Case Number: EC065242??? Hearing Date: July 29, 2016??? Dept: NCB
18. EC065242
GABRIELA PAUL v MARK JOSEPH MARKUS
Motion for Monetary and Non-Monetary Sanctions
This hearing concerns the Defendants? motion to seek sanctions under CCP section 128.7. The Defendants argue that the Plaintiffs have violated CCP section 128.7 because this action is based on the same facts and theories that were brought in another action between the parties, which is EC062483.
CCP section 128.7 states 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.
CCP section 128.7 permits the Court to impose monetary sanctions on an attorney or an unrepresented party that violates any one of these requirements. Eichenbaum v. Alon (2003) 106 Cal App 4th 967, 976. In addition, section 128.7 does not require a finding of subjective bad faith; instead it requires only that the Court find that the conduct be objectively unreasonable. In re Marriage of Reese & Guy (1999) 73 Cal. App. 4th 1214, 1221.
The Defendant complied with the safe harbor requirement of CCP section 128.7(c) because he served the pending motion for sanctions on June 14, 2016, which was 23 days before he filed this motion on July 7, 2016.
In EC062483, the Plaintiffs claimed that they had retained Thomas Kent to provide legal services to them in a Chapter 11 bankruptcy matter and Dawn Gross to protect the Plaintiffs? interest in disbursing funds to creditors (see copy of Second Amended Complaint in exhibit C to Defendant?s request for judicial notice). Bruce Brusavich was a personal injury attorney for the Plaintiff, Gabriela Paul, and he is the managing partner of Agnew & Brusavich. Defendant, Kate Shin, was co-counsel in the bankruptcy proceeding. The Plaintiffs claimed that Mark Markus was liable because Thomas Kent was his agent.
The Plaintiffs claim in EC062483 that the Defendants caused them damages because Thomas Kent used the Plaintiffs? money for his own purposes and because the Defendants failed to provide adequate litigation services in the bankruptcy that would preserve their assets.
In the pending case, EC065242, the Plaintiffs claim that Mark Markus entered into a contract to represent the Plaintiffs in their bankruptcy proceedings (see copy of Complaint in exhibit F to Defendant?s request for judicial notice). The Plaintiffs claim in EC064242 that they suffered damages because the Defendant did not provide adequate litigation services in the bankruptcy proceeding that would preserve their assets. The Plaintiffs also allege that Mark Markus conspired with Thomas Kent to convert their money. The contract attached to the Complaint that is alleged to be with the Defendant, Mark Markus, is not. Instead, it is between the Plaintiffs and Thomas Kent.
A comparison of the pleadings in EC062483 and EC065242 reveal that they are based on the same transaction, i.e., the Defendant?s legal services provided to the Plaintiffs in their bankruptcy proceeding, and they are directed at the same Defendant, Mark Markus. As the following demonstrates, the Plaintiffs have violated the primary right theory by splitting the claim into two cases.
The primary right theory provides that a “cause of action” is comprised of a “primary right” of the plaintiff, a corresponding “primary duty” of the defendant, and a wrongful act by the defendant constituting a breach of that duty. Crowley v. Katleman (1994) 8 Cal. 4th 666, 681-682. The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action. Id. A pleading that states the violation of one primary right in two causes of action contravenes the rule against “splitting” a cause of action. Id.
The primary right is distinguished from the legal theory on which liability for the injury is premised. Id. Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief. Id.
The primary right theory has a fairly narrow field of application. Id. It is invoked most often when a plaintiff attempts to divide a primary right and enforce it in two lawsuits. Id. The theory prevents this result by either of two means:
1) if the first suit is still pending when the second is filed, the defendant in the second suit may plead that fact in abatement; or
2) if the first suit has terminated in a judgment on the merits adverse to the plaintiff, the defendant in the second suit may set up that judgment as a bar under the principles of res judicata.
Id.
The latter application of the primary right theory appears to be most common: numerous cases hold that when there is only one primary right an adverse judgment in the first suit is a bar even though the second suit is based on a different theory or seeks a different remedy. Id.
Here, in the transaction arising from the Plaintiffs? request for legal services with respect to using bankruptcy proceedings to protect their assets, the Defendant had a “primary duty” to provide legal services that met the minimum standards in the community and the Plaintiffs? claim that they suffered damages because of the Defendant?s wrongful act, i.e., the breach of the ?primary duty? by providing legal services below the minimum standards. Under the primary rights theory, the Plaintiffs should have brought this claim in a single legal action against the Defendant and cannot split the claim into two more legal actions.
Here, the Plaintiffs split their claim into two legal actions, i.e., EC062483 and EC065242. The Plaintiffs have not filed any opposition papers to offer any valid or reasonable basis for splitting their claims into two legal actions.
The Plaintiffs commenced the second action in EC065242 recently, on May 9, 2016. This was soon after the Defendant had filed a motion for summary judgment in EC062483 on April 1, 2016. Further, a review of the Court file reveals that the Plaintiffs have not filed a proof of service to demonstrate that they served the complaint in EC065242 on the Defendants. In their motion, the Defendants state that they incurred copying costs to obtain a copy of the Complaint because it was not served on them.
It is reasonable to draw an inference from the fact that the Plaintiffs split their cause of action by commencing a second action against the Defendant recently, and soon after the Defendant filed a motion for summary judgment, that the Plaintiffs filed the second action to avoid the imminent resolution of EC062483 against them and to continue the litigation in a second case, i.e., the Plaintiffs filed the second action for the improper purpose of causing unnecessary delay in the resolution of the claims and to needlessly increase the cost of litigation to the Defendant.
As noted above, the Plaintiffs have not filed any opposition papers to the pending motion. Further, the Defendant provides a copy of the letter that Defendant?s counsel sent to the Plaintiffs? counsel on June 14, 2016 in which the Defendant raises the issue that the second action is improper and provided a copy of the pending motion for sanctions (see exhibit J to request for judicial notice). Since the Plaintiffs did not take any action, the Defendant filed the motion for sanctions on July 7, 2016. The Plaintiffs have not offered any grounds to the Defendant or to the Court to show that the second filed action has any purpose other than to cause unnecessary delay in the resolution of the claims against the Defendant and to cause a needless increase in the cost of litigation to the Defendant.
Therefore, the Court grants the Defendant?s motion for sanctions under CCP section 128.7 because it was objectively unreasonable for the Plaintiffs to split their cause of action against the Defendant by commencing a second action that arises from the Defendant?s alleged breach of his primary duty to provide adequate legal services to the Plaintiffs with regards to the Plaintiffs? bankruptcy proceedings.
The Defendant?s attorney, Holly Teel, provides facts in her declaration to demonstrate that she expects to bill 21.9 hours at $240 per hour on the issues arising from the Plaintiffs? commencement of a second action, that another attorney, Frances O?Meara, expects to bill 2.7 hours at $240 per hour on these issues, that a $5.50 charge was incurred to obtain a copy of the Complaint because it was not served on the Defendant when filed, and that the filing fee for this motion is $60. The amount requested of $5,969 is a reasonable amount of attorney?s fees and costs to impose on the Plaintiffs as monetary sanctions for their violation of CCP section 128.7.
Finally, as noted above, when the first suit is still pending when the second is filed, the defendant in the second suit may plead that fact in abatement and request a stay of the second suit. Here, the Court stays the second action, EC065242 pending the resolution of the first action. If the first suit terminates in a judgment on the merits adverse to the Plaintiffs, the Defendant in the second suit may then raise that judgment as a defense under the principles of res judicata.