Friday, August 28, 2026
Page 3
Court of Appeal:
Wrong Hearing Date in Notice Does Not Gut Sanction Award
Opinion Creates Split With Second District, Says ‘Strict Compliance’ Required for ‘Safe Harbor’ Window That Allows Party 21 Days to Withdraw Offensive Filing Does Not Apply to Moving Party’s Notice Obligations
By a MetNews Staff Writer
Div. Four of the First District Court of Appeal has affirmed an order imposing sanctions in the amount of $29,055 on a Palo Alto-area law firm and its founder for filing an amended complaint that asserts causes of action that were identical to those that were the subject of an earlier demurrer that was sustained without leave to amend, rejecting the view that the moving party’s inclusion of an incorrect date its notice of the request undermined the court’s jurisdiction.
The sanctions were requested under Code of Civil Procedure §§128.5 and 128.7, each of which authorizes a court to require the payment of penalties for bad faith tactics during litigation.
Both sections contain nearly identical safe harbor provisions, each of which provide that a “[n]otice of motion shall be served as provided in Section 1010 but shall not be filed with or presented to the court unless” the challenged action or filing “is not withdrawn or appropriately corrected” within 21 days of service. Courts have interpreted the section to require “strict compliance” with the provisions.
Sec. 1010, in turn, specifies:
“Notices must be in writing, and the notice of a motion, other than for a new trial, must state when, and the grounds upon which it will be made, and the papers, if any, upon which it is to be based.”
No Reversal Warranted
Marin Superior Court Judge Andrew Sweet, sitting by assignment, authored the decision, filed late Wednesday and joined in by Presiding Justice Tracie L. Brown and Justice Jeremy M. Goldman. He wrote:
“We hold that the fact that the hearing was rescheduled for a later date, as reflected in the notice of motion that was filed with the trial court does not require reversing the court’s order where the motion served and subsequently filed were substantively the same and otherwise strictly satisfied the safe harbor provisions. We affirm.”
Sweet acknowledged decisions invalidating sanctions awards under similar circumstances but said:
“We agree…that the safe harbor provision of section 128.7 requires strict compliance in order to afford a litigant an adequate opportunity to withdraw an offending pleading without penalty once the impropriety of the pleading has been made clear. However, as we explain more fully below, we respectfully disagree with two cases from the Second District that extend application of strict compliance of section 128.7’s safe harbor provisions to include the notice provisions in section 1010.”
Arguing that the defects in the notice undermined the court’s ability to impose sanctions was Ari Law P.C., founded by attorney Ali Ari Aalaei, which had filed a complaint on its own behalf against Autonation.com Inc. and BMW Financial Services NA LLC, among others, in 2023, asserting claims for breach of contract, fraud, as well as causes of action arising out of alleged implied and express warranties relating to the lease of a vehicle.
Demurrer Sustained
In August 2024, San Mateo Superior Court Judge Nancy L. Fineman sustained a demurrer as to the breach-of warranty causes of action, without leave to amend, but granted leave to file an updated pleading.
Ari Law filed a third-amended complaint the following month, asserting all of the same causes of action. After calls to withdraw those counts were ignored, BMW Financial served the plaintiff with a notice of motion and motion for sanctions pursuant to §§125.7 and 125.8 on Dec. 17, 2024, citing a hearing date of Jan. 17, 2025.
The defendant filed its request with the court on Jan. 15, 2025 and served a new copy of a notice of motion on Ari Law, this time listing March 18, 2025 as a the hearing date.
On March 18, 2025, Fineman told the plaintiff that the argument was “going nowhere” because the “notice was good.” She imposed sanctions on the firm and Aalaei a few weeks later, writing:
“Both Plaintiff and its counsel are officers of the Court, so [an] inference of bad faith based on…utterly unmeritorious conduct is…appropriate….[T]he Court…imposes monetary sanctions on Plaintiff in the amount of $29,055 in Defendant’s attorney’s fees related to the instant Motion.”
A demurrer to the new pleading was sustained on Feb. 2, 2025 as to the warranty causes of action.
Procedural Requirements
On appeal, Ari law alleged that Fineman erred in awarding sanctions because the defendant’s papers did not comply with the procedural requirements of the safe harbor provisions found in §§128.5 and 128.7. Sweet responded:
“That the filed motion noticed a later hearing date of March 18, 2025, does not eviscerate strict compliance with the safe harbor provisions. We therefore affirm the trial court’s sanctions order.”
He recognized that two Second District cases, the 2009 decision by Div. Four in Galleria Plus Inc. v. Hanmi Bank, and Div. Five’s opinion earlier this year in J.N. v. Goldberg, have enforced strict compliance with the statute’s notice provisions based on an assertion that doing so underscores the seriousness of sanctions. However, he remarked:
“[W]e believe that a failure to include when the sanctions motion will in fact be heard does not render a notice of motion under section 1010 ‘fatally defective.’ We agree that section 128.7’s plain language clearly incorporates and requires compliance with section 1010. We disagree, however, that the legislative history and case law interpreting section 128.7 require strict compliance with the notice provisions of section 1010, particularly where the trial court’s procedure for scheduling hearings makes strict compliance with section 1010 impossible in the absence of an ex parte request to obtain a hearing date before filing the motion.”
No Prejudice
Saying that “we find that the notice provided under section 1010 should be interpreted as it ordinarily would,” the jurist concluded that “[e]ven if a party timely asserts an objection to a motion based on defective notice, the party must also show prejudice” and “Ari Law’s opposition did not argue that it was prejudiced by the defective notice” and so is deemed to have “waived any defects or irregularities in the notice of motion.”
In a footnote, he added:
“[W]e note that the placeholder hearing date on the motion here—January 17, 2025—would not have complied with the time requirements of section 1005, subdivision (b) based on when the motion could have been filed after expiration of the safe harbor. The fact that local court rules or procedures may prevent a party from obtaining a hearing date at the time the motion for sanctions must be served does not warrant the inclusion of a placeholder hearing date that fails to satisfy statutory requirements.”
The case is Ari Law P.C. v. Autonation.com Inc., 2026 S.O.S. 2690.
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