Defendant’s Motion for Sanctions
required by Grant, but PSC simply asks the Court to exercise its discretion anew. Nothing in Grant prevents such an exercise of discretion.
Second, they point to the following language in Grant: “Likewise, we do not mean to imply that, just because sometime in the future the bond will become insufficient due to increasing interest, the bond can be increased before it reasonably is necessary to assure the judgment creditor of the security to which he or she is entitled.” (Grant, supra, 225 Cal.App.3d at p. 939.) This language concerns a scenario not before the Court. With already accrued interest, the prior bond is indisputably insufficient to secure the judgment. This is not a bond that will “become insufficient” at “sometime in the future.” The bond is insufficient now.
Third, the PKG Parties argue the Court has already accounted for postjudgment interest by excluding it from the original bond because they couldn’t afford to cover both principal and interest. This argument fails to consider the evidence before the Court in October 2024, which showed that while the PKG Parties were unable to afford both principal and interest at that time, profits were “either stable or trending upwards.” (ROA 456 at p. 5.) The Court took the PKG Parties’ evidence and argument at face value.
Two years of stable or upward-trending profits have passed, and the evidence reflects the PKG Parties remain going concerns, in that they have valid liquor licenses. Nothing in the record indicates the PKG Parties’ own characterization of future business expectations was incorrect, so it stands to reason that what they can afford today is different from what they could afford nearly two years ago.
Fourth, they argue PSC has failed to show “a real, substantial possibility, not just speculation,” that the bond is insufficient. (Grant, supra, 225 Cal.App.3d at p. 938.) Again, the bond is indisputably insufficient to secure the judgment. Nearly two years of interest have accrued. The Court is permitted to consider this accrual under Grant, and it is also permitted to consider two years of what the PKG Parties themselves called stable and upward-trending profits.
For all of these reasons, in the exercise of its discretion, the Court concludes the bonds should be increased as set forth above. 6 WRW Properties, LLC vs. JVS Development LLC
Defendant’s Motion for Sanctions
ARC 1 Retail, LLC appealed the Court’s judgment in favor of Orange Coast Title Company of Southern California. The appellate court affirmed in an
2017-00939294
unpublished opinion. (ARC Retail 1, LLC v. Orange Coast Title Company of Southern California (November 13, 2025, G06283) (hereafter “Slip Op.”).) OCTC moved for sanctions on appeal. The appellate court denied the motion insofar as OCTC argued the appeal was frivolous, but granted the motion insofar as OCTC argued ARC violated the Rules of Court. The appellate court remanded to this Court with instructions “to determine: (1) whether sanctions should be awarded against ARC, its appellate counsel, or both; and (2) the appropriate amount of an award of sanctions to compensate Orange Coast for the attorney fees and other expenses it incurred on appeal, which award will deter ARC and/or its appellate counsel from violating the Rules of Court in the future.” (Slip Op. at p. 21.)
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OCTC seeks $89,363.50 in sanctions against ARC and its counsel, Gerard Fox Law, P.C., jointly and severally. This request is GRANTED IN PART. The Court awards OCTC $10,000 in sanctions against Gerard Fox Law, P.C. No sanctions are awarded against ARC. The Court finds this amount sufficient to deter future violations of the Rules of Court. Pursuant to Bus. & Prof. Code § 6068.7(a)(3), the clerk is ordered to transmit a copy of this order to the State Bar. Pursuant to Bus. & Prof. Code § 6068.7(o)(3), Gerard Fox Law, P.C. is ordered to do the same, and to file proof of service of this order on the State Bar.
Finally, ARC’s request to strike or tax costs, made in its opposition brief, is DENIED. GROUNDS FOR RULING
I. Against Whom Sanctions Should Be Awarded
The two questions presented on remand are (1) whether sanctions should be awarded against ARC, its counsel, or both, and (2) the amount of sanctions to be awarded.
The Court finds sanctions should be awarded against Gerard Fox Law, P.C. alone. The sanctionable misconduct is violation of the Rules of Court regarding the content of appellate briefs. Represented parties entrust compliance with those rules to their retained counsel. In contrast, when violations of the Rules of Court are paired with a frivolous appeal, sanctions against both client and counsel are appropriate. (Compare Alicia T. v. County of Los Angeles (1990) 222 Cal.App.3d 869, 884-886 (sanctions against counsel for violations of Rules of Court) with Evans v. Centerstone Development Co. (2005) 134 Cal.App.4th 151, 165-170 (sanctions against client and counsel for frivolous appeal and violations of Rules of Court).) OCTC argues sanctions against ARC are appropriate because joint and several
sanctions are routinely imposed “for a frivolous appeal or unreasonable rule violations.” (Mot. at p. 4.) The case it cites for this proposition, Pierotti v. Torian (2000) 81 Cal.App.4th 17, involved a frivolous appeal and unreasonable rule violations, like Evans, supra. OCTC also argues ARC has a “demonstrated history of disregarding court rules and procedures.” (Mot. at p. 5.) Apart from the misconduct noted by the appellate court, it cites ARC’s prosecuting this action while not in good standing with the Secretary of State and its attempt to file an untimely expert report. The former issue was resolved when ARC restored its good standing status, and the latter was sufficiently addressed by the Court’s refusal to consider the expert report. In short, sanctions against counsel alone are appropriate.
II. Amount of Award
As to the amount of the award, OCTC seeks $89,363.50, representing attorney’s fees and expenses incurred on appeal and in preparing this motion. The Court will not permit recovery of this amount for several reasons.
First, the claimed lodestar is not credible. When OCTC moved for sanctions on appeal, it claimed a total of $26,542.50 in fees for its responsive brief, preparation of the sanctions motion, oral argument preparation, and appearance at oral argument. (OCTC RJN, Ex. E.) Here, OCTC seeks over $60,000 more. OCTC offers no explanation for why it told the appellate court it sought about $26,000 “in connection with ARC’s frivolous appeal” (OCTC RJN, Ex. E, at ¶ 9) but now claims about $85,000 “in attorney’s fees in connection with the appeal.” (Mot. at p. 6.) If OCTC intends to seek its fees on appeal, it will be limited to what it claimed on appeal, plus fees incurred for the present papers.
Second, awarding all fees incurred on appeal would effectively grant OCTC relief the appellate court denied. Such an award might be justified if the appeal were frivolous, but the appellate court expressly declined to find the appeal frivolous.
Third, and relatedly, an award of all fees incurred on appeal would be disproportionate to the misconduct at issue. The appellate court ordered sanctions for (1) six citations to unpublished cases, (2) an unspecified number of inaccurate quotations from published cases, and (3) numerous improper citations to the appellate record. (Slip Op. at p. 20.) For comparison, in the recent case of Noland v. Land of the Free, L.P. (2025) 114
Cal.App.5th 426, “nearly all of the quotations in plaintiff’s opening brief, and many of the quotations in plaintiff’s reply brief,” were “fabricated” by generative artificial intelligence. (Id., at p. 435.) The appellate court awarded $10,000 in sanctions. It noted that larger sanctions might be appropriate, but because counsel “expressed remorse for his actions,” $10,000 sufficed.
Based on the appellate court’s opinion in this case, it appears counsel’s misconduct was less pervasive than in Noland, where nearly all quotations were fabricated. This might support a lower sanction than the $10,000 awarded there. On the other hand, ARC and its counsel’s opposition brief is anything but remorseful. It describes the appellate court’s opinion as “simply an embarrassment to those of us who defend the California court system,” accuses the appellate court of being “disingenuous” and “intellectually...insulting,” questions whether the appellate court ever read two cases cited in its opinion, and characterizes the opinion as containing “a gross misstatement of fact and grossly improper assumption.” (See generally Opp.)
Moreover, the opposition asks this Court to ignore the appellate court’s instructions on remand and not order sanctions. This might merit a higher sanction than the amount awarded in Noland. Considering the foregoing, as well as the full record in this matter, the Court concludes in its discretion that $10,000 is a sufficient sanction to deter counsel from violating the Rules of Court in the future. Said sanction is payable to OCTC, through its counsel, by July 26, 2026.
III. Request to Strike Costs In the last sentence of its opposition, ARC asks the Court to “strike the disallowed costs from the Memorandum of Costs.” No motion to strike or tax costs has been filed, so this request is denied.
7 Arteaga vs. Penske Logistics, LLC.
2025-01501859
Defendant’s Motion to Stay
Defendant Penske Logistics, LLC’s motion to stay proceedings is GRANTED. This case is stayed pending resolution of Nelson v. Penske Logistics, LLC, San Joaquin County Super. Ct. No. STK-CV-UOE-2024-0001484. A status conference will take place on March 2, 2027 at 8:30 a.m. The parties shall file a joint status report by February 23, 2027.
GROUNDS FOR RULING
I. Factual Background