Judge: Michael E. Whitaker, Case: 23SMCV04868, Date: 2023-12-12 Tentative Ruling

Case Number: 23SMCV04868    Hearing Date: March 27, 2024    Dept: 207

TENTATIVE RULING

MOTION

This case arises from a dispute between former business partners.  Plaintiffs Stephen R. Hofer; Stephen R. Hofer Law Corporation d/b/a Aerlex Law Group; Aerlex Tax Services, LLC; and Aerlex Tax Services, LLP (“Plaintiffs”) brought suit against Defendants Vicky Boladian and Boladian Aviation Law Group, APC (“Defendants”) alleging thirteen causes of action: (1) breach of contract – settlement agreement; (2) breach of contract – operating agreement and buy-sell agreement; (3) breach of implied covenant of good faith and fair dealing; (4) breach of fiduciary duty; (5) intentional misrepresentation; (6) fraud in the inducement; (7) wrongful dissociation; (8) conversion; (9) intentional interference with contractual relations; (10) computer data access and fraud act; (11) receiving stolen property; (12) unlawful business practices; and (13) declaratory relief.

Defendants demur to the first, second, fifth, sixth, seventh, eighth, ninth, tenth, and eleventh causes of action on the grounds that they fail to state facts sufficient to constitute a cause of action, pursuant to Code of Civil Procedure section 430.10, subdivision (e).

Plaintiffs oppose the demurrer and Defendants reply.

MEET AND CONFER REQUIREMENT

            Code of Civil Procedure section 430.41, subdivision (a) requires that “Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” 

The statute further requires “As part of the meet and confer process, the demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies.”  (Code Civ. Proc., § 430.41, subd. (a)(1).)  “The party who filed the complaint, cross-complaint, or answer shall provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency.”  (Ibid.)

“The parties shall meet and confer at least five days before the date the responsive pleading is due.  (Code Civ. Proc. § 430.41, subd. (a)(2).)  “The demurring party shall file and serve with the demurrer a declaration stating either” the means by which the parties met and conferred, or that the party who filed the pleading subject to demurrer failed to respond to the meet and confer request.  (Id., subd. (a)(3).) 

“If the parties are not able to meet and confer at least 5 days before the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.”  (Id., subd. (a)(2).)

On December 7, 2023, Defendants’ counsel filed a Declaration of Demurring or Moving Party in Support of Automatic Extension, explaining that counsel was unable to meet and confer due to having to address Plaintiffs’ voluminous motion for preliminary injunction and due to trial preparation in another case.

In support of the demurrer, counsel filed another declaration indicating, “On January 2, 2024, I sent an email to Plaintiffs’ attorney, Amy L. Nashon, with a detailed outline for the arguments that I planned to raise in the demurrer.  Ms. Nashon responded by informing me that Plaintiffs would oppose the demurrer and that they were not going to file an amended complaint.  (Sohal Dec. ¶ 2.)

In opposition, Plaintiffs contend that, contrary to the declaration in support of automatic extension, which indicates, “I made a good faith attempt to meet and confer with the party who filed the pleading at least five days before the date the responsive pleading was due[,]” Defendants’ counsel did not actually attempt to meet and confer until January 2.  Plaintiffs also seek sanctions under Code of Civil Procedure section 128.5 in the amount of $8,449, counsel’s fees to prepare the opposition.

The Court agrees that Defendants do not meet the criteria for an automatic extension, which is granted only if the parties made a good faith attempt to meet and confer.  By contrast, counsel’s declaration explains, “Due to my unusually busy schedule in the month of November, and Plaintiffs' rushed filing of a preliminary injunction motion, I was unable to complete my analysis of Plaintiffs' Complaint and meet and confer with Plaintiffs' counsel regarding Defendants' demurrer. I plan on completing the meet and confer within a week or so of the date of this declaration.”  Thus, counsel’s declaration makes clear that counsel could not have made a good faith attempt to meet and confer because counsel did not have time to properly review the complaint. 

Because Defendants do not meet the criteria for an automatic extension, and Defendants did not otherwise obtain an extension, either from Plaintiffs or from the Court, Defendants’ demurrer is untimely, and therefore procedurally improper. 

SANCTIONS

            “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.”  (Code Civ. Proc., § 128.5, subd. (a).) 

            “If the alleged action or tactic is the making or opposing of a written motion or the filing and service of […] other responsive pleading that can be withdrawn or appropriately corrected, a notice of motion shall be served as provided in Section 1010, but shall not be filed with or presented to the court, unless 21 days after service of the motion or any other period as the court may prescribe, the challenged action or tactic is not withdrawn or appropriately corrected.”  (Id., subd. (f)(1)(B).) 

            Plaintiffs request sanctions for counsel’s “false misrepresentations under oath representing that a good faith attempt to meet and confer had been made where none actually occurred.”  (Opp. at p. 2.)  Defendants oppose, arguing that there is no false misrepresentation and that Plaintiffs failed to comply with the mandatory 21-day safe harbor requirements of

Section 128.5.    

“[T]he law requires strict compliance with the safe harbor provisions.  Failure to comply with the safe harbor provisions precludes an award of sanctions.”  (Transcon Financial, Inc. v. Reid & Hellyer, APC (2022) 81 Cal.App.5th 547, 551 [cleaned up].)

Here, Plaintiff has not demonstrated compliance with the 21-day safe harbor provision.  Therefore, the Court cannot award Plaintiff’s requested sanctions.

CONCLUSION AND ORDER

Because Defendants do not satisfy the criteria for an automatic 30-day extension, and did not otherwise obtain an extension, either from Plaintiffs or the Court, the Court overrules the demurrer in its entirety as untimely.  Because the Court overrules the demurrer on procedural grounds, and does not reach the merits, the Court similarly denies Defendants’ Request for Judicial Noice as moot. 

The Court also denies Plaintiff’s request for sanctions, as procedurally improper.

Further, the Court orders Defendants to file an Answer to the Complaint on or before April 16, 2024.

Defendants shall provide notice of the Court’s ruling and file a proof of service regarding the same. 

DATED:  March 27, 2024                                                      ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court