Case Number: GC050609    Hearing Date: July 18, 2014    Dept: NCB

18. GC050609
JEAN LAURICELLA, M.D. v LAURICELLA REALTY CORPORATION
Amended Motion for Order of Sanctions under CCP§128.7

The Plaintiff commenced this action to quiet title in her home. A Court trial occurred on May 19, 2014. The Court took the matter under submission on May 21, 2014.

This hearing concerns the Plaintiff’s motion for monetary sanctions under CCP section 128.7. The Plaintiff argues that the Defendants’ answer contains factual allegations that are not warranted by the evidence and that its affirmative defenses are not warranted by existing law or any good faith argument for an amendment of the law.

CCP section 128.7 provides that the Court may impose monetary 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.

Under CCP section 128.7 there are basically three types of submitted papers that warrant sanctions:

1) factually frivolous (not well grounded in fact);
2) legally frivolous (not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law); and
3) papers interposed for an improper purpose.
Guillemin v. Stein (2002) 104 Cal. App. 4th 156, 167.

In order to impose sanctions, the Court must find that the conduct is “objectively unreasonable”. Id.

The Plaintiff seeks to quiet title under the alternative theories of adverse possession and gift. The Plaintiff claimed in paragraphs 13 to 17 that she has resided in the residence since 1978 and never asked for or received permission to live in the house from the Defendants..
The Defendants denied these paragraphs in their verified answer. The Plaintiff argues that this denial violates CCP section 128.7.
The Court disagrees. Regardless of the outcome of the case, Defendant reasonably asserted the defense to adverse possession based on the recorded title in Defendant’s name being caused by Plaintiff herself thereby arguing that possession was not adverse or hostile to defendants.
Under California law, the requirement of “hostility” in an adverse possession claim does not require that the parties have a dispute as to the title during the period of possession; instead, the claimant’s possession must be adverse to the record owner, “unaccompanied by any recognition, express or inferrable from the circumstances of the right in the latter.” Sorensen v. Costa (1948) 32 Cal. 2d 453, 459. The Court finds that it was not “objectively unreasonable” for the Defendants to deny the Plaintiff’s allegations that her possession had been “hostile” to the Defendants when she had acquiesced to her father’s request that she place title in the name of the Defendant, Lauricella Realty Corp. Defendants’ denials were not factually frivolous.
Accordingly, there are no grounds to find that the Defendants’ denials in its answer violate CCP section 128.7.

Further, the Defendants asserted in their fourth affirmative defense that the Plaintiff had permission to reside in the house. The Plaintiff argues that this affirmative defense violates CCP section 128.7.
There is evidence in the record that no one director, officer or authorized representative of Lauricella Realty gave Plaintiff permission to reside in the house. However, the Plaintiff pleaded in paragraphs 10 to 12 of her Verified First Amended Complaint that her father purchased the property, told her that the property was hers, but told her to place title in the name of the Defendant, Lauricella Realty Corp. Since title was held by the Defendant, Lauricella Realty Corp., it was not objectively unreasonable for Defendants to assert that the Plaintiff resided on the property with “permission” It was not “objectively unreasonable” for the Defendants to assert a defense that the Plaintiff had permission to reside in the property because her father had established the circumstances of her residence on property owned by the Defendant, Lauricella Realty Corp. This indicates that the Defendants’ affirmative defense was not factually frivolous.
Accordingly, there are no grounds to find that the Defendants’ affirmative defense that the Plaintiff had permission to reside on the property violates CCP section 128.7.

Finally, the Defendants asserted in their first affirmative defense that the Plaintiff had failed to state any claims in her Complaint. The Plaintiff argues that this affirmative defense violates CCP section 128.7.
However, as discussed above, the Plaintiff’s pleadings included allegations from which it was not unreasonable nor frivolous to claim that her possession of the property was not hostile and that she had permission to reside on the property. Accordingly, there are no grounds to find that the Defendants’ affirmative defense that the Plaintiff had failed to state sufficient facts in her pleadings violates CCP section 128.7.

Therefore, the Court denies the Plaintiff’s motion for sanctions under CCP section 128.7.

On page 12, at lines 7 to 8, the Defendants seeks an award of in monetary sanctions under CCP § 128.7(c)(1). However, CCP section 128.7(c)(1) is not authority to seek monetary sanctions in opposition papers. Instead, section 128.7(c)(1) expressly states that a motion for sanctions under CCP section 128.7 shall be made separately from other motions and that notice of the motion must be served but not filed with the Court unless, within 21 days after service of the motion, the challenged paper is not withdrawn.
This 21-day time period is known as a “safe harbor” period and its purpose is to permit an offending party to avoid sanctions by withdrawing the improper pleading during the safe harbor period. Li v. Majestic Industry Hills LLC (2009) 177 Cal. App. 4th 585, 591. This permits a party to withdraw a questionable pleading without penalty, thus saving the court and the parties time and money litigating the pleading as well as the sanctions request. Id. Section 128.7 is designed to be remedial, not punitive. Id. The safe harbor period is mandatory and the full time period must be provided absent a Court order shortening that time if sanctions are to be awarded. Id. at 595.
This required the Defendants to serve a separate, noticed motion for sanctions under CCP section 128.7 and then wait 21 days before filing the motion with the Court so that the Plaintiff had the opportunity to withdraw her motion. The Defendants did not follow these procedures.
Accordingly, the Court denies the Defendants’ request for sanctions under CCP section 128.7(c)(1) because the Defendants did not comply with its mandatory procedures.