Opinion
G044491
09-23-2011
AMER JNEID et al., Plaintiffs and Respondents, v. NOVELL, INC., Defendant and Appellant.
Workman Nydegger, Sterling A. Brennan and L. Rex Sears for Defendant and Appellant. Suojanen Law Office, Bill Suojanen; Law Offices of Michael G. York and Michael G. York for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 02CC00182)
OPINION
Appeal from an order of the Superior Court of Orange County, Gail Andrea Andler, Judge. Affirmed.
Workman Nydegger, Sterling A. Brennan and L. Rex Sears for Defendant and Appellant.
Suojanen Law Office, Bill Suojanen; Law Offices of Michael G. York and
Michael G. York for Plaintiffs and Respondents.
* * *
BACKGROUND
This appeal is the direct result of this court's decision in Jneid v. Tripole (Dec. 17, 2009, G039500) [nonpub. opn.] (Jneid I). The history leading up to this appeal is this: Novell bought intellectual property "assets" from various entities, including Amer Jneid, Ali Beydoun, Craig Sheldon, and TriPole Corporation. The deal obligated Novell to pay the sellers bonuses and contingent payments if certain "revenue milestones" were met. The sellers sued, claiming that Novell had manipulated its books to make it look like the milestones had not been met, so as to relieve the company of the need to pay bonuses and contingent payments.
In April 2003, during the pendency of the litigation, the plaintiffs served a request for production of documents that would have, if it had been honored, resulted in the production of some 17,000 pages of documents located in a certain "iFolder." Novell produced nothing but objections at the time. However, in 2006, after trial began, Novell produced eight CD's containing those 17,000 pages. The trial court granted issue and evidentiary sanctions that "came close," as we said in Jneid I, "to a directed verdict." (Jneid I, supra, G039500.) The sanctions resulted in a judgment totaling close to $20 million against Novell.
Novell appealed. This court held in Jneid I that the issue and evidentiary sanctions went "'further than necessary to accomplish the purpose of discovery,'" and reversed the judgment. (Jneid I, supra, G039500.) We said that there were lesser sanctions available to the trial court for Novell's malfeasance, and spelled out those sanctions. Here are the four relevant passages from Jneid I where we spelled out the appropriate sanctions to apply on remand:
(1) "Payment to plaintiffs and TriPole for the attorney fees, costs, and expenses they incurred for the already completed trial is an appropriate sanction sufficient to rectify the prejudice they suffered."
(2) "As an additional sanction Novell should be charged with the costs, including attorney fees, costs, and expenses, of any additional discovery resulting from the late production of the documents."
(3) "The superior court shall determine the attorney fees, costs, and expenses incurred by plaintiffs and TriPole in connection with the already completed trial and order Novell to pay those amounts forthwith."
(4) "In addition, the court shall determine the amounts Novell shall pay to plaintiffs and TriPole for additional discovery to be conducted because of the late production of the documents." (Jneid I, supra, G039500.)
In the wake of Jneid I, the trial court made four separate attorney fee, cost and expense orders as the appropriate sanctions for Novell's failure to comply with the April 2003 request for production of documents. Four separate orders were made because there were four sets of attorneys who represented the sellers up to and including what should have been the mistrial.
This appeal represents the first of these four orders to reach this court, centering on the work of attorney Bill Suojanen. The total award is about $1 million, consisting of about $700,000 in attorney fees as such, plus another $302,000 in costs and expenses. Novell presents challenges to three discrete expense items awarded Suojanen, plus presents an overall challenge to the trial court's determination of precisely when trial began and ended in calculating Suojanan's attorney fees.
The three expense items challenged are: (1) $42,500 for the "lost income sitting at trial (6 mos.)" claimed by one of the plaintiffs, Ali Beydoun; (2) $87,500 for "[t]rial-related services provided by Mr. Jneid and his two companies"; and (3) $65,086.98 for "Trepal & Pistone Travel Expenses for first trial." According to Novell, none of these expense items are correctly within the purview of our disposition in Jneid I. The quoted descriptions are taken from attorney Suojanen's supplemental brief to the trial court in support of his attorney fee, cost and expense request, dated July 26, 2010.
The argument aimed at the attorney fee award is that the trial court erred in determining that "trial" began with oral argument concerning in limine motions on June 12, 2006 , and ended with the trial judge's ruling on the "last post-trial motion," which was April 3, 2008. Instead of the roughly 22-month period June 2006 to April 2008 which the trial judge used to calculate the fees attributable to Novell's failure to produce the 17,000 pages when it originally should have, Novell contends that the trial judge should have used the shorter six-month period from July 24, 2006, when one of plaintiffs' counsel gave an opening statement, to the jury's final verdict on January 29, 2007.
DISCUSSION
1. Inadequate Record
We first hold that Novell has waived its challenges to the three items of expenses. The numbers for each challenged item are taken from page 556 of the Appellant's Appendix, which is page 4 of a supplemental brief submitted to the trial court by Suojanen dated July 26, 2010. On that page there is a table breaking down various expense items claimed by Suojanen. Each itemized expense item, however, is shown to have been supported by an accompanying declaration, and in some cases supported by an exhibit in addition to a declaration. Thus, the $42,500 for the "lost income sitting at trial (6 mos.)" claimed by Ali Beydoun was supported by "Beydoun Suppl Decl." The $87,500 for "[t]rial related services provided by Mr. Jneid and his two companies" was supported by "Jneid Decl. ¶ 6; Suojanen Decl., ¶ 10, Ex. 'l.'" And the $65,086.98 for "Trepal & Pistone Travel Expenses for first trial" was supported by "Jneid Decl. ¶ 5 Trepel Decl."
Novell, however, did not include those supporting declarations and exhibits in its Appellant's Appendix. On page 7 of its Reply Brief, Novell implicitly recognizes that it did not include the supporting declarations and exhibits backing up Suojanen's itemization, but attempts to excuse the omission by asserting that it was respondents' duty to have proffered the documents. (Specifically, Novell argues that the plaintiffs "could have, but made a strategic decision not to, submit the declarations and exhibit they argue Novell should have submitted in a respondent's appendix.")
Novell's argument betrays a misunderstanding of basic appellate procedure. It is "the burden of an appellant -- not the respondent -- to show error by an adequate record." (Cypress Security, LLC v. City and County of San Francisco (2010) 184 Cal.App.4th 1003, 1014, citing Ballard v. Uribe (1986) 41 Cal.3d 564, 574-575.) Respondents only have a burden to furnish additional material for the record when the appellant demonstrates an error which carries a presumption of prejudice, as, for example, might be the case if the appellant shows jury misconduct. (See Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2009) ¶ 4:5.5, p. 4-4, ¶ 8:158.1, p. 8-117.) In such a case, the respondent will not "be heard" to argue that the error was harmless unless it has proved a record sufficient to support its harmless error argument. (Lankster v. Alpha Beta Co. (1993) 15 Cal.App.4th 678, 683 [noting that appellant had "met her burden on appeal by presenting a record sufficient to establish juror misconduct" and therefore burden "shifted" to respondent to "rebut the presumption by attacking the strength of the evidence of misconduct, the nature and seriousness of the misconduct, and the probability of actual prejudice"].)
Here, however, Novell has shown nothing which establishes a presumption of prejudice. For us to determine whether there was any error at all we must first examine the evidence supporting the award of the challenged expense items in the first place, and that evidence has not been furnished us on appeal.
Concurrent with its reply brief, Novell filed a "reply appendix" which contains the declarations of Bill Suojanen and Amer Jneid which do shed some light on to two of the three challenged expenses, namely the $87,500 for trial-related services provided by plaintiff Jneid himself and two of his companies, plus the $65,086.98 for travel expenses paid to another firm, Trepal & Pistone.
The filing of the reply appendix, however, does not cure the failure to supply an adequate record. The material was supplied to this court after the respondent's brief was filed, pointing out the deficiencies in the appellant's appendix. The respondents thus had no opportunity to address any of the material in the "reply appendix" in their respondent's brief. It would now be unfair to respondents to consider Novell's argument on the merits.
As to one of the challenged items, the $42,500 for Beydoun's lost time, Novell appears to assert that the issue is strictly one of law, hence its failure to provide Beydoun's supporting declaration is irrelevant. Not so. The inadequate record means this court cannot assess the nature of Beydoun's lost time, its relationship to the unnecessary trial that took place in the last half of 2006, or even whether Beydoun might, as a witness in the case, have actually been compensated for his time as a litigation expense.
2. The "Temporal Limits" of Trial
Novell argues that the trial court erred in calculating Suojanan's fees based on the 22-month period from oral argument on the in limine motions (June 2006) to the trial court's final ruling on a posttrial motion (April 2008). The trial court referred to the issue as one of the "'temporal limits' for the award of fees, costs, and expenses" contemplated in Jneid I.
Preliminarily, we should recognize there is some equitable appeal in Novell's argument. The length of the "trial" was the product of discovery sanctions which this court, in Jneid I, said went too far, and allowed the completion of a trial which, had the sanctions been more moderate, would have been declared mistried early on.
But the problem we faced on appeal in Jneid I was one which necessarily required the allocation of an unnecessary loss, but a loss that could not be realistically prevented until after the entire trial had been completed and the case went up on appeal. And given that the ultimate cause of the unnecessarily prolonged trial was Novell's discovery malfeasance, the loss was appropriately allocated to Novell.
It was thus in the context of loss allocation that Jneid I used the phrase "attorney fees, costs, and expenses incurred by plaintiffs and TriPole in connection with the already completed trial" (italics added) to define the parameters of the "attorney fees, costs and expenses" which the plaintiffs had "incurred." (Jneid I, supra, 39500.) So the question is not, as Novell now argues, what is the meaning of "trial" in the legal abstract, but what did we mean when we wrote "in connection with the already completed trial." And we clearly meant this trial, particularly as it was affected by Novell's discovery malfeasance dating back to April 2003. Everything "in connection with" necessarily included everything from the in limine motions that framed the course of the trial to the final posttrial motion. Our prior opinion did not say "at the trial" or "during the trial." We said "in connection with" the trial. The trial judge was thus clearly correct to gauge the "temporal limits" of trial by that 22-month time period.
DISPOSITION
The order is affirmed. Plaintiffs and respondents are to recover their costs on appeal.
RYLAARSDAM, ACTING P. J.
WE CONCUR:
MOORE, J.
ARONSON, J.