Filed 7/22/22 CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
TRANSCON FINANCIAL, INC., et al.,
Plaintiffs and Appellants, E076728
v. (Super.Ct.No. RIC2003566)
REID & HELLYER, APC, OPINION
Defendant and Respondent.
APPEAL from the Superior Court of Riverside County. Carol A. Greene, Judge.
Reversed.
Law Office of Ronald B. Talkov, Ronald B. Talkov; Talkov Law, Scott Talkov
and Christopher M. Kiernan for Plaintiffs and Appellants.
O’Hagan Meyer, Clint D. Robison and John P. Allenza for Defendant and
Respondent.
Defendant Reid & Hellyer, APC (Reid & Hellyer) moved for sanctions against
plaintiff Transcon Financial, Inc. (Transcon) and its counsel, Ronald B. Talkov. Reid &
Hellyer filed two motions, one under Code of Civil Procedure section 128.5 and one
1 under section 128.7. (Unlabeled statutory citations refer to the Code of Civil Procedure.)
The trial court granted both motions.
Transcon and Talkov appeal from the orders granting the sanctions motions. We
hold that the trial court erred by concluding that the sanctions motions could be filed on
the last day of the 21-day safe harbor period, rather than on the first day after the 21-day
period expired.
Reid & Hellyer filed their sanctions motions on the last day of the 21-day period
and therefore did not comply with the safe harbor provisions of the governing statutes.
The trial court therefore erred by granting the motions. Accordingly, we reverse.
BACKGROUND
On November 12, 2020, Reid & Hellyer served the motions for sanctions on
Transcon and Talkov. The firm served the motions by first class mail and email. On
December 7, 2020, the firm filed the sanctions motions. Transcon and Talkov filed
opposition briefs arguing in part that Reid & Hellyer had not complied with the 21-day
safe harbor provisions of sections 128.5 and 128.7.
The trial court determined that Reid & Hellyer had complied with the safe harbor
provisions. The court ruled that 21 days from service was December 3, 2020, a
Thursday, but service by email extended the period by two court days to Monday,
December 7. (§ 1010.6, subd. (a)(4)(B).) The court concluded that “the first day to file
was December 7, 2020,” the day on which the firm had filed the motions.
The court further ruled that Transcon and Talkov had engaged in sanctionable
conduct by (1) asserting a cause of action that was legally frivolous and completely
2 meritless and (2) including confidential financial information in the complaint for
purposes of harassment. The court ordered Transcon and Talkov to pay $5,570 in costs
to Reid & Hellyer and another $1,000 each to the court.
DISCUSSION
Transcon and Talkov argue that the court erroneously determined Reid & Hellyer
had complied with the safe harbor provisions of sections 128.5 and 128.7. We agree.
The firm filed the sanctions motions one day early. Consequently, Reid & Hellyer was
not entitled to sanctions.
When the facts are undisputed, as they are here, we apply the de novo standard of
review to the court’s calculation of the safe harbor period. (Broadcast Music, Inc. v.
Structured Asset Sales, LLC (2022) 75 Cal.App.5th 596, 604 (Broadcast Music);
Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698 (Martorana).)
Under section 128.7, the party moving for sanctions must serve the motion on the
opposing party, but the motion “shall not be filed with or presented to the court unless,
within 21 days after service of the motion, or any other period as the court may prescribe,
the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or
appropriately corrected.” (§ 128.7, subd. (c)(1).) Section 128.5 contains a nearly
identical safe harbor provision. (§ 128.5, subd. (f)(1)(B) [sanctions motion “shall not be
filed with or presented to the court, unless 21 days after service of the motion or any
other period as the court may prescribe, the challenged action or tactic is not withdrawn
or appropriately corrected”].)
3 Thus, a party seeking sanctions under sections 128.5 and 128.7 must follow a two-
step procedure. (Martorana, supra, 175 Cal.App.4th at p. 698.) First, the “‘moving party
must serve on the offending party a motion for sanctions.’” (Ibid.) Service of the
sanctions motion triggers the 21-day safe harbor period during which the moving party
may not file the motion. (Ibid.) That is because the offending party may avoid sanctions
by withdrawing the challenged pleading during the 21-day period. (Ibid.) Second, if the
offending party does not withdraw the challenged pleading during that period, then the
moving party may file the sanctions motion. (Ibid.)
The “21 days is not a notice period. . . . It defines when the target of a sanctions
motion can act without penalty and withdraw” an objectionable document. (Broadcast
Music, supra, 75 Cal.App.5th at p. 606.) The moving party must file the motion “outside
the safe harbor period,” not “on day one of the safe harbor period, day 21 of the safe
harbor period, or any day in between.” (Ibid.) In other words, the “sanctions motion
cannot be filed until the 22nd day after service of the motion, i.e., after the 21-day safe
harbor period expires.” (Id. at p. 605.)
Moreover, the law requires strict compliance with the safe harbor provisions.
(Li v. Majestic Industry Hills LLC (2009) 177 Cal.App.4th 585, 593.) Failure to comply
with the safe harbor provisions “precludes an award of sanctions.” (Martorana, supra,
175 Cal.App.4th at p. 700; Li, at p. 594 [“compliance with the safe harbor is a
prerequisite to recovering sanctions”].)
In this case, the court erred by concluding that Reid & Hellyer had complied with
the safe harbor provisions. The firm served both sanctions motions on November 12,
4 2020. The parties agree that 21 days from that date was Thursday, December 3, 2020.
The parties also agree that the safe harbor period was extended by two court days under
section 1010.6, subdivision (a)(4)(B). That section concerns electronic service and states
in relevant part: “[A]ny right or duty to do any act or make any response within any
period or on a date certain after the service of the document, which time period or date is
prescribed by statute or rule of court, shall be extended after service by electronic means
by two court days.” (§ 1010.6, subd. (a)(4)(B).)
Section 1010.6 thus extended the safe harbor period by two court days to Monday,
December 7, 2020. 1 That means that Transcon and Talkov had through December 7 to
withdraw the challenged complaint and avoid sanctions. And Reid & Hellyer had to wait
for the period to expire fully before filing the sanctions motions. (Broadcast Music,
supra, 75 Cal.App.5th at pp. 605-606.) The first day that the firm could file the motions
was December 8, 2020. The trial court therefore erred by concluding that the firm had
complied with the safe harbor provisions by filing on December 7.
The error requires reversal. (Martorana, supra, 175 Cal.App.4th at p. 700.) If the
court had properly calculated the safe harbor period, it would have been required to deny
the sanctions motions, because compliance with the safe harbor provisions was
mandatory. (Ibid.) The error thus prejudiced Transcon and Talkov. (Cassim v. Allstate
Ins. Co.
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Filed 7/22/22 CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
TRANSCON FINANCIAL, INC., et al.,
Plaintiffs and Appellants, E076728
v. (Super.Ct.No. RIC2003566)
REID & HELLYER, APC, OPINION
Defendant and Respondent.
APPEAL from the Superior Court of Riverside County. Carol A. Greene, Judge.
Reversed.
Law Office of Ronald B. Talkov, Ronald B. Talkov; Talkov Law, Scott Talkov
and Christopher M. Kiernan for Plaintiffs and Appellants.
O’Hagan Meyer, Clint D. Robison and John P. Allenza for Defendant and
Respondent.
Defendant Reid & Hellyer, APC (Reid & Hellyer) moved for sanctions against
plaintiff Transcon Financial, Inc. (Transcon) and its counsel, Ronald B. Talkov. Reid &
Hellyer filed two motions, one under Code of Civil Procedure section 128.5 and one
1 under section 128.7. (Unlabeled statutory citations refer to the Code of Civil Procedure.)
The trial court granted both motions.
Transcon and Talkov appeal from the orders granting the sanctions motions. We
hold that the trial court erred by concluding that the sanctions motions could be filed on
the last day of the 21-day safe harbor period, rather than on the first day after the 21-day
period expired.
Reid & Hellyer filed their sanctions motions on the last day of the 21-day period
and therefore did not comply with the safe harbor provisions of the governing statutes.
The trial court therefore erred by granting the motions. Accordingly, we reverse.
BACKGROUND
On November 12, 2020, Reid & Hellyer served the motions for sanctions on
Transcon and Talkov. The firm served the motions by first class mail and email. On
December 7, 2020, the firm filed the sanctions motions. Transcon and Talkov filed
opposition briefs arguing in part that Reid & Hellyer had not complied with the 21-day
safe harbor provisions of sections 128.5 and 128.7.
The trial court determined that Reid & Hellyer had complied with the safe harbor
provisions. The court ruled that 21 days from service was December 3, 2020, a
Thursday, but service by email extended the period by two court days to Monday,
December 7. (§ 1010.6, subd. (a)(4)(B).) The court concluded that “the first day to file
was December 7, 2020,” the day on which the firm had filed the motions.
The court further ruled that Transcon and Talkov had engaged in sanctionable
conduct by (1) asserting a cause of action that was legally frivolous and completely
2 meritless and (2) including confidential financial information in the complaint for
purposes of harassment. The court ordered Transcon and Talkov to pay $5,570 in costs
to Reid & Hellyer and another $1,000 each to the court.
DISCUSSION
Transcon and Talkov argue that the court erroneously determined Reid & Hellyer
had complied with the safe harbor provisions of sections 128.5 and 128.7. We agree.
The firm filed the sanctions motions one day early. Consequently, Reid & Hellyer was
not entitled to sanctions.
When the facts are undisputed, as they are here, we apply the de novo standard of
review to the court’s calculation of the safe harbor period. (Broadcast Music, Inc. v.
Structured Asset Sales, LLC (2022) 75 Cal.App.5th 596, 604 (Broadcast Music);
Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698 (Martorana).)
Under section 128.7, the party moving for sanctions must serve the motion on the
opposing party, but the motion “shall not be filed with or presented to the court unless,
within 21 days after service of the motion, or any other period as the court may prescribe,
the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or
appropriately corrected.” (§ 128.7, subd. (c)(1).) Section 128.5 contains a nearly
identical safe harbor provision. (§ 128.5, subd. (f)(1)(B) [sanctions motion “shall not be
filed with or presented to the court, unless 21 days after service of the motion or any
other period as the court may prescribe, the challenged action or tactic is not withdrawn
or appropriately corrected”].)
3 Thus, a party seeking sanctions under sections 128.5 and 128.7 must follow a two-
step procedure. (Martorana, supra, 175 Cal.App.4th at p. 698.) First, the “‘moving party
must serve on the offending party a motion for sanctions.’” (Ibid.) Service of the
sanctions motion triggers the 21-day safe harbor period during which the moving party
may not file the motion. (Ibid.) That is because the offending party may avoid sanctions
by withdrawing the challenged pleading during the 21-day period. (Ibid.) Second, if the
offending party does not withdraw the challenged pleading during that period, then the
moving party may file the sanctions motion. (Ibid.)
The “21 days is not a notice period. . . . It defines when the target of a sanctions
motion can act without penalty and withdraw” an objectionable document. (Broadcast
Music, supra, 75 Cal.App.5th at p. 606.) The moving party must file the motion “outside
the safe harbor period,” not “on day one of the safe harbor period, day 21 of the safe
harbor period, or any day in between.” (Ibid.) In other words, the “sanctions motion
cannot be filed until the 22nd day after service of the motion, i.e., after the 21-day safe
harbor period expires.” (Id. at p. 605.)
Moreover, the law requires strict compliance with the safe harbor provisions.
(Li v. Majestic Industry Hills LLC (2009) 177 Cal.App.4th 585, 593.) Failure to comply
with the safe harbor provisions “precludes an award of sanctions.” (Martorana, supra,
175 Cal.App.4th at p. 700; Li, at p. 594 [“compliance with the safe harbor is a
prerequisite to recovering sanctions”].)
In this case, the court erred by concluding that Reid & Hellyer had complied with
the safe harbor provisions. The firm served both sanctions motions on November 12,
4 2020. The parties agree that 21 days from that date was Thursday, December 3, 2020.
The parties also agree that the safe harbor period was extended by two court days under
section 1010.6, subdivision (a)(4)(B). That section concerns electronic service and states
in relevant part: “[A]ny right or duty to do any act or make any response within any
period or on a date certain after the service of the document, which time period or date is
prescribed by statute or rule of court, shall be extended after service by electronic means
by two court days.” (§ 1010.6, subd. (a)(4)(B).)
Section 1010.6 thus extended the safe harbor period by two court days to Monday,
December 7, 2020. 1 That means that Transcon and Talkov had through December 7 to
withdraw the challenged complaint and avoid sanctions. And Reid & Hellyer had to wait
for the period to expire fully before filing the sanctions motions. (Broadcast Music,
supra, 75 Cal.App.5th at pp. 605-606.) The first day that the firm could file the motions
was December 8, 2020. The trial court therefore erred by concluding that the firm had
complied with the safe harbor provisions by filing on December 7.
The error requires reversal. (Martorana, supra, 175 Cal.App.4th at p. 700.) If the
court had properly calculated the safe harbor period, it would have been required to deny
the sanctions motions, because compliance with the safe harbor provisions was
mandatory. (Ibid.) The error thus prejudiced Transcon and Talkov. (Cassim v. Allstate
Ins. Co. (2004) 33 Cal.4th 780, 800 [error is prejudicial if ‘“it is reasonably probable that
1 Section 1013, subdivision (a), provides for an extension of five calendar days when a document is served by mail (and both the mailing address and the place of mailing are within California). Given that Reid & Hellyer also served the motions by email, we apply the shorter two-day extension for email service.
5 a result more favorable to the appealing party would have been reached in the absence of
the error’”].)
Reid & Hellyer relies on In re Marriage of Falcone & Fyke (2008) 164
Cal.App.4th 814 (Marriage of Falcone) to argue that filing on the last day of the safe
harbor period is proper. The wife in that case argued for reversal of the sanctions order
because the filed motion papers differed from the papers that the husband had served on
her. (Id. at p. 827.) In that context, the appellate court observed that “the papers to be
served on the opposing party . . . must be the same papers that are ultimately filed with
the court no less than 21 days later.” (Ibid.)
We conclude that Marriage of Falcone is consistent with our approach for two
reasons. First, the court was not asked to decide whether filing on the 21st day after
service was proper. The case therefore does not support Reid & Hellyer’s argument.
(California Building Industry Assn. v. State Water Resources Control Bd. (2018) 4
Cal.5th 1032, 1043 [“It is axiomatic that cases are not authority for propositions that are
not considered”].) Second, our interpretation of the statutes is consistent with the
language on which Reid & Hellyer relies, namely, that after service of a sanctions
motion, the motion may be “filed with the court no less than 21 days later.” (Marriage of
Falcone, supra, 164 Cal.App.4th at p. 827.) Filing the motion on the 21st day would be
filing it less than 21 days later. The party moving for sanctions must wait for the entire
21-day period to expire before filing, just as Marriage of Falcone says.
For all of these reasons, the court erred by granting the sanctions motions. We
therefore reverse with directions to deny both motions.
6 DISPOSITION
The orders granting the motions for sanctions are reversed, and the trial court is
directed to enter an order denying both motions. Transcon and Talkov shall recover their
costs of appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
CERTIFIED FOP PUBLICATION
MENETREZ J.
We concur:
MILLER Acting P. J. RAPHAEL J.