Opinion
A131076
11-09-2011
EDITH MAZZAFERRI, as Trustee, etc., Plaintiff and Respondent, v. RONALD MAZZAFERRO et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(City and County of San Francisco Super. Ct. No. CGC-10-500462)
Defendants were sanctioned by the trial court for filing frivolous motions to strike under the anti-SLAPP statute, Code of Civil Procedure section 425.16. They argue that the procedural provisions of section 128.7 govern motions for such sanctions, and that both the plaintiff and trial court failed to comply with those requirements. We hold that the provisions of section 128.5, specifically incorporated in the anti-SLAPP statute, instead govern in this context. However, we agree with Defendants that the trial court failed to comply with the requirements of that statute because it failed to specify its reasons for imposing sanctions. Moreover, the trial court erred in using a summary procedure to impose further sanctions in a second order.
SLAPP refers to a strategic lawsuit against public participation. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57 & fn. 1.) All statutory references are to the Code of Civil Procedure unless otherwise indicated.
I. B ACKGROUND
As more fully explained in our opinion in related appeal No. A131261, filed concurrently herewith, Edith Mazzaferri, acting as trustee of The Fiorani Living Trust (Trust), sued appellants Robert F. Van Zandt,Paul Den Beste, Danielle Duperret, and Mazzaferri's son Ronald Mazzaferro, both in his personal capacity and in his capacity as trustee of the Trust (collectively, Defendants). The suit alleged mismanagement of the Trust's assets while Mazzaferro was serving as trustee.
Mazzaferri identified this defendant as Robert F. "Vanzandt," but we use the spelling the defendant himself uses in his appellate papers.
Mazzaferri states in her complaint that her son changed his name from Ronald Mazzaferri to Ronald Mazzaferro.
Mazzaferri also sued Stuart Bailey, Lotchk Corporation, Great Sunset Ventures, Inc., and Doe defendants, but these defendants are not involved in the instant appeal.
In October 2010, Defendants filed five separate anti-SLAPP motions, seeking dismissal of the complaint. In her opposition to Defendants' anti-SLAPP motions, Mazzaferri sought an award of attorney fees and costs pursuant to section 425.16, subdivision (c)(1) (section 425.16(c)(1)) on the ground that Defendants' motions were frivolous and brought solely for delay. Defendants opposed the request, arguing their motions were meritorious. On December 10, 2010, the court denied all five anti-SLAPP motions and found they were "frivolous and . . . solely intended to cause unnecessary delay." The court ordered Defendants jointly and severally to pay Mazzaferri's attorney fees and costs in the amount of $11,150.
Defendants subsequently filed objections to the December 2010 order on due process grounds, but did not formally request reconsideration of the sanctions order. They argued that sanctions for a frivolous anti-SLAPP motion could only be awarded pursuant to the procedures of section 128.7 and that those procedures had not been followed in this case. They also argued that the trial court failed to provide an adequate statement of reasons for the sanctions award. The trial court did not respond to these "objections."
Section 128.7 provides, in pertinent part: "(a) Every pleading, petition, written notice of motion, or other similar paper shall be signed by at least one attorney of record in the attorney's individual name, or, if the party is not represented by an attorney, shall be signed by the party. Each paper shall state the signer's address and telephone number, if any. Except when otherwise provided by law, pleadings need not be verified or accompanied by affidavit. An unsigned paper shall be stricken unless omission of the signature is corrected promptly after being called to the attention of the attorney or party. [¶] (b) By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, petition, written notice of motion, or other similar paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met: [¶] (1) It is not being 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 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 evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. [¶] (4) The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief. [¶] (c) If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation. In determining what sanctions, if any, should be ordered, the court shall consider whether a party seeking sanctions has exercised due diligence. [¶] (1) 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. 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. Absent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees."
In January 2011, Mazzaferri made an ex parte application to reduce the December 2010 sanctions award to judgment on the ground that Defendants were refusing to pay the sanctions, and also asked the court to award additional attorney fees and costs incurred in efforts to collect the sanctions. On January 7, the court issued an order "that plaintiff Edith Mazzaferri, Trustee of the Fiorani Living Trust, has a joint and several judgment against [Defendants] in the amount of $11,150" and that Mazzaferri "recover, jointly and severally, from [Defendants] costs and attorney fees in the sum of $4,150 that [Mazzaferri] has incurred in enforcing this Court's Order dated December 10, 2010." The court further ordered, "The Clerk shall issue a writ of execution on the 12/10/10 order for the payment of Attorney's fees. The clerk shall also issue an abstract of judgment."
On January 10, 2011, Defendants appealed from "the January 7, 2011 order/judgment jointly but solely awarding fees and costs to plaintiff Edith Mazzaferri." The notice of appeal was also timely as to the December 10, 2010 order that initially awarded fees and costs as sanctions, and we construe the appeal to also encompass that sanction order. (Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 18, 20-22.) Both orders were immediately appealable as orders for the payment of monetary sanctions in excess of $5,000. (§ 904.1, subd. (a)(12); Doe v. Luster (2006) 145 Cal.App.4th 139, 145-146.)
On October 21, 2011, appellant Paul Den Beste filed a "Notice that Appeal is Moot, Re: Judgment on Appeal is Void Under Title 11 U S C 362 Bankruptcy Automatic Stay" in this appeal. The filing does not constitute an application within the meaning California Rules of Court, rule 8.50, or a motion within the meaning of rule 8.54. Rather, it appears to be an improper attempt to augment Den Beste's arguments in support of his appeal in violation of California Rules of Court, rule 8.200(a)(4) and to present additional evidence in violation of rule 8.155(a). The court will take no action in response to this filing.
II. DISCUSSION
Defendants argue they were denied due process as to both the December 2010 sanctions order and the January 2011 order awarding additional sanctions. Specifically, they argue that the procedures of section 128.7 govern sanctions for filing a frivolous anti-SLAPP motion in actions initiated after 1994 and that Mazzaferri and the court failed to comply with those procedures. Even if the procedures of section 128.5 were to govern, they argue, the court erred by failing to specify the basis for the sanctions orders as required by that statute. Mazzaferri contends that the procedures specified in section 128.5 apply, and that they were followed here.
The relevant subsections of section 128.5 provide: "(a) Every trial court may order a party, the party's attorney, or both to pay any reasonable expenses, including attorney's fees, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay. This section also applies to judicial arbitration proceedings under Chapter 2.5 (commencing with Section 1141.10) of Title 3 of Part 3. [¶] (b) For purposes of this section: [¶] (1) 'Actions or tactics' include, but are not limited to, the making or opposing of motions or the filing and service of a complaint or cross-complaint only if the actions or tactics arise from a complaint filed, or a proceeding initiated, on or before December 31, 1994. The mere filing of a complaint without service thereof on an opposing party does not constitute 'actions or tactics' for purposes of this section. [¶] (2) 'Frivolous' means (A) totally and completely without merit or (B) for the sole purpose of harassing an opposing party. [¶] (c) Expenses pursuant to this section shall not be imposed except on notice contained in a party's moving or responding papers; or the court's own motion, after notice and opportunity to be heard. An order imposing expenses shall be in writing and shall recite in detail the conduct or circumstances justifying the order."
We conclude the procedures of section 128.5 apply to a sanctions proceeding under section 425.16(c)(1). We also conclude that Mazzaferri and the court failed to fully comply with those requirements. We therefore reverse and remand to the trial court for further proceedings consistent with statutory requirements. A. Section 128.5 Procedures Govern Sanctions for Frivolous Anti-SLAPP Motions
Section 425.16(c)(1) provides in relevant part: "If the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney's fees to a plaintiff prevailing on the motion, pursuant to Section 128.5." (Italics added.) Section 128.5 authorizes an award of sanctions for bad-faith actions, frivolous tactics, or tactics intended to cause unnecessary delay. (§ 128.5, subd. (a).) However, section 128.5 by its own terms applies only to actions or tactics that "arise from a complaint filed, or a proceeding initiated, on or before December 31, 1994." (§ 128.5, subd. (b)(1).) For actions or tactics arising from complaints filed or proceedings initiated after that date, section 128.7 generally governs. (§ 128.7, subds. (a)-(c), (i).) Unlike section 128.5, section 128.7 requires the party seeking sanctions to file a separate formal motion for sanctions and includes a safe harbor provision that allows the party potentially subject to sanctions to avoid the penalty by timely withdrawing the offending document. (Compare § 128.5 with § 128.7, subd. (c)(1).) Defendants argue that the anti-SLAPP statute's reference to section 128.5 must be construed as a reference to section 128.7 when anti-SLAPP sanctions are sought in post-1994 proceedings.
Our colleagues in the Fourth District Court of Appeal addressed this question and held that section 128.5 continues to apply to requests for sanctions pursuant to section 425.16(c)(1). (Decker v. U.D. Registry, Inc. (2003) 105 Cal.App.4th 1382, 1392 (Decker), superseded by statute on a different point as stated in Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1349.) Decker notes that section 425.16(c)(1) has referred to section 128.5 ever since the anti-SLAPP statute was originally enacted in 1992. (Decker, at p. 1392.) In 1992, section 128.5 was not restricted to proceedings filed or initiated on a certain date. (Stats. 1990, ch. 887, § 1, p. 3764.) The date restriction was added in 1994 by the same legislation that enacted section 128.7. (Stats. 1994, ch. 1062, §§ 1, 3, pp. 6395, 6397.) Decker holds that section 425.16(c)(1)'s continuing reference to section 128.5, while not "resuscitating" section 128.5, "means a court must use the procedures and apply the substantive standards of section 128.5 in deciding whether to award attorney fees under the anti-SLAPP statute." (Decker, at p. 1392.) Several other courts of appeal have similarly held (or assumed) that section 128.5's procedures govern sanctions proceedings under section 425.16(c)(1). (See Foundation for Taxpayer & Consumer Rights v. Garamendi (2005) 132 Cal.App.4th 1375, 1388; Moore v. Shaw (2004) 116 Cal.App.4th 182, 199 & fn. 9; Carpenter v. Jack in the Box Corp. (2007) 151 Cal.App.4th 454, 469 (Carpenter); California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032, 1038 (California Back Specialists); Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435, 450.)
In Olmstead v. Arthur J. Gallagher & Co. (2004) 32 Cal.4th 804, 817-818 (Olmstead), the Supreme Court agreed with Decker's analysis. The issue before the Court was whether section 128.5 itself authorized sanctions for conduct arising from a claim initiated after December 31, 1994. (Olmstead, at p. 807.) In answering that question in the negative, the Court distinguished situations where other statutes, such as section 425.16, authorized the award of such sanctions and incorporated the procedures of section 128.5 by reference. (Olmstead, at p. 817.) As to those situations, the Court explained that "[t]he correct response was given by the Court of Appeal in Decker . . . . As the court there noted, a cross-reference to section 128.5 in another sanction statute is not properly read 'as resuscitating section 128.5. Rather, . . . [such] reference . . . [simply] means a court must use the procedures and apply the substantive standards of section 128.5 in deciding whether to award attorney fees' under the other statute. (Decker, supra, at p. 1392, italics added.) [¶] We agree. That the Legislature has incorporated section 128.5's procedures, standards, or definitions in separate statutes which apply in particular contexts does not undermine the conclusion that section 128.5, invoked in its own right, is generally inapplicable to actions and proceedings commenced after 1994." (Olmstead, at pp. 817-818, fn. omitted.)
Olmstead puts to rest any question whether section 128.5 governs requests for sanctions for filing a frivolous anti-SLAPP motion under section 425.16(c)(1). It does. We reject Defendants' argument that section 128.7, rather than 128.5, controls. B. Failure to Specify Reasons for Sanctions Invalidates the Orders
It also appears that the Legislature has acquiesced in this interpretation. Following Decker, the Legislature amended section 425.16, subdivision (f), expressly acting to abrogate a different holding in Decker dealing with the timing of the special motion to strike. (See Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1349; Stats. 2005, ch. 535, §§ 1, 4, pp. 4120, 4123 [urgency statute eff. Oct. 5, 2005].) The Legislature did not, however, choose to amend section 425.16(c)(1). When " ' "a statute has been construed by judicial decision, and that construction is not altered by subsequent legislation, it must be presumed that the Legislature is aware of the judicial construction and approves of it." [Citations.] "There is a strong presumption that when the Legislature reenacts a statute which has been judicially construed it adopts the construction placed on the statute by the courts." ' [Citation.]" (People v. Meloney (2003) 30 Cal.4th 1145, 1161.)
Section 128.5, subdivision (c) provides in relevant part, "An order imposing expenses shall be in writing and shall recite in detail the conduct or circumstances justifying the order." In Decker, the court reversed a sanctions order that failed to comply with this requirement. (Decker, supra, 105 Cal.App.4th at p. 1392.) The court explained, "In the order awarding plaintiffs their attorney fees, the trial court stated only that [Defendant's] motions were 'frivolous.' This is insufficient. The court's written order 'should be more informative than a mere recitation of the words of the statute.' (Childs v. PaineWebber Incorporated (1994) 29 Cal.App.4th 982, 996.)" (Decker, at p. 1392, parallel citation omitted.) Several other courts have similarly held that orders merely reciting the words of the statute are insufficient under section 128.5 and reversed the orders on that ground. (See Lavine v. Hospital of the Good Samaritan (1985) 169 Cal.App.3d 1019, 1028-1030 (Lavine); Corcoran v. Arouh (1994) 24 Cal.App.4th 310, 316; Gebers v. State Farm General Ins. Co. (1995) 38 Cal.App.4th 1648, 1654, fn. 4; cf. Carpenter, supra, 151 Cal.App.4th at p. 470 [statutory requirement satisfied where "court's statement of reasons, although brief, incorporated by reference both defendants' moving papers and our previous opinion affirming the denial of the special notion to strike"]; California Back Specialists, supra, 160 Cal.App.4th at p. 1038 [sufficient statement of reasons where trial court found " 'the outcome could hardly have been clearer; defendant's position is completely incorrect' "].)
Here, the trial court's orders only recite the words of the statute. After denying each anti-SLAPP motion, the court wrote, "The court finds the special motion to strike is frivolous and is solely intended to cause unnecessary delay. Defendants, and each of them[,] are jointly and severally ordered to play [sic] plaintiff reasonable attorney fees and costs in the amount of $11,150." Similarly, the January 7, 2011 order simply awarded the additional sanctions without stating a basis for the award. The orders entered fail to comply with section 128.5.
The usual remedy for a failure to comply with the requirement for a specification of reasons is remand to the trial court to either enter a new order or vacate the award of sanctions. (Decker, supra, 105 Cal.App.4th at p. 1392; Lavine, supra, 169 Cal.App.3d at p. 1030.) In Decker, the court reversed the sanctions order without remanding for reconsideration because it concluded the record in that case did not support an award of sanctions under the frivolousness or delay standards of sections 425.16 and 128.5. (Decker, at p. 1392.) We conclude here that the record would support a sanctions order, and we therefore remand for the trial court's reconsideration. C. Summary Procedure in Imposing the January 2011 Sanctions Violates Due Process
The award of $4,150 in additional sanctions in the January 7, 2011 order must be reversed for the additional reason that the sanctions were issued without adequate notice or hearing.
"Adequate notice prior to imposition of sanctions is mandated by statute (Code Civ. Proc., § 128.5, subd. (b)) and by the due process clauses of the state and federal Constitutions. (Cal. Const., art. I, § 7; U.S. Const., 14th Amend.) Constitutional due process principles are offended by summary imposition of sanctions by a superior court. [Citation.] Adequacy of notice is not dependent upon an arbitrary number of days notice but should be determined on a case-by-case basis to satisfy basic due process requirements. [Citation.]" (Childs, supra, 29 Cal.App.4th at p. 996, italics added; see also Lavine, supra, 169 Cal.App.3d at p. 1028 [rejecting argument that § 128.5 procedure is unconstitutionally summary].)
Although Childs, supra, 29 Cal.App.4th at p. 996, cites section 128.5, subdivision (b) as authority that "[a]dequate notice prior to imposition of sanctions is mandated by statute," section 128.5, subdivision (b) does not now and did not then mention notice. (See § 128.5, subd. (b); Stats. 1990, ch. 887, § 1, p. 3764.) Before section 128.5 was amended in 1984, subdivision (b) of the statute was similar to current subdivision (c) and required notice (compare Stats. 1981, ch. 762, § 1, p. 2968 with current § 128.5(c)), but that version of subdivision (b) was not in effect when Childs, a 1994 case, was decided. Thus, it appears that the reference to section 128.5, subdivision (b) in Childs is a typographical error and the court intended to refer to subdivision (c).
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Here, the trial court granted Mazzaferri $4,150 in additional sanctions in an ex parte proceeding. Ex parte proceedings are generally disfavored and are not appropriate when a statute expressly requires notice. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2011) ¶¶ 9:345-9:346.1, 9:348, pp. 9(I)-136 to 9(I)-138 (rev. #1 2010).) Section 128.5 expressly requires notice. (§ 128.5, subd. (c).) The court should not have awarded additional sanctions without affording Defendants adequate notice and an opportunity to be heard.
III. DISPOSITION
The December 10, 2010 and the January 7, 2011 orders awarding sanctions are reversed. On remand, Mazzaferri may renew her motions for sanctions and the court may consider imposition of sanctions in a manner consistent with the views expressed in this opinion. Each side shall bear its own costs in this appeal.
Bruiniers, J.
We concur:
Simons, Acting P. J.
Needham, J.