Anabi Oil Corp. v. iFuel CA2/4

Filed 2/24/22 Anabi Oil Corp. v. iFuel CA2/4
Opinion following supplemental briefing
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF
CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
ANABI OIL CORPORATION,
B301899
Plaintiff and Appellant,
(Los Angeles County
v. Super. Ct. No. 19NWCV00160)
IFUEL, INC., et al.,
Defendants and Appellants;
EVON HALAKA,
Defendant and Respondent.
Motion for sanctions. Granted.
K.P. Roberts & Associates, Kenneth P. Roberts, Ryan
P. Tish and Kevin Y. Kanooni for Plaintiff and Appellant.
Kashfian & Kashfian, Ryan D. Kashfian and Robert A.
Kashfian for Defendants and Appellants.
No appearance for Defendant and Respondent.
INTRODUCTION
In this post-remittitur opinion, we impose $11,562.50
in monetary sanctions against attorney Kenneth P. Roberts
and law firm K.P. Roberts & Associates (collectively
Roberts), counsel for plaintiff and appellant Anabi Oil
Corporation (Anabi), for filing a frivolous motion to recall the
remittitur. In our initial opinion, we affirmed an order
granting in part and denying in part an anti-SLAPP motion
filed by defendants and appellants iFuel, Inc., and Artashes
Yepremyan. We did not address the issue of iFuel and
Yepremyan’s entitlement to appellate attorney fees, which
the parties had not raised. In our disposition, we ordered
that “Anabi, iFuel, and Yepremyan shall bear their own
costs on appeal.” (Anabi Oil Corp. v. iFuel, Inc. (July 6,
2021, No. B301899) 2021 Cal.App.Unpub. LEXIS 4407, at
*42 (Anabi I).) Following issuance of the remittitur, which
restated our order regarding costs, iFuel and Yepremyan
filed in the trial court a motion to recover appellate attorney
fees under the anti-SLAPP statute. They argued our costs
order did not preclude their recovery of appellate attorney
fees, citing, inter alia, our analogous opinion in Stratton v.
Beck (2018) 30 Cal.App.5th 901 (Stratton).
Without citing Stratton, which he admittedly had
reviewed, Roberts filed in this court, on Anabi’s behalf, a
motion to recall the remittitur. Arguing “it would not make
sense” to allow iFuel and Yepremyan to recover appellate
attorney fees while denying them appellate costs, Roberts
speculated that we intended in our costs order to implicitly
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resolve against iFuel and Yepremyan the unbriefed issue of
their entitlement to fees. Roberts asked us to recall the
remittitur in order to clarify that this was our intent, so that
Anabi would not “have to address” iFuel and Yepremyan’s
motion for fees. iFuel and Yepremyan argued the motion to
recall the remittitur was frivolous, and moved for the
imposition of monetary sanctions against Roberts for filing
the motion, in the amount of $11,562.50 in attorney fees
incurred in post-remittitur proceedings. We denied the
motion to recall the remittitur, and ordered Roberts to show
cause in writing why sanctions should not be imposed.
Roberts contends sanctions are not warranted because
the motion to recall the remittitur was not frivolous. In the
alternative, he requests that we impose sanctions only in an
amount less than $1,000. We conclude the motion to recall
the remittitur was frivolous, warranting the imposition of
monetary sanctions against Roberts. We further conclude
iFuel and Yepremyan’s requested sum of $11,562.50 is
appropriate, as the imposition of sanctions in this amount
will compensate iFuel and Yepremyan for their attorney fees
and discourage Roberts and others from pursuing frivolous
claims on appeal.
BACKGROUND
A. Our Initial Opinion and Remittitur
In 2014, Anabi and iFuel executed contracts requiring
iFuel to make monthly purchases of gasoline from Anabi, for
resale at a gas station iFuel had leased. (Anabi I, supra,
2021 Cal.App.Unpub. LEXIS 4407, at *5.) The contracts
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granted Anabi a right of first refusal with respect to iFuel’s
leasehold interest in the gas station. (Id. at *5-*6.) The
contracts also imposed payment obligations on iFuel, which
Yepremyan guaranteed, in the event of a breach of the
gasoline sale provisions. (Id. at *5.) In 2019, iFuel and
Yepremyan entered into a settlement agreement with iFuel’s
landlord in a separate action, agreeing to vacate the
property. (Id. at *7-*8.) After Anabi received notice of the
settlement agreement and the impending transfer of
possession of the gas station, Anabi brought the instant
action against iFuel and Yepremyan, alleging they had
breached Anabi’s right of first refusal and anticipatorily
breached their payment obligations. (Id. at *9-*12.) iFuel
and Yepremyan filed an anti-SLAPP motion, asking the trial
court to strike Anabi’s complaint or specified portions
thereof. (Anabi I, supra, supra, at *12.) The court granted
iFuel and Yepremyan’s anti-SLAPP motion with respect to
Anabi’s claims based on the right of first refusal, but denied
the motion with respect to Anabi’s claims based on iFuel and
Yepremyan’s payment obligations. (Anabi I, at *21-*24.)
The parties cross-appealed; Anabi contended iFuel and
Yepremyan’s anti-SLAPP motion should have been wholly
denied, while iFuel and Yepremyan contended it should have
been wholly granted. (Anabi I, supra, 2021 Cal.App.Unpub.
LEXIS 4407, at *4.) Rejecting both cross-appeals, we
affirmed the order partially granting and partially denying
iFuel and Yepremyan’s anti-SLAPP motion. (Anabi I, supra,
at *4, *42.) We did not address the issue of iFuel and
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Yepremyan’s entitlement to appellate attorney fees, which
the parties had not raised. In our disposition, we ordered
that “Anabi, iFuel, and Yepremyan shall bear their own
costs on appeal.” (Id. at *42.) On October 18, 2021, the clerk
of this court issued a remittitur, which restated our order
regarding costs.
B. Post-Remittitur Proceedings
In November 2021, iFuel and Yepremyan filed in the
trial court a motion to recover appellate attorney fees under
the anti-SLAPP statute, as prevailing defendants on a
portion of their anti-SLAPP motion. (See Code Civ. Proc.,
§ 425.16, subd. (c)(1).) They argued our costs order did not
preclude their recovery of appellate attorney fees, citing,
inter alia, our opinion in Stratton, supra, 30 Cal.App.5th
901. Anabi’s counsel, Roberts, reviewed the motion and the
authorities cited therein, including Stratton.
In December 2021, on Anabi’s behalf, Roberts filed in
this court a motion to recall the remittitur. Roberts argued,
“[G]iven that neither Anabi Oil nor iFuel prevailed on their
appeals, Anabi Oil believes it implicit [in the order for the
parties to bear their own costs] that the Court of Appeal
intended that neither party recover . . . fees against the
other. It is submitted that it would not make sense to deny
an award of costs and impliedly or otherwise intend that
iFuel would be allowed its fees upon application after
remittitur. If Anabi Oil is correct, it is respectfully
submitted that this Court of Appeal should recall its
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Remittitur to make this clarification so that Anabi Oil will
not have to address the claim of attorney’s fees . . . .” (Fn.
omitted.) Roberts did not cite Stratton, or any other
authority cited by iFuel and Yepremyan in the trial court.
In addition to opposing the motion to recall the
remittitur, iFuel and Yepremyan moved for the imposition of
monetary sanctions against Roberts under California Rules
of Court, rule 8.276(a)(3), for filing a frivolous motion. They
requested that sanctions be imposed in the amount of
$11,562.50 in attorney fees incurred in these post-remittitur
proceedings, as supported by the attached declaration of
their counsel Ryan D. Kashfian.
On December 15, 2021, we issued an order denying the
motion to recall the remittitur, observing, “The remittitur
unambiguously did not determine whether iFuel and
Yepremyan are entitled to appellate attorney fees under
Code of Civil Procedure section 425.16, or deprive the trial
court of jurisdiction to make that determination. (See
Stratton v. Beck (2018) 30 Cal.App.5th 901, 904, 909-914.)”
Contemporaneously, we ordered Roberts to show cause in
writing why sanctions should not be assessed for the reasons
asserted in iFuel and Yepremyan’s motion for sanctions.1
1 We have satisfied the requirements of due process by giving
fair warning of the imposition of sanctions, allowing Roberts to
file opening and reply briefs on the sanctions issue, holding a
hearing at which Roberts presented oral argument, and issuing
this written statement of reasons. (See In re Marriage of
Flaherty (1982) 31 Cal.3d 637, 654.)
6
In his responsive briefing, supporting declaration, and
oral argument, Roberts misrepresented the motion to recall
the remittitur as a neutral request for clarification. He
maintained that the motion did not: (1) argue “one way or
the other” whether we had intended to deny iFuel and
Yepremyan their appellate attorney fees alongside their
appellate costs; (2) advocate the denial of fees; or (3) make
any request concerning the scheduled hearing in the trial
court on iFuel and Yepremyan’s fee motion. In fact, as
noted, the motion: (1) unequivocally stated Roberts’s belief
that we “intended that neither party recover . . . fees against
the other”; (2) asserted “it would not make sense” to have
intended otherwise; and (3) asked us to recall and clarify the
remittitur so that Anabi would not “have to address” iFuel
and Yepremyan’s motion for fees, implicitly asking us to
intervene so that the scheduled hearing on the motion would
not take place.
DISCUSSION
A. Principles
1. Sanctions
“On motion of a party or its own motion, a Court of
Appeal may impose sanctions . . . on a party or an attorney
for: [¶] . . . [¶] Filing a frivolous motion.” (Cal. Rules of
Court, rule 8.276(a)(3).) A motion is frivolous if any
reasonable attorney would agree the motion is totally devoid
of merit. (See Workman v. Colichman (2019) 33 Cal.App.5th
1039, 1062 (Workman) [frivolous appeal]; L.A. Taxi
7
Cooperative, Inc. v. The Independent Taxi Owners Assn. of
Los Angeles (2015) 239 Cal.App.4th 918, 932 (L.A. Taxi)
[frivolous anti-SLAPP motion].) A motion’s failure to cite
controlling adverse authority supports a finding of
frivolousness. (See L.A. Taxi, supra, at 933 [defendants’
second anti-SLAPP motion was frivolous, in part because it
failed to address controlling adverse authority that had been
cited by plaintiffs in opposition to first anti-SLAPP motion];
Personal Court Reporters, Inc. v. Rand (2012) 205
Cal.App.4th 182, 193 [“Where, as here, a party appeals and
merely repeats an argument that was soundly rejected by
another appellate panel, we have little difficulty concluding
that the party lacked good faith in pursuing the appeal.
Defendants’ conduct is especially egregious because they
failed to bring the prior case to our attention”].)
“‘Among the specific factors we may consider in
determining the appropriate amount of sanctions are the
amount of respondent’s attorney fees on appeal; . . . the
degree of objective frivolousness and delay; and the need for
discouragement of like conduct in the future.’” (Workman,
supra, 33 Cal.App.5th at 1064.) The final factor is important
because the pursuit of a frivolous motion squanders limited
judicial resources, depriving litigants with genuine issues of
the court’s time and energy. (See Kleveland v. Siegel &
Wolensky, LLP (2013) 215 Cal.App.4th 534, 559
[“‘Respondent[s] . . . are not the only parties damaged when
an appellant pursues a frivolous claim. Other appellate
parties, many of whom wait years for a resolution of bona
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fide disputes, are prejudiced by the useless diversion of this
court’s attention. [Citation.] In the same vein, the appellate
system and the taxpayers of this state are damaged by what
amounts to a waste of this court’s time and resources’”]; In re
Marriage of Flaherty, supra, 31 Cal.3d at 650 [“an appeal
taken despite the fact that no reasonable attorney could
have thought it meritorious ties up judicial resources and
diverts attention from the already burdensome volume of
work at the appellate courts”].)
2. Appellate Fees and Costs
Rule 8.278(d)(2) of the California Rules of Court (rule
8.278(d)(2)) provides, “Unless the court orders otherwise, an
award of costs neither includes attorney’s fees on appeal nor
precludes a party from seeking them . . . .” (Rule
8.278(d)(2).) “The plain meaning of rule 8.278(d)(2) is that
an award of costs in the Court of Appeal generally has no
bearing on a party’s ability to seek appellate attorney fees in
the trial court. Indeed, a leading treatise instructs, ‘Unless
an appellate decision expressly awards or denies fees, any
decision on allocation of appellate costs is irrelevant to a
later motion for fees in the trial court.’” (Stratton, supra, 30
Cal.App.5th at 910-911, quoting Pearl, Cal. Attorney Fee
Awards (Cont.Ed.Bar 2d ed. 2018) Obtaining Fees for
Appellate Services, § 12.4.) Although rule 8.278(d)(2) refers
to a costs award, it also applies where the court orders the
parties to bear their own costs. (Stratton, supra, at 911-912
[trial court properly awarded appellate attorney fees under
9
Labor Code section 98.2, despite prior order for parties to
bear their own appellate costs], citing Butler-Rupp v
Lourdeaux (2007) 154 Cal.App.4th 918, 925-927 [same, with
respect to award of appellate attorney fees under Civil Code
section 1717].) Moreover, rule 8.278(d)(2) applies
“regardless of the basis on which a party may seek fees.”
(Stratton, at 912 [deeming Butler-Rupp “indistinguishable”
despite “the different underlying basis for the attorney fee
award”].)
Under rule 8.278(d)(2), an order for the parties to bear
their own costs on appeal from an anti-SLAPP ruling does
not preclude recovery of appellate attorney fees in the trial
court. “[A] prevailing defendant on a special motion to strike
[under the anti-SLAPP statute] shall be entitled to recover
his or her attorney’s fees and costs. If the court finds that a
special motion to strike is frivolous or is solely intended to
cause unnecessary delay, the court shall award costs and
reasonable attorney’s fees to a plaintiff prevailing on the
motion . . . .” (Code Civ. Proc., § 425.16, subd. (c)(1).)
“[B]ecause [this provision] authorizes an award of attorney
fees to [the] prevailing party without limitation [to fees
incurred in the trial court], appellate attorney fees are also
recoverable.” (L.A. Taxi, supra, 239 Cal.App.4th at 933;
accord, Stratton, supra, 30 Cal.App.5th at 909 [“‘[a] statute
authorizing an attorney fee award at the trial court level
10
includes appellate attorney fees unless the statute
specifically provides otherwise’”].)2
B. Analysis
We conclude Roberts should be sanctioned for filing a
frivolous motion to recall the remittitur, as any reasonable
attorney would know the motion was totally devoid of merit.
In other words, no reasonable attorney would have perceived
any merit in Roberts’s argument that “it would not make
sense” to allow iFuel and Yepremyan to recover appellate
attorney fees while denying them appellate costs, and that
we should therefore recall the remittitur and clarify that it
was intended to preclude iFuel and Yepremyan’s recovery of
appellate attorney fees. Well before Roberts advanced this
argument, we explained in Stratton that under rule
8.278(d)(2), a decision on the allocation of appellate costs
2 Contrary to Roberts’s suggestion, we did not hold in L.A.
Taxi that the anti-SLAPP statute mandated an award of
appellate costs. Instead, we relied on the statute only in holding
that the prevailing plaintiffs on a frivolous anti-SLAPP motion
had been entitled to trial-court fees and costs, and that they also
could recover appellate attorney fees on remand. (L.A. Taxi,
supra, 239 Cal.App.4th at 932-933.) Separately, without
reference to the anti-SLAPP statute, we awarded the plaintiffs
their appellate costs. (See L.A. Taxi, supra, at 934.) In any
event, Roberts’s interpretation of L.A. Taxi does not assist him.
Even had the anti-SLAPP statute mandated an award of
appellate costs to iFuel and Yepremyan, any error in denying
them costs would not have warranted recalling the remittitur in
order to compound the error by denying them fees as well.
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alone is “‘irrelevant’” to a later motion for fees. (Stratton,
supra, 30 Cal.App.5th at 911.) Applying that rule in
circumstances analogous to those here, we held that our
order directing the parties to bear their own appellate costs
did not preclude the trial court from awarding appellate
attorney fees under Labor Code section 98.2, and we
affirmed the award of such fees. (Stratton, supra, at 909-
914.) We thus did in Stratton precisely what Roberts argued
would be senseless to do here, viz., allow a party to recover
appellate attorney fees while denying the party appellate
costs.
Roberts’s failure to cite Stratton in the motion
underscored its frivolousness.3 (See L.A. Taxi, supra, 239
3 Roberts’s failure to cite Stratton, which he admittedly had
reviewed, also violated the Rules of Professional Conduct. (See
Rules Prof. Conduct, rule 3.3(a)(2) (rule 3.3) [lawyer shall not
“fail to disclose to the tribunal legal authority in the controlling
jurisdiction known to the lawyer to be directly adverse to the
position of the client and not disclosed by opposing counsel”];
Davis v. TWC Dealer Group, Inc. (2019) 41 Cal.App.5th 662, 665,
671, 676-678 [counsel violated rule 3.3 by failing to inform court
of adverse controlling authority newly issued, after briefing was
completed, in separate case litigated by same firm; court
published opinion to “affirm -- and remind the profession of -- the
importance of candor toward the court”]; cf. Batt v. City and
County of San Francisco (2007) 155 Cal.App.4th 65, 82, fn. 9
(Batt) [before adoption of rule 3.3 in California, counsel violated
former rule 5-200, prohibiting advocacy by means inconsistent
with truth, by failing to cite known cases “clearly . . . pertinent to
any meaningful discussion” of issue presented], disapproved on
another ground by McWilliams v. City of Long Beach (2013) 56
Cal.4th 613.)
12
Cal.App.4th at 933; Personal Court Reporters, Inc. v. Rand,
supra, 205 Cal.App.4th 182, 193.) Roberts admits he
reviewed Stratton before filing the motion, but claims he
reasonably believed Stratton was distinguishable because it
involved fees under Labor Code section 98.2, rather than the
anti-SLAPP statute. But in Stratton, we emphasized that
rule 8.278(d)(2) applies “regardless of the basis on which a
party may seek fees,” and deemed a case involving fees
awarded under a different statute “indistinguishable.”
(Stratton, supra, 30 Cal.App.5th at 912.) Any reasonable
attorney would have expected us to follow our opinion in
Stratton despite “the different underlying basis for the
4
attorney fee award . . . .” (Ibid.)
We conclude Roberts’s filing of the frivolous motion to
recall the remittitur warrants the requested imposition of
4 Even crediting Roberts’s declaration that he believed in
good faith -- unreasonably -- that Stratton was distinguishable,
he violated his duty of candor to the court by failing to articulate
that belief in the motion to recall the remittitur, instead choosing
to ignore Stratton altogether. (See Batt, supra, 155 Cal.App.4th
at 82, fn. 9 [“‘The obligation to disclose adverse legal authority is
an aspect of the lawyer’s role as “officer of the court.” . . . lawyers
should reveal cases and statutes of the controlling jurisdiction
that the court needs to be aware of in order to intelligently rule
on the matter. It is good ethics and good tactics to identify the
adverse authorities, even though not directly adverse, and then
argue why they are distinguishable or unsound’”].) As noted,
Roberts continued to exhibit a lack of candor after we issued our
order to show cause, by misrepresenting the motion to recall the
remittitur as a neutral request for clarification.
13
$11,562.50 in monetary sanctions, reflecting the attorney
fees incurred by iFuel and Yepremyan in these post-
remittitur proceedings. (See Workman, supra, 33
Cal.App.5th at 1064.) Roberts neither challenges iFuel and
Yepremyan’s evidence in support of the requested sum, nor
articulates any reason to reduce the sum to less than $1,000,
as he requests. It is not our duty to develop an argument for
him. Moreover, reducing the sanctions to a paltry sum
would defeat our principal purpose in imposing them, viz.,
“‘discouragement of like conduct in the future.’” (Id. at
1064.) We intend that the sanctions we impose will
discourage Roberts and others from pursuing frivolous
claims on appeal, sparing the appellate system the “useless
diversion of this court’s attention,” and conserving for bona
fide disputes “this court’s time and resources.” (Kleveland v.
Siegel & Wolensky, LLP, supra, 215 Cal.App.4th 534, 559;
see also In re Marriage of Flaherty, supra, 31 Cal.3d at 650.)
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DISPOSITION
iFuel and Yepremyan’s motion for sanctions is granted.
Sanctions are imposed against Kenneth P. Roberts and K.P.
Roberts & Associates, jointly and severally, in the amount of
$11,562.50, payable to iFuel and Yepremyan. It is ordered
that within 30 days of this opinion’s becoming final:
(1) Kenneth P. Roberts and K.P. Roberts & Associates shall
pay the sanctions imposed herein; and (2) the clerk of this
court shall send a copy of this opinion to the State Bar of
California (see Bus. & Prof. Code, § 6086.7, subd. (a)(3)).
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
MANELLA, P. J.
We concur:
WILLHITE, J.
CURREY, J.
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