Judge: Mel Red Recana, Case: 23STCV15717, Date: 2024-02-27 Tentative Ruling
Case Number: 23STCV15717 Hearing Date: February 27, 2024 Dept: 45
Hearing
date: February 27, 2024
Moving
Party: Defendant Eligio Villalvazo
Responding
Party: None.
Motion
for Sanctions
The Court
considered the moving papers.
The
motion is DENIED.
Background
On
July 6, 2023, Plaintiff Royalty Enterprise Construction (“Plaintiff”) filed a
Complaint against Defendants Eligio Villalvazo; John Christian Enterprise LLC
(“Defendants”); and DOES 1 to 100, inclusive, alleging a sole cause of action
for Intention Interference with Economic Relationship.
On
December 6, 2023, Defendant Eligio Villalvazo (“Defendant Villalvazo”) filed
this instant Motion for Sanctions. No opposition has been filed.
Legal
Standard
Code of Civil
Procedure Section 128.7, subdivision (b), states in pertinent part, “[b]y
presenting to the court, whether by signing, filing, submitting, or later
advocating, a pleading, petition, written notice of motion, or other similar
paper, an attorney or unrepresented party 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) It 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)
The 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) The
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) The
denials of factual contentions are warranted on the evidence or, if
specifically so identified, are reasonably based on a lack of information or
belief.” (Code Civ. Proc., § 128.7, subd. (b).)
“If, after
notice and a reasonable opportunity to respond, the court determines that
subdivision (b) has been violated, the court may, subject to the conditions
stated below, impose an appropriate sanction upon the attorneys, law firms, or
parties that have violated subdivision (b) or are responsible for the
violation. In determining what sanctions, if any, should be ordered, the court
shall consider whether a party seeking sanctions has exercised due diligence.”
(Code Civ. Proc., § 128.7, subd. (c).)
In Peake v.
Underwood (2014) 227 Cal.App.4th 428, 448, the court held, “Code of Civil
Procedure section 128.7 sanctions should be “made with restraint and are not
mandatory even if a claim is frivolous.” (Peake v. Underwood (2014) 227
Cal.App.4th 428, 448 (Peake).) “[W]hen determining whether sanctions
should be imposed, the issue is not merely whether the party would prevail on
the underlying factual or legal argument. Instead, courts should apply an
objective test of reasonableness, including whether ‘any reasonable attorney
would agree that [the claim] is totally and completely without merit.’” (Id.)
“[T]he fact that a plaintiff fails to provide a sufficient showing to overcome
a demurrer or to survive summary judgment is not, in itself, enough to warrant
the imposition of sanctions.” (Id.) However, “the fact that a party does
not actually believe in the merits of his or her claim is relevant to the issue
whether sanctions are warranted in the particular case.” (Peake, supra,
227 Cal.App.4th at p. 449.)
Discussion
Defendant
Eligio Villalvazo (“Defendant Villalvazo”) moves this Court to impose monetary
sanctions of $5,000.00 and non-monetary sanctions, including striking the
complaint and dismissing the action on the merits and with prejudice against
Plaintiff Royalty Enterprise Construction (“Plaintiff”) and his attorneys
Behrouz Shafie & Associates and Behrouz Shafie, in the amount of $4,081.43.
Defendant
Villalvazo argues Attorney Shafie and Plaintiff simply made up facts and are
pursuing the claim for the primary purpose of harassing Villalvazo and to
prevent him from employment in his field of expertise. Specifically, Defendant
Villalvazo contends the Complaint appears to list every client that Plaintiff
has or knows and seeks to stop Defendant Villalvazo from working for anyone who
may need concrete work. Defendant Villalvazo further contends he is an expert
in his field and sought out by many who need concrete work. As such, Defendant
Villalvazo argues the broad request to enjoin him from working for any customer
that has any relationship with Plaintiff, without allegations or proof that
Defendant Villalvazo has interfered with such relationship, is harassment and
against the law and public policy. Moreover, Defendant Villalvazo asserts there
are no trade secrets to protect and no evidence of any wrongdoing by him. Defendant Villalvazo also asserts the only
specific allegations against him have been rebutted by the declarations
submitted to Attorney Shafie and in this motion. (Stern Decl., ¶, Exs. 1-2.)
Additionally,
Defendant Villalvazo argues Plaintiff’s claim is objectively unreasonable.
Defendant Villalvazo contends an objective view of the facts known to attorney
Shafie reveals that there is and was insufficient factual or legal grounds to
bring this action or continuing to advocate the claims in this action against
Defendant Villalvazo. Lastly, Defendant Villalvazo argues the fact that
Attorney Shafie has not responded to his counsel’s letter or defended
Plaintiff’s claims is further evidence of a bad faith action.
In
Golden Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19
Cal.App.5th 399, 430, the court held “[t]o allege the tort of intentional
interference with prospective economic advantage, the plaintiff must plead and prove:
(1) an economic relationship between plaintiff and some third party, with
probability of future economic benefit to plaintiff; (2) defendant's knowledge
of the relationship; (3) intentional acts on part of defendant designed to
disrupt the relationship; (4) actual disruption of the relationship; and (5)
economic harm to plaintiff proximately caused by acts of defendant.” (Golden
Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19 Cal.App.5th
399, 430.)
The
Complaint alleges Plaintiff has an existing economic relationship with the
Arzuman Brothers and Retem Ari. (Compl., ¶ 14.) The Complaint further alleges
Defendant Villalvazo knew of the existence of these economic relationships
because he was formerly and currently employed by Plaintiff from 2015 to
present. (Id. at ¶ 15.) The Complaint further alleges Defendant
Villalvazo had worked for Plaintiff on jobs for the Arzuman Brothers and Retem
Ari. (Id.) The Complaint also alleges Defendant Villalvazo committed
intentional acts designed to disrupt these relationship by falsely representing
to the Arzuman Brothers and Retem Ari that Plaintiff was insolvent, does not
pay his employees, unreliable, and no longer capable of providing quality
concrete and foundation contacting services. (Id. at ¶¶ 16-17.) The
Complaint also alleges that as a result of Defendant Villalvazo’s conduct the
Arzuman Brothers and Retem Ari broke off contract negotiations with Plaintiff
causing Plaintiff to suffer damages in the amount of $1,397,000.00. (Id.
at ¶¶ 19-20.)
Here,
the facts as alleged in the Complaint do not appear objectively unreasonable
such that any reasonable attorney would agree that the claim is without merit. Plaintiff
alleges facts about existing relationships with customers for concrete and
foundation services. Plaintiff alleges that with at least two of these clients
Defendant Villalvazo interfered with the economic relationship resulting in
monetary damages suffered by Plaintiff. Although Plaintiff does not oppose this
motion, there is no other indication from the court record to suggest that
Plaintiff does not believe its claim has any merit.
Therefore,
the motion for sanctions is DENIED.
It
is so ordered.
Dated: February 27, 2024
_______________________
ROLF M. TREU
Assigned Judge of
the Superior Court