Crockett v. Miller
Filed 6/2/06 Crockett v. Miller CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
| DANIEL CROCKETT et al., Plaintiffs and Appellants, v. BRENT A. MILLER et al., Defendants and Respondents. | D046304 (Super. Ct. No. GIE019162) |
APPEAL from a judgment of the Superior Court of San Diego County, Lillian Y. Lim, Judge. Affirmed.
This appeal arises out of the court's dismissal of Daniel Crockett and Barbara Smith's complaint against Brent A. Miller and Brenda J. Miller (together, the Millers) as a result of Crockett and Smith's failure to properly respond to discovery, failure to obey court orders, and failure to pay discovery sanctions. Crockett and Smith assert that the court abused its discretion in dismissing their complaint because (1) they were financially unable to pay the monetary sanctions ordered by the court; and (2) they complied to the best of their ability with the court's orders. Smith also asserts that dismissal of her complaint was an abuse of discretion because no complaints of discovery abuses were made against her. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Underlying Complaint and Cross-Complaint
Crockett and Smith were tenants and employees of the Millers on a ranch in Alpine, California. Crockett and Smith filed an action against the Millers, asserting that the Millers interfered with their use of the property, converted their personal property, were indebted to them for work performed, negligently caused the death of a horse they owned by failing to provide it with water, interfered with their attempt to sell another horse, and slandered them.
The Millers filed a cross-complaint against Crockett and Smith, alleging that they had converted the Millers' money, failed to pay commissions on sales of horses, failed to pay for supplies provided by the Millers, were delinquent on rent and utility payments, damaged the property before they vacated the premises, and damaged the Millers' business plans to operate the ranch as an equestrian center, retreat, children's camp, petting farm and campground.
B. The Millers' Motion To Compel
In July 2004 the Millers brought a motion to compel against both Crockett and Smith, seeking to compel (1) further answers to their form interrogatories, set one;
After briefing and argument on the matter, the trial court issued a minute order granting in part, and denying in part, the Millers' motion to compel. The court ordered responses, further responses and documents responsive to the subject discovery to be produced on or before September 7, 2004. The order also included monetary sanctions against Crockett and Smith in the amount of $6,750. Crockett and Smith were required to pay the sanctions within 45 days. The order provided that if Crockett and Smith were unable to pay the sanctions in a timely manner, they could submit a financial declaration and request installments payments of no less than $1,000 per month
C. The Millers' Motion for Sanctions
In September 2004 the Millers filed a motion for sanctions alleging Crockett and Smith failed to obey the court's previous order because of insufficient responses and a refusal to produce documents as ordered by the court. The Millers requested monetary and issue sanctions against Crockett and Smith and terminating sanctions against Crockett.
On September 17, 2004, 10 days after the court-imposed deadline for further production of documents, the deposition of Crockett was held. At the end of the deposition, Crockett stated on the record that he maintained three volumes of ledgers keeping detailed daily notes, and those notes included the disputed terms of the lease agreement with the Millers and other details relevant to the litigation. Before the hearing on the motion for sanctions, Crockett also revealed at his deposition that he had an equestrian sales catalogue in which he had made notes about the condition, terms of purchase and hauling of a horse, "Solo Impressions," which was the subject of Crockett and Smith's negligence claim against the Millers. Additionally, prior to the hearing on the motion for sanctions, Crockett failed to appear for a continuation of his deposition.
As a result of these events, the Millers filed supplemental moving papers and requested additional sanctions.
D. Hearing on Motion for Sanctions
The court denied the Millers' request for issue and terminating sanctions. However, the court granted, in part, the Millers' request for evidence sanctions, ordering that all documents not produced by Crockett and Smith before the September 7, 2004, deadline imposed under the earlier order on the motion to compel would be inadmissible at trial. The court also ordered an additional $3,000 in monetary sanctions against Crockett, payable in 45 days. The court ordered an additional $1,500 in monetary sanctions against Smith, also payable in 45 days. The court ordered that the existing $6,750 in monetary sanctions previously imposed on Crockett and Smith, which had not been paid, be paid within 10 days of the order. With regard to the monetary sanctions the court further ordered: "If not paid, each plaintiff is to personally appear to show cause why the Complaint should not be dismissed for abuse of the discovery process and failure to make any payment of sanctions."
E. First Order To Show Cause Why the Complaint Should Not Be Dismissed
Crockett and Smith failed to pay the monetary sanctions on time, and the court ordered both Crockett and Smith to appear at an order to show cause (OSC) hearing as to why the complaint should not be dismissed. At the January 2005 hearing on the OSC, Smith failed to appear as ordered. Only Crockett and his counsel appeared. Crockett's counsel represented to the trial court that Crockett had authority to speak on Smith's behalf. The trial court was informed that discovery was on hold while the parties continued attempts to settle the matter and that to date there were no additional discovery violations to report. Crockett claimed that he and Smith were unable to pay the discovery sanctions.
The court stated that it was not going to issue any order other than related to the monetary sanctions at that hearing, because it wanted the discovery process to conclude and assess the failure to comply at that time. That, according to the court, "gives me greater discretion, obviously, than to just impose money or have a judgment entered related to money sanctions." The court also stated its rationale for needing additional information before exercising its discretion as to imposing any additional discovery sanctions against Crockett and Smith: "So to the extent this case is not settling and the agreement that a hold on discovery no longer exists, then I want you to complete discovery. So I can take that all into account in deciding what's an appropriate way in dealing with the issue of how discovery was conducted and completed. . . . "
The trial also court gave Crockett and Smith an opportunity to substantiate their claimed inability to pay the monetary sanctions. The court ordered Crockett and Smith to provide a financial declaration, covered by a protective order, by January 18, 2005. The financial declaration was to specify income, debts and expenses, as follows:
"[THE COURT:] Now, I would like to get information, counsel, from your client--clients, plural, of their financial circumstances that justify why these sanctions have not been paid timely. I want it in writing. And I want it under penalty of perjury as opposed to an oral rendition of what the circumstances are today.
"MR OLSON: We can do that, Your Honor.
"THE COURT: And when can you have those provided to the Court?
"MR. OLSON: May we have ten days?
"THE COURT: Okay. Ten days. I need to know the standard information--assets, debts, sources of income, bank accounts, property. Anything like that. I need all that information so I can make a more informed decision. If I need any more--after I see that, if I need any more information from counsel, I'll let all of you know. And to the extent I want to do something in addition to this money issue, I'll provide notice to counsel so that we can talk about it. Okay?" (Italics added.)
The court also added:
"If I don't receive that information or I consider the information not a good faith effort of presenting the financial circumstances of your clients, I will take that into account in deciding whether or not to dismiss the complaint with prejudice, based on everything that was put before me on the motions that I've heard as it relates to the abuse of discovery. Okay. [¶] . . . [¶] Actually, to the extent I'm looking at additional sanctions, the range of things I will look at will also include striking the answer to the cross-complaint."
The court's minute order stated that following receipt of the financial declarations the court would "make a decision as to any additional sanctions as to the complaint and cross-complaint due to abuse of [the] discovery process."
F. Second OSC Why the Complaint Should Not Be Dismissed
Crockett filed a financial declaration, but it was not signed. No response was made by Smith to the court's order.
The court set a second OSC hearing as to why the complaint should not be dismissed and the answer to the cross-complaint should not be stricken. The Millers filed objections to and a motion to strike the unsigned financial declaration.
At the hearing on the OSC, counsel for Crockett and Smith stated that recent rains had caused a large loss to their livestock, damaged their records, and thus created conditions making it impossible for them to respond to the trial court's previous order requiring financial declarations. Counsel for Crockett and Smith also claimed that he was unavailable to meet with his clients because he was on vacation and that was the reason the declaration was unsigned.
The court ordered both Crockett and Smith to submit a supplemental financial declaration by February 14, 2005, and the court would thereafter take the matter under submission. Counsel would be notified if anything less than terminating sanctions would be imposed and a hearing was necessary.
G. Crockett and Smith's Response to the Court's Order
In response to the court's order, Crockett and Smith submitted a handwritten letter, signed under penalty of perjury by both Crockett and Smith. The letter, which addressed the court directly and invited it to contact Crockett and Smith on an ex parte basis, did not include any of the financial information ordered by the court, i.e., "assets, debts, sources of income, bank accounts, property . . . ." Rather, the letter complained about the sanctions previously ordered and stated that Crockett and Smith were unable to provide a financial declaration because of the time spent taking care of their ranch.
H. The Court's Award of Terminating Sanctions
The court issued a ruling on February 15, 2005, the day after Crockett and Smith submitted their handwritten letter. The court indicated that it had "reviewed all matters related to discovery compliance and sanctions" as well as Crockett and Smith's response to the OSC. Terminating sanctions were awarded against both Crockett and Smith. Crockett and Smith's complaint was dismissed and their answer to the cross-complaint was stricken. All of the previous monetary sanction awards against Crockett and Smith, totaling $11,250, were confirmed, and a default judgment was ordered filed as to the cross-complaint.[1]
The court entered judgment on June 9, 2005. This timely appeal follows.
DISCUSSION
A. Standard of Review
We review the court's imposition of discovery sanctions for abuse of discretion. "'"The power to impose discovery sanctions is a broad discretion subject to reversal only for arbitrary, capricious, or whimsical action. [Citations.] Only two facts are absolutely prerequisite to imposition of the sanction: (1) there must be a failure to comply . . . and (2) the failure must be wilful [citation]." [Citation.]'" (Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1545.) The question before us is not whether the trial court should have imposed lesser sanctions, but whether the court abused its discretion by imposing the sanctions it did. (Collisson & Kaplan v. Hartunian (1994) 21 Cal.App.4th 1611, 1620; Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1245.)
B. Analysis
Code of Civil Procedure[2] section 2023.010 (formerly section 2023) provides:
"Misuses of the discovery process include, but are not limited to, the following: [¶] (a) Persisting, over objection and without substantial justification, in an attempt to obtain information or materials that are outside the scope of permissible discovery. [¶] (b) Using a discovery method in a manner that does not comply with its specified procedures. [¶] (c) Employing a discovery method in a manner or to an extent that causes unwarranted annoyance, embarrassment, or oppression, or undue burden and expense. [¶] (d) Failing to respond or to submit to an authorized method of discovery. (e) Making, without substantial justification, an unmeritorious objection to discovery. [¶] (f) Making an evasive response to discovery. [¶] (g) Disobeying a court order to provide discovery. [¶] (h) Making or opposing, unsuccessfully and without substantial justification, a motion to compel or to limit discovery. [¶] (i) Failing to confer in person, by telephone, or by letter with an opposing party or attorney in a reasonable and good faith attempt to resolve informally any dispute concerning discovery, if the section governing a particular discovery motion requires the filing of a declaration stating facts showing that an attempt at informal resolution has been made." (Italics added.)
Section 2023.030 (former section 2034) provides in part:
"To the extent authorized by the chapter governing any particular discovery method or any other provision of this title, the court, after notice to any affected party, person, or attorney, and after opportunity for hearing, may impose the following sanctions against anyone engaging in conduct that is a misuse of the discovery process: [¶] . . . [¶] (d) The court may impose a terminating sanction by one of the following orders: [¶] (1) An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process. [¶] (2) An order staying further proceedings by that party until an order for discovery is obeyed. [¶] (3) An order dismissing the action, or any part of the action, of that party. [¶] (4) An order rendering a judgment by default against that party." (Italics added.)
A court is not required to impose sanctions in a graduated fashion, but may apply "the ultimate sanction" against a party who has persisted in refusing to comply with discovery obligations. (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 793.) "[T]he unsuccessful imposition of a lesser sanction is not an absolute prerequisite to the utilization of the ultimate sanction . . . ." (Scherrer v. Plaza Marina Coml. Corp. (1971) 16 Cal.App.3d 520, 524.) Nevertheless, it is generally recognized that "terminating sanctions are to be used sparingly, only when the trial court concludes that lesser sanctions would not bring about the compliance of the offending party." (R .S. Creative, Inc. v. Creative Cotton, Ltd. (1999) 75 Cal.App.4th 486, 496.) This may be the case where there is a chronic pattern of delay or evasiveness by the defaulting party (Collisson & Kaplan v. Hartunian, supra, 21 Cal.App.4th at p. 1619; Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 490, disapproved on other grounds in Garcia v. McCutchen (1997) 16 Cal.4th 469, 478, fn. 4), or where the refusal to obey the discovery order was willful and the court concludes that no other lesser sanction would compel the party to obey. (Rail Services of America v. State Comp. Ins. Fund (2003) 110 Cal.App.4th 323, 331.)
Courts contemplating imposition of a terminating sanction should generally engage in a "balancing process" (McGinty v. Superior Court (1994) 26 Cal.App.4th 204, 214), taking into account the nature of the discovery abuse, whether it was part of a pattern, whether it was "'willful'" and "'without substantial justification'" (Sauer v. Superior Court (1987) 195 Cal.App.3d 213, 224-225), whether lesser sanctions would be effective to produce the discovery sought, the extent of the prejudice to the other party, and whether the sanction would result in a "windfall" to the other party. (McGinty v. Superior Court, supra, 26 Cal.App.4th at p. 214; see also Lang v. Hochman, supra, 77 Cal.App.4th at p. 1246 [trial courts impose a terminating sanction after considering the "totality of the circumstances: conduct of the party to determine if the actions were willful; the detriment to the propounding party; and the number of formal and informal attempts to obtain the discovery"].)
Crockett and Smith first assert that the court abused its discretion in dismissing their action based upon the fact that they were unable to pay the monetary sanctions ordered by the court. This contention is unavailing.
First, despite being given two opportunities to provide financial declarations to demonstrate an inability to pay the sanctions, Crockett and Smith failed to make such a showing. On the first occasion, Crockett filed a financial declaration that was unsigned and therefore could not be considered by the court. Smith did not file a financial declaration at all. After the court granted them a second chance to file a financial declaration, Crockett and Smith submitted a handwritten letter that, although signed under penalty of perjury, did not provide any financial information demonstrating an inability to pay. Thus, there was no showing of an inability to pay in this action.
Second, the court did not base its dismissal solely on Crockett and Smith's failure to pay sanctions ordered by the court. When the court ordered Crockett and Smith to provide financial declarations substantiating their claimed inability to pay the monetary sanctions, the court indicated that after receipt of the declarations it would consider imposing additional sanctions "due to abuse of the discovery process," not just their failure to pay the monetary sanctions. In ordering dismissal of Crockett and Smith's complaint, the court explicitly stated that it had "reviewed all matters related to discovery compliance and sanctions as well as [Crockett and Smith's] Response to the Order to Show Cause." Thus, the court did consider the entire history of Crockett and Smith's failure to comply with discovery requests and the several attempts made to gain compliance. This included their initial deficient discovery responses, the discovery of further documents not produced by the court-ordered deadline, the failure to pay sanctions, and the failure twice to obey the court's order requiring the filing of financial declarations demonstrating an inability to pay the monetary sanctions.
In asserting the court erred in dismissing their complaint based upon their failure to pay sanctions, Crockett and Smith rely heavily on Newland v. Superior Court of Los Angeles (1995) 40 Cal.App.4th 608 (Newland). However, based upon the ongoing discovery abuse by Crockett and Smith, as described, ante, and in more detail in the factual background of this opinion, ante, their reliance on Newland is misplaced.
In Newland, the plaintiff brought a motion to strike defendant Newland's answer because he had not "'paid the sanctions that were ordered by the Court . . . .'" (Newland, supra, 40 Cal.App.4th at p. 611.) The trial court issued terminating sanctions against the defendant because, due to a misunderstanding, defendants were three days late in paying $750 in discovery sanctions. (Id. at p. 612.) As a result, a judgment for $220,739.10 in damages was entered against the defendant, and the defendant lost the opportunity to have a motion for summary judgment heard. (Id. at pp. 612-613.) The Court of Appeal in Newland reversed, holding that "a terminating sanction issued solely because of a failure to pay a monetary discovery sanction is never justified." (Id. at p. 615.)
However, while it is error to impose terminating sanctions solely because a party has failed to pay monetary sanctions ordered by the court, they may be imposed where, in addition to nonpayment of monetary sanctions, a party has violated other discovery orders. (Stein v. Hassen (1973) 34 Cal.App.3d 294, 302-303; Willams v. Travelers Ins. Co. (1975) 49 Cal.App.3d 805, 810; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2005) ¶ 8:1227, p. 8F-88 (rev. # 1, 2005).) Here, as described, ante, there was a pattern of discovery abuse and willful failures to comply with the court's orders. The dismissal was based upon the entirety of Crockett and Smith's actions, not just their failure to pay monetary sanctions.
Crockett and Smith next assert that the court abused its discretion in dismissing their complaint because they complied to the "best of their ability with all court orders." In doing so, it appears that they contend there is no evidence that any of their conduct was "willful." We reject this contention.
Following the first motion to compel, as described, ante, Crockett and Smith failed to produce all documents ordered by the court by the court-imposed deadline, and, without excuse, failed to pay the sanctions ordered. Thereafter, Crockett and Smith twice disobeyed the court's order to produce financial statements detailing their asserted inability to pay the monetary sanctions ordered by the court. In fact, in arguing in the opening brief that Crockett and Smith's actions were not willful, counsel fails to address their failure on two occasions to comply with a direct order of the court. The evidence amply supports a finding that these actions by Crockett and Smith were willful.
Smith asserts that the court abused its discretion in dismissing her complaint because, other than the court's order compelling her to submit to a videotaped deposition, no further complaints were brought against her for alleged discovery abuses. This contention is unavailing.
The original motion to compel was directed toward both Crockett and Smith. The court granted that motion and imposed sanctions against both Crockett and Smith in the amount of $6,750. Smith did not pay those monetary sanctions. The terminating sanctions requested in the motion for sanctions were as to Crockett only, but the issue, evidence and monetary sanctions were requested as to both. The court denied the motion for terminating sanctions as to Crockett and denied the motion for issue sanctions brought against both Crockett and Smith. However, the court granted an evidence sanction against Crockett and Smith, excluding from trial any documents not produced by the court's original due date following the motion to compel. The court ordered additional monetary sanctions of $1,500 against Smith and $3,000 against Crockett, payable within 45 days. The court ordered that the previous unpaid sanctions ordered against both Smith and Crockett were to be paid within 10 days. The court further ordered that if the sanctions were not paid, both parties were to appear at an OSC hearing as to why the complaint should not be dismissed "for abuse of the discovery process and failure to make any payment of sanctions." Smith did not pay the sanctions by the court-ordered deadline.
Both OSC's ordered that both Crockett and Smith provide financial declarations to substantiate their claim that they could not pay the monetary sanctions ordered by the court. In response to the first OSC, Smith did not submit a declaration, and Crockett submitted an unsigned declaration. In response to the second OSC, Smith and Crockett submitted a handwritten letter that failed to comply with the court's order. Accordingly, Smith cannot claim that there were no complaints against her for discovery abuses other than her refusal to submit to a videotaped deposition.
DISPOSITION
The judgment is affirmed.
NARES, Acting P. J.
WE CONCUR:
HALLER, J.
O'ROURKE, J.
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[1] This appeal only challenges the court's dismissal of Crockett and Miller's complaint. The default judgment on the cross-complaint is the subject of a separate pending appeal.
[2] All further statutory references are to the Code of Civil Procedure.
