Judge: Maurice A. Leiter, Case: 22STCV06085, Date: 2022-08-24 Tentative Ruling

Case Number: 22STCV06085    Hearing Date: August 24, 2022    Dept: 54

Hearing Date: August 24, 2022

Department 54, Judge Maurice Leiter

Motion for Sanctions

Moving Party: Defendant Nisan Tepper, individually and as successor trustee of the Tepper Family Revocable Trust dated April 18, 2006

Responding Party: Plaintiff Cartwright Termite & Pest Control, Inc.

T/R:     DEFENDANT’S MOTION FOR SANCTIONS IS DENIED.

DEFENDANT TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

CCP § 128.7(b) provides that by signing and filing a pleading, an attorney “is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met: (1) [i]t is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation[;] (2) [t]he claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law[;] (3) [t]he allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery[;] (4) [t]he denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.” CCP § 128.7 authorizes the court to impose appropriate sanctions upon attorneys or parties that have violated subsection (b). (CCP § 128.7(c).) 

Defendant Nisan Tepper moves for sanctions against Plaintiff on the ground that the action is barred by a settlement agreement between the parties. In previous litigation, third party Overland, “along with each of its subsidiary, parent and affiliated companies” agreed to release all claims, whether known or unknown, that arose prior to the execution of the settlement agreement. Defendant asserts that Plaintiff Cartwright and Overland are affiliates because Michael Robert Cartwright is a majority shareholder and officer for both companies.

In opposition, Plaintiff argues that common shareholders and officers do not make companies affiliated as a matter of law. Plaintiff also contends that Defendant is a necessary party because he is named in the chain of title of real property instruments that Plaintiff seeks to cancel in this lawsuit.

Defendant ultimately may be able to establish that the settlement bars this lawsuit, but the issue is not so clear. The Court cannot conclude based on the materials before it that this action is frivolous and in bad faith. Bad faith sanctions are a very extreme remedy, only to be employed in extreme circumstances. Disagreement over a contract term is not such a circumstance.

Defendant’s motion is DENIED.