Judge Salvatore Sirna, Case Number: 21PSCV00589, Date: 2023-10-31 Tentative Ruling

Judge: Salvatore Sirna, Case: 21PSCV00589, Date: 2023-10-31 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 21PSCV00589 Hearing Date: October 31, 2023 Dept: G

Defendant Xiaoshu Zhang’s Motion for Sanctions against Plaintiff

Respondent: Plaintiff Lingxi Teng

TENTATIVE RULING

Defendant Xiaoshu Zhang’s Motion for Sanctions against Plaintiff is DENIED without prejudice.

BACKGROUND

This is a breach of contract action arising from a loan agreement. On February 22, 2021, Plaintiff Lingxi Teng allegedly entered into a written loan agreement with Defendants Weijin Hu, Xiaoshu Zhang, and Lion Tools LLC (Lion Tools) in which Teng agreed to loan $50,000 to Defendants in exchange for repayment by April 10. Subsequently, Teng alleges Defendants breached the agreement by failing to repay the loan.

On July 20, 2021, Teng filed a complaint against Defendants and Does 1-10, alleging (1) breach of contract, (2) common counts, and (3) negligence.

On October 9, 2023, Zhang filed the present motion. A hearing on the motion is set for October 31 with a mandatory settlement conference on November 2 and a trial setting conference on November 13.

ANALYSIS

Zhang moves for monetary and terminating sanctions against Teng pursuant to Code of Civil Procedure section 128.7. For the following reasons, the court DENIES Zhang’s motion.

Legal Standard

Pursuant to Code of Civil Procedure section 128.7, “a court may impose sanctions if it concludes a pleading was filed for an improper purpose or was indisputably without merit, either legally or factually.” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 189.) “A claim is factually frivolous if it is ‘not well grounded in fact’ and 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.’” (Ibid, quoting Guillemin v. Stein (2002) 104 Cal.App.4th 156, 167.) The moving party bears the burden of showing the “the party’s conduct in asserting the claim was objectively unreasonable.” (Ibid.) “A claim is objectively unreasonable if ‘any reasonable attorney would agree that [it] is totally and completely without merit.’” (Ibid, quoting In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) But this section “should be utilized only in ‘the rare and exceptional case where the action is clearly frivolous, legally unreasonable or without legal foundation, or brought for an improper purpose.’” (Kumar v. Ramsey (2021) 71 Cal.App.5th 1110, 1121 (Kumar), quoting Operating Engineers Pension Trust v. A-C Co. (9th Cir. 1988) 859 F.2d 1336, 1344.)

Code of Civil Procedure section 128.7 also includes a safe harbor provision that states a “[n]otice of motion shall be served as provided in Section 1010, but shall not be filed with or presented to the court unless, within 21 days after service of the motion, or any other period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.” (Code Civ. Proc., § 128.7, subd. (c)(1); Li v. Majestic Industry Hills, LLC (2009) 177 Cal.App.4th 585, 590-591.) This safe harbor requirement is strictly enforced, and substantial compliance is not sufficient. (See Cromwell v. Cummings (1998) 65 Cal.App.4th Supp.10, 15.)

“If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney’s fees incurred in presenting or opposing the motion.” (Code Civ. Proc., § 128.7, subd. (c)(1).) An award of fees is not warranted unless the motion was “frivolous, unfounded, filed for an improper purpose, or otherwise unreasonable.” (Musaelian v. Adams (2011) 197 Cal.App.4th 1251, 1258.)

Discussion

As an initial matter, Zhang argues the court should decline to consider Teng’s opposition on the grounds that it was untimely filed and improperly served. But when a party files an opposition or reply that addresses the merits, that party waives the right to challenge the notice of the respective moving papers or opposition. (See Carlton v. Quint (2000) 77 Cal.App.4th 844, 697-698.) Because Zhang has filed a reply to Teng’s opposition that addresses the merits of Zhang’s motion, the court will not disregard Teng’s opposition.

Prior to the filing of this motion on October 9, 2023, Zhang’s counsel served a copy of the motion on Teng via overnight mail on September 11. (Iazzetta Suppl. Decl., ¶ 5.) Because Zhang’s original service of this motion was twenty-eight days before it was filed, the court finds Zhang has complied with the safe harbor provisions of Code of Civil Procedure section 128.7.

Here, the court finds Zhang’s motion premature. Zhang argues sanctions are warranted because Teng’s Complaint lacks any evidentiary support as it fails to establish how Zhang was a party to the alleged loan agreement. Zhang also argues Teng failed to respond to Zhang’s demand for a bill of particulars and that Teng’s action was brought for an improper purpose. Because the issues raised here are more appropriately raised in a motion for summary judgment or adjudication, the court exercises its discretion and declines to find Teng’s Complaint is without merit.

Accordingly, the court DENIES Zhang’s motion.

CONCLUSION

Based on the foregoing, Zhang’s motion for sanctions is DENIED without prejudice.