Judge Theresa M. Traber, Case 22STCV13547 2022-10-13 Tentative Ruling

Judge: Theresa M. Traber, Case: 22STCV13547, Date: 2022-10-13 Tentative Ruling

Case Number: 22STCV13547 Hearing Date: October 13, 2022 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: October 13, 2022 TRIAL DATE: NOT SET

CASE: 17^th Street Complex, LLC et al. v. Ohio Security Insurance Company, et al.

CASE NO.: 22STCV13547

MOTION FOR SANCTIONS UNDER CODE OF CIVIL PROCEDURE SECTION 128.7

MOVING PARTY: Defendant Nahai Insurance Services, Inc.

RESPONDING PARTY(S): Plaintiffs 17th Street Complex, LLC; 17th Street, LLC

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for breach of contract filed on April 25, 2022. Plaintiffs allege that Defendant Ohio Security Insurance Company has failed to pay all insurance owed on a claim pursuant to an insurance policy.

Defendant Nahai Insurance Services Inc. moves for sanctions under Code of Civil Procedure section 128.7.

TENTATIVE RULING:

Defendant’s Motion for Sanctions is DENIED.

DISCUSSION:

Defendant Nahai Insurance Services Inc. moves for sanctions under Code of Civil Procedure section 128.7.

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

Plaintiffs 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other period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.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).)

Defendant Nahai complied with these provisions by serving Plaintiffs with the motion on August 22, 2022. (Declaration of John Antoni ISO MOT Exh. E.) Plaintiffs therefore had until September 14, 2022 (21 days + 2 days for service by email) to withdraw or amend the Complaint. Plaintiffs did not do so, and Defendant filed this motion on September 14, 2022. Thus, Plaintiffs met the requirements of both safe-harbor provisions.

Analysis

Defendant Nahai Insurance Services Inc. moves for sanctions under Code of Civil Procedure section 128.7 on the grounds that the Third Cause of Action for Negligence is not warranted by existing law and presented for an improper purpose.

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 a pleading “primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation,” or presenting claims that are not “warranted by existing law” (Code Civ. Proc. § 128.7(b)(1)-2.) 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.)

Defendant has not shown that the pleading is presented for an improper purpose or is not warranted by existing law. 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.)

Defendant bases this motion, in its entirety, on the Third Cause of Action in the Complaint, which states that it incorporates all of the preceding allegations in the Complaint and then adds: “The aforesaid insurance policy, with the erroneous name of ownership, was obtained by Nahai who purchased the policy under the erroneous name of the owner.” (Complaint ¶¶ 22-23.) Although Defendant argues, correctly, that Plaintiffs have alleged neither causation nor damages in connection with this cause of action, Defendant has not produced any evidence that this cause of action was asserted to harass Defendant, nor has Defendant cited any statute or precedent showing that such a cause of action is subject to sanctions under section 128.7 as a matter of law. Defendant has therefore not demonstrated that it is entitled to the extreme measure of sanctions under section 128.7

CONCLUSION:

Accordingly, Defendant’s Motion for Sanctions is DENIED.

Moving Party to give notice.

IT IS SO ORDERED.

Dated: October 13, 2022 ___________________________________

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.