Opinion
NOT TO BE PUBLISHED
Super. Ct. No. CV02-72352.
NICHOLSON, Acting P.J.
This is an appeal from an order imposing $5,327 in monetary sanctions for misuse of the discovery process. We reverse because there was inadequate notice. The notice of motion for sanctions stated that its grounds for sanctions was conduct committed prior to filing of the motion. The trial court’s sanctions order, however, was based on conduct after the filing of the motion.
This action and offshoots of it have spawned several appeals to this court. (See Wichmann v. Livingston & Mattesich Law Corporation (Oct. 29, 2001, C037241) [nonpub. opn.]; Wallis v. Strohl (May 3, 2002, C035172) [nonpub. opn.]; Wallis v. PHL Associates, Inc. (Feb. 28, 2006, C047182) [nonpub. opn.].) The requests for judicial notice, filed February 9, 2007, and February 22, 2007, are granted.
BACKGROUND
Although the cross-complaint at the core of this litigation has not yet gone to trial, the trial court record is already voluminous. The appellants’ appendix filed by the Wallis cross-defendants is 7,349 pages long. This summary includes only what we perceive to be the relevant and salient points relating to the discovery dispute at issue on this appeal.
In one of the prior appeals involving this action, we reviewed the genesis of the action:
“The plaintiff in this case is Dale M. Wallis, a Doctor of Veterinary Medicine, who worked as the Director of Laboratories for defendant, PHL Associates, Inc. (PHL). PHL is a California corporation doing business as Poultry Health Laboratories. According to the complaint, Wallis invented a unique vaccine for mastitis in dairy cows. After she was fired by [PHL], Wallis sued PHL and Jeffrey Wichmann, Thomas Hanzo, Mary Holmes, and Thomas Strohl, alleging various causes of action relating to their use of her vaccine without properly compensating her. Wichmann, Hanzo, and Holmes were officers, directors and shareholders of PHL. . . .
“PHL and most of the other defendants then filed a cross-complaint against Wallis for breach of fiduciary duty, unfair competition, and other causes of action. PHL also included James Luard Wallis and Hygieia Biological Laboratories as cross-defendants [hereafter, the Wallis cross-defendants]. The cross-complaint was severed from the complaint and action on the cross-complaint was stayed until Wallis’s claims against PHL were resolved. The jury reached verdicts on Wallis’s complaint, finding PHL liable for fraud and deceit, and conversion in the amount of $1,944,977. The jury also found Wichmann, Hanzo and Holmes liable for fraud, deceit and conversion.” (Wallis v. PHL Associates, Inc. (Feb. 28, 2006, C047182) [nonpub. opn.], typed opn. at pp. 2-3.)
On October 30, 2003, the trial court, in response to a motion by PHL to compel responses to its demands to produce documents, issued the following order, in pertinent part:
“The cross-defendant Hygieia Laboratories is ordered to provide a privilege log of all responsive documents for which privilege is claimed. The cross-defendant Hygieia Laboratories is ordered to provide complete and unredacted productions records for any J-5 E.coli Bacterin. . . . [¶] . . . [¶]
“The records must be produced within 90 days after the date the clerk mails this order. Any redaction must be clearly identified and any omitted document must be reflected in a privilege log. Documents may be omitted entirely only if they are identified in a privilege log as attorney-client communications, attorney work product, or some other matter subject to a specified privilege. The trade-secret privilege may not be claimed for any constituent of Hygieia’s J-5 E.coli Bacterin.” (Italics added.)
Thereafter, several hearings were held concerning production of documents and a protective order. After the Wallis cross-defendants failed to produce the production records for the J-5 E.coli Bacterin and claimed that there were limitations concerning what they were required to produce with respect to the J-5 E.coli Bacterin, the trial court issued another order on August 25, 2005, granting yet another motion by PHL to compel production of documents. This order made it clear that the Wallis cross-defendants’ duty to produce production records concerning the J-5 E.coli Bacterin was unlimited. The order stated, in pertinent part:
“[PHL’s] motion to compel the [Wallis] cross-defendants to comply with this court’s October 30, 2003, is GRANTED. The court’s October 30, 2003, order stated, unambiguously, that ‘(t)he trade-secret privilege may not be claimed for any constituent of Hygieia’s J-5 E.coli Bacterin.’ . . . The court’s March 29, 2004 order stated, unambiguously, that ‘the Court is not aware of any modification to the Order . . . dated October 30, 2003, that would suggest the trade-secret privilege may be claimed for any constituent of Hygieia’s J-5 E.coli Bacterin.’
“The [Wallis] cross-defendants’ confusion about the court’s unambiguous orders may have arisen from hearings conducted on December 9, 2003, February 10, 2004, and July 27, 2004. The court’s comments that ‘I’m trying to make some vehicle where we can keep some things secret, which deserve to be kept secret’ and that documents would be unredacted ‘unless we come upon a document which has super secret information (and) needs special treatment’ were not intended as modifications of the October 30, 2003, order. Rather, these comments were intended to express the court’s sensitivity to the parties’ concerns about protecting trade secrets from use outside of this litigation. To reiterate, the [Wallis] cross-defendants are required to produce all of the information required by the October 30, 2003, order and may not claim the trade-secret privilege for any constituent of Hygieia’s J-5 E.coli Bacterin. The [Wallis] cross-defendants are ordered to produce the documents within 30 days of service of the notice of entry of order.” (Italics in first paragraph in original; other italics added.)
The court also granted PHL’s motion for sanctions, awarding $2,850 against the Wallis cross-defendants.
On September 9, 2005, the Wallis cross-defendants filed a motion for reconsideration of the August 25 order. The trial court, having issued a tentative ruling denying the motion for reconsideration, held a hearing on the motion on October 28, 2005. During that hearing, the court adopted its tentative ruling as its final order denying the motion for reconsideration. The court, however, struck the sanctions order on its own motion. A written order denying the motion for reconsideration was filed on January 3, 2006, and was served on the Wallis cross-defendants by mail on the next day.
Although the trial court had appointed a discovery referee, the court made it clear that the Wallis cross-defendants were to produce records concerning the J-5 E.coli Bacterin directly to the cross-complainants. Yet counsel for the Wallis cross-defendants claimed that the court’s orders required the Wallis cross-defendants to give the records concerning the J-5 E.coli Bacterin to the discovery referee for in camera review, not to PHL’s counsel. On November 23, 2005, the court reiterated: “Nothing in the court’s prior written orders indicates that the [Wallis] cross-defendants should produce documents responsive to the October 30, 2003, order that contain information about the J-5 E.Coli Bacterin and do not contain trade secrets about other products to the discovery referee rather than to counsel for the cross-complainant.” (Italics added.)
On January 3, 2006, the same day the trial court issued its written order denying the Wallis cross-defendants’ motion for reconsideration of the August 25, 2005, order, PHL filed a motion for terminating, evidentiary, issue, and monetary sanctions, based on the Wallis cross-defendants’ failure to produce the J-5 E.coli Bacterin production records.
On January 12, 2006, the Wallis cross-defendants proffered the unredacted J-5 E.coli Bacterin production records to the discovery referee, but not directly to PHL. This proffer, however, did not comply with the August 25, 2005, order, which required the Wallis cross-defendants to give the unredacted records to PHL.
The Wallis cross-defendants’ opening brief asserts that they produced the J-5 E.coli Bacterin production records to PHL on March 20, 2006. The brief, however, does not provide a citation to the record for this statement. (See Cal. Rules of Court, rule 8.204(A)(1)(C) [requiring party to support such statements with citations to record].)
The motion for sanctions was first considered by the discovery referee. On March 21, 2006, the referee recommended various sanctions, including monetary sanctions of $5,327 and conditional terminating, evidentiary, and issue sanctions, based on the Wallis cross-defendants’ failure to comply with the August 25, 2005, order. As to the monetary sanctions, the referee found that the August 25, 2005, order was clear and unambiguous and required the Wallis cross-defendants to produce the J-5 E.coli Bacterin production records within 30 days. According to the referee, following the denial of the motion for reconsideration, “the obligation to comply with the Court’s order of August 25, 2005 was immediate.” The referee stated his basis for ordering monetary sanctions: “[The Wallis cross-defendants’] and [their counsel’s] failure to comply with [the trial court’s] Order of August 25, 2005 immediately after the issuance of the January 3, 2006 order[] [denying reconsideration] was without substantial justification and [] no other considerations justify the withholding of monetary sanctions.”
The trial court, on June 7, 2006, ordered the monetary sanctions and denied the motion as to the other types of sanctions. Concerning monetary sanctions, the court “adopt[ed] the portion of the discovery referee’s order imposing $5,327.00 in monetary sanctions on the Wallis Cross-Defendants for failing to obey this court’s August 25, 2005, order compelling production of documents within 30 days.”
DISCUSSION
I
Notice of Sanctions
The Wallis cross-defendants contend the order requiring them to pay monetary sanctions was improper because it was based on conduct committed after PHL filed is motion for sanctions. We agree.
“We review the order imposing sanctions under the deferential abuse of discretion standard.” (Safeco Ins. Co. of America v. Parks (2004) 122 Cal.App.4th 779, 795.)
Imposing sanctions for conduct committed after PHL filed its motion for sanctions was improper for two reasons. First, the motion, itself, sought sanctions for conduct that predated the motion, not for postmotion conduct. And second, due process requires notice of the grounds upon which sanctions are sought, which notice can only be given concerning events that have already occurred.
A. Request for Sanctions Based on Conduct Committed Before Motion Made
The motion for sanctions filed by PHL on January 3, 2006, sought sanctions “on the grounds that [the Wallis] Cross-defendants have misused the discovery process by failing to comply with [the trial court’s] orders on [PHL’s] motion to compel production of documents and have failed to produce the documents, as ordered by the Court, and have failed to produce the document as of the date of this notice.” (Italics added.) Therefore, PHL did not request sanctions for conduct that would occur after the filing of the sanctions motion.
If the trial court finds that a party misused the discovery process, the court may impose monetary sanctions on the offending party and counsel. (Code Civ. Proc., § 2023.030, subd. (a).) The amount to be imposed is defined as “the reasonable expenses, including attorney’s fees, incurred by anyone as a result of that conduct.” (Ibid.) Here, the monetary sanctions sought by PHL with its notice of motion on January 3, 2006, were “all fees and costs associated with the filing of the instant Motion.”
Therefore, looking at the timeline, the sanctions order was imposed based on conduct other than the conduct alleged in the motion for sanctions. The conduct upon which the sanctions were grounded (failure to produce the record immediately after the order denying reconsideration was served on the Wallis cross-defendants) did not occur until after PHL filed its motion for sanctions.
PHL responds to the contention that the sanctions order was improperly based on postmotion conduct by simply denying that the order was based on postmotion conduct. “Because [the Wallis cross-defendants] wrongfully refused to produce documents for five months before the sanctions motion was even filed,” argues PHL, “the trial court did not rely on post-motion conduct to justify its award of sanctions.” This head-in-the-sand response ignores the obvious reliance of the referee solely on postmotion conduct to recommend the monetary sanctions and the trial court’s adoption of the referee’s report in this regard.
Cross-complainants Wichmann and Holmes follow suit in their brief, claiming that the monetary sanctions were based on the Wallis cross-defendants’ conduct before the filing of the motion for sanctions. According to Wichmann and Holmes, the Wallis cross-defendants had sufficient notice of the conduct upon which the motion was based, ignoring the fact that the conduct upon which the trial court relied to order sanctions had not even occurred yet when the notice was filed.
B. Sanctions Ordered for Conduct Concerning Which Notice was not Given
A party subject to sanctions is entitled to due process. Writing concerning sanctions for a frivolous appeal, the Supreme Court stated that “the rudiments of fair play include notice, an opportunity to respond, and a hearing. [Citation.]” (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 654.)
Notice concerning sanctions in a discovery dispute, such as this, is given by filing and serving the motion for sanctions. The motion must state “the grounds upon which [the motion] will be made.” (Code Civ. Proc., § 1010; Cal. Rules of Court, rule 3.1110.)
“Constitutional due process principles are offended by the summary imposition of sanctions by the appellate courts.” (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 652.) The same must be true of a trial court’s summary imposition of sanctions. There is nothing in the character of a trial court that is different from appellate courts with respect to these due process principles.
The manner in which sanctions were imposed in this case amounted to a summary imposition of sanctions because the Wallis cross-defendants did not have notice that their conduct after the filing of the motion for sanctions would be used as the basis for sanctions. PHL did not request sanctions for postmotion conduct. Neither did it relate the fees and costs sought as sanctions to conduct committed after the filing of the motion. In the end, the trial court imposed sanctions in the amount of fees and costs incurred before the sanctionable conduct occurred. The order, therefore, violated the Wallis cross-defendants’ due process rights.
PHL asserts the August 25, 2005, order was not abated during the time before the trial court denied the motion for reconsideration. Therefore, they argue, the Wallis cross-defendants were not excused from complying with the order during the time after the August 25, 2005, order but before the denial of the motion for reconsideration on January 3, 2006. This assertion misses the mark. If the trial court had imposed sanctions for the conduct of the Wallis cross-defendants before the filing of the order denying reconsideration, the assertion would be relevant and we would be required to determine whether the filing of the motion for reconsideration abated the duty to comply with the August 25, 2005, order. However, because the trial court did not impose sanctions based on conduct predating the January 3, 2006, denial of reconsideration, it is not relevant whether the Wallis cross-defendants were required to comply with the August 25, 2005, order even before the order was entered denying reconsideration.
Because the order imposing monetary sanctions was not preceded by proper notice to the Wallis cross-defendants, we conclude the trial court abused its discretion by imposing the monetary sanctions.
Having denied that the sanctions order was based on postmotion conduct, PHL and the other cross-complainants make no argument that error with respect to the notice requirements was harmless. Since harmlessness is not apparent on the record, we conclude the order must be reversed.
II
Other Contentions
Because we conclude the order against the Wallis cross-defendants for monetary sanctions must be reversed, we need not reach the numerous other issues raised by the Wallis cross-defendants.
DISPOSITION
The order imposing sanctions is reversed. The Wallis cross-defendants shall recover their costs on appeal. (Cal. Rules of Court, rule 8.276(a).)
We concur: HULL, J., CANTIL-SAKAUYE, J.