Judge Katherine Chilton, Case 20STLC07430 2023-04-03 Tentative Ruling

Judge: Katherine Chilton, Case: 20STLC07430, Date: 2023-04-03 Tentative Ruling

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Case Number: 20STLC07430 Hearing Date: April 3, 2023 Dept: 25

PROCEEDINGS: MOTION ON REMAND FOR DETERMINATION THAT DEFENDANTS’ PRIOR SERVICE OF THEIR SECTION 128.7 MOTION WAS PROPER

DEFENDANT: Defendant ALO, LLC

PLAINTIFF: Plaintiff Brian Whitaker

MOTION ON REMAND FOR DETERMINATION THAT DEFENDANTS’ PRIOR SERVICE OF THEIR SECTION 128.7 MOTION WAS PROPER

(CCP § 128.7)

TENTATIVE RULING:

The Court finds that Defendants did not properly serve Plaintiff with their CCP Section 128.7 motion on November 2, 2020. Because Plaintiff dismissed the action within 21 days after Defendants properly served the pre-filing notice on April 22, 2021, Defendants are not entitled to attorney’s fees.

DEFENDANTS’ BRIEF: Filed on March 17, 2023

PLAINTIFF’S BRIEF: Filed on March 17, 2023

ANALYSIS:

I. Background

On August 31, 2020, Plaintiff Brian Whitaker (“Plaintiff”) filed a verified Complaint seeking damages for violations of the Unruh Civil Rights Act against Defendants 370 North Canon Drive, LP (“370 North Canon”), Tashman Management, LLC (“Tashman”), and ALO, LLP (“ALO”) (collectively, “Defendants”). Defendant ALO filed an Answer on October 14, 2020, Defendant Tashman filed an Answer on October 20, 2020, and Defendant 370 North Canon filed its Answer on November 16, 2020.

On December 3, 2020, Defendants filed a motion for sanctions pursuant to Code of Civil Procedure section 128.7 which was set for hearing for April 21, 2021. On April 20, Plaintiff filed a response to that motion, stating he had not been properly served with the motion for sanctions and had only recently discovered it. (4/20/21 Response.)

At the April 21 hearing, the Court did not adopt its tentative ruling and continued the hearing to June 7. (4/21/21 Minute Order.) The Court ordered Defendants to serve and electronically file their motion at least 20 days before the next scheduled hearing. (Id.) While on the record, the parties also agreed to accept electronic service. (Id.)

On April 22, 2021, Defendants re-served the pre-filing notice on Plaintiff. On April 28, Plaintiff requested that the entire action be dismissed with prejudice. (4/28/21 Request for Dismissal.) Dismissal was entered as requested on May 5. (Id.)

On June 7, 2021, Defendants filed a Motion for Attorney’s Fees and Entrance of Judgment. Plaintiff filed an opposition on August 16. Defendants filed a reply brief on August 19.

On August 26, 2021, the Court denied Defendants’ Motion for Attorneys’ Fees on the basis that the second pre-filing notice restarted the 21-day safe harbor period and Plaintiff dismissed within that 21-day period. Defendants filed an appeal on November 8, 2021.

On February 16, 2023, the Appellate Division of the Superior Court of California, County of Los Angeles, reversed the Court’s decision, finding that the Court had not determined whether Defendants’ November 2, 2020 prefiling notice was properly served. “Without such determination, no conclusions can be drawn as to whether defendants’ originally intended safe harbor period was successfully begun and thereafter expired and thus whether their original motion was pending at the time plaintiff elected to dismiss his case.” (Appellate Op. at pp. 9-10). The Appellate Division remanded the case for a determination of whether Defendants’ November 2, 2020 service was proper and, if appropriate, consideration of the merits of Defendants’ sanctions motion.

Plaintiff Whitaker and Defendant ALO submitted briefs on this issue.

II. Legal Standard

As previously discussed, 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 section 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.4^th 967, 976.)

“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.)

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.)

“If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney's fees incurred in presenting or opposing the motion. Absent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees.” (Code Civ. Proc., § 128.7, subd. (c)(1).)

III. Discussion

Defendants sought attorney’s fees as sanctions under CCP Section 128.7 due to Plaintiff’s failure to dismiss its action within the 21-day safe harbor period. Defendants argued that, on November 2, 2020, their attorney properly served Plaintiff’s attorney with a notice of the sanctions motion via email. Because Plaintiff did not dismiss the action within the safe harbor period, Defendants filed the 128.7 sanctions motion on December 3. As discussed above, the sanctions motion came up for hearing on April 21. (4/21/21 Minute Order.) The Court posted a tentative ruling on April 20 finding the Complaint frivolous, but continuing the hearing due to Defendants’ counsel’s failure to submit any evidence discussing the attorney’s fees incurred and sought. After hearing oral argument from both parties, however, the Court decided not to adopt its tentative ruling as the final order of the Court and instead continued the hearing to June 7 for de novo consideration. (4/21/21 Minute Order.)

Defendants explain that, as a result of the Court resetting the hearing for de novo consideration on April 22, 2021, Defendants’ counsel again served Plaintiff’s counsel a letter providing pre-filing notice of the sanctions motion and advising of the June 7 continued sanctions hearing via email and FedEx. Six days later, on April 28, Plaintiff filed a request for dismissal of the entire action with prejudice, which was entered on May 5.

Accordingly, at issue here is whether Defendants’ November 2, 2020 safe harbor pre-filing notice was properly served on Plaintiff. If it was, then Plaintiff did not dismiss within the 21-day safe harbor period and Defendants’ motion for sanctions should be considered. If it was not, then the 21-day safe harbor period was not triggered until the proper service of the pre-filing notice on April 22, 2021 and Plaintiff dismissed his complaint within that safe harbor period.

Defendants state that they served the November 2, 2020 pre-filing motion and cover letter on several attorneys at Plaintiff’s counsel’s firm. (Wainscoat Decl. ¶ 2, Exh. A [Ortiz Decl., Exh. A]). They had previously corresponded with some of those same attorneys on this matter and other matters so they knew the email addresses were valid. (Id. at Exh. A [Ortiz Decl. ¶ 4].) Defendants contend that one of Defendant’s counsel had a conversation with one of Plaintiff’s counsel’s about the motion so it is clear that Plaintiff’s counsel was aware of the motion. (Id., [Ortiz Decl. ¶ 6]). Defendants argue that Plaintiff never contended that it did not receive notice and a copy of the papers on or about November 2, 2020, just that Plaintiff was not served at Plaintiff’s counsel “preferred email distribution list.” (Def. Mot. at p. 5).

Plaintiff, on the other hand, contends that the safe harbor copy of the motion for sanctions was not properly served. Plaintiff states that the operative rule regarding such service on November 2, 2020 was one adopted by the Judicial Council and effective on April 17, 2020 which was still effective as of November 2, 2020. (Pl. Brief at p. 2). The operative rule, “Emergency Rules Related to Covid-19” Rule 12(b)(1) permits electronic service but states: “Before first serving a represented party electronically, the serving party must confirm by telephone or email the appropriate electronic service address for counsel being served.” (Id.; emphasis added). As Plaintiff notes, the question is whether defense counsel confirmed by phone or email the appropriate electronic address. Defense counsel did not. (Id. at pp. 2-3).

Defense counsel served Plaintiff via email at a variety of email addresses for different attorneys at Plaintiff’s counsel’s firm. But there is no evidence that Defense counsel confirmed which email address was the appropriate one for electronic service. As Plaintiff notes, because their attorneys come and go, they have set up a service address which is staffed by employees who monitor and disseminate pleadings and documents to the appropriate persons. (Potter Decl. ¶ 4-5); Wainscoat Decl., Exh. A [Ortiz Decl., Exh. B, page 6]). Defense counsel did not use this address.

Defendants complain that they did not have this address until much later, but that is solely because Defendants did not confirm by phone or by email what the appropriate electronic service address was.

When Defendants subsequently served their prefiling motion, on or about April 22, 2021, Plaintiff dismissed the lawsuit on April 28, 2021, within the 21-day safe harbor period. Accordingly, Defendants are not entitled to attorney’s fees.

Having found that Defendants did not properly serve Plaintiff with the safe-harbor pre-filing motion on November 2, 2020, Plaintiff did not have a 21-day safe harbor period during which it could dismiss its case. When Defendants properly served Plaintiff with the safe-harbor pre-filing motion on April 22, 2021, Plaintiff dismissed the case within the 21-day safe harbor period. Accordingly, Defendants are not entitled to attorney’s fees under CCP 128.7.

IV. Conclusion & Order

For the foregoing reasons, the Court finds that Defendants ALO, LLC, 370 North Canon Drive, LP, and Tashman Management, LLP’s did not properly serve Plaintiff with their November 2, 2020 pre-filing motion. Because Plaintiff dismissed the action within 21 days after Defendants properly served the pre-filing notice on April 22, 2021, Defendants are not entitled to attorney’s fees.

The Court will give notice to all parties.