Judge: Monica Bachner, Case: 22STCV23415, Date: 2023-02-24 Tentative Ruling

Case Number: 22STCV23415    Hearing Date: February 24, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendant Geico General Insurance Company’s Motion for Sanctions is granted.  Plaintiffs Complaint is dismissed, with prejudice.  In addition, the Court orders Plaintiffs and Plaintiffs’ counsel of record, Steven Tamer of TamerLawCorp., jointly and severally, to pay monetary sanctions in the amount of $3,850 to Defendant, by and through counsel for Defendant, within 30 days of notice of the Court’s orders.

          Defendant Geico General Insurance Company (“Defendant”) moves the Court for terminating sanctions and monetary sanctions against Plaintiffs Ryan Thomas Cleary and Lora Peterson (collectively “Plaintiffs”) pursuant to Code of Civil procedure section 128.7 because Plaintiffs presented a frivolous claim without any legal or evidentiary support.  There is no opposition to the Motion.

Code of Civil Procedure section 128.7 states that the Court may impose sanctions on a party or attorney that presents a pleading, petition, motion, or other similar papers in the following circumstances:¿ 

1) the document is 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 not 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 no evidentiary support;¿ 

4) the denials of factual contentions are not warranted on the evidence.¿ 

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Code of Civil Procedure¿section 128.7(c)(1) provides that a motion for sanctions under this section shall be made separately from other motions or requests and describe the conduct alleged to violate the statute.¿ A motion shall not be filed or presented to the Court unless within 21 days after service of the motion the challenged papers are not withdrawn or appropriately corrected.¿ (Code Civ. Proc., § 128.7(c)(1).)¿ Under Code of Civil Procedure section 128.7(c) the court may impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for such violation.¿¿¿ 

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Code of Civil Procedure section § 128.7(d) provides the sanction imposed is limited to what is sufficient to deter¿repetition¿of this conduct or comparable conduct by others similarly situated.¿ Monetary sanctions may not be awarded against a represented party for a violation of § 128.7(b)(2).¿ (Code Civ. Proc. § 128.7(d)(1).)¿¿The¿sanction may consist of or include¿directives of a non-monetary nature, an order to pay a penalty into court, or, if imposed on motion and warranted for effective deterrence, an order directing payment to the¿moving party¿of some or¿all of the reasonable¿attorney’s fees and other expenses incurred as a direct result of the violation.¿¿(Id.; See also¿Goodstone¿v. Southwest Airlines Co.¿(1998) 63 Cal.App.4^th¿406, 419 – 420 [If warranted, the¿court may¿further¿award to the party prevailing on the motion the reasonable expenses and attorneys’¿fees incurred in presenting or opposing the motion.].)¿ In determining what sanctions, if any, should be ordered, the court must also consider whether the party seeking sanctions has exercised due diligence.¿ (CCP §128.7(c);¿¿see¿also¿generally¿Weil & Brown, Civ. Pro.¿Before Trial (The Rutter Group 2008) ¶¶9:1187 – 9:1189.)

As a preliminary matter, the Court notes that Defendant complied with the 21-day safe harbor requirement.  (See Bennet Decl., ¶ 8.)

Defendant contends that Plaintiffs filed a frivolous lawsuit because the allegations in Plaintiffs’ Complaint that their car was stolen, and that Defendant failed to pay Plaintiffs for the stolen car, are not true.

Plaintiffs’ Complaint alleges in relevant part that their car, which was insured by Defendant, was stolen.  (Compl., ¶¶ 6-7.)  Plaintiffs filed a claim with Defendant, which Defendant accepted.  (Id. at ¶ 7.)  Defendant issued a check to Plaintiffs for $35,115.28 for the claim.  (Id. at ¶ 9.)  Defendant put a stop payment on the check, and refused to pay Plaintiffs on their claim for the stolen car.  (Id. at ¶¶ 10-12.)

          Defendant present evidence that Plaintiffs’ car was not stolen, but, was in fact, repossessed by Mechanics Bank Auto Finance (“MBAF”) because Plaintiffs failed to make timely payments on the loan.  (Guevarra Decl., ¶¶ 3-4.)  After the car was repossessed, MBAF sold the car at auction.  (Id., ¶ 4, Exh. 1.)  When Defendant contacted MBAF to confirm the amount of the outstanding lien, so Defendant could pay the same, MBAF informed Defendant that the car had not been stolen.  (Youmog Decl., ¶¶ 10, 12, Exhs. 6, 8; Guevarra Decl., ¶ 4, Exh. 1.)  MBAF also informed Defendant that the car had been repossessed and auctioned off.  (Id.)  While repossession was not covered under Plaintiffs’ insurance policy, and despite Plaintiffs’ misrepresentations, Defendant decided to honor Plaintiffs’ claim as a customer service gesture.  (Youmog Decl., ¶ 11, Exh. 7.)  On April 16, 2021, Defendant paid Plaintiffs $28,616, which represented the actual cash value of the car, minus $6,500 for the salvage value (since MBAF had sold the car).  (Id.)  Defendant also paid Plaintiffs the full $1,500 rental reimbursement limit.  (Id.)
 

          From the outset of this action, Defendant attempted to meet and confer with Plaintiffs’ attorney to resolve this issue, by explaining that the vehicle was not stolen, and was actually repossessed, but Plaintiffs’ attorney never responded.  (Bennet Decl., ¶¶ 3-7, Exh. 9.)

          Here, Defendant presented evidence that the allegations in the Complaint have no evidentiary support, and that the allegations made therein are not warranted by the existing law.  Plaintiffs assert causes of action for (1) breach of contract, (2) breach of covenant of good faith and fair dealing, and (3) bad faith insurance.  However, as set forth above, and contrary to the allegations in the Complaint, Defendant has not breached the contract, as it paid Plaintiffs for the car, even though it was not covered under the insurance policy.  In addition, there is no evidence that Defendant has acted in bad faith.

          Plaintiffs failed to file any opposition and offer any evidence to show that their claims are not frivolous, or that the claims have evidentiary support, or show that sanctions are not warranted.  Plaintiffs’ attorney also failed to file any explanation as to his failure to advise Plaintiffs to dismiss this action despite Defendant pointing out the patent issues with this lawsuit.

          Defendant asks the Court that Plaintiffs and their attorney of record, Steven Tamer of TamerLawCorp., be sanctioned in the amount of $3,850 (which represents 14 hours of work at a rate of $275/hour).  (Bennett Decl., ¶ 9.).  The time includes Defendant’s attorney’s attempt to meet and confer with Plaintiffs’ attorney, reviewing thousands of pages of documents, researching relevant legal authority, and drafting the Motion and supporting papers.  (Id.). The Court finds that the fees sought by Defendant are reasonable, as Plaintiffs filed the instant lawsuit despite there being no evidentiary support for the allegations in the Complaint.  In addition, Defendant attempted to meet and confer to have this matter dismissed prior to the filing of this Motion, but Plaintiffs’ attorney failed to respond to Defendant’s meet and confer efforts, and Defendant was forced to file the instant Motion. 

          Thus, the Court GRANTS Defendant’s Motion for Sanctions.  Plaintiffs Complaint is dismissed, with prejudice.  In addition, the Court orders Plaintiffs and Plaintiffs’ counsel of record, Steven Tamer of TamerLawCorp., jointly and severally, to pay monetary sanctions in the amount of $3,850 to Defendant, by and through counsel for Defendant, within 30 days of notice of the Court’s orders.

Dated:  February 24, 2023

Hon. Monica Bachner

Judge of the Superior Court