CCP 1038 Sanctions Cannot Be Awarded Against Attorneys, but Can Be Granted by Different Judge Than the One Who Granted Summary Judgment

In Suarez v. City of Corona, published August 29, 2014, the Fourth District Court of Appeal, Division 1, reversed in part and affirmed in part an award of defense-fee sanctions under Code of Civil Procedure section 1038.  The plaintiff and his counsel maintained an action against the defendant city arising out of the explosion of a compressed natural gas tank in a van in which he rode, while the tank was being filled at a city-owned filling station.  He contended that the city maintained a dangerous condition of public property.  Discovery turned up no evidence of a dangerous condition, as well as evidence that factors unrelated to the city caused the explosion.  The plaintiff rejected demands to dismiss the city, or to provide a theory of liability against the city.  The city won summary judgment.  It then moved for defense fees under section 1038.  Although the judge who granted summary judgment was available, a commissioner heard the motion.  Neither party objected to the commissioner presiding over the motion.  The commissioner awarded defense fees of over $100,000 against the plaintiff and his counsel.

The appellate court reversed the award of fees against the plaintiff's counsel.  It agreed with the recent decision in Settle v. State of California (2014) 228 Cal.App.4th 215 that section 1038 cannot be interpreted to provide for awards of attorney fees against counsel.  It upheld the award against the plaintiff in full.  It rejected the argument that the commissioner had no jurisdiction to hear the motion.  Although a section 1038 motion must be heard by the same judge who granted summary judgment unless that judge is available, parties may stipulate to a commissioner hearing a matter, and the stipulation may be inferred form counsel's conduct.  Plaintiff's counsel could not wait until after the commissioner ruled against him to object to the commissioner hearing the matter.  The appellate court, reviewing the finding of lack of reasonable cause de novo, agreed with the commissioner's finding that the suit against the city lacked reasonable cause.  It rejected the argument that to provide due process the motion for sanctions had to be noticed to be heard at the same time as the summary judgment motion.  The motion need only be filed at the earliest practical time before the entry of judgment.