finalized the settlement. Select Staffing’s counsel knew this because he told Plaintiff’s counsel shortly before cancelling the deposition that he would draft the settlement agreement and, furthermore, did not send Plaintiff the draft agreement until September 7, 2023, two days after the settlement discussions and one day after the deposition would have occurred.

For these reasons, the Court does not find that sanctions are warranted.