Yeomans vs. Walgreen Co.

At the February 3, 2026 review hearing, the court continued the review hearing again, noting that “Plaintiff's counsel states the Federal Court action was dismissed but they intend to proceed with the State action.” (ROA 166.) In the next joint status report, Plaintiffs’ counsel represents that in response to the court’s order requesting a plan if the case were to move forward, “Plaintiffs respectfully request that the Court lift the stay so that the matters could proceed,” and proposed the motion to consolidate be put back on calendar, sought leave to file a consolidated complaint, and proposed a schedule for discovery and a class certification motion. (ROA 168; Coelho Dec. ¶¶ 11-14; Martinez Dec. ¶¶ 11-13.)

Indeed, at the March 5, 2026 review hearing, the court noted that “Counsel for defendant states that they anticipated the case to be dismissed but are not certain on the status of the plaintiff who has failed to appear.” (ROA 173.) Thus, both the court and Defendant were aware that while dismissal was anticipated, it was not a certainty. Plaintiff’s counsel failed to appear for the March 5, 2026 Review Hearing, so the court issued an OSC re: Dismissal. (Id.)

At the April 7, 2026 review hearing, the case was dismissed. “The Court and counsel discuss the case and counsel for plaintiff informs the Court that they have not been able to get consent from certain clients. The Court and counsel agree to dismiss the case as there has been no action or progress and the statute of limitations has been reached. The Court orders the entire action dismissed without prejudice.” (ROA 176.)

The parties dispute the substance of their communications during the time between the Ninth Circuit Mier decision and the dismissal of the state actions. However, Defendants did not have any evidence that Plaintiffs’ counsel had authorization from all Plaintiffs to dismiss the actions. “Without his client's free and intelligent consent, after full knowledge of all the facts and circumstances, an attorney may not surrender any substantial right of his client; nor may he impair, compromise,

or destroy his client's cause of action.” (Bice v. Stevens (1958) 160 Cal. App. 2d 222, 232.) “While procedural matters are generally within the control of the attorney, the cause of action or the subject matter of the litigation is within the control of the client, and an attorney may not impair, compromise, settle, surrender, or destroy it without his client's consent.” (Id.) “[D]ismissal of a cause of action by an attorney acting without any authority from his client is an act beyond the scope of his authority which, on proper proof, may be vacated at any time.” (Romadka v. Hoge (1991) 232 Cal. App. 3d 1231, 1236 [emphasis in original].)

As Defendants’ counsel, Anthony G. Hopp, recounts the discussion with Plaintiffs’ counsel, Thiago Coelho, it was clear from their communications that Plaintiffs’ counsel intended to dismiss the cases but could not dismiss the cases until authorizations were obtained from Plaintiffs: • On November 6, 2025, Mr. Coelho explained that “he needed to confer further with his clients,” and “was inclined to dismiss the cases and was simply awaiting confirmation from his clients before doing so.” (Hopp Dec. ¶ 3.) • On February 3, 2026, Mr.

Coelho stated that “he intended to dismiss the cases and assured [Mr. Hopp] that the litigation would not proceed.” (Hopp. Dec. ¶ 4.) • On February 27, 2026, “Mr. Coelho explained that he had still been unable to speak with all of his clients to obtain their consent to dismiss the cases. Without speaking to them, he could not yet voluntarily dismiss the cases. He further confirmed that he intended to dismiss the cases as soon as he secured authorization from all Plaintiffs.” (Hopp Dec. ¶ 6.)

As Defendants concede in reply, “[n]o one disputes that dismissal required client consent[.]” (Reply at p. 2.)

“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.” (CCP § 128.5(a).) “Frivolous” means totally and completely without merit or for the sole purpose of harassing an opposing party. (CCP § 128.5(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.” (Levy v. Blum (2001) 92 Cal. App. 4th 625, 635.) “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.” (Id.) “Section 128.5 requires much more than a party acting with ‘no good reason’ to justify an award of sanctions.” (Id.) “There must be a showing not only of a meritless or frivolous action or tactic, but also of bad faith.” (Id. at 635-636.)

The facts do not demonstrate that Plaintiffs’ counsel acted frivolously (i.e. without merit or for the sole purpose of harassing Defendants) or with the intent to cause unnecessary delay, or otherwise acted in bad faith.

In litigation, “[c]ounsel face the danger of being trapped between their obligation to their clients to diligently pursue any possibly meritorious claim, and their obligation to the judicial system to refrain from prosecuting frivolous claims.” (In re Marriage of Flaherty (1982) 31 Cal. 3d 637, 647.) “[A]n attorney is often confronted with clashing obligations imposed by our system of justice.” (Id.) “An attorney has an obligation not only to protect his client's interests but also to respect the legitimate interests of fellow members of the bar, the judiciary, and the administration of justice.” (Id.) “The courts have frequently disciplined attorneys who do not adequately protect their clients' interests.” (Id.)

Courts have also “rejected numerous attempts to hold attorneys liable for good faith decisions to assert their clients' claims.” (Id.) “The strong public policy in favor of the peaceful resolution of disputes in the courts requires that attorneys not be deterred from pursuing legal remedies because of a fear of personal liability.” (Id.) To decide otherwise “would inject undesirable self-protective reservations into the attorney's counselling role,” and prevent counsel from devoting their entire energies to their clients' interests. (Id.) “If the issue which the attorney is called upon to decide is fairly debatable, then under his oath of office, he is not only authorized but obligated to present and urge his client's claim upon the court.” (Id. [emphasis added].)

Here, absent authorization from Plaintiffs to dismiss the cases, Plaintiffs’ counsel was ethically obligated to continue to diligently pursue Plaintiffs’ claims.

Sanctions are a response to the “fear that irresponsible litigants may abuse their right of access to the judicial system.” (In re Marriage of Flaherty, 31 Cal. 3d at 648.) To be sanctionable,

the conduct “must be shown to have been so manifestly erroneous that no prudent attorney would have done so.” (Id.) An action is “frivolous only when it is [done] for an improper motive—to harass the respondent or delay the effect of an adverse judgment—or when it indisputably has no merit— when any reasonable attorney would agree that the [action taken] is totally and completely without merit.” (Id. at 650.) Conduct is not sanctionable if the party has “nothing to gain from delay,” and there is no evidence of subjective bad faith. (Id. at 651.)

The foregoing facts do not demonstrate any abuse of the right to access the judicial system, any intent to harass Defendants or delay any adverse judgment, and do not show that Plaintiffs’ counsel’s continued pursuit of Plaintiffs’ claims was totally and completely without merit. Critically, Plaintiffs gained nothing from this delay. There is no evidence of bad faith, and thus no ground for sanctions.

Based on the foregoing, this Motion for Sanctions is denied.

Defendants are ordered to give notice of this ruling.

11 30-2021-01183112 Plaintiff Edwards Villa, Inc.’s (“Plaintiff”) Demurrer to Edwards Villa, Inc. vs. Defendant QT General Contractor, Inc. and Quang Quoc Ybanag Realty & Truong’s (collectively, “QT Defendants”) Second Amended Development Corp. Answer (“SAA”) to Plaintiff’s Second Amended Complaint (“SAC”) is SUSTAINED WITHOUT LEAVE TO AMEND as to QT Defendants’ 28th Affirmative Defense of Illegality/Void Contract and QT Defendants’ 29th Affirmative Defense of In Pari Delicto – Equal Fault.

The court GRANTS Plaintiff’s requests for judicial notice of the court’s ruling on QT General Contractor and Quang Quoc Truong’s Motion for Summary Judgment, and the court’s ruling on Edwards Villa, Inc.’s Motion for Summary Adjudication in this action. (Cal. Evid. Code § 452(d).)

The court GRANTS QT Defendants’ request for judicial notice as to the court’s ruling on QT General Contractor and Quang Quoc Truong’s Motion for Leave to Amend its Answer to Edwards Villa, Inc.’s Second Amended Complaint (ROA 924).