Fine Consulting Services, Inc. vs. Alvarez

dated. (Code Civ. Proc. § 2015.5 [requiring that a declaration state the date of execution to be valid].) Here, the declaration of Geneva Milne states, “Executed this DAY day of MONTH, 2026.” (ROA 442.)

The Court Clerk shall give notice of this ruling.

6 Fine Consulting TENTATIVE RULING: Services, Inc. vs. Alvarez For the reasons set forth below, Plaintiff Fine Consulting Services, Inc.’s (“FCS”) motion for sanctions against Defendant Search Fund Accelerator, LLC (“SFA”), under Code of Civil Procedure section 128.7 is DENIED.

Plaintiff argues that Defendant SFA’s motion to disqualify counsel Katie Charleston as trial counsel under the advocate-witness doctrine lacked evidentiary support, was not warranted by existing law or any good faith argument, and was presented for an improper purpose, including to harass, cause delay, increase litigation costs, and gain tactical advantage following mistrial.

Motion for Sanctions Under Section 128.7

Code of Civil Procedure section 128.7 authorizes a court to impose 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.

Code of Civil Procedure 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.)

Under section 128.7, a court may impose sanctions if it concludes a pleading was filed for an improper purpose or was indisputably without merit, either legally or factually. (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 189-190.) A claim is factually frivolous if it is “not well grounded in fact” and is legally frivolous if it is “not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.” (Ibid.) In either case, to obtain sanctions, the moving party must show the party's conduct in asserting the claim was objectively unreasonable. (Ibid.)

A claim is objectively unreasonable if “any reasonable attorney would agree that [it] is totally and completely without merit.” (Ibid.) However, “section 128.7 sanctions should be ‘made with restraint’ [Citation], and are not mandatory even if a claim is frivolous.” (Peake v. Underwood (2014) 227 Cal.App.4th 428. at 448.)

“When a motion has partial merit, it is not ‘totally and completely’ without merit.” (Gerbosi v. Gaims, Weil, W. & Epstein, LLP (2011) 193 Cal. App. 4th 435, 450.)

Merits

Here, while the court ultimately did not agree with SFA’s motion to disqualify, the court cannot find that the motion was without merit, made for an improper purpose, and/or lacked evidence. At the very least, SFA’s motion had minimal partial merit that was based on facts and the law.

First, SFA provided a legal basis for the motion. California Rules of Professional Conduct, rule 3.7 sets forth the attorney advocate-witness doctrine. “[T]he general rule is that an attorney may serve as both advocate and witness, testifying at trial concerning disputed issues, if the client has provided its informed written consent.” (Geringer v. Blue Rider Finance (2023) 94 Cal.App.4th 813, 822.) But even with informed consent, “[A] court retains discretion to disqualify a likely advocate-witness as counsel, notwithstanding client consent, where there is ‘a convincing demonstration of detriment to the opponent or injury to the integrity of the judicial process.’ (Lyle[v.

Superior Court (1981) 122 Cal.App.3d 470,] 482.)” (Doe v. Yim (2020) 55 Cal.App.5th 573, 581-582). While the court ultimately weighed the evidence and found that the factors weighed against disqualification, there was a sufficient legal basis for the motion.

Second, SFA provided some evidentiary support for the motion.

“In exercising its discretion to disqualify counsel under the advocatewitness rule, a court must consider: (1) ‘“‘whether counsel’s testimony is, in fact, genuinely needed’”’; (2) ‘the possibility [opposing] counsel is using the motion to disqualify for purely tactical reasons’; and (3) ‘the combined effects of the strong interest parties have in representation by counsel of their choice, and in avoiding the duplicate expense and time-consuming effort involved in replacing counsel already familiar with the case.’ [Citation.]” (Yim, supra, 55 Cal.App.5th at pp. 583–584.) SFA’s motion proffered facts related to these factors.

• Factor 1—Genuinely Necessary Witness: It was undisputed that Attorney Charleston has personal knowledge of key events. Attorney Charleston was deposed in her capacity as Plaintiff’s PMK witness. (See Motion to DQ, Pitet Decl., Ex. 1.) Among other things, her testimony related to her setting up, testing, attempting to resolve technical issues with, and ultimately closing Ellen and Stephen’s e-mail accounts—all central issues in this case. (See, e.g., Pitet Decl., Ex. 1 at pp. 29-65, 108, 129, 140.) As such, SFA did offer evidence that Attorney Charleston was a possible key witness. Nonetheless, the court ultimately found that Defendant did not establish that it was unable to fully elicit testimony from Attorney Charleston or fully advocate for its client at the first trial.

• Factor 2—Possibility of Tactical Purpose: SFA offered the following evidence: After the mistrial, Attorney Charleston filed a claim with the State Bar against defense counsel Attorney Pitet, alleging that defendant counsel Pitet knowingly made false statements accusing her of destroying evidence and manufacturing facts and evidence. Attorney Pitet promptly responded to the inquiry, and the State Bar closed the matter without further investigation. Defendant SFA first moved to disqualify Attorney Charleston two months after the State Bar investigation had closed.

Therefore, SFA did offer some evidence that SFA’s delay in filing the motion was due to other reasons. The court, nevertheless, found that SFA’s arguments were unpersuasive because Defendants knew as early as January 2023 and as late as June 2025 that Attorney Charleston would take on a dual role at trial and took no steps to disqualify, to object to Charleston’s testimony or continued representation, or otherwise alert the court to this issue.

• Factor 3—Plaintiff’s Interest in Chosen Representation: There was evidence that Plaintiff has co-counsel, Outwater and Pinckes LLP. Ultimately, the court weighed in favor of

Plaintiff’s interest in its chosen counsel, Attorney Charleston, who actively participated in the underlying transaction and was extensively involved in this litigation since filing the action.

In summary, while the court ultimately was unpersuaded and did not find the weight of SFA’s evidence enough to warrant disqualification, there was at least minimal evidence to support each of the factors for disqualification.

Finally, the court cannot, on the record before it, find that there is sufficient evidence that the motion was filed for an improper purpose/motive. While the court did find that “Defendant’s lengthy delay in moving for disqualification supports a reasonable finding that this motion was made for tactical purposes” (Minute Order, dated 07/15/26), the court cannot find that the delayed filing shows the motion was filed for the purpose of harassment, causing unnecessary delay or needlessly increasing the cost of litigation. While SFA’s motion to disqualify did have those indirect consequences, there is insufficient evidence that the purpose of the motion was to directly cause said consequences. SFA’s counsel offers a declaration that the intent was to file the motion in good faith and the court accepts that testimony.

For these reasons, the motion is DENIED.

Plaintiff to give notice.

7 GSHC TENTATIVE RULING: Surrogacy Agency LLC For the reasons set forth below, the motion by Plaintiff/Cross- vs. Li Defendant GSHC Surrogacy Agency, LLC (“GSHC”) for attorneys’ fees is DENIED.

Fees Under CUTSA

GSHC moves for attorneys’ fees in the amount of $24,780.00 under Civil Code § 3426.4 as the prevailing party on a misappropriation of trades secret claim, which was allegedly made in bad faith.

Attorney’s fees are recoverable as costs, when authorized by contract, statute, or law. (Code Civ. Proc., § 1033.5(10)(A)-(C).) Defendants Sung Yoon Kim and Omniq, Inc. argue that Defendants are entitled to recover statutory fees pursuant to the California Uniform Trade Secrets Act (“CUTSA”). CUTSA provides that if “a claim of misappropriation is made in bad faith . . . the court may award reasonable attorney’s fees and costs [including expert fees] to the