Case Number: GC045358 Hearing Date: April 18, 2014 Dept: A

Shantre Investments v Thompson

MOTION FOR ATTORNEY’S FEES
MOTION FOR SANCTIONS

Calendar: 20
Case No: GC045358
Date: 4/18/14

RELIEF REQUESTED:
1. Motion of Cross-Defendant, Jeff Thompson
Order awarding attorney’s fees of $388,059.71 for prevailing on the unlawful detainer complaint.

2. Motion of Cross-Complainant, Hsing Liang Sidney Lin
Order imposing monetary sanctions on Jeff Thompson and his attorney, Nick Alden, for presenting a frivolous motion for attorney’s fees

3. Motion of Nancy Wang and Dylan Cheng
Order imposing monetary sanctions on Jeff Thompson and his attorney, Nick Alden, for presenting a frivolous motion for attorney’s fees

DISCUSSION:
This case arises from the claim of the Plaintiff, Shantre Investments, Inc., that its property was improperly sold in a foreclosure sale. The Plaintiff was formed for the purpose of holding the property for Scott Dority and Georgeanne Dority.
In addition, Jeff Thompson, Fang Chu, and Hsing Liang Sidney Lin, have filed Cross-Complainants regarding the property at issue.
Further, Hsing Liang Sidney Lin filed an unlawful detainer complaint in 13P00076. This unlawful detainer case was consolidated with this proceeding.
The Court granted a request to bifurcate the unlawful detainer claim and the trial on the unlawful detainer claims was held. The jury rendered a verdict in favor of the Defendant on December 31, 2013. The Court granted a motion for a new trial on the unlawful detainer claim on February 7, 2014. (This portion is on appeal.)
Trial of remaining claims is set for August 18, 2014.

This hearing concerns the following motions:

1) the motion of Cross-Defendant, Jeff Thompson, for an order awarding him attorney’s fees of $388,059.71 because he is the prevailing party on the unlawful detainer complaint; and
2) the motion of Cross-Complainant, Hsing Liang Sidney Lin, for an order imposing monetary sanctions under CCP section 128.7 on Jeff Thompson and his counsel, Nick Alden, for bringing the frivolous motion for attorney’s fees.

1. Jeff Thompson’s Motion for Attorney’s Fees
Jeff Thompson seeks an award of $388,059.71 in attorney’s fees on the ground that he prevailed on the unlawful detainer complaint when he obtained a verdict in his favor. The moving papers acknowledge that the Court granted a new trial on the unlawful detainer complaint on page 5, lines 4 to 5. The moving papers offer no legal authority holding that after a new trial is granted, a party may claim to be a prevailing party on the former judgment.
The Court granted a new trial on the unlawful detainer complaint on February 7, 2014. The right to possession has not been resolved (as it are on appeal) and Jeff Thompson has not achieved any goal in the litigation. There is no judgment on which the Court could enter the award of attorney’s fees. Since a new trial was granted and the case is still pending, Jeff Thompson is not a prevailing party and has no right to obtain an award of attorney’s fees.
Jeff Thompson argues that his appeal indicates the judgment in his favor remains valid. Case law holds that when the Court issues a new trial order, the judgment is vacated. Beavers v. Allstate Ins. Co. (1990) 225 Cal. App. 3d 310, 330. When a party files an appeal from a new trial order, then the entire judgment is subject to appellate review at that time. Id. The appeal suspends the vacating effect of the order granting the new trial, and the judgment remains effective for the purpose of an appeal from the judgment (italics added for emphasis). Id.
This authority indicates that the judgment does not remain valid or exist for any purpose other than the appeal. The order vacating the judgment is suspended and the judgment remains solely to provide a basis for the appeal. It does not offer any ground to find that Jeff Thompson is a prevailing party who may recover attorney’s fees.
In addition, Jeff Thompson sought an award of attorney’s fees against Nancy Wang and Dylan Cheng, who were not parties to the unlawful detainer claim. Jeff Thompson offers no legal authority holding that he can be a prevailing party against parties who not named in the unlawful detainer complaint.
Therefore, the Court will deny the motion for attorney’s fees.

2. Motions for Sanctions under CCP section 128.7
There are two motions for sanctions. Hsing Liang Sidney Lin seeks an order imposing $1,197.50 in monetary sanctions on Jeff Thompson and his attorney, Nick Alden, under CCP section 128.7 because the motion for attorney’s fees is frivolous. Nancy Wang and Dylan Cheng seek an order imposing $2,881.50 in monetary sanctions on Jeff Thompson and his attorney, Nick Alden, under CCP section 128.7 because the motion for attorney’s fees is frivolous.

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.

Accordingly, under 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.

Jeff Thompson and his attorney, Nick Alden, presented a motion for attorney’s fees on the ground that Jeff Thompson is the prevailing party on a judgment, even after the Court granted a new trial. Jeff Thompson offered no legal authority holding that a party may claim attorney’s fees as the prevailing party on judgment after the Court orders a new trial.
Jeff Thompson’s motion for attorney’s fees is a legally frivolous motion that is not warranted by existing law. There is no good faith argument for extending, modifying, or reversing existing law. Further, the conduct of Nick Alden in drafting and presenting the motion is “objectively unreasonable” because no reasonable attorney would draft and file such a motion under the circumstances.
Further, Jeff Thompson and his attorney, Nick Alden, refused to withdraw the motion for attorney’s fees after Hsing Liang Sidney Lin, Nancy Wang, and Dylan Cheng served them with the motions for sanctions under CCP section 128.7 and presented grounds that the motion for attorney’s fees was not supported by any legal authority.

The opposition papers of Jeff Thompson and his attorney, Nick Alden, fail to offer any grounds to find that the motion for attorney’s fees was warranted by existing law. Instead, they repeat the findings in the verdict, argue that they may recover attorney’s fees on the contract, and claim to be the prevailing party on the judgment. A reasonable attorney who did a cursory review of legal authority would immediately realize that it is legally frivolous to file a motion for attorney’s fees after the Court has granted a motion for new trial.

The opposition papers claim that the moving parties did not comply with the safe harbor provision. Under CCP section 128.7(c), the moving parties were required to serve the motion at least 21 days before they filed the motion to provide Jeff Thompson and his attorney, Nick Alden, with the opportunity to withdraw the motion.
A review of the moving papers reveals that they complied with this requirement. Kenny Tan, the attorney for Hsing Liang Sidney Lin, states that the motion was served on February 28, 2014 with a letter to convince the Defendant to withdraw his motion for attorney’s fees. Karen Rudolph, a paralegal for Carlson Law Group, which is the attorney for Nancy Wang and Dylan Cheng, states in a declaration accompanying the reply that the motion for sanctions under CCP section 128.7 was served on March 3, 2014. These facts indicate that the moving parties complied with the safe harbor requirement.

Therefore, the Court will grant both motions for sanctions under CCP section 128.7 and impose monetary sanctions on Jeff Thompson and Nick Alden.

Hsing Liang Sidney Lin seeks an order imposing $1,197.50 in monetary sanctions on Jeff Thompson and his attorney, Nick Alden. His attorney, Kenny Tan, provides facts in his declaration to demonstrate that 6.5 hours at $175 per hour were billed and that the filing fee was $60. Accordingly, the Court will impose $1,197.50 in monetary sanctions on Jeff Thompson and his attorney, Nick Alden, under CCP section 128.7.

Nancy Wang and Dylan Cheng seek an order imposing $2,881.50 in monetary sanctions on Jeff Thompson and his attorney, Nick Alden. Their attorney, Brandon Brousseau, provides facts in his declaration to demonstrate that he billed 17.1 hours at $165 per hour on the motion and that the filing fee was $60. Accordingly, the Court will impose $2,881.50 in monetary sanctions on Jeff Thompson and his attorney, Nick Alden, under CCP section 128.7.

RULING:
1. Motion of Cross-Defendant, Jeff Thompson
DENY motion.

2. Motion of Cross-Complainant, Hsing Liang Sidney Lin
GRANT motion and impose monetary sanctions of $1,197.50 on Jeff Thompson and his attorney, Nick Alden, under CCP section 128.7 for presenting the motion for attorney’s fees

3. Motion of Nancy Wang and Dylan Cheng
GRANT motion and impose monetary sanctions of $2,881.50 on Jeff Thompson and his attorney, Nick Alden, under CCP section 128.7 for presenting the motion for attorney’s fees