Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 SMARTER HOA SOLUTIONS INC., Case No.: 3:24-cv-01781-JAH-MMP 11 Plaintiff, ORDER DENYING DEFENDANT’S 12 v. MOTION FOR SANCTIONS 13 CARMEN PEÑA; CASANET [ECF No. 55] PROPERTY MANAGEMENT LLC, 14 Defendants. 15 16 Pending before the Court is Defendant Carmen Peña’s Motion for Sanctions, filed 17 pursuant to Federal Rule of Civil Procedure 11. ECF No. 55 (“Motion”). Plaintiff Smarter 18 HOA Solutions Inc. (“HOA”) has opposed, and Defendant Peña has filed a reply. See ECF 19 Nos. 62 (“Opposition”), 63 (“Reply”). For the reasons discussed below, Defendant Peña’s 20 Motion for Sanctions is DENIED. 21 BACKGROUND 22 The complete background of this case is discussed in detail in the Court’s prior 23 Orders. See ECF Nos. 51, 52, 67, 69. Relevant here, Plaintiff HOA’s five remaining causes 24 of action against Defendant Peña and Defendant Casanet Property Management LLC 25 (“Casanet”) are for: (1) Conversion, (2) Intentional Interference with Contractual 26 Relations, (3) Intentional Interference with Prospective Economic Advantage, (4) Trade 27 Secret Misappropriation Under the Defend Trade Secrets Act, 18 U.S.C. § 1836, and (5) 28 Misappropriation of Trade Secrets under California Civil Code § 3426. ECF No. 51 at 19. 1 On May 6, 2025, Defendant Peña filed a motion to dismiss seeking dismissal of all 2 claims against Defendant Peña. ECF No. 20. On July 21, 2025, the Court issued an order 3 construing Defendant Peña’s motion to dismiss as a motion for judgment on the pleadings 4 and, except for select discovery deadlines, stayed all proceedings in this case pending this 5 Court’s determination on the pending motion. See ECF No. 33. 6 On July 24, 2025, Defendant Casanet filed a motion for good faith settlement 7 determination between Defendant Casanet and Plaintiff HOA (collectively, the “Settling 8 Parties”) pursuant to Cal. Civ. Proc. Code § 877.6. ECF No. 35. On August 29, 2025, 9 this Court set a briefing schedule requiring Defendant Peña to respond by September 10, 10 2025, and Defendant Casanet to reply by September 17, 2025. ECF No. 43. Both 11 Defendant Peña and Defendant Casanet timely filed their briefs by their respective 12 deadlines. ECF Nos. 44, 46. 13 On September 11, 2025, the day after Defendant Peña filed her opposition to the 14 motion for good faith settlement determination, Anabella Bonfa, as counsel for Plaintiff 15 HOA, filed a declaration in response to Defendant Peña’s opposition to the motion (the 16 “Bonfa Declaration”) challenging this Court’s consideration of Defendant Peña’s 17 opposition and requesting, inter alia, leave to file a motion for terminating sanctions 18 against Defendant Peña for failure to follow court orders. See ECF No. 45 ¶¶ 9–10. 19 On September 12, 2025, Defendant Peña served Plaintiff HOA with a copy of the 20 instant Motion via email. See Opp’n, Ex. A. As further discussed below, the copy served 21 on Plaintiff HOA contained only the first seven pages of the Motion presently before the 22 Court. Id.; ECF No. 55. 23 On October 23, 2025, Defendant Casanet and Plaintiff HOA filed a Stipulation 24 Regarding Confidential Client List informing the Court that Plaintiff HOA would provide 25 counsel for Casanet a list of “Do Not Call” clients, consisting of HOA’s existing clients, 26 and which counsel for Casanet shall not share with Casanet, so that the parties could 27 proceed under the tentative terms of the proposed good faith settlement. ECF No. 48. 28 On March 27, 2026, the Court ruled on Defendant Peña’s motion for judgment on 1 the pleadings, dismissing only Plaintiff HOA’s breach of contract against Defendant Peña. 2 ECF No. 51 (the “March 27, 2026 Order”). The Court also denied Defendant Peña’s 3 motion for sanctions under Rule 11 and lifted the stay of proceedings. Id. In a separate 4 order issued by the Court that day, the Court denied the Settling Parties’ motion for good 5 faith settlement determination and declined to consider the requests in the Bonfa 6 Declaration. ECF No. 52. 7 On March 31, 2026, Defendant Peña filed the instant Motion for Rule 11 sanctions 8 against Plaintiff HOA and counsel for HOA. ECF No. 55. 9 On April 1, 2026, Defendant Casanet filed a renewed motion for good faith 10 settlement determination on behalf of the Settling Parties. ECF No. 54. The motion was 11 fully briefed by all parties and is presently under consideration by this Court. See ECF 12 Nos. 57–58, 67–68, 70–71. On April 9, 2026, the Court stayed all discovery between 13 Plaintiff HOA and Defendant Casanet pending this Court’s disposition of the renewed 14 motion for good faith settlement determination. See ECF No. 56. 15 On May 7, 2026, Plaintiff HOA moved to compel discovery and requested sanctions 16 against Defendant Peña. ECF No. 60. Specifically, Plaintiff HOA moved for terminating 17 sanctions and/or default judgment and monetary sanctions against Defendant Peña for her 18 alleged failure to comply with two court orders. Id. at 5, 19–21. The matter was briefed 19 before Magistrate Judge Pettit. ECF Nos. 64–65. On August 20, 2026, Judge Pettit denied 20 Plaintiff HOA’s request for sanctions against Defendant Peña and ordered Defendant Peña 21 to produce certain discovery no later than September 11, 2026. ECF No. 69. 22 DISCUSSION 23 Defendant Peña moves for sanctions against Plaintiff HOA pursuant to Rule 11 of 24 the Federal Rules of Civil Procedure. Defendant Peña argues that sanctions are proper 25 because Plaintiff HOA’s complaint and proposed settlement with Defendant Casanet are 26 frivolous and filed for an improper purpose. Mot. at 1–2. Defendant Peña also argues that 27 the Bonfa Declaration, seeking, among other things, leave to file a motion for terminating 28 sanctions against Defendant Peña, was also filed for an improper purpose. Mot. at 2–3. 1 Given that Defendant Peña is appearing pro se, the Court will “liberally construe” 2 Defendant Peña’s pleadings. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) 3 (“A document filed pro se is ‘to be liberally construed . . . .’”); see also Fed. R. Civ. P. 8(e) 4 (“Pleadings must be construed so as to do justice.”). 5 I. Defective Notice 6 The Court will begin by considering whether Defendant Peña’s Motion is ripe for 7 consideration on the merits. 8 1. Federal Rules of Civil Procedure and Civil Local Rules 9 As an initial matter, Plaintiff HOA objects that the Motion is procedurally defective 10 under Rule 11 because Defendant Peña filed a joint motion combining two separate 11 motions for sanctions into one filing, one noticed and the other unnoticed. Opp’n at 15– 12 16. Under Rule 11, “a motion for sanctions must be made separately from any other motion 13 and must describe the specific conduct that allegedly violates Rule 11(b).” Fed. R. Civ. P. 14 11(c)(2). Here, Defendant Peña included a separate, unnoticed motion for sanctions (the 15 “Unnoticed Motion”), pursuant to 28 U.S.C. § 1927 and the court’s inherent authority, as 16 an attachment to the instant Motion filed under Rule 11. See ECF Nos. 55-1, 55-2, 55-3. 17 However, in construing the pleadings so as to do justice, the Court will treat the motions 18 as two independent motions improperly filed together rather than as a joint motion. See 19 Erickson, 551 U.S. at 94; Fed. R. Civ. P. 8(e). 20 As to the Unnoticed Motion, the motion fails to conform to the requirements of the 21 Federal Rules and this Court’s Local Rules. Under Rule 7(b)(1), “a request for a court 22 order must be made by motion.” Fed. R. Civ. P. 7(b)(1). Rules 5(a) and 6(c) establish 23 additional requirements a party must follow prior to filing a motion with the Court. See 24 Fed. R. Civ. P. 5(a), 6(c). Under this Court’s Local Rules, “each motion or other request 25 for ruling by the Court must include within it a Memorandum of Points and Authorities in 26 support of the motion and a caption listing the nature of the motion, hearing date and time, 27 and the judge who will hear the motion.” CivLR 7.1(f)(1). “[A] written notice of a matter 28 requiring the Court’s ruling is necessary” and “all hearing dates for any motion must be 1 obtained from the law clerk of the judge to whom the case is assigned.” CivLR 7.1(e)(1). 2 Thus, at a minimum, the Unnoticed Motion is procedurally defective because it fails to 3 satisfy the proper notice requirements, the thirty-four-page motion exceeds the twenty- 4 five-page filing limit allowed absent leave from the Court, and the motion was filed without 5 first obtaining a hearing date. See Fed. R. Civ. P. 5(a), 6(c), 7(b)(1); CivLR 7.1. 6 Accordingly, the Court deems Defendant Peña’s failure to follow applicable rules a waiver 7 of the Unnoticed Motion being considered by this Court and DECLINES to consider the 8 defective motion on the merits.1 See CivLR 7.1(f)(2) (“A movant’s failure to file any 9 papers required under the local rules may be deemed as a waiver of the motion, or other 10 request for ruling by the Court.”). 11 For the clarity of the parties, the Court also finds the Unnoticed Motion irrelevant to 12 the Motion filed pursuant to Rule 11 (the instant Motion) and therefore DECLINES to 13 consider any facts and arguments provided therein for purposes of evaluating the merits of 14 the instant Motion. Moreover, given that Defendant Peña’s Reply relates solely to the 15 Unnoticed Motion and not the instant Motion, the Court also disregards the facts and 16 arguments contained therein as the pleading is irrelevant to the issues properly before the 17 Court. Thus, to the extent the Court evaluates Defendant Peña’s Rule 11 Motion on the 18 merits, the Court will limit its review to the arguments and information in the noticed, 19 instant Motion. See Mot. at 1–7. 20 21 22 1 Although the Court declines to consider the defective Unnoticed Motion on the merits, 23 the Court cautions Defendant Peña that a request for sanctions under 28 U.S.C. § 1927 cannot be applied to an initial pleading, such as a complaint. In re Keegan Mgmt. Co., 78 24 F.3d 431, 435 (9th Cir. 1996). Nor is a motion for sanctions based solely on an attorney’s 25 regular course of conduct in litigating a civil matter—i.e., filing documents, sending legal communication, engaging in negotiations and discussions with relevant parties—a valid 26 basis for a motion under the statute. See id. at 436 (section 1927 sanctions “must be 27 supported by a finding of subjective bad faith” such as where “an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of 28 1 Finally, the Court hereby admonishes Defendant Peña that proceeding pro se does 2 not excuse the complete abandonment of the applicable rules governing this litigation. 3 “Although we construe pleadings liberally in their favor, pro se litigants are bound by the 4 rules of procedure.” Ghazali v. Moran, 46 F.3d 52, 54 (9th Cir. 1995) (per curiam) (citing 5 King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1987)). “Any person appearing [pro se] is 6 bound by these rules of court and by the [Federal Rules of Civil Procedure].” CivLR 7 83.11(a). Here, this Court’s dismissal of Plaintiff HOA’s breach of contract claim pursuant 8 to Defendant Peña’s motion for judgment on the pleadings did not dismiss the entirety of 9 the action. See ECF No. 51. The Court’s order expressly DENIED Defendant Peña’s 10 motion as to the remaining five claims and those claims were unrelated and unaffected by 11 this Court’s finding that the underlying contract at issue was unenforceable. Id. 12 Accordingly, the Court ORDERS Defendant Peña to comply with all obligations 13 relating to those outstanding claims as established under the Federal Rules, this Court’s 14 Local Rules,2 and any orders issued by this Court. See ECF Nos. 51, 69. This includes 15 filing documents with this Court according to Local Rule 5.1, which requires, for example, 16 that each filed document be “line numbered in the left margin with not more than 28 lines 17 per page” with the text and footnotes set to “14-point standard font (e.g. Times New 18 Roman).” CivLR 5.1(a). Failure to comply therewith may be grounds to support a 19 judgment by default against Defendant Peña. See CivLR 83.11(a). 20 2. The Noticed Motion 21 As to the noticed Motion, Plaintiff HOA objects that the Motion is procedurally 22 defective because Defendant Peña failed to provide Plaintiff with a 21-day “safe harbor” 23 period required by Rule 11. Opp’n at 13–15. 24 Rule 11 “place[s] stringent notice and filing requirements on parties seeking 25 26 27 2 A copy of the Local Rules of Practice for the United States District Court for the Southern District of California may be accessed at the following link and cited to as “CivLR”: 28 1 sanctions.” Holgate v. Baldwin, 425 F.3d 671, 677 (9th Cir. 2005). Under Rule 11, “[a] 2 motion must be served under Rule 5, but it must not be filed or be presented to the court if 3 the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately 4 corrected within 21 days after service or within another time the court sets.” Fed. R. Civ. 5 P. 11(c)(2). This notice requirement allows the offending party a safe harbor, “within 21 6 days after service of the motion for sanctions, to withdraw the offending pleading and 7 thereby escape sanctions.” Barber v. Miller, 146 F.3d 707, 710 (9th Cir. 1998). Courts 8 “enforce this safe harbor provision strictly.” Holgate, 425 F.3d at 678. 9 “[T]he ‘safe harbor’ period begins to run only upon service of the motion.” Id. 10 (quoting Fed. R. Civ. P. 11 advisory committee’s note to 1993 amendment). “When 11 deciding a motion for sanctions under Rule 11, a district court should consider when the 12 opposing counsel was served with the motion.” Id. at 679. “Ordinarily the motion should 13 be served promptly after the inappropriate paper is filed, and, if delayed too long, may be 14 viewed as untimely.” Id. (quoting Fed. R. Civ. P. 11 advisory committee’s note to 1993 15 amendment). 16 Here, Plaintiff HOA admits that Defendant Peña first served the Motion on 17 September 12, 2025—more than six months prior to the filing of the Motion on March 31, 18 2026—but argues that the Motion is procedurally defective under Rule 11 because 19 “Plaintiff was not provided 21 days to respond at any time.” Opp’n at 14. Plaintiff argues 20 it was deprived of procedural notice and an opportunity to respond, pursuant to Rule 11, 21 for two reasons. 22 First, Plaintiff HOA argues that the safe harbor period did not begin to run when 23 Plaintiff was first served with the Motion because the stay was in effect. Id. Plaintiff 24 argues that although Plaintiff was served the Motion, the pleading was not legally viable 25 because Plaintiff was legally prohibited from filing “any dismissal, amendment, or any 26 other pleading without being sanctioned” and “service of the motion violated the stay.” Id. 27 at 13–14. Thus, Plaintiff argues it was not provided the 21-day safe harbor because the 28 Motion was actually served and filed with the Court on the same day. Id. at 14. 1 The Court finds no support for Plaintiff’s argument. Although courts strictly enforce 2 the safe harbor period, Rule 11 is clear that the safe harbor period begins on the date “[t]he 3 movant serves the allegedly offending party with a filing-ready motion.” Truesdell v. S. 4 Cal. Permanente Med. Grp., 293 F.3d 1146, 1150 (9th Cir. 2002); see also Holgate, 425 5 F.3d at 678. Such a reading is consistent with the “purpose of the safe harbor requirement 6 [] to provide parties with proper notice of the allegations against them and an adequate 7 opportunity to cure the alleged deficiencies.” Holgate, 425 F.3d at 679. 8 Here, Defendant Peña served the filing-ready Motion on Plaintiff HOA “promptly” 9 the day after the Bonfa Declaration was filed and more than six months before filing the 10 Motion with the Court. See Holgate, 425 F.3d at 679. Read liberally, Defendant Peña’s 11 Motion requests dismissal of the complaint and withdrawal of the offending claims and 12 contentions in the Settling Parties’ proposed settlement agreement and the Bonfa 13 Declaration. See Erickson, 551 U.S. at 94; Fed. R. Civ. P. 8(e). Even if Plaintiff HOA was 14 unable to file corrected pleadings at the time the Motion was initially served, Plaintiff HOA 15 received more than six months’ notice of the defects and improper conduct alleged in 16 Defendant Peña’s Motion. That the Motion was served during the stay did not prevent 17 Plaintiff HOA from considering and responding to the Motion. A stay of proceedings 18 freezes any deadlines relating to court proceedings but does not prohibit parties from 19 engaging in other litigation activity, such as settlement negotiations or other discovery- 20 related activity. Thus, the existence of the stay is not dispositive of service under Rule 11, 21 as Plaintiff HOA had more than six months to cure the alleged defects. For example, at 22 any time during the stay, Plaintiff HOA “could have affirmatively withdrawn the complaint 23 or formally disclaimed any intention of filing an amended complaint, while making clear 24 that [it] was taking advantage of the safe-harbor period.” Truesdell, 293 F.3d at 1153. 25 “The mandatory safe-harbor period still was available. [Plaintiff HOA] simply elected not 26 to take advantage of it.” Id. (holding that counsel “had more than the full 21-day 27 opportunity that Rule 11 affords him to withdraw, amend, or disclaim the filing”). 28 Accordingly, the Court holds that the safe harbor period began to run as of the initial 1 date of service such that Plaintiff HOA received more than six months’ prior notice of 2 Defendant Peña’s Motion. The Court has not found, nor does Plaintiff HOA cite, any 3 caselaw compelling the Court to hold otherwise. 4 Second, Plaintiff HOA argues the Motion is procedurally defective for failure to 5 provide Plaintiff with the 21-day safe harbor period under Rule 11 because “[a] motion for 6 Rule 11 sanctions must be served on the offending party at least 21 days prior to the entry 7 of a final judgment or judicial rejection of the offending contention.” Opp’n at 14. 8 According to Plaintiff, “[t]his is because a party seeking sanctions must leave sufficient 9 opportunity for the opposing party to choose to withdraw or cure the offense voluntarily 10 before the court disposes of the challenged contention.” Id. at 14–15. 11 In support, Plaintiff cites one state court case, Li v. Majestic Industry Hills LLC, 177 12 Cal. App. 4th 585, 595 (2009), which discusses sanctions pursuant to Cal. Civ. Proc. Code 13 § 128.7, without any analysis of the pertinence of Li on the facts at issue here.3 Id. at 15. 14 Nor does a cursory review of Li provide support for Plaintiff HOA’s argument. To the 15 contrary, under Li, a “trial court’s dismissal of the offending pleading with prejudice during 16 the safe harbor period leaves nothing for the plaintiff to correct or withdraw, effectively 17 depriving that party of the safe harbor period.” Id. at 595 (citing Truesdell, 293 F.3d at 18 1153) (emphasis added). Put differently, a district court’s dismissal of an offending 19 pleading with leave to amend does not “cut off the safe-harbor period” because the safe 20 harbor period continues to run from the date of service so long as the allegedly offending 21 party retains the “opportunity to take advantage of the safe-harbor provision.” Truesdell, 22 293 F.3d at 1152–53 (finding that, “even after the district court’s [dismissal of the 23 complaint with leave to amend], the safe-harbor period was still running”). 24 Here, this Court has already held that the safe harbor period began upon initial 25 service, meaning Plaintiff HOA received more than 21-days’ actual notice of the 26 27 28 1 allegations in Defendant Peña’s Motion. The safe harbor period began upon initial service 2 of the Motion, more than six months before the Motion was filed, and continued to run 3 until the Court “cut off the safe-harbor period” by issuing final judgment on the allegedly 4 offending pleadings. Although this Court ruled on the offending pleadings six months after 5 Plaintiff HOA was served with the Motion, the rulings were only dispositive of Plaintiff 6 HOA’s action for breach of contract. See ECF No. 51. The Court declined to consider 7 Plaintiff HOA’s informal requests in the Bonfa Declaration and denied the Settling Parties’ 8 motion for good faith settlement determination without prejudice. ECF No. 52. Thus, the 9 Court finds that for at least 21 days from the date of service, Plaintiff HOA retained the 10 “opportunity to take advantage of the safe-harbor provision” had it decided to do so. See 11 Truesdell, 293 F.3d at 1152–53 (“Both technically and practically, Plaintiff’s counsel had 12 the full 21–day period that the Rule and our precedents require. As a technical matter, the 13 moving party complied with the Rule’s 21–day provision by waiting 27 days to file its 14 motion. As a practical matter, Plaintiff’s counsel had the full safe-harbor period in which 15 to withdraw the complaint because the district court’s decision on the 20th day dismissed 16 the complaint with leave to amend.”). 17 Separately, Plaintiff HOA filed its opposition on May 13, 2026, more than six weeks 18 after Defendant Peña filed the Motion, and over eight months after receiving initial service 19 of the Motion. Accordingly, the Court finds no prejudice to Plaintiff HOA from a lack of 20 notice to require that Defendant Peña satisfy a second safe harbor period beginning on the 21 date of filing. See Holgate, 425 F.3d at 678 (finding “no need for [defendant] to satisfy a 22 second safe harbor period when he re-filed his Rule 11 motion” a year after filing the same 23 motion because plaintiff “received all the process due to him when [defendant] initially 24 satisfied the safe harbor requirements of Rule 11”). 25 Accordingly, the Court rejects Plaintiff HOA’s argument that the Motion is 26 procedurally defective under Rule 11 for failure to provide Plaintiff with the required 21- 27 day safe harbor period and holds that the Motion is ripe for consideration on the merits. 28 // 1 II. Rule 11 Sanctions 2 Defendant Peña moves for sanctions against Plaintiff HOA and its counsel of record, 3 Wellman & Warren LLP. Mot. at 1. 4 As discussed, Rule 11 “place[s] stringent notice and filing requirements on parties 5 seeking sanctions.” Holgate, 425 F.3d at 677. Under Rule 11, “a motion for sanctions . . 6 . must describe the specific conduct that allegedly violates Rule 11(b).” Fed. R. Civ. P. 7 11(c)(2). Counsel is subject to Rule 11 sanctions by presenting a paper for an “improper 8 purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of 9 litigation,” or by presenting “claims, defenses, and other legal contentions [not] warranted 10 by existing law,” among other reasons. Fed. R. Civ. P. 11(b)(1)–(2). 11 1. Sanctions Against Plaintiff HOA 12 As an initial matter, under Rule 11, a represented party may not be sanctioned for a 13 violation of Rule 11(b)(2) committed by its counsel. See Fed. R. Civ. P. 11(c)(5)(A). 14 Defendant Peña provides no basis to find that sanctions are appropriate against Plaintiff 15 HOA under Rule 11(b)(1). 16 Accordingly, the Motion is DENIED as to sanctions against Plaintiff HOA. 17 2. Sanctions Based on the Complaint and Proposed Settlement Agreement 18 Next, the Court will analyze whether sanctions against Plaintiff HOA’s counsel, 19 Wellman & Warren LLP, are appropriate. 20 Defendant Peña moves for sanctions against Wellman & Warren LLP, Plaintiff 21 HOA’s counsel of record, for “maintaining a baseless, frivolous and harassing lawsuit” 22 against Defendant Peña. Mot. at 1. Defendant Peña alleges that the complaint and 23 proposed settlement agreement are frivolous and filed for an improper purpose, including 24 to “harass and cause unnecessary litigation.” Id. at 1–2. 25 Where, as here, a “complaint is the primary focus of Rule 11 proceedings, a district 26 court must conduct a two-prong inquiry to determine (1) whether the complaint is legally 27 or factually baseless from an objective perspective, and (2) if the attorney has conducted a 28 reasonable and competent inquiry before signing and filing it.” Holgate, 425 F.3d at 676 1 (quoting Christian v. Mattel, Inc., 286 F.3d 1118, 1127 (9th Cir. 2002)). “As shorthand 2 for this test, we use the word ‘frivolous’ ‘to denote a filing that is both baseless and made 3 without a reasonable and competent inquiry.’” Id. (quoting In re Keegan Mgmt. Co., 78 4 F.3d 431, 434 (9th Cir. 1996)) (emphasis in original). 5 Defendant Peña’s primary argument that the complaint and, by extension, the 6 proposed settlement agreement, are frivolous is that they are based on an “illegal non- 7 compete agreement” that is “legally unfounded and contrary to California Public Policy.” 8 Mot. at 2. On that basis, Defendant Peña generally alleges that the complaint and proposed 9 settlement agreement are filed for an improper purpose, including to “harass and cause 10 unnecessary litigation.” Id. at 1–2. Defendant Peña provides no other facts in support of 11 her conclusory allegations. 12 To the extent Defendant Peña seeks sanctions relating to Plaintiff HOA’s action for 13 breach of contract, Defendant Peña has failed to show sanctions are proper. Although the 14 Court’s March 27, 2026 Order ultimately held that the non-compete agreement was 15 unenforceable and granted judgment on the pleadings on Plaintiff HOA’s breach of 16 contract claim, that holding was based on a detailed analysis of the undisputed facts before 17 the Court and the relevant law. See, e.g., Aetna Life Ins. Co. v. Alla Med. Servs., Inc., 855 18 F.2d 1470, 1476 (9th Cir. 1988) (“The rule is not intended to chill an attorney’s enthusiasm 19 or creativity in pursuing factual or legal theories.”) (quoting Fed. R. Civ. P. 11 advisory 20 committee’s note to 1983 amendment). Defendant Peña provides no other basis to allege 21 the complaint, including the remaining causes of action, is otherwise frivolous or filed for 22 an improper purpose. 23 Similarly, the Court finds no support for Defendant Peña’s conclusory allegations 24 that the proposed settlement agreement was filed pursuant to “a pattern of vexatious and 25 abusive litigation.” Mot. at 2; see also Aetna, 855 F.2d at 1476 (holding that a motion or 26 paper, “other than a complaint,” that is “filed in the context of a persistent pattern of clearly 27 abusive litigation activity” will “be deemed to have been filed for an improper purpose and 28 sanctionable,” and noting that “there comes a point when successive motions and papers 1 become so harassing and vexatious that they justify sanctions even if they are not totally 2 frivolous”). Thus, Defendant Peña presents no facts to support her burden. 3 Accordingly, consistent with this Court’s March 27, 2026 Order, the Motion is 4 DENIED as to HOA’s complaint and proposed settlement agreement. 5 3. Sanctions Based on the Bonfa Declaration 6 Defendant Peña also moves for sanctions based on the Bonfa Declaration, arguing it 7 misrepresents Defendant Peña’s actions, misleads the Court, and abuses the litigation 8 processes by requesting terminating sanctions against Defendant Peña for an improper 9 purpose. Id. at 2–3. 10 Defendant Peña fails to show how the Bonfa Declaration was frivolous or filed for 11 an improper purpose. Contrary to Defendant Peña’s argument, the Bonfa Declaration did 12 not request sanctions against Defendant Peña for her opposition to the Settling Parties’ 13 motion for good faith settlement. The Bonfa Declaration took issue with Defendant Peña’s 14 alleged failure to “comply with [outstanding] discovery requests” and “two prior court 15 orders regarding discovery,” not the mere fact of Defendant Peña’s opposition in and of 16 itself. Bonfa Decl. ¶ 9. The Bonfa Declaration advised the Court that Defendant Peña’s 17 failure to comply with discovery is “prejudicing [Plaintiff HOA’s] ability to enter into a 18 settlement with Casanet” in light of the “unfounded arguments supporting [Defendant 19 Peña’s] opposition to the [Settling Parties’] Motion for Good Faith Settlement with 20 Casanet.” Id. at ¶¶ 8–9. Based on these allegations, the Bonfa Declaration requested either 21 an order from the Court compelling Defendant Peña to comply with discovery or, 22 alternatively, “that it be allowed to proceed with motions for terminating sanctions against 23 [Defendant Peña]” prior to the Court’s consideration of the then-pending motion for good 24 faith settlement “so that the settling parties are not prejudiced by [Defendant Peña’s] refusal 25 to respond to discovery.” Id. at ¶¶ 8–9. 26 Although the Court declined to consider Plaintiff HOA’s requests in the Bonfa 27 Declaration, ECF No. 52, the Court finds these allegations sufficient to show the Bonfa 28 Declaration was filed based on genuine issues at stake in the litigation and not for an | ||}improper purpose. In addition, based on the current record before the Court, including this 2 || Court’s August 20, 2026, order granting in part and denying in part Plaintiff HOA’s motion 3 ||to compel discovery from Defendant Pefia based on the same underlying conduct alleged 4 ||in the Bonfa Declaration, see generally ECF No. 69, the Court finds that Plaintiff HOA’s 5 allegations were objectively reasonable and not “legally or factually baseless.” See 6 || Keegan, 78 F.3d at 434 (“Because the frivolousness prong of Rule 11 is measured by 7 || objective reasonableness, whether [a party] actually relied on the cases [or factual basis] 8 || which show its claims aren’t frivolous is irrelevant”) (internal quotation marks and 9 || citations omitted). 10 Accordingly, the Motion is DENIED as to the Bonfa Declaration. 11 CONCLUSION 12 Based on the foregoing, the Court HEREBY ORDERS that Defendant Pefia’s 13 Motion for Sanctions is DENIED. 14 The Court FURTHER ORDERS Defendant Pefia to fully and timely comply with 15 |/all obligations relating to the remaining claims at issue in this litigation, pursuant to the 16 || Federal Rules of Civil Procedure, this Court’s Local Rules, and any orders issued by this 17 || Court. See Ghazali, 46 F.3d at 54 (“Although we construe pleadings liberally in their favor, 18 se litigants are bound by the rules of procedure.”); CivLR 83.11 (a). 19 “Failure to comply therewith may be ground[s| for . . . judgment by default.” 20 || CivLR 83.11(a) (emphasis added). 21 IT IS SO ORDERED. 22 || DATED: September 11, 2026 23 OHN A. HOUSTON 24 HUNITED STATES DISTRICT JUDGE 25 26 27 28 14