Lynn Behrens Zimmerman vs Bill Hollings et al

Case Number

18CV01746

Case Type

Hearing Date / Time

Fri, 01/19/2024 - 10:00

Nature of Proceedings

Motion: Sanctions

Tentative Ruling

For all reasons discussed herein, the motion of defendants RGC Services, Inc., dba RE/MAX Gold Coast and Bill Holling for monetary sanctions is denied.

Background:

On April 6, 2018, plaintiff Lynn Behrens Zimmerman (plaintiff), individually and as executor of the estate of Clarke Paxton (Paxton), filed her original complaint in this action. The complaint asserts eleven causes of action: (1) violation of the Garn-St. Germain Act/RESPA; (2) breach of contract; (3) violation of FDCPA (15 U.S.C. § 1692f(6)); (4) wrongful foreclosure; (5) violation of the California Home Owners Bill of Rights; (6) violation of Civil Code section 2934a; (7) cancellation of instruments; (8) fraud; (9) violation of Unfair Competition Law; (10) fraud; and, (11) intentional infliction of emotional distress. (Note: The list of causes of action in the caption is different somewhat from the titles and order of the causes of action in the text of the complaint. The court identifies the causes of action as they are labelled in the text of the complaint.)

The complaint, which consists of 40 pages of allegations, fails to clearly identify which causes of action are brought against which defendants. (See Cal. Rules of Court, rule 2.112(4).) The first, second, tenth, and eleventh causes of action do not identify any defendants. The third through ninth causes of action state that they are asserted against all defendants.

All of the causes of action alleged in the complaint arise out of purportedly illegal servicing, collection, and removal activities, as well as a purported wrongful foreclosure and transfer by trustee’s sale of property located at 175 El Sueno Road, Santa Barbara (the Property), following the death of Paxton. (See Compl., ¶¶ 7, 9, 10, 14-20, 24, 26, 37, 45, 47-50.) Plaintiff alleges that in 2003, she and Paxton purchased the Property as joint tenants. (Complaint, ¶¶ 7, 10.) Paxton passed away on December 7, 2010. (Complaint, ¶ 12.) Plaintiff brings the present action both individually and as the executor of the Estate of Paxton. (Complaint, ¶ 2.)

There are very few allegations relating specifically to defendants RGC Services, Inc., dba RE/MAX Gold Coast (named as REMAX Gold Ventura) (Remax) and Bill Holling (Holling) (collectively, the Remax defendants), who are presently the moving parties.

The first substantive allegation involving the Remax defendants appears in the first paragraph 47 (located at pages 11 through 12 of the complaint), which states: “[a]t the request of [defendant] Wells Fargo, [plaintiff] was removed by [Hollings] an agent of [Re/Max]; owner of RCG; accompanied by two off duty sheriffs hired by him dressed to appear to be on duty. They threatened, and intimidated [plaintiff] and gave her five minutes to get her dogs, her medicine and get out. She was able to take her purse and her dogs. She found out later when she went to Santa Barbara Sheriff there was no sheriff’s order to remove her.” The following paragraph (the first paragraph 48) alleges that plaintiff was homeless for the first year after the eviction, and had to live on friends’ couches and then an apartment which she had to evacuate during a fire and mudslides. Plaintiff alleges that she lost virtually everything from the eviction and destruction of her personal things.

Initial paragraphs 50 through 53 repeat and elaborate on the allegations of paragraph 47, alleging that defendant Holling and Remax and uniformed deputies told her that her bankruptcy was meaningless. They threatened to take plaintiff’s dogs to the pound and yelled at her. Plaintiff left with the clothes on her back, her medications, her purse, and her dogs. They would not let plaintiff make a phone call, and changed the locks as she drove away. She went to the Sheriff’s Department to obtain an incident report for the officers at her door, and was told there was no incident report on file for her address, leading her to conclude that Holling hired two off-duty deputies to intimidate her. Plaintiff alleges that she spent hundreds of sleepless nights over the incident, unable to digest food, and suffered stress-related PTSD. She alleges that she was given one, 8-hour period to empty her house. Holling showed up and demanded she sign a release, or she would not be permitted in the house to retrieve her belongings. Her friend told Holling plaintiff wasn’t signing anything, and he was to let her in. Her friend asked for an additional day, but Holling was unwilling to drive from Ventura to let her in a second time. She alleged further that several days later, Remax agents delivered a dumpster and hired to men to empty her home, and throw away everything they didn’t take for themselves, which included a washer, dryer, refrigerator, four televisions, furniture, and hundreds of possession. “50k in stolen.” She alleged that the Sheriff would not get involved because it was an eviction action.

Plaintiff seeks compensatory and special damages ($8.5 million); punitive damages; an order “restoring ownership and title”; a “declaratory judgment finding that [Wells Fargo] did not have legally cognizable rights as to [plaintiff], the Property, the [loan] tendered to an executed by [plaintiff].” (Compl., p. 40, ll. 15-22.)

On August 31, 2018, defendant Wells Fargo Bank, N.A. (Wells Fargo) filed a demurrer to plaintiff’s complaint and a notice of related case identifying Superior Court of Santa Barbara County case numbers 16CV02773 entitled Wells Fargo Bank, N.A. v. Lynn Behrens Zimmerman, 16CV00796 entitled Lynn Behrens Zimmerman v. Wells Fargo Bank, N.A., 15CV04112 entitled Lynn Behrens v. Wells Fargo Bank, N.A., 15CV01403 entitled Wells Fargo Bank, N.A. v. Lynn Behrens Zimmerman, and United States District Court for the Central District of California case number CV-15-05332-CAS-MRW entitled Lynn Behrens v. Wells Fargo Bank, N.A., as related to the present action.

On October 12, 2018, the court sustained the demurrer of Wells Fargo to plaintiff’s complaint without leave to amend.

On October 19, 2018, the court denied the special motion to strike of the Remax defendants which was filed on September 4, 2018.

On November 7, 2018, the court entered judgment in favor of Wells Fargo and against plaintiff, which was affirmed by the Second District Court of Appeal, Division Six.

On December 11, 2018, plaintiff filed a notice of related case identifying as related to the present action the same matters identified in the notice of related case filed by Wells Fargo further discussed above.

On May 21, 2021, the court granted the unopposed motion for judgment on the pleadings filed by the Remax defendants on January 21, 2021, with leave to amend with respect to the first through tenth causes of action alleged in plaintiff’s complaint. The court denied the Remax defendants’ motion for judgment on the pleadings with respect to the eleventh cause of action for intentional infliction of emotional distress. The court further ordered that, to the extent plaintiff wished to file an amended complaint, she may do so on or before June 4, 2021. (See May 21, 2021, Minute Order.)

Court records reflect that plaintiff has not filed an amended complaint in this matter.

On October 16, 2023, the Remax defendants filed a motion for sanctions under Code of Civil Procedure section 128.5 and 128.7, on the grounds that the factual contentions of the complaint lack evidentiary and legal support, that it is presently unlikely that plaintiff will be able to produce evidentiary support for her claims, that the sole remaining cause of action alleged against the Remax defendants is barred under the applicable statute of limitations, and plaintiff has not prosecuted her single remaining claim in over three years.

Plaintiff has not filed an opposition to the present motion.

Analysis:

For all reasons discussed below, the court will deny the motion of the Remax defendants.

(1) Remax Defendants’ Request for Sanctions under Code of Civil Procedure section 128.5

“A trial court may order a party, the party’s attorney, or both, to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay…. [¶][¶] ‘Actions or tactics’ include … the filing and service of a complaint….[¶] ‘Frivolous’ means totally and completely without merit or for the sole purpose of harassing an opposing party.” (Code Civ. Proc., § 128.5, subds. (a), (b)(1), (2).)

“If the alleged action or tactic is the … filing and service of a complaint … that can be withdrawn or appropriately corrected, a notice of motion shall be served as provided in Section 1010, but shall not be filed with or presented to the court, unless 21 days after service of the motion or any other period as the court may prescribe, the challenged action or tactic is not withdrawn or appropriately corrected.” (Code Civ. Proc., § 128.5, subd. (f)(1)(B); see also Transcon Financial, Inc. v. Reid & Hellyer, APC (2022) 81 Cal.App.5th 547, 550-551 [failure to follow statutory two-step procedure by party seeking sanctions precludes an award of sanctions] .)

In support of the motion, the Remax defendants submit the declaration of their counsel, Daniel J. Knierim, who states that on September 20, 2023, counsel served a copy of the proposed motion, together with a letter providing notice, on plaintiff’s counsel by overnight mail. (Knierim Decl., ¶ 10 & Exh. 2.) Counsel further declares that he informed plaintiff’s counsel that if plaintiff did not dismiss the Remax defendants] within 21 days of service, the Remax defendants would file the present motion and seek to recover sanctions. (Ibid.)

Available information demonstrates that the Remax defendants strictly complied with the 21-day safe harbor provision under Code of Civil Procedure section 128.5, subdivision (f)(1)(B).)

A motion for sanctions “shall describe the specific alleged action or tactic, made in bad faith, that is frivolous or solely intended to cause unnecessary delay.” (Code Civ. Proc., § 128.5, subd. (f)(1)(A).) The court may order a party to pay fees and expenses for sanctionable actions or tactics only “after notice and a reasonable opportunity to respond[.]” (Code Civ. Proc., § 128.5, subd. (f)(1); see also Levy v. Blum (2001) 92 Cal.App.4th 625, 635 (Levy) [“[s]ection 128.5 requires notice and an opportunity to be heard before the imposition of sanctions, and the court must issue a written order reciting in detail the conduct justifying sanctions”].)

The motion for sanctions does not provide notice sufficient to satisfy statutory or due process requirements. For example, although the notice asserts that the factual contentions of the complaint lack support and that plaintiff has not prosecuted the remaining cause of action alleged against the Remax defendants, the notice and the memorandum do not specifically state whether the filing of the original complaint, plaintiff’s failure to file an amended complaint, or plaintiff’s failure to pursue the remaining cause of action alleged against the Remax defendants constitutes sanctionable conduct. (See Parker v. Harbert (2012) 212 Cal.App.4th 1172, 1178 [before a court imposes sanctions, the notice provided “must advise of the specific grounds and conduct on which sanctions are to be based”]; see also West Coast Development v. Reed (1992) 2 Cal.App.4th 693, 707 (West Coast) [it is error for trial court to fail to state grounds for sanctions].) As a result, neither plaintiff nor the court can determine what conduct the Remax defendants contend is sanctionable. For this reason, the notice also fails to provide plaintiff with sufficient notice or opportunity to be heard.

Notwithstanding the procedural problems discussed above, the Remax defendants have failed to meet their burden to demonstrate that plaintiff’s claims are frivolous or brought for an improper purpose. “Whether an action is frivolous is governed by an objective standard: any reasonable attorney would agree it is totally and completely without merit. [Citations.] There must also be a showing of an improper purpose, i.e., subjective bad faith on the part of the attorney or party to be sanctioned.” (Levy, supra, 92 Cal.App.4th at p. 635; accord, In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 135.) “[T]he prosecution of a frivolous action may in itself be evidence from which a finding of subjective bad faith may be made.” (West Coast, supra, 2 Cal.App.4th at p. 702.) Though prosecuting an action that is without merit may be evidence of subjective bad faith, “it does not settle the issue.” (Orange County Dept. of Child Support Services v. Superior Court (2005) 129 Cal.App.4th 798, 804.)

Apart from denying the allegations of the remaining cause of action for intentional infliction of emotional distress, the Remax defendants present no information or evidence to demonstrate that plaintiff’s claims are completely and totally without merit. While the Remax defendants assert that they have “rejected” plaintiff’s account of the eviction from the property, which the Remax defendants contend was conducted reasonably, in its May 21, 2021, Minute Order denying the Remax defendants’ motion for judgment on the pleadings, the court found that plaintiff sufficiently alleged a cause of action for intentional infliction of emotional distress against these defendants. The court is not obligated to accept as true the Remax defendants’ self-serving conclusions with respect to whether evidentiary support exists to prove plaintiff’s claims.

In addition, apart from asserting conclusory and speculative arguments that plaintiff cannot produce evidence to support or prove her claims, the Remax defendants present no information or evidence to demonstrate that there exists a lack of evidentiary support for the remaining cause of action for intentional infliction of emotional distress. Moreover, any alleged delay or purported disinterest by plaintiff in prosecuting the present action does not, by itself, require the court to conclude that plaintiff’s claims are frivolous or totally without merit.

Furthermore, while the Remax defendants’ assertions regarding whether the remaining cause of action is barred by the applicable statute of limitations may have provided sufficient grounds for a procedurally appropriate pleading challenge (and the court notes that statute of limitations issues were not raised in the Remax defendants’ motion for judgment on the pleadings), and may constitute grounds for a motion for summary judgment or adjudication to the extent any evidence obtained by the Remax defendants demonstrates that the action is time-barred (and the court presently makes no findings in this regard), the present motion is not a procedurally appropriate means to determine whether the plaintiff’s cause of action for intentional infliction of emotional distress is barred by the statute of limitations.

In addition, assuming without deciding that plaintiff’s claim for emotional distress damages is or may be time-barred, this would not require the court to necessarily conclude that plaintiff filed the present action in bad faith or for an improper purpose.

For all reasons discussed above, an award of sanctions under Code of Civil Procedure section 128.5 is not presently warranted or appropriate.

(2) Remax Defendants’ Request for Sanctions under Code of Civil Procedure section 128.7

Under Code of Civil Procedure section 128.7, an attorney or unrepresented party who presents to the court, whether by signing, filing, submitting or advocating, a pleading, certifies that to the best of that person’s knowledge, information, and belief, after a reasonable inquiry, the pleading (1) is not being presented for an improper purpose; (2) alleges claims that are warranted and not frivolous; (3) alleges factual contentions with evidentiary support, or that are likely to have evidentiary support after investigation or discovery; and (4) contains warranted denials of factual allegations which have evidentiary support. (Code Civ. Proc., §128.7, subd. (b).) If, after notice and a reasonable opportunity to respond, the court determines that section 128.7, subdivision (b), has been violated, the court may impose sanctions upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation. (Id., subd. (c).) In determining an appropriate sanction, the court considers whether the party seeking sanctions has exercised due diligence. (Ibid.)

“A court has broad discretion to impose sanctions if the moving party satisfies the elements of the sanctions statute.” (Peake v. Underwood (2014) 227 Cal.App.4th 428, 441 (Peake).) Sanctions may be issued against a party for filing a complaint that is legally or factually frivolous. (Kumar v. Ramsey (2021) 71 Cal.App.5th 1110, 1120 (Kumar).) “A claim is factually frivolous if it is ‘not well grounded in fact’ and is legally frivolous if it is ‘not warranted by existing law[.’]” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 189 (Bucur).) “In either case, to obtain sanctions, the moving party must show the party's conduct in asserting the claim was objectively unreasonable. [Citation.] A claim is objectively unreasonable if ‘any reasonable attorney would agree that [it] is totally and completely without merit.’ [Citation.]” (Peake, supra, 227 Cal.App.4th at p. 440.)

As section 128.7 applies only in limited circumstances, the burden of avoiding sanctions under section 128.7 is light. (Kumar, supra, 71 Cal.App.5th at p. 1126.) The opposing party need not demonstrate that it would prevail on the factual or legal argument, or present enough evidence such as that required to overcome summary judgment or demurrer. (Ibid.) Instead, the opposing party must “make a sufficient evidentiary showing to demonstrate that he made a reasonable inquiry into the facts and entertained a good faith belief in the merits of the claim.” (Ibid.) “[T]he application of section 128.7 must not ‘conflict with the primary duty of an attorney to represent his or her client zealously,’ through innovative but sensible advocacy.” (Bucur, supra, 244 Cal.App.4th at p. 190 [citation omitted].) Accordingly, section 128.7 is utilized only rarely, and only when the action is “clearly frivolous, legally unreasonable or without legal foundation, or brought for an improper purpose”, even if the claim is arguably frivolous. (Kumar, supra, 71 Cal.App.5th at p. 1121 citing Operating Engineers Pension Trust v. A-C Co. (9th Cir. 1988) 859 F.2d 1336, 1344 and Peake, supra, 227 Cal.App.4th at p. 448.)

A party seeking sanctions under Code of Civil Procedure section 128.7 must comply with the safe harbor provisions of subdivision (c)(1), which provide that “[n]otice 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, subd. (c)(1).)

The same analysis applies. The court finds that the Remax defendants have strictly complied with the statutory 21-day safe harbor provision. However, for all reasons more fully discussed above, the Remax defendants have provided no evidence or information to permit the court to conclude that plaintiff’s complaint is legally or factually frivolous, or that plaintiff’s conduct was unreasonable or improper. Therefore, an award of sanctions under Code of Civil Procedure section 128.7 is also not presently warranted or appropriate.