Second District, Division 7 Overturns Sanctions Where Merits Hearing Was Heard 19 Days Into 21-Day Safe Harbor Period.
Here is a good one for all of you Code of Civil Procedure section 128.7 fans!
The lesson from Li v. Majestic Industry Hills, LLC, Case No. B208404 (2d Dist., Div. 7 Sept. 8, 2009) (certified for partial publication) is intuitive, but a great reminder … make sure you—as the litigant requesting sanctions under section 128.7–give your opponent the full 21-day safe harbor withdrawal period. If you don’t, you will risk reversal of the sanctions order. That is exactly what happened in Li.
There, a party requesting sanctions under section 128.7 ostensibly won. After all, it beat back a motion to vacate and then won the 128.7 sanctions motion, garnering sanctions of $9,750 jointly and severally against the loser and his lawyers. However, there was a problem, and the problem required reversal of the sanctions order.
The motion to vacate was granted 19 days into the 21-day safe harbor withdrawal period of section 128.7. Sound like a technicality? Hardly.
The appellate court determined that the full safe harbor period must be given to the 128.7 responding party before sanctions were warranted. Even though the party responding to the sanctions picked the motion to vacate date, the party seeking sanctions had a responsibility to make sure that the opponent had the full 21 days without regard to when the merits motion was heard.
The solution? The Rutter Group treatise on pretrial civil procedure had the answer: the party requesting sanctions could ask for a continuance of the 128.7 motion or ask the court to shorten time to file its 128.7 motion (effectively reducing the safe harbor period). Also, analogous federal cases under F.R.Civ. P., rule 11 also supported the result, buttressing the reversal of the sanctions award.