Opinion
A161444
09-27-2021
KNITTER & KNITTER LLP, Plaintiff and Respondent, v. WILLIAM J. REED, Defendant and Appellant.
NOT TO BE PUBLISHED
Solano County Super. Ct. No. FCS 050141
POLLAK, P. J.
Defendant William J. Reed appeals a judgment awarding plaintiff Knitter & Knitter LLP (Knitter) approximately $65,000 on its action to collect outstanding legal fees owed by Reed. Reed, appearing in propria persona, contends the court erred in entering a default judgment against him as a remedy for his abuse of the discovery process, and that the court erred in denying his motion to set aside the judgment. We find no prejudicial error and shall affirm the judgment.
Factual and Procedural Background
On January 9, 2018, Knitter filed the present action seeking to collect on unpaid legal bills incurred by Reed over the four years prior. After numerous discovery disputes, trial was set for November 2019.
On the day of the trial, Knitter filed a motion in limine to prohibit Reed from introducing any evidence at trial or, alternatively, to grant terminating sanctions pursuant to Code of Civil Procedure section 2023.030 based on his abuse of the discovery process. A declaration by Knitter's counsel details the discovery requests propounded by Knitter, the court orders compelling Reed's responses and Reed's failure to respond to the discovery requests and orders.
Code of Civil Procedure section 2023.030, subdivision (c) authorizes the court to “impose an evidence sanction by an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence” and under subdivision (d)(4) to “impose a terminating sanction by... [a]n order rendering a judgment by default against that party.”
At the hearing on the motion, Reed informed the court that he had delivered the outstanding discovery responses that morning. He explained that he tried previously to comply but that Knitter's office was closed when he attempted to deliver the responses. He argued that Knitter was not prejudiced by the delay because Knitter already knew the theory of his defense. Finally, Reed indicated that, in any event, he “was not particularly interested in putting in any documentary evidence in [his] case in chief.”
The court granted the motion in full, finding that Reed had “willfully disobeyed the court's orders with regard to payment of sanctions as well as responding to discovery.” The court indicated that it would enter a default judgment and gave Knitter the opportunity to prove its damages. Following Knitter's presentation of evidence, the court asked whether Reed wished to be heard. Reed indicated that he did, but then proceeded to rehash the court's ruling on the discovery sanction. Once the court reiterated its in limine ruling, Reed confirmed that his trial brief had been filed and stated that he had nothing additional to add. The court found that Reed owed Knitter $65,018.02 in unpaid legal fees and interest and directed that Knitter prepare the judgment. On May 1, 2020, the court entered judgment in Knitter's favor for that amount.
In his trial brief, Reed argued that the legal fees at issue were not recoverable because the appellate work Knitter performed on his behalf was expressly excluded from the signed retainer agreement and that, although the parties intended to sign a separate agreement as to that work, no agreement was ever reached. He argued further that Knitter could not establish its right to recover under a quantum meruit theory because its claim was untimely and the services it rendered had not conferred a benefit on Reed.
On August 3, 2020, Reed filed a motion to set aside the judgment under Code of Civil Procedure section 473, subdivisions (b) and (d) and Civil Code section 3412. Reed argued that the court erred by entering a default judgment on Knitter's complaint because, among other things, Knitter's complaint failed to allege a valid cause of action and because the prayer sought damages “according to proof.”
In response, in addition to addressing Reed's arguments on the merits, Knitter sought clarification from the court that the judgment entered in May 2019 was entered following a court trial and not by way of default. The court confirmed that the judgment was incorrectly identified as a “default judgment” rather than a judgment after court trial and requested that counsel make the necessary corrections and resubmit the judgment for the court's signature.
On September 2, 2020, the court denied Reed's motion to set aside the judgment. On November 2, Reed filed a notice of appeal challenging both the “default judgment” and the denial of his motion to set aside the judgment.
Discussion
1. The court did not err in granting Knitter's motion in limine.
Reed contends, for the first time on appeal, that the court erred in granting Knitter's request for discovery sanctions because the request was made by motion in limine on the day of trial and not by properly noticed motion. He argues that the sanction order is “void for lack of required notice.” We disagree.
Section 2023.030 authorizes the court to impose discovery sanctions “after notice to any affected party, person, or attorney, and after opportunity for hearing.” Section 2023.040 requires that “A request for a sanction shall, in the notice of motion, identify every person, party, and attorney against whom the sanction is sought, and specify the type of sanction sought. The notice of motion shall be supported by a memorandum of points and authorities, and accompanied by a declaration setting forth facts supporting the amount of any monetary sanction sought.” A request for sanctions is subject to the notice requirements of the Code of Civil Procedure. (Alliance Bank v. Murray (1984) 161 Cal.App.3d 1, 5-6.) The notice requirements, however, are subject to waiver by a party's appearance at the hearing and opposition to the motion on the merits. (Id. at p. 7.)
Reed does not dispute that the motion in limine fully advised him of the grounds for sanctions and the type of sanctions being requested. Moreover, the record reflects that Reed appeared at the hearing on the motion and argued against imposition of sanctions on the merits. At no point did Reed argue that the request for sanctions was untimely or that he needed more time to respond. Accordingly, Reed waived any objection to the timeliness of the notice by responding and participating in the hearing. (See Moofly Productions, LLC v. Favila (2020) 46 Cal.App.5th 1, 10, citing Tate v. Superior Court (1975) 45 Cal.App.3d 925, 930 [“a party who appears and contests a motion in the court below cannot object on appeal... that he had no notice of the motion or that the notice was insufficient or defective”].) Reed makes no argument on appeal that the court wrongly decided the merits of the motion; the court did not abuse its discretion in considering and granting the motion.
2. The court did not err in entering judgment in Knitter's favor and thereafter denying Reed's motion to set the judgment aside.
Reed argues that the court lacked jurisdiction to enter a default judgment because Knitter's complaint failed to allege a valid cause of action and because the prayer sought damages “according to proof.” In Falahati v. Kondo (2005) 127 Cal.App.4th 823, 829, cited by Reed, the court explained that a default judgment “cannot properly be based on a complaint which fails to state a cause of action against the party defaulted because... ‘[a] defendant who fails to answer admits only facts that are well pleaded.' ” The court also observed that a default judgment “is void... if the complaint failed to ‘apprise[] the defendant of the nature of the plaintiff's demand,' or if the court granted relief which it had no power to grant including a default judgment which exceeds the amount demanded in the complaint.” (Id. at p. 830; see also § 580, subd. (a); Greenup v. Rodman (1986) 42 Cal.3d 822, 824 [“in all default judgments the demand sets a ceiling on recovery”]; Simke, Chodos, Silberfeld & Anteau, Inc. v. Athans (2011) 195 Cal.App.4th 1275, 1286 [“[A] default judgment that violates section 580 is void; it can be challenged and set aside at any time.”].) The purpose of these rules is to “ensure that a defendant who declines to contest an action does not thereby subject himself to open-ended liability.” (Greenup v. Rodman, supra, 42 Cal.3d at p. 826.) These due process requirements apply whether the default occurs “by inaction or by wilful obstruction.” (Id. at p. 829 [rejecting argument that the limits on default judgments do not apply when the court enters a default judgment as a discovery sanction].)
Here, the court did not consider that it had entered a default judgment but a judgment after a court trial. However, whether the judgment is characterized as a default judgment under section 2023.030, subdivision (d)(4), or a judgment entered after a court trial at which the defendant was precluded from introducing evidence under section 2023.030, subdivision (c), Reed's due process rights were sufficiently protected. Reed was apprised of the claims against him and he appeared throughout the proceedings to contest Knitter's claims on the merits. Reed was advised of the amount of damages being sought. While Knitter's complaint prayed for damages according to proof, it also alleged that it was entitled to recover the “reasonable value of services of no less than $250,000.” Knitter presented evidence of the amount of its unpaid bills for legal services, which was considerably less that the $250,000 indicated in the complaint, and Reed was given an opportunity to respond to that evidence. The court did not err by entering judgment based on the evidence presented and it properly denied Reed's motion to set that judgment aside based on the alleged defects in the complaint.
Disposition
The judgment is affirmed. Knitter shall recover its costs on appeal.
WE CONCUR: STREETER, J., BROWN, J.