Judge: Robert S. Draper, Case: 21STCV35370, Date: 2022-08-04 Tentative Ruling

Case Number: 21STCV35370    Hearing Date: August 4, 2022    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Plaintiff Bow Tie Realty & Investment, Inc.’s Motion for Sanctions is GRANTED in the amount of $10,935.00.

FACTUAL BACKGROUND 

This is an action for declaratory relief and fraudulent transfer. The Complaint alleges as follows.

On September 16, 2019, Plaintiff Bow Tie Realty & Investment, Inc. (“Plaintiff”) was awarded judgment against Defendant Caroline S. Lee (“Lee”) in the amount of $672,892.19 in Caroline S. Lee v. Jong Han Lee, et al., Case No. BC697147 (“First Lawsuit”). That judgment included an award based on a claim of fraud arising out of Lee’s fraudulent inducement to enter a contract. (Complaint ¶ 7.)

A second lawsuit between the parties also resulted in a judgment in favor of Plaintiff on June 21, 2021, in the amount of $46,903.69. That judgment was rendered in Bow Tie Realty & Investment v. Caroline Lee, et al., Case No. 20STCV14403 (“Second Lawsuit”). Plaintiff alleges that this Second Lawsuit was filed based on claimed fraudulent transfers by Caroline S. Lee. (Complaint ¶ 8.)

A supersedeas bond was posted by the Defendant Lee in the First Lawsuit. (Complaint ¶ 8.) This resulted in the Second Lawsuit becoming moot, and therefore Plaintiff dismissed that suit, without prejudice, although it has a money judgment from the Second Lawsuit which remains. (Complaint ¶ 8.)

In attempting to enforce the Second Judgment (for $46,903.69) Plaintiff learned that Caroline S. Lee has engaged in other fraudulent transfers. One such transfer is a July 9, 2020 transfer to Defendant Chung Soonkyo, LLC, a limited liability company that Lee owns. (Complaint ¶ 9.)

PROCEDURAL HISTORY 

On September 27, 2021, Plaintiff filed the Complaint.

On October 6, 2021, Plaintiff filed three Notices of Lis Pendens.

On November 4, 2021, Defendants filed a Motion to Expunge Lis Pendens.

On February 2, 2022, the Court denied Defendants’ Motion to Expunge Lis Pendens and granted Plaintiff’s Request for Monetary Sanctions against Plaintiff. In so ruling, the Court found that Plaintiff “met its burden of establishing the probable validity of its real property claims by a preponderance of the evidence.”

On February 9, 2022, Plaintiff filed the Notice of Ruling.

On February 23, 2022, Defendants filed a Motion for Reconsideration.

On May 24, 2022, Plaintiff filed an Opposition and a Request for Sanctions against Defendants.

On June 15, 2022, this Court denied Defendants’ Motion for Reconsideration.

On June 16, 2022, the Court heard Plaintiff’s Request for Sanctions. The Court continued the hearing and allowed defense counsel to file a Supplemental Opposition.

On July 25, 2022, Defendants filed a Supplemental Opposition.

On July 29, 2022, Plaintiff filed a Supplemental Reply.

DISCUSSION 

I.                MOTION FOR SANCTIONS

Plaintiff moves the Court for sanctions against Jack Karpeles, counsel for Defendants, pursuant to Code of Civil Procedure section 128.7.

CCP section 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.” (Code Civ. Proc., § 128.7(b).) CCP section 128.7 authorizes the court to impose appropriate sanctions upon attorneys or parties that have violated subsection (b). (Id., § 128.7(c).) 

A claim can be factually frivolous or legally frivolous. (See Peake v. Underwood (2014) 227 Cal.App.4th 428, 440.) “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.) “In either case, to obtain sanctions, the moving party must show the party’s conduct in asserting the claim was objectively unreasonable.” (Id.) “A claim is objectively unreasonable if ‘any reasonable attorney would agree that [it] is totally and completely without merit.’” (Id.) 

Here, Plaintiff argues that Defendants’ Motion for Reconsideration was both factually and legally frivolous.

Plaintiff notes that the Motion for Reconsideration was based on the contention that Plaintiff’s Attorney made misrepresentations to the Court. (Motion at p. 1.) Plaintiff argues that this was not only untrue, but completely irrelevant to reconsideration of Defendants’ Motion to Expunge Lis Pendens.

Indeed, the entirety of Defendants’ Motion for Reconsideration was based on Plaintiff’s Counsel’s statements in separate cases, without any indication of why they were relevant to the Motion at hand. As this Court noted in its ruling, “Defendants do not provide any context [to the evidence presented], do not explain how it is relevant to the current discussion, and make no argument for why it represents new evidence sufficient to grant their Motion for Reconsideration.”

Additionally, the Court notes that, though the Court granted Defendants leave to file supplemental evidence supporting their opposition to sanctions, the evidence that Defendants submitted merely doubles down on the irrelevant and context less arguments that Defendants made in their Motion for Reconsideration. Again, the Court is left wondering how any of this is relevant to the Motion for Reconsideration, and again is not provided any explanation for the relevance.

Accordingly, the Court finds that Defendants’ filling of the Motion for Reconsideration was both legally and factually frivolous, and GRANTS Plaintiff’s Motion for Sanctions in the amount of $10,935.00.

DATED: August 4, 2022 

________________________________ 

Hon. Robert S. Draper 

Judge of the Superior Court