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Li v. Majestic Industry Hills

September 8, 2009

JOSEPH LI, PLAINTIFF AND APPELLANT,
v.
MAJESTIC INDUSTRY HILLS, LLC, DEFENDANT AND RESPONDENT.



APPEAL from orders of the Superior Court of Los Angeles County, Luis A. Lavin, Judge. The order denying the motion to vacate the judgment is affirmed. The order awarding sanctions is reversed. (Los Angeles County Super. Ct. No. BC300589)

The opinion of the court was delivered by: Perluss, P. J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

Joseph Li appeals from orders denying his belated motion to vacate the voluntary dismissal of his wrongful termination action against Majestic Industry Hills LLC (MIH), which had been entered in 2003 pursuant to a confidential settlement agreement, and awarding sanctions under Code of Civil Procedure section 128.7 (section 128.7) on the ground the motion to vacate was frivolous. We affirm the order denying the motion to vacate, but reverse the award of sanctions because the trial court‟s order denying the motion to vacate on the 19th day following service of the section 128.7 motion deprived Li of the full 21-day safe harbor period mandated by that statute.

FACTUAL AND PROCEDURAL BACKGROUND

1. Li's 2003 Lawsuit against MIH

MIH, which operates the Pacific Palms Conference Resort, terminated Li‟s employment as an executive sous chef in March 2003. In August 2003 Li sued MIH alleging, among other claims, breach of contract and wrongful termination in violation of public policy. As to the latter cause of action, Li alleged he had been fired in retaliation for his complaints to management about MIH‟s alleged practice of serving "spoiled, expired, and/or otherwise adulterated food to its customers," in particular, tainted roasted pigs, in violation of various provisions of the Penal Code and the Health and Safety Code.

2. The Settlement of the Lawsuit and Dismissal of the Action with Prejudice

In November 2003 Li and MIH settled the lawsuit. A notice of settlement, prepared and signed by Li‟s attorney of record, was filed with the court on November 4, 2003. On November 10, 2003 a request for dismissal of the entire action with prejudice, again signed by Li‟s counsel, was filed with the court. The clerk entered the dismissal as requested on the same day.

3. Li's 2008 Motion to Vacate the Dismissal

On March 14, 2008 Li, represented by new counsel, filed a motion asking the court to use its equitable power to "set aside and cancel the settlement agreement and dismissal with prejudice." Li asserted the 2003 settlement agreement violated public policy by containing confidentiality provisions that prevented him from exposing MIH‟s continuing criminal behavior to government officials or the general public. The motion sought to set aside "only that portion of the settlement agreement and resulting dismissal which involved the hiding and covering up of continued acts by [MIH] which under the appealable statutes and case law are crimes in the State of California." Li personally served the motion on MIH on March 14, 2008. The hearing on the motion was scheduled for April 4, 2008.

4. MIH's Opposition and Motion for Sanctions

On March 21, 2008 MIH filed and served its opposition to the motion.*fn2 At the same time MIH served on Li a motion for sanctions pursuant to section 128.7, asserting the motion to vacate the dismissal was frivolous. Pursuant to section 128.7‟s safe harbor provision, MIH did not file its sanctions motion with the court.

5. The Trial Court's Denial of the Motion to Vacate and Order Awarding Sanctions

The court continued the hearing on Li‟s motion to set aside the judgment from April 4, 2008 to April 9, 2008. Then, on April 9, 2008-19 days after the section 128.7 motion had been served-the court denied Li‟s motion, finding Li had not demonstrated the settlement agreement had been obtained "by fraud, undue influence, was void on its face, or that the court did not have jurisdiction to enter a dismissal pursuant to the settlement agreement." Accordingly, the court ruled, ...


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