Taylor vs. First American Title Insurance Company

The motion for reconsideration by Plaintiff Jacob Taylor (“Plaintiff”) for an order revoking the Court’s October 20, 2025 Order granting the Motion to Compel Arbitration pursuant to Code of Civil Procedure section 1008 is granted in part and denied in part. The motion by Defendants First American Title Insurance Company, Richa Krishnanand, and Jeff Watska (collectively, “Defendants”) for an order requiring Plaintiff and his counsel to reimburse Defendants for their expenses, including attorney’s fees, incurred in responding to Plaintiff’s November 17, 2025 and December 11, 2025 ex parte applications and the filing of the motion for sanctions in the amount of $15,140.96 is denied.

MOTION FOR RECONSIDERATION

Applicable legal authority A motion for reconsideration must be filed within 10 days of service on him of notice of entry of the order in question. (Code Civ. Proc., § 1008, subd. (a).) As provided in section 1013, the 5 day extension of time for mail service applies in the absence of a specific exception. (Code Civ. Proc., § 1013, subd. (a).) There is no exception stated for section 1008. (See also, Rutter, Civ. Proc. before Trial § 9:326.1 [stating the 10 day deadline is extended under CCP 1013 for service by mail in the absence of a specific exception.].)

A motion for reconsideration made by a party must be based on new or different facts, circumstances, or law than those before the court at the time of the original ruling. (Code Civ. Proc., § 1008, subd. (a).) The motion must also be accompanied by an affidavit from the moving party that states: (1) what application was previously made; (2) when and to what judge; (3) what order was made; and (4) what new or different facts, circumstances or law are claimed to be shown. (Code Civ. Proc., § 1008, subd. (a).) A party seeking reconsideration also must provide a satisfactory explanation for the failure to produce the evidence at an earlier time. (New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 213.)

A motion for reconsideration is invalid when filed if it failed to comply with the statutory procedural requirement that the motion contain the requisite affidavit. (Branner v. Regents of University of California (2009) 175 Cal.App.4th 1043, 1048.)

The burden under section 1008 “is comparable to that of a party seeking a new trial on the ground of newly discovered evidence: the information must be such that the moving party could not, with reasonable diligence, have discovered or produced it at the trial.” (New York Times Co. v. Superior Court, 135 Cal.App.4th at 212-213.) The legislative intent was to restrict motions for reconsideration to circumstances where a party offers the court some fact or circumstance not previously considered, and some valid reason for not offering it earlier. (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500.) A party seeking reconsideration of a prior order based on “new or different facts, circumstances or law” must provide a satisfactory explanation for failing to present the information at the first hearing; i.e., a showing of reasonable diligence. (Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 690.) The court cannot consider matters presented at the earlier hearing. (Code Civ. Proc., § 1008, subd. (f).) Reconsideration cannot be granted based on claims the court misinterpreted the law in its initial ruling. (Gilberd v. AC Transit, 32 Cal.App.4th at 1500.)

Merits Plaintiff substantially complied with section 1008, subdivision (a). However, Defendants did not oppose the motion on the ground that Plaintiff did not strictly comply with section 1008. The Court grants Plaintiff’s request to reconsider the Court’s October 20, 2025 Order.

In the Court’s October 20, 2025 ruling, the Court did not grant the motion on the sole ground that Plaintiff did not tender the consideration for the Separation Agreement. Even if Plaintiff properly and promptly returned the consideration for the Separation Agreement, Plaintiff still had not met his burden to show the Separation Agreement was obtained through fraud. (Bellah Decl., ¶ 2, Exhibit 5, Page 5.) A party that believes it has been fraudulently induced to enter into a contract may rescind. (Little v. Pullman (2013) 219 Cal.App.4th 558, 566.) The elements of fraud in the inducement are (1) the defendant made a promise to the plaintiff, (2) at the time the promise was made, the defendant did not intend to perform the promise; (3) the defendant intended to cause the plaintiff to rely on the promise; (4) the plaintiff reasonably relied on the promise; and (5) the plaintiff was harmed as a result. (Lazar v. Sup. Court (1996) 12 Cal.4th 631, 638-639; Muraoka v. Budget Rent-A-Car, Inc. (1984) 160 Cal.App.3d 107, 119.) To establish a claim of fraudulent inducement, one must show that the defendant did not intend to honor its contractual promises when they were made.” (Agosta v. Astor (2004) 120 Cal.App.4th 596, 603.)

Plaintiff did not meet his burden to show the Separation Agreement was obtained through fraud. Accordingly, Plaintiff’s request to revoke the Court’s October 20, 2025 ruling is denied.

MOTION FOR SANCTIONS Defendants seek CCP section 128.5 sanctions against Plaintiff for having to respond to Plaintiff’s November 11, 2025 and December 11, 2025 ex parte applications to advance the hearing on Plaintiff’s motion for reconsideration.

As an initial matter, the Court declines to consider Defendants’ reply evidence. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537- 1538.)

Notice of a 128.5 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).) The safe harbor notice provisions must be strictly complied with. This serves the statute’s remedial purpose and underscores the seriousness of a motion for sanctions. (Galleria Plus, Inc. v. Hanmi Bank (2009) 179 Cal.App.4th 535, 538.) This applies to both the 21 day safe harbor period and the contents of the notice to be served. When a moving party does not strictly comply with the safe harbor provisions, the motion should be denied. (Galleria Plus, Inc. v. Hanmi Bank, supra, 179 Cal.App.4th at 538.)

“The purpose of the safe harbor provision is ‘to conserve judicial resources otherwise spent adjudicating a sanctions motion by affording a prescribed period of time during which a party may correct or withdraw a frivolous or improper pleading or motion without any penalty. [Citation.] If the merits of the objectionable document are resolved by the court prior to the expiration of the safe harbor period, there is nothing left to correct or withdraw, thereby undermining the remedial purpose of the safe harbor provision.’” (Changsha Metro Group Co., Ltd. v. Xufeng (2020) 57 Cal.App.5th 1, 8-9, citing Li v. Majestic Industry Hills LLC (2009) 177 Cal.App.4th 585, 593-594.) Section 128.5 limits the safe harbor provisions to only those alleged actions and tactics that can be withdrawn or appropriately corrected and common sense. (Id., at 16.) “[W]hen it is not practical to apply the safe harbor provision then it need not be used.” (Id., at 18.) By way of example, “ section 128.5, subdivision (f) does not work with the anti-SLAPP statute.” (Id., at 21.) The “proper procedure for the trial court to follow in regard to a request for attorney’s fees related to an anti-SLAPP motion is the procedure set forth in subdivisions (a) and (c).” (Id.)

Although an ex parte application could be withdrawn, it would not be possible for Defendants to comply with the safe harbor requirement if seeking 128.5 sanctions for a purportedly frivolous ex parte application. Even if the safe harbor did not apply, Defendants still must meet their burden to show the applications were frivolous under section 128.5.

The term “frivolous” “means totally and completely without merit or for the sole purpose of harassing an opposing party.” (Code Civ. Proc., § 128.5, subd. (b)(2).)

“Whether an action is frivolous is governed by an objective standard: any reasonable attorney would agree it is totally and completely without merit. (Finnie v. Town of Tiburon (1988) 199 Cal.App.3d 1, 12, 244 Cal.Rptr. 581; In re Marriage of Reese & Guy (1999) 73 Cal.App.4th 1214, 1220–1221, 87 Cal.Rptr.2d 339.) 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. (Campbell v. Cal–Gard Surety Services, Inc. (1998) 62 Cal.App.4th 563, 574, 73 Cal.Rptr.2d 64; In re Marriage of Reese & Guy, supra, at p. 1221, 87 Cal.Rptr.2d 339.) Section 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. (Trans–Action Commercial Investors, Ltd. v. Firmaterr, Inc. (1997) 60 Cal.App.4th 352, 367, 70 Cal.Rptr.2d 449.)” (Levy v. Blum (2001) 92 Cal.App.4th 625, 635.)

The intent of section 128.5 was to broaden the powers of trial courts to manage their calendars and provide for the expeditious processing of civil actions by authorizing monetary sanctions now not presently authorized. (Levy v. Blum, 92 Cal.App.4th at 635, citing Trans–Action Commercial Investors, Ltd. v. Jelinek (1998) 60 Cal.App.4th 352, 367.) “Section 128.5 authorizes the award of attorney fees as a sanction to control improper resort to the judicial process.” (Id.;) “The statute permits the award of attorney fees, not simply as appropriate compensation to the prevailing party, but as a means of controlling burdensome and unnecessary legal tactics.” (Id.)

“Section 128.5 requires much more than a party acting with ‘no good reason’ to justify an award of sanctions. There must be a showing not only of a meritless or frivolous action or tactic, but also of bad faith.” (Levy v. Blum, 92 Cal.App.4th at 635-636.)

In any event, whether to grant sanctions is subject to the court’s discretion. (Wallis v. PHL Associates, Inc. (2008) 168 Cal.App.4th 882, 893.)

Defendants have not shown Plaintiff’s ex parte applications were frivolous or submitted with bad faith. In addition, even if the safe harbor provision doesn’t apply, Defendants waited over a month after Plaintiff’s second ex parte application to file this motion for sanctions.

Accordingly, the motion for sanctions is denied.

Plaintiff shall give notice.