Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from an order of the Superior Court of Los Angeles County No. BC316790, Wendell Mortimer, Jr., Judge. Reversed in part and modified in part.
Knopfler & Pazos, George Knopfler, James Pazos for Plaintiff and Appellant.
McMillan & Shureen, Donald T. McMillan, George J. Keller for Defendants and Respondents.
BOREN, P.J.
Plaintiff Nationwide Indemnity Company (hereinafter, Nationwide) appeals an order imposing discovery sanctions. Nationwide properly contends that the trial court lacked jurisdiction to grant the motions by defendants American States Insurance Company and American Economy Insurance Company (hereinafter collectively referred to as American Insurance) to compel further responses to interrogatories and to demand production of documents after expiration of the statutory 45-day period from service of its discovery responses. (Code Civ. Proc., §§ 2030.300, subd. (c), 2031.310, subd. (c).)
All further statutory references are to the Code of Civil Procedure, unless otherwise indicated.
Although delay ensued in agreeing upon a discovery referee, American Insurance failed to exercise its statutory right (§ 639, subd. (a)) to move for the appointment of a discovery referee before whom it could have timely filed its motions to compel and for sanctions. Thus, it cannot be heard to complain about the purported lack of a “forum” in which to bring the motions. Because the jurisdictional 45-day period for motions to compel further responses had lapsed and the motions to compel were untimely and opposed with “substantial justification” (§§ 2030.300, subd. (d), 2031.310, subd. (d)), American Insurance’s complaints about Nationwide’s inadequate discovery responses provide no valid predicate upon which to base sanctions.
Nationwide also contends: (1) that e-mail communications after the 45-day period did not have the effect of tolling the time for filing motions to compel until after mediation; (2) that it acted with substantial justification in opposing the motions to compel; and (3) that the amount of sanctions was improper. Because we find Nationwide’s initial and primary contention dispositive, it is unnecessary to address these other contentions.
FACTUAL AND PROCEDURAL SUMMARY
The underlying matter involves construction defects in a housing complex in Santa Barbara. Equitable indemnification issues arose between the general contractor’s primary insurance carriers, including Nationwide, and the many subcontractors’ insurance companies, including American Insurance. Nationwide and other primary insurers sued American Insurance and other subcontractor insurers for declaratory relief and equitable contribution. The ensuing litigation in this consolidated coverage matter resulted in a case management order and the appointment of a discovery referee (Judge Lester Olson, ret.).
The case management order (CMO).
On June 22, 2005, the trial court (Judge Jon Mayeda) filed a CMO. Pursuant to the CMO, all discovery by the parties not specifically authorized by the CMO was stayed, with the stay to be lifted at the conclusion of the mediation process. The CMO also provided for a discovery referee: “The parties shall select a mutually agreed upon Discovery Referee to handle all discovery disputes prior to and during the Mediation. If the parties are unable to agree on a Discovery Referee within thirty (30) days after this Order is in effect, then the court shall appoint one pursuant to Code of Civil Procedure [section] 639 and California Rule[s] of Court, [former rule] 244.2.”
Pursuant to the CMO, all parties were to serve verified responses to the special interrogatories (attached to the CMO) within 30 days of the date of the CMO. Any dispute as to the validity of objections asserted to special interrogatories would be “submitted to the Discovery Referee who may order any party to prepare a brief regarding the dispute.”
To facilitate demands for the production of documents, a document depository was established. As with interrogatories, any dispute as to the validity of any objections asserted regarding the production of documents would be “submitted to the Discovery Referee who may order any party to prepare a brief regarding the dispute.” Any party failing to deposit documents in compliance with the specified procedures would be afforded five days to comply with the order after notice of noncompliance. “Thereafter, any party may notify the Discovery Referee of such noncompliance, and, if necessary, bring a motion to compel compliance before the Discovery Referee pursuant to Code of Civil Procedure.”
Regarding mediation, the CMO specified that the date for the initial mediation would be set by the mutually agreed upon mediator. All discovery set forth in the CMO was to “be completed and all disputes thereto resolved prior to the commencement of the initial mediation.” The CMO further provided that the “mediation process will be deemed to be concluded and the discovery stay simultaneously lifted on the date that the Mediator faxes to all counsel notice that the mediation process has been concluded.”
The chronology of the discovery events.
On August 5, 2005, Nationwide served its responses to the CMO interrogatories, and on August 22, 2005, it served its responses to the demand for documents. In September and October of 2005, Nationwide and American Insurance communicated back and forth (by fax and mail) regarding the claimed deficiencies in Nationwide’s discovery responses. Because of disagreements among plaintiff insurers, including Nationwide, in selecting a discovery referee, no referee was selected within the 30-day period after the CMO. Nor thereafter did the trial court appoint a discovery referee, either on its own motion or on the request of American Insurance.
On January 23, 2006, counsel for American Insurance (Kelly Silverstein) proposed in an e-mail to numerous parties that in order to keep the initial mediation date scheduled for March 1, 2006, every party agrees to reserve its rights “to address disputes regarding the CMO discovery until after mediation . . . if it takes place on 3/1/06.” She also proposed, “If the mediation does not take place, or it takes place on 3/1/06 and does not result in a settlement, then each party has until April 3, 2006 to request a hearing with the Discovery Referee regarding any CMO discovery dispute.”
Later, that same afternoon, although other parties were apparently in accord, counsel for Nationwide (James Pazos) did not agree to the above proposed stipulation. Pazos stated in a reply e-mail that he did “not want to waive our position that . . . the 45 days cut off for bring[ing] a motion to compel has elapsed. Ms. Silverstein informed me that it is her position, and possibly other defendants[’] position, that the 45 day cut off is [in]applicable because Plaintiff delayed in selecting a discovery referee and/or other reasons. [¶] Thus, what I propose is a standstill with regard to that issue and we can address that issue, if necessary, after the mediation along with other discovery disputes. Thus, we will treat any motion to compel filed within 45 days of March 1st as if it were filed today [i.e., January 23, 2006]. [¶] This should address everyone’s concerns since we would still have all the argument we would otherwise have and will allow us to see if this matter can be resolved to some extent.”
Approximately a week later, on February 3, 2006, the court signed the order appointing the discovery referee; notice of that appointment was given on March 15, 2006. On March 1, the parties conducted the initial and only mediation session pursuant to the CMO. By April 14, 2006, 45 days after the March 1 mediation, American Insurance still had not filed any motion to compel further responses from Nationwide. On May 10, 2006, the mediator declared “the mediation is completed.”
On May 30, 2006, the complex litigation panel issued stays of the entire action pending an initial status conference and the reassignment of the matter to the complex litigation department. On December 1, 2006, the court lifted the stay on the entire action. On December 27, 2006, American Insurance filed with the discovery referee its motions to compel further responses to the CMO special interrogatories and to the demand for documents. American Insurance also moved to impose discovery sanctions.
Nationwide opposed the motion and argued, inter alia, that the court should deny the motions because they were filed 447 days after the expiration of the statutory and jurisdictional 45-day cutoff. (See §§ 2030.300, subd. (c), 2031.310, subd. (c).) Alternatively, Nationwide argued that the motions to compel, filed after the initial March 1, 2006, mediation, ran afoul of the CMO provision that requires as follows: “All discovery set forth in this Order shall be completed, and all disputes thereto resolved prior to the commencement of the initial mediation.” Nationwide further urged that to the extent American Insurance intended to rely upon the January 23, 2006, e-mail agreement with Nationwide that “any motion to compel filed within 45 days of March 1st [will be treated] as if it were filed today [i.e., January 23, 2006],” and assuming this agreement could effectively modify the CMO requirement, American Insurance failed to file its motion within 45 days of the March 1, 2006, initial mediation.
American Insurance countered this argument by asserting that it could not have brought the motion prior to when the discovery referee was appointed on February 3, 2006, because it had no forum within which to bring the motion. Regarding American Insurance’s failure to bring the motion within 45 days of February 3, 2006, American Insurance argued that the time to bring its motion had been extended by the January 23, 2006, e-mails until after completion of the mediation, and “mediation concluded on May 10, 2006.”
On February 20, 2007, the discovery referee conducted a hearing on the motions to compel and to impose sanctions. Thereafter, the referee accepted additional documentary support by American Insurance regarding its attorney fees, and then filed its report and recommendations for a court order. On May 2, 2007, the court adopted the discovery referee’s proposed order. It thus granted American Insurance’s motion to compel and ordered Nationwide to pay to American Insurance $19,695.75 and to pay to the discovery referee $11,179 (for the referee’s fees and costs).
On July 13, 2007, Nationwide filed before this court a petition for a writ of mandate seeking relief from the trial court’s discovery and sanctions order; we denied the petition. On August 30, 2007, Nationwide served supplemental responses in compliance with the trial court’s discovery order.
Nationwide appeals the sanctions order, which we find is appealable and not rendered moot by Nationwide’s subsequent compliance with the underlying discovery order. (§§ 904.1, subds. (11), (12), 906; see Foothill Properties v. Lyon/Copley Corona Associates (1996) 46 Cal.App.4th 1542, 1557.)
DISCUSSION
American Insurance untimely filed its motions to compel additional discovey responses long after the statutory and jurisdictional 45-day period for such motions had expired.
Section 2030.300, subdivision (c) provides with respect to motions to compel further responses to interrogatories: “Unless notice of this motion is given within 45 days of the service of the response, or any supplemental response, or on or before any specific later date to which the propounding party and the responding party have agreed in writing, the propounding party waives any right to compel a further response to the interrogatories.” Section 2031.310, subdivision (c) provides the same with respect to motions to compel a further response to the demand for document inspection.
In construing similar predecessor statutory provisions, the court in Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, concluded that the 45-day time limitation for motions to compel further answers to interrogatories and to compel production of documents was not “‘jurisdictional’ in the fundamental sense, but is only ‘jurisdictional’ in the sense that it renders the court without authority to rule on motions to compel other than to deny them.” (Id. at p. 1410, italics added; see also Vidal Sassoon v. Superior Court (1983) 147 Cal.App.3d 681, 685.) “The Legislature has explicitly stated that unless a party moves to compel further response within 45 days of the unsatisfactory response, he waives any right to compel a further response.” (Professional Career Colleges Magna Institute, Inc. v. Superior Court (1989) 207 Cal.App.3d 490, 494.)
Based on the dates of Nationwide’s service of responses (August 5 and 22 of 2005), the 45 days for motions to compel by American Insurance would have run on September 19, 2005, for its motion to compel further responses to interrogatories, and would have run on October 6, 2005, for its motion to compel further document inspection. However, American Insurance filed its motions to compel with the discovery referee on December 27, 2006.
Overview of American Insurance’s position.
American Insurance urges that at the outset of the discovery dispute, in September and October of 2005, it had no forum within which to bring its motions to compel. American Insurance argues that it had “no forum” because the discovery referee necessary to decide motions to compel had not been appointed by the court until February 3, 2006--and that just prior to the referee’s appointment, the parties agreed via e-mails to extend the date for filing motions to compel until the conclusion of mediation, which occurred on May 10, 2006, and which was then followed by a stay of the entire action from May 30, 2006, until the stay was lifted on December 1, 2006. Accordingly, American Insurance reasons that its motions to compel filed on December 27, 2006, were timely and thus a valid predicate for the imposition of sanctions.
The discovery referee issue.
American Insurance notes that because of disagreements in the fall of 2005 among the plaintiff insurers, including Nationwide, there was some delay in selecting a mutually acceptable discovery referee. Two of the plaintiff insurers wanted to select a different discovery referee, but Nationwide preferred Judge Lester Olson, who ultimately was agreed upon. American Insurance faults Nationwide for not agreeing more promptly to a discovery referee and for purportedly “dilatory participation” in the referee selection process.
American Insurance also points to the undisputed value of a case management order to lay out “a clear path and timetable for the completion of all tasks necessary to ready the case for trial,” and of a discovery referee to assist “the trial judge in resolving discovery disputes.” (Lu v. Superior Court (1997) 55 Cal.App.4th 1264, 1268, 1269.) It is undisputed that the CMO at issue here required any dispute regarding responses to interrogatories or document requests to be submitted to the appointed discovery referee who could then order the parties to brief the dispute.
Contrary to American Insurance’s assertion, even without a discovery referee yet in place, it does not necessarily follow that there was “no forum” possible in which it could have raised discovery issues and had them resolved. The CMO filed by Judge Mayeda on June 22, 2005, specifically provided: “If the parties are unable to agree on a Discovery Referee within thirty (30) days after this order is in effect, then the court shall appoint one pursuant to Code of Civil Procedure [section] 639 and California Rule[s] of Court, [former rule] 244.2.”
Thus, with no discovery referee agreed upon by the parties within 30 days after the effective date of the CMO, the trial court had authority under the CMO to appoint a discovery referee. In fact, the CMO specifically cited to section 639, which provides that “[w]hen the parties do not consent, the court may, upon the written motion of any party, or of its own motion, appoint a referee . . . .” (§ 639, subd. (a), italics added.) It was the obligation of American Insurance, as the aggrieved party, to bring the discovery issues complained of to the attention of the trial court and to request that it appoint a referee to timely resolve the issues. American Insurance had the ability to trigger the creation of the forum it asserts it lacked.
To hold otherwise would cause a party’s failure to request a discovery referee, or a court’s refusal to appoint one, to circumvent the Legislature’s “mandatory and jurisdictional” (Sexton v. Superior Court, supra, 58 Cal.App.4th at p. 1410) 45-day cutoff for moving to compel further responses. If we permitted American Insurance to avoid its duty to resolve discovery complaints by seeking the appointment of a referee, we would discourage parties from scrupulously adhering to the terms of case management orders and frustrate the otherwise expeditious handling and disposition of complex cases. Indeed, the discovery issues here, and perhaps the litigation as a whole, could likely have been resolved more quickly if American Insurance had moved for the appointment of the discovery referee it complains it lacked.
Conclusion.
Discovery sanctions are permissible only when the motion is unsuccessfully opposed by a party who acts without “substantial justification.” (§§ 2030.300, subd. (d), 2031.310, subd. (d); see Foothill Properties v. Lyon/Copley Corona Associates, supra, 46 Cal.App.4th at p. 1557.) Here, because there was no jurisdiction to rule on motions alleging inadequacies in discovery responses and to compel further responses, there was “substantial justification” for opposing the motions to compel. Hence, there was no valid basis for imposing discovery sanctions.
The May 2, 2007, order imposing on Nationwide $19,695.75 in sanctions payable to American Insurance must be reversed and the sanctions vacated. That aspect of the order requiring Nationwide to pay the referee’s fees and costs of $11,179.00, with interest at a rate of 10 percent from the date of the order, must be modified (see § 906) to reflect that such payment must be made by American Insurance.
DISPOSITION
The portion of the May 2, 2007, order imposing on Nationwide $19,695.75 in sanctions payable to American Insurance is reversed and the sanctions are vacated. That aspect of the order requiring Nationwide to pay the referee’s fees and costs of $11,179.00, with interest at a rate of 10 percent from the date of the order, is modified to reflect that such payment must be made by American Insurance.
Nationwide is entitled to recover its costs on appeal.
We concur: DOI TODD, J., ASHMANN-GERST, J.