Judge Theresa M. Traber, Case 20STCV03704 2023-04-28 Tentative Ruling

Judge: Theresa M. Traber, Case: 20STCV03704, Date: 2023-04-28 Tentative Ruling

Case Number: 20STCV03704 Hearing Date: April 28, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: April 28, 2023 TRIAL DATE: August 29, 2023

CASE: Ryan Suavet, et al. v. DRNK Coffee + Tea Franchising, LLC

CASE NO.: 20STCV03704

MOTION FOR SANCTIONS PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 128.7

MOVING PARTY: Defendants 110 Sunshine Smoothies, Inc.; Golam Hossein Atighehchi; and Fariba Atighehechi

RESPONDING PARTY(S): Plaintiff Laetitia Suavet Vinciguerra

CASE HISTORY:

· 01/29/20: Complaint filed

· 12/10/20: First Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for breach of contract that was commenced on January 19, 2020. In their First Amended Complaint, filed on December 10, 2020, Plaintiffs allege that Defendants breached a franchise agreement with Plaintiffs to open a coffee shop.

Defendants move for monetary and terminating sanctions as to Plaintiff Laetitia Vinciguerra and her counsel pursuant to Code of Civil Procedure section 128.7.

TENTATIVE RULING:

Defendants’ Motion for Sanctions pursuant to Code of Civil Procedure section 128.7 is DENIED.

DISCUSSION:

Defendants move for monetary and terminating sanctions as to Plaintiff Laetitia Vinciguerra and her counsel pursuant to Code of Civil Procedure section 128.7.

Defendants’ Evidentiary Objections

Defendants raise evidentiary objections to the Declarations of R. Michael Ghilezan and Plaintiff Ryan Suavet. Defendants cite no authority requiring the Court to rule on evidentiary objections in the context of a Motion for Sanctions, as opposed to a motion for summary judgment or summary adjudication. (Code Civ. Proc. § 437c(q).) That said, the Court overrules the objections and considers them only as relevant to the weight of the evidence. A few specific rulings are in order, however. The statements of Ryan and Laetitia made to Mr. Ghilezan are admissible for a non-hearsay purpose, that is, the lawyer’s state of mind in advancing these claims. His state of mind is plainly material since Defendants seek sanctions against him for prosecuting the claims they attack in their motion. The Court also rejects Defendants’ many objections that Ryan Suavet’s sworn statements in support of Plaintiffs’ allegations are irrelevant to the viability of Laetitia’s claims. As explained below, there is no reason why Laetitia cannot advance her claims by offering evidence from Ryan and other witnesses. The fact that she cannot offer testimony based on personal knowledge to support each element of her claim does not render them without factual support.

Compliance with the Safe Harbor Provisions of Code of Civil Procedure § 128.7(c)(1)

Defendants seek sanctions under Code of Civil Procedure section 128.7. The safe-harbor provision of section 128.7 provides, in relevant part:

A motion for sanctions under this section shall be made separately from other motions or requests and shall describe the specific conduct alleged to violate subdivision (b). Notice 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(c)(1).)

Defendants complied with this provision by serving Plaintiff Vinciguerra with the motion on March 2, 2023. (Declaration of Brent Kramer ISO Mot. ¶ 2.) Plaintiff therefore had until March 27, 2023 (21 days + 2 days for service by email) to withdraw or amend the operative complaint as to Plaintiff Vinciguerra. Plaintiff did not do so, and Defendants filed this motion on April 4, 2023. Thus, Defendants met the requirements of the safe-harbor provision.

Analysis

Defendants seek sanctions against Plaintiff Vinciguerra and her counsel on the grounds that she had no factual basis for the claims she asserted against Defendants.

Under Code of Civil Procedure section 128.7, if the Court determines that subsection (b) has been violated, it may “impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.” (Code Civ. Proc. § 128.7(c).) Violations of subsection (b) include presenting allegations which do not “have evidentiary support” or are not “likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.” (Code Civ. Proc. § 128.7(b)(3).) Sanctions under this section “shall be limited to what is sufficient to deter repetition of this conduct or comparable conduct by others similarly situated.” (Code Civ. Proc. § 128.7(d).) The sanction may include, “if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of some or all of the reasonable attorney’s fees and other expenses incurred as a direct result of the violation.” (Id.)

To obtain sanctions on this ground, the moving party must show the “party’s conduct in asserting the claim was objectively unreasonable,” meaning that “any reasonable attorney would agree that [it] is totally and completely without merit.” (Bucar v. Ahmad (2016) 244 Cal.App.4th 175, 189.) Indeed, even “the 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.” (Peake v. Underwood (2014) 227 Cal.App.4th 428, 448.)

Here, Plaintiff Vinciguerra is a party to four causes of action against Defendants: the sixth cause of action for promissory estoppel, the seventh cause of action for money had and received, the eighth cause of action for unjust enrichment, and the tenth cause of action for negligence. (See First Amended Complaint.) As pled, these causes of action allege that the wrongful acts with which Defendants are charged were done to both Plaintiff Suavet and Plaintiff Vinciguerra (who are husband and wife). (Id.) The only allegation in the First Amended Complaint pertaining solely to Plaintiff Vinciguerra is that she was allegedly charged $62,525.95 on her credit card. (FAC ¶ 24.) When called upon to testify as to her knowledge of these allegations in a noticed deposition, Plaintiff Vinciguerra was only able to testify as to the credit card allegation. (Declaration of Luke Manzo ISO Mot. Exh. 1 p.200:7-8, 13-15.) Further, when questioned about the identity of many of the named parties in this action, Plaintiff had no personal knowledge whatsoever. (Id. pp. 28-42.)

Defendants contend that Plaintiff’s complete lack of knowledge of these basic facts shows that she had no factual basis for her participation in this action, and that continuing to press her claims is objectively unreasonable. Unfortunately for Defendants, virtually all of the deposition testimony on which they rely was subject to objections by Plaintiff’s counsel, and the merit of those objections has not yet been adjudicated. (Id.) The Court therefore cannot consider this evidence, as its admissibility has not been established, and the determination of its admissibility is outside the scope of this motion. (Code Civ. Proc. § 128.7(c)(1).) As this is the only evidence on which Defendants rely to support their motion, Defendants have failed to demonstrate that sanctions under section 128.7 are warranted.

What is more, as Plaintiff have shown, Defendants have framed their motion for sanctions by ignoring the relevant testimony and documents on which Plaintiff relies to support her claims. (See, e.g., Ghilezan Decl., ¶¶ 24-25; Manzo Decl., Exh. 1 [Plaintiff’s deposition testimony about improper credit card charges she seeks to recover from Defendants]; Ghilezan Decl., ¶ 23 and Exh. 6 [Plaintiff’s production of credit card statements showing the improper charges].) Defendants have not explained why Plaintiff’s limited knowledge of some aspects of her claims would preclude her from supporting her causes of action by relying on evidence other than her personal testimony. Nor is there any reasonable basis for Defendants to assert that Plaintiff should have personal knowledge of the claims not grounded on the credit card charges she was induced to make, because those are causes of action she is not prosecuting in this case. As Plaintiff clarifies, she does not assert or join the First through Fifth or the Ninth through Eleventh Causes of Action, but only the Sixth through Eighth Causes of Action, which include allegations of payments made using Plaintiff’s credit card. Further, in opposition to the sanctions motion, Plaintiffs have offered additional affirmative evidence in support of their claims, thus severely undermining the contention that they are frivolous or lacking in evidentiary support. (See Declarations of Michael Ghilezan, Laetitia Suavet, and Ryan Suavet.) Finally, even if they had poked holes in Plaintiffs’ factual showing, Defendants have offered no evidence to establish the necessary element that Plaintiff acted with an improper motive in asserting her claims in this case.

For all these reasons, Defendants’ motion for sanctions must be and is denied.

CONCLUSION:

Accordingly, Defendants’ Motion for Sanctions pursuant to Code of Civil Procedure section 128.7 is DENIED.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: April 28, 2023 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.