Ybarra v. Wahl

Filed 3/28/07 Ybarra v. Wahl CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

In this legal malpractice action, the defendants default was entered by the clerk based on a declaration by the plaintiffs attorney that the answer was deemed stricken for violation of a discovery order. The trial court thereafter refused to set aside the default. As we explain, the default and the ensuing default judgment are void. We therefore reverse the judgment, with instructions to the trial court to reinstate the defendants answer.

BACKGROUND

This action arose out of a prior dependency case, in which defendant Victor Wahl represented plaintiffs Robert and Lucille Ybarra. Plaintiffs filed this action against defendant in August 2001. They asserted causes of action for negligence, legal malpractice, fraud, and intentional infliction of emotional distress. As stated in the caption of their complaint, plaintiffs sought damages against defendant in excess of $50,000. Defendant answered the complaint in December 2001, interposing a general denial with affirmative defenses.

In July 2003, the court (Judge Barrett) conducted a hearing on four discovery motions brought by plaintiffs. At that time, defendant was in pro per. The court took the motions to compel discovery under submission, issuing a formal order shortly thereafter. In its order, the court granted all four of plaintiffs motion, in whole or in part, and it awarded plaintiffs monetary sanctions against defendant.

In September 2003, the court (Judge McKenney) conducted a trial setting conference. A formal order after hearing was prepared by plaintiffs attorney and signed by Judge McKenney. The order recites that attorney Ben Koller appeared specially for defendant, who was not present, announced that his firm was substituting into the case and asked for a continuance to October 28, 2003, to allow them to adequately prepare for this matter. Koller acknowledged defendants lack of compliance with the earlier discovery order. The attorney said that the materials were turned over to his office and assured the Court of compliance by October 10th. Plaintiffs counsel agreed to the continuance on the condition that the court would enter an order striking Defendants answer if he failed to comply with the discovery order by October 10th. The order (1) continued the trial setting conference for four weeks, (2) commanded defendant to comply with Judge Barretts discovery order by 5:00 p.m. on October 10th, and (3) provided: If the responses are not made by that date and time, this Court orders that the Answer filed in this matter by Defendant is to be deemed stricken. The order was not approved as to form by defendants counsel, though plaintiffs attorney submitted the proposed order to him.

In December 2003, plaintiffs filed a request with the court clerk to enter defendants default. In support of the request for entry of default, plaintiffs attorney submitted a declaration, which stated: On October 8th, 2003, I received some discovery from Mr. Kurtzman [defense counsel]. It also stated: Although Defendant produced some of the discovery which was ordered, it was sparse. Further, counsel declared, answers to Special Interrogatories and Form Interrogatories were ordered by Judge Barrett but they were not provided. Counsel concludes: The Answer has been stricken as a matter of law because, the Order After Hearing executed by Judge McKenney on October 16, 2003, deems the Answer stricken if complete responses were not received on October 10th. [] With the Answer stricken, I hereby respectfully request this Court to enter the default filed herewith.

The clerk entered defendants default as requested on December 10, 2003.

Two days later, on December 12, 2003, defendant filed a motion to reinstate his answer. In support of the motion, defense counsel declared: I believed I had completed the discovery responses on October 7, 2003 and only learned after October 10, 2003 that there was still outstanding discovery. He further declared: As of the preparation of this motion, I again believe that all outstanding discovery matters have been dealt with to the best of Defendants ability. Plaintiffs opposed the motion.

A hearing on the defense motion for reinstatement was conducted in March 2004. At the outset of the hearing, the court (Judge McKenney) indicated an inclination to deny the motion, stating his view that defendant had flat stonewalled discovery on this case. Thats what resulted in the order striking his answer. Despite vigorous argument by defense counsel that defendant had complied promptly and that he had no further responsive documents to produce, the court denied the motion, stating the answer remains stricken.

A formal order after hearing was issued in May 2004, denying defendants motion to reinstate his answer. Defendant promptly moved for reconsideration. Plaintiffs opposed the motion. In July 2004, the court denied the defense motion for reconsideration. In August 2004, defendant filed an appeal, which was dismissed at his request four months later.

In December 2004, plaintiffs applied for a default judgment in the amount of $50, 952.[1] The application was supported by the declaration of plaintiffs counsel.

In February 2005, the court (Judge Kleinberg) conducted a prove-up hearing on plaintiffs request for a default judgment. After hearing testimony from Mr. Ybarra, and an offer of proof from counsel as to the nature of the damages, the court granted the request for a default judgment. The court took the issue of attorney fees under submission, however, stating that it wanted a summary of time spent on the matter by counsel. Thereafter, on March 1, 2005, the court entered default judgment in favor of plaintiffs in the amount of nearly $98,000.

Defendant brought this appeal from the judgment.

CONTENTIONS

Defendant makes three arguments on appeal. First, he asserts, the default judgment is void, since the terminating sanction was imposed without a noticed motion. Moreover, defendant argues, imposition of a terminating sanction would have been an abuse of discretion in any event. Finally, he contends, even if the judgment were not void, it is erroneous in amount.

Plaintiffs disagree with all of defendants contentions. They assert estoppel, waiver, and nonappealability. Plaintiffs also defend the judgment on the merits, arguing that the automatic terminating sanction was valid and that the trial court did not abuse its discretion. Plaintiffs likewise defend the amount of the judgment; alternatively, they urge remand for determination of their damages.

DISCUSSION

We begin our analysis by describing the standards that govern our review.

I. Standards of Review

A trial courts choice of sanctions with respect to discovery matters is reviewed on appeal for abuse of discretion. (Sauer v. Superior Court (1987) 195 Cal.App.3d 213, 228.) Though broad, the trial courts discretion is subject to substantive and procedural limits. Substantively, there generally must be a willful failure to comply with a court order for discovery. (Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1327.) Procedurally, a noticed motion is required; sanctions may not be granted ex parte. (Sole Energy Co. v. Hodges (2005) 128 Cal.App.4th 199, 202.) Within those limits, the trial court enjoys broad discretion, which will not be disturbed on appeal absent a showing of abuse. (Sauer v. Superior Court, at p. 228.)

Likewise, as a general rule, the denial of a motion to set aside a default likewise is reviewed for an abuse of discretion. (See, e.g., Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981.) Nevertheless, our review is informed by the overall policy favoring disposition on the merits. (Elston v. City of Turlock (1985) 38 Cal.3d 227, 233; see Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 255-256; Rodrigues v. Superior Court (2005) 127 Cal.App.4th 1027, 1037.) Appellate courts are much more disposed to affirm an order when the result is to compel a trial on the merits than when the default judgment is allowed to stand. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.) Furthermore, errors of law are scrutinized de novo. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860 [independent review, where grant of new trial was based on error of law].) As relevant here, whether the default and default judgment complied with constitutional and statutory requirements are questions of law as to which we exercise independent review. (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 828, fn. omitted.)

II. Imposition of Discovery Sanctions

A trial court may impose sanctions, including terminating sanctions, for a partys misuse of the discovery process, which includes disobedience of a court order. (Sole Energy Co. v. Hodges, supra, 128 Cal.App.4th at p. 207; see Code Civ. Proc., 2023.010 [misuses of discovery], 2023.030 [sanctions].)[2]

A. Substantive Prerequisites

Generally speaking, non-monetary sanctions for discovery abuse will not be imposed in the absence of willful failure to comply with a prior court order. (Biles v. Exxon Mobil Corp., supra, 124 Cal.App.4th at p. 1327.) A stipulation by the parties may substitute for the order. (Mileikowsky v. Tenet Healthsystem (2005) 128 Cal.App.4th 262, 279 [stipulation waived partys right to insist on a formal order compelling responses as a precursor to an issuance of evidentiary, issue, or terminating sanctions].) Nevertheless, there must be a judicial finding of willful non-compliance. (See, e.g., Weinkauf v. Superior Court (1966) 64 Cal.2d 662, 664; Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 787-788.) To justify imposition of such discovery sanctions, the trial court must expressly find that the disobedient partys failure to obey was wilful. (Motown Record Corp. v. Superior Court (1984) 155 Cal.App.3d 482, 489.) The propriety of terminating sanctions is determined by the totality of the circumstances, including the willfulness of the improper acts, the detriment to the propounding party, and the number of formal and informal attempts to obtain the discovery. (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1244-1246.)

B. Procedural Requirements

The trial courts power to impose discovery sanctions is circumscribed by procedural requirements, both statutory and constitutional. (See Sole Energy Co. v. Hodges,supra, 128 Cal.App.4th at pp. 207-208.) By statute, the court, after notice to any affected party, person, or attorney, and after opportunity for hearing, may impose specified sanctions. ( 2023.030.) Adequate notice prior to imposition of sanctions is mandated not only by statute, but also by the due process clauses of both the state and federal Constitutions. (OBrien v. Cseh (1983) 148 Cal.App.3d 957, 961 [sanctions under 128.5]; Sole Energy Co. v. Hodges, supra, 128 Cal.App.4th at p. 208 [discovery sanctions].)

To satisfy these procedural safeguards, a noticed motion is a necessary predicate to the imposition of discovery sanctions. (Sole Energy Co. v. Hodges,supra, 128 Cal.App.4th at p. 208; see 2023.040; Alliance Bank v. Murray (1984) 161 Cal.App.3d 1, 5 [citing predecessor provision, former 2034, subd. (b)].) Ex parte imposition of discovery sanctions offends due process as well as statutory protections. (Sole Energy Co. v. Hodges, at p. 208.) This is true, even if the discovery order conditionally authorizes an ex parte application. (Alliance Bank v. Murray,at p. 6.) Where terminating sanctions are obtained ex parte, the orders entering default and any subsequent default judgments are void. (Sole Energy Co. v. Hodges, at p. 210.)

C. Analysis

Based on the governing procedural requirements described above, the present case must be resolved in defendants favor. As we now explain, the procedures employed by plaintiffs do not comport with due process and statutory guarantees in at least two respects. For that reason, they cannot support the judgment.

In the first place, terminating sanctions were conditionally imposed in this case, at the trial setting conference in September 2003. According to the stipulated order, if defendant failed to comply with the prior discovery order, the terminating sanction would be imposed. The conditional imposition of discovery sanctions does not pass constitutional or statutory muster. (Alliance Bank v. Murray, supra, 161 Cal.App.3d at p. 6; Sole Energy Co. v. Hodges,supra, 128 Cal.App.4th at p. 208; see also, e.g., Duggan v. Moss (1979) 98 Cal.App.3d 735, 741 [conditional dismissal sanction was in excess of courts jurisdiction and therefore void].)

Furthermore, the procedure employed by plaintiffs to prove defendants noncompliance does not comport with governing standards of due process. The court in this case conducted no evidentiary hearing to determine whether defendant willfully disobeyed the discovery order. (Biles v. Exxon Mobil Corp., supra, 124 Cal.App.4th at p. 1324; see also, e.g., Duggan v. Moss, supra, 98 Cal.App.3d at p. 741 [the trial court made no express finding that appellant had willfully failed to serve answers].) Indeed, there was not even an ex parte hearing before a judge in this case. (Cf., OBrien v. Cseh, supra, 148 Cal.App.3d at p. 962 [Plaintiffs rush to compel sanctions against defendant on an ex parte basis was a flagrant violation of due process principles].) Here, plaintiffs simply filed a successful request with the clerk to enter defendants default. The procedures employed by plaintiffs and the court did not come close to comporting with due process, and did not comply with the requirements of [the] Code of Civil Procedure. (Sole Energy Co. v. Hodges,supra, 128 Cal.App.4th at p. 208, citing 2023, subd. (c); see now, 2023.040.)

Finally, the subsequent hearing on defendants motion to reinstate his answer does not serve to rectify the violations. For one thing, defendant would not have had to move to set aside the default if plaintiffs had afforded him his statutory and due process rights in the first instance. (Falahati v. Kondo, supra, 127 Cal.App.4th at pp. 832-833.) More importantly, at the later hearing, the burden of proof shifted to defendant, instead of being imposed on plaintiffs as the party seeking sanctions. (See Evid. Code 500; cf., Beck Development Co. v. Southern Pacific Transportation Co. (1996) 44 Cal.App.4th 1160, 1206 [defendant[] did not have the burden of proof and hence was not obligated to prove the site was nonhazardous]; Oldenburg v. Sears, Roebuck & Co. (1957) 152 Cal.App.2d 733, 741 [party with burden of proof who fails to carry it  should suffer, and not his adversary ].) In short, the due process problem created here was not alleviated by holding a hearing after the imposition of terminating sanctions, at which the burden of proof was improperly imposed on the defendant.

III. Relief from Default

A. General Principles

By statute, a court may, upon any terms as may be just, relieve a party from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. (Code Civ. Proc., 473, subd. (b).) Contrary to plaintiffs contention, relief under the statute is not limited to involuntary judgments or dismissals. (Zamora v. Clayborn Contracting Group, Inc., supra, 28 Cal.4th at p. 256.)

The question as to whether or not a default was properly entered may be reviewed upon an appeal from the judgment. (Bristol Convalescent Hosp. v. Stone (1968) 258 Cal.App.2d 848, 859.) If the clerks mechanical computation of the time elapsed since service was completed is in error and he should enter a default prematurely, a judgment based upon such default is void. (Id. at p. 862; see also, e.g., Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 864 [where defendants had answered but failed to appear at trial, it was beyond the power and authority of the court to enter their default; both the default and ensuing judgment were void].) It is not the business of the clerk, whose duties in entering defaults are ministerial, to pass upon the question of the sufficiency or validity of a pleading which has been filed within time as extended by the court. (Stevens v. Torregano (1961) 192 Cal.App.2d 105, 112.) A default so entered is void. (Ibid.) And a judgment based on a void default likewise is void. (Bristol Convalescent Hosp. v. Stone,at p. 862.) Such a judgment may be set aside by the court at any time, and regardless of how the matter comes to the courts attention. (Ibid.) In such cases, a court has inherent power, apart from statute, to correct its records by vacating a judgment which is void on its face, for such a judgment is a nullity and may be ignored. (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1239; accord, Heidary v. Yadollahi, at p. 862; see 473, subd. (d); see generally 8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, 202, pp. 707-708; id. (2006 supp.), p. 218.) But where the judgment is not void, it may be set aside only under [subdivision (b) of] section 473, Code of Civil Procedure, or on appeal from the judgment, or by suit in equity. (Bristol Convalescent Hosp. v. Stone, at p. 862.)

B. Analysis

As explained above, the procedure employed here for taking defendants default was impermissible, as it violated the discovery statutes and resulted in a deprivation of due process. Under the circumstances of this case, the clerk lacked authority to enter defendants default, and the court likewise lacked authority to enter a default judgment against him. (Cf., Bristol Convalescent Hosp. v. Stone, supra, 258 Cal.App.2d at p. 862; Heidary v. Yadollahi, supra, 99 Cal.App.4th at pp. 862-864.) The default and the ensuing default judgment thus were void. Relief from a judgment void on its face is an absolute right. (Waller v. Weston (1899) 125 Cal. 201, 203; accord, Smith v. Bratman (1917) 174 Cal. 518, 521; see 8 Witkin, Cal. Procedure, supra, Attack on Judgment in Trial Court, 201, p. 706-707.) In light of the illegality of the default proceedings, the trial courts refusal to reinstate defendants answer constitutes reversible error. (Heidary v. Yadollahi, at p. 868.)

CONCLUSION

The entry of default was improper and the ensuing default judgment is void. Given that conclusion, we need not consider whether the court erred in determining the amount of damages.

Disposition

The judgment is reversed and the matter is remanded to the trial court with directions to reinstate defendants answer. Defendant shall have costs on appeal.

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McAdams, J.

WE CONCUR:

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Mihara, Acting P.J.

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Duffy, J.

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[1] Plaintiffs previously had filed a statement of damages, which asserted entitlement to general and special damages totaling just over $50,000, including $22,600 in attorney fees. It also reserved the right to seek punitive damages of $50,000.

[2] Further unspecified statutory references are to the Code of Civil Procedure.