Judge: Kevin C. Brazile, Case: 24STCV07533, Date: 2025-01-31 Tentative Ruling

Hearing Date: January 31, 2025

Case Name: Llanos v. Sedgwick Formally York Risk, et al.

Case No.: 21STCV30098

Matter: Motions for Sanctions (2x)

Moving Party: Plaintiff Jonathan Alvarez Llanos

Responding Party: Defendant Steadfast Insurance Company

Notice: OK

Ruling: The Motions are denied.

Moving party to give notice.

The Court encourages all parties to appear remotely via LA CourtConnect.  If submitting on the Court's tentative ruling, please follow the instructions provided above.

This is an action in which Plaintiff Jonathan Alvarez Llanos alleges, among other things, that his insurer acted in bad faith while distributing funds related to his underinsured motorist claim.  The thrust of the Complaint seems to be that, contrary to its agreement, Defendant Steadfast Insurance Company failed to evaluate Plaintiff’s request for arbitration or an interpleader action for $700,000 in policy benefits as to which there was an apportionment dispute among the claimants.

The Complaint asserts causes of action for (1) breach of contract, (2) tortious breach of implied covenant of good faith and fair dealing, (3) violation of the UCL, (4) unjust enrichment, (5) injunctive relief, and (6) declaratory relief.

On January 24, 2025, the Court denied Defendant Steadfast Insurance Company’s motion for summary judgment/adjudication (“MSJ”).

Plaintiff now seeks sanctions under CCP §§ 128.5, 128.7 because Defendant’s MSJ was frivolous given Schwartz v. State Farm Fire & Cas. Co. (2001) 88 Cal.App.4th 1329.

Code Civ. Proc. § 128.5(a) provides in relevant part, “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. ”   A determination of frivolousness requires a finding that the tactics at issue were “totally and completely without merit” (Code Civ. Proc. § 128.5(b)(2)), that is, “any reasonably attorney would agree such a motion is totally devoid of merit.”  (Karwasky v. Zachay (1983) 146 Cal.App.3d 679, 681.)  “There must also be a showing of an improper purpose, i.e., subjective bad faith on the part of the attorney or party to be sanctioned.”  (In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 135.)

Under Code Civ. Proc. § 128.7, a court may impose sanctions for filing a pleading if the court concludes the pleading was filed for an improper purpose or was indisputably without factual or legal merit.  (Guillemin v. Stein (2002) 104 Cal.App.4th 156, 168.)  A claim is factually frivolous if it is “not well grounded in fact” and it 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. at p. 167.)  In either case, to obtain sanctions, the moving party must show the party's conduct in asserting the claim was objectively unreasonable.  (Ibid.)  A claim is objectively unreasonable if “any reasonable attorney would agree that [it] is totally and completely without merit.” (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650; Guillemin, supra, at p. 168.)

While the MSJ lacked merit, the Court finds that Defendant’s arguments were not frivolous. 

The Motions for Sanctions are, therefore, denied.

Moving party to give notice.