Cruz v. Pacific Life Insurance Company

Absent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees. “(D) If the alleged action or tactic is the making or opposing of a written motion or the filing and service of a complaint, crosscomplaint, answer, or other responsive pleading that can be withdrawn or appropriately corrected, the court on its own motion may enter an order describing the specific action or tactic, made in bad faith, that is frivolous or solely intended to cause unnecessary delay, and direct an attorney, law firm, or party to show cause why it has made an action or tactic as defined in subdivision (b), unless, within 21 days of service of the order to show cause, the challenged action or tactic is withdrawn or appropriately corrected.”

Civ. Proc. Code § 128.5.

A party seeking sanctions under section 128.5 must follow a twostep procedure: “First, the ‘“moving party must serve on the offending party a motion for sanctions.”’ [Citation.] Service of the sanctions motion triggers the 21-day safe harbor period during which the moving party may not file the motion. [Citation.] That is because the offending party may avoid sanctions by withdrawing the challenged pleading during the 21-day period. [Citation.] Second, if the offending party does not withdraw the challenged pleading during that period, then the moving party may file the sanctions motion. [Citation.] “The ‘21 days is not a notice period. . . . It defines when the target of a sanctions motion can act without penalty and withdraw’ an objectionable document. [Citation.] The moving party must file the motion ‘outside the safe harbor period,’ not ‘on day one of the

safe harbor period, day 21 of the safe harbor period, or any day in between.’ [Citation.] In other words, the ‘sanctions motion cannot be filed until the 22nd day after service of the motion, i.e., after the 21-day safe harbor period expires.’ [Citation.] “Moreover, the law requires strict compliance with the safe harbor provisions. [Citation.] Failure to comply with the safe harbor provisions ‘precludes an award of sanctions.’ [Citations.]” Transcon Financial, Inc. v. Reid & Hellyer, APC (2022) 81 Cal.App.5th 547, 550-51 (italics in original).

Defendant contends plaintiff and her counsel “engaged in bad faith actions and tactics that were frivolous and solely intended to cause unnecessary delay, forcing [defendant] to incur substantial and avoidable attorneys’ fees and costs.” Notice of Motion (ROA 89) at 2:10-12. Specifically, defendant asserts that plaintiff stipulated to amend her complaint, filed a first amended complaint that allegedly did not conform to the stipulation, and dilly-dallied in resolving the issue, which resulted in defendant filing a motion to enforce the parties’ stipulation, before plaintiff ultimately stipulated to amend the complaint again. ROA 80.

Defendant asserts it incurred $31,797.00 in attorneys’ fees and costs in connection with plaintiff’s filing of the first amended complaint ($1,912.50 for correspondence attempting to resolve the issue; $17,770.50 for preparing and filing the motion to enforce the stipulation; and $12,114.00 for preparing and filing the instant sanctions motion). Wolgin Decl. ¶ 15. Defendant filed the sanctions motion on May 8, 2026, and served plaintiff with the motion the same day. ROA 89.

The alleged action or tactic at issue here is plaintiff’s filing of the first amended complaint that defendant asserts did not comply with the parties’ stipulation. See, e.g., Brief (ROA 89) 6:20-22 (“Despite this Stipulation and Order, . . . Plaintiff filed a First Amended Class Action Complaint . . . that failed to exclude variable life insurance policies from the proposed classes”); id. at 7:1-2 (“[P]acific Life’s counsel made no fewer than eight written attempts and multiple telephone attempts to request that Plaintiff correct the amended complaint”). The first amended complaint is a pleading that plaintiff could have withdrawn. The 21-day safe harbor provision in section 128.5(f)(1)(B) therefore applies to the motion.

While defendant asserts plaintiff engaged in other conduct that did not constitute the filing of a pleading, and thus that the safe harbor provision does not apply, the other conduct about which defendant complains (e.g., plaintiff’s delay in resolving the first amended complaint issue; plaintiff’s alleged failure to meet and confer about resolving the first amended complaint issue) plainly arises from plaintiff’s filing of the first amended complaint. Because the safe harbor provision applies, and because defendant did not comply with it, the motion must be denied. See, e.g., Transcon, 81 Cal.App.5th at 551.

In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, on which defendant relies, does not apply here. In that case, the court awarded sanctions pursuant to section 128.5 based solely

on counsel’s conduct: “And given the nature of the conduct on which the sanctions were based—Trigger’s misrepresentation to the court that she was ready to proceed to trial, when she was, in fact, not ready, her failure to ever correct the court’s misapprehension as to her readiness, and her delay in seeking a continuance until after the case was called for trial—the ‘safe harbor’ provisions are not applicable. Rather, these provisions allow time for the withdrawal of frivolous pleadings.” Id. at 147. As discussed above, the challenged conduct here is plaintiff’s filing of a pleading, i.e., the first amended complaint that defendant contends did not comply with the parties’ stipulation. Plaintiff to give notice. 4 Cruz v. PMAB-8, LLC

2023-01318976

Plaintiff’s Motion for Approval of PAGA Settlement

“Because an aggrieved employee's action under the Labor Code Private Attorneys General Act of 2004 functions as a substitute for an action brought by the government itself, a judgment in that action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.” Arias v. Superior Court (2009) 46 Cal.4th 969, 986. PAGA settlements are subject to trial court review “to determine whether [they are] fair, reasonable, and adequate in view of PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77.

The court has reviewed and considered the papers filed in support of plaintiff’s motion for approval of a $700,000 PAGA settlement. The court has the following questions and comments:

As to the settlement:

1. The following phrase should be removed from paragraph I.B of the settlement agreement: “or needed by the Settlement Administrator.”

2. The “Released Claims” provision in paragraph I.Y of the settlement agreement is overbroad. Releases for aggrieved employees other than plaintiffs should not release more than the civil penalties available under PAGA based on the facts alleged in the operative complaint and the notice letter(s) to the LWDA. In addition, the settlement agreement should use a consistent term for the aggrieved employees’ release, i.e., “Released Claims” rather than “Released PAGA Claims.”

3. Subsection (b) of paragraph III.A.I of the settlement agreement should be removed. The court will not approve a settlement that permits defendant to shorten the PAGA period.

4. Plaintiff’s counsel seeks attorneys’ fees totaling one-third of the gross settlement amount. Absent unique circumstances, the court is unlikely to approve an attorneys’ fees award that exceeds 30% of the gross settlement amount.