Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. NC042803, Roy L. Paul, Judge.
Law Office of Martha R. Dah Dah, Martha R. Dah Dah and Rene C. Nunez, for Plaintiffs and Appellants.
Songstad & Randall, William D. Coffee and Damon D. Eisenbrey, for Defendants and Respondents Carlos de Jesus Chavez and Savage Services Corporation.
Kinkle, Rodiger and Spriggs, Guillermo W. Schnaider, Daniel S. Alderman and Allison R. Hilgers, for Defendant and Respondent Danesa Robles.
ZELON, J.
In March 2010, the trial court dismissed Domingo Cortes Ramirez’s personal injury suit against Carlos de Jesus Chavez, Savage Services and Danesa Robles (Defendants), based on evidence that Ramirez and his wife, Benita Cortez, committed egregious misconduct during discovery.
Under Stephen Slesinger, Inc. v. Walt Disney Co. (2007) 155 Cal.App.4th 736, 764 (Slesinger), a trial court has the inherent power to dismiss an action for litigation misconduct, if a party engaged in “deliberate” and “egregious” misconduct that “renders any remedy short of dismissal inadequate to preserve the fairness of the trial.” Ramirez challenges the dismissal, claiming the trial court did not make any factual findings as to the alternative remedies. Because the trial court failed to consider this issue, we reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Using the name Roberto Palacios, Ramirez brought this suit in November 2008 to recover for injuries from a September 2007 highway accident, in which Defendant Carlos de Jesus Chavez rear-ended him. Ramirez claimed the accident caused brain injury and emotional distress, and sought damages that included loss of earnings and future earnings. His wife, Benita Cortez, claimed loss of consortium.
According to the complaint, Chavez was at the time driving a vehicle for his employer, Savage Services Corporation.
During the course of discovery over the following year, Defendants discovered Ramirez was a “wanted person” for the alleged theft of equipment from his employer at the time of the accident. In November 2009, Ramirez’s attorneys postponed a scheduled deposition for one month, while, according to Cortez, Ramirez tended to his sick mother in Mexico. Ramirez failed to attend the rescheduled deposition on December 15, 2009.
Cortez also missed a scheduled deposition, before Defendants deposed her on December 15, 2009. At the deposition, she testified that Ramirez had not worked after the 2007 accident and that she had taken care of him during that time because he was incapacitated. (“You can’t demand of Roberto to get a job, because you look at him, he seems fine, but in his head, he’s not all right.”) She said she had sent the couple’s three children to live with her brother, Sergio Cortez, because Ramirez became overly aggressive after the accident. She also testified that Ramirez had never used any other name and had no family in the United States. She and Ramirez lived alone, though he had been in Mexico with his terminally ill mother since November.
The day after Cortez’s deposition and Ramirez’s missed deposition, police arrested Ramirez for burglary. Defendants discovered from police that Ramirez’s real name was Domingo Cortes Ramirez; they deposed him in jail on January 22, 2010. Ramirez confirmed his real identity and testified that Cortez’s maiden name (and her brother’s last name) was Lopez Franco, not Cortez.
Initially denying he had worked after the accident, Ramirez then said that he had worked for “party supplies” in 2008 and at the Hemet Diner and California Palms restaurant in 2009. He also said that his mother had moved to the United States with him and was currently living in Los Angeles with his sister. Though he could not remember when or for how long he had gone to Mexico in 2009 with his mother, he recalled that in October Cortez had told him about the November deposition. At the time, he was in Mexico and did not believe could attend. He did, however, return to the United States by November. He further contradicted Cortez’s testimony by stating that the couple had lived with a friend after the accident and that he had more family in the Los Angeles area.
Following Ramirez’s deposition, Cortez made several corrections to her deposition to reflect the couple’s real names and to change her husband’s location in December from Mexico to Arizona. Cortez then provided Defendants with copies of the couple’s birth and marriage certificates, the birth certificates of their children, and other identification documents. Defendants then obtained employment records that showed Ramirez had worked (under the name Palacios) for California Palms continuously from April to December 2009, putting into question his claim to have visited Mexico in October 2009.
In early February, Defendants moved to dismiss and for judgment on the pleadings. On March 4, 2010, the trial court heard the motion and dismissed the suit, characterizing the case as “one of wholesale deceit.” The hearing lasted 30 minutes. In a minute order dated March 26, 2010, the trial court entered judgment for Defendants and ordered the complaint dismissed with prejudice. Ramirez appeals.
DISCUSSION
Ramirez asserts the trial court abused its discretion in imposing a terminating sanction. We review the trial court’s order for abuse of discretion, viewing the entire record in the light most favorable to the court’s ruling, and drawing all reasonable inferences in support of it. (Slesinger, supra, 155 Cal.App.4th at p. 765.)
A trial court has the inherent, discretionary power to control the litigation before it and to impose terminating sanctions against parties who abuse the litigation process. (Lyons v. Wickhorst (1986) 42 Cal.3d 911 (Lyons).) Discovery sanctions specifically “are intended to remedy discovery abuse, not to punish the offending party, ” and the trial court must tailor its sanctions to serve this remedial purpose. (Williams v. Russ (2008) 167 Cal.App.4th 1215, 1223 (Williams).) “The essential requirement is to calibrate the sanction to the wrong.” (Slesinger, supra, at p. 763.) Because a terminating sanction is a drastic measure that denies a party’s ability to vindicate his or her rights, state and federal courts have repeatedly emphasized its limited use in only the most rare and extreme circumstances, favoring, instead, allowing a trial on the merits. (Lyons, supra, 42 Cal.3d at pp. 916-917.)
The landmark case Slesinger established the trial court’s inherent power to dismiss an action for discovery abuse, requiring a party to engage in “deliberate” and “egregious” misconduct that “renders any remedy short of dismissal inadequate to preserve the fairness of the trial.” (Slesinger, supra, 155 Cal.App.4th at p. 764.) In this context, a terminating sanction “restores balance to the adversary system when the misconduct of one party has destroyed it.” (Id. at p. 761.)
In Slesinger, the trial court concluded that extensive discovery abuse by plaintiff Stephen Slesinger, Inc. (SSI) rendered a fair trial impossible. (Slesinger, supra, at p. 773.) Early in its 14-year breach of contract suit against Walt Disney, SSI hired a private investigator “to help SSI prosecute its lawsuit by surreptitiously obtaining Disney documents.” (Id. at p. 742) For at least three years, the investigator trespassed on multiple properties and illegally obtained confidential and privileged documents from Disney’s dumpsters and offices, and from the facilities of the document disposal company Disney hired. (Id. at pp. 751-752, 767.) The trial court found SSI principals had authorized this illicit action and passed important stolen documents from its investigator to its lawyers. (Id. at p. 746) These principals concealed the misconduct for at least nine years, altering documents to remove marks identifying their provenance and confidential nature, and repeatedly denying knowledge of wrongdoing when Disney questioned how the documents materialized. (Id., at pp. 740, 755-756.) Only after Disney discovered the misconduct through depositions of SSI principals and its investigator did SSI produce over 6, 000 pages of documents it had illicitly obtained. (Id. at p. 747.) SSI also disclosed that it had discarded an untold number of stolen documents and had no records of what they contained or when they were discarded. (Ibid.)
The trial court found the pattern of misconduct, and its likely ongoing nature and infectious impact, rendered a fair trial impossible. (Slesinger, supra, at p. 773.) The court denied SSI’s proposal for a new trial with a proposed change in counsel, a new “document review counsel” team and a series of court orders, stating the court had no confidence that SSI could or would obey a prophylactic court order. (Id. at pp. 756, 772.) The “breathtaking” pattern and history of misconduct, “reasonably suggested that SSI would not obey remedial orders if disobedience might be to its tactical advantage.” (Id. at p. 773.) The stolen documents, which included comprehensive internal litigation memos, had given SSI “insight into Disney’s confidential approach to the litigation.” (Id. at p. 772.) Because these principals “had gleaned information from the documents that no court order could dissipate” and might possess even more unrevealed documents, “no remedy short of terminating sanctions can effectively remove the threat and adequately protect both the institution of justice and [Disney] from further SSI abuse.” (Id. at pp. 756, 774.)
In other cases, courts have upheld terminating sanctions, authorized by statue, when past orders have not deterred misconduct or when the misconduct itself permanently impairs the fairness of the trial. In Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967 (Doppes), Bentley defied at least four discovery orders and continued to withhold critical documents from Doppes even after trial began. Bentley’s misconduct justified a terminating sanction when it became clear that repeated monetary sanctions and court orders had had no deterrent effect on Bentley. (Id. at pp. 994, 997.) By contrast, the court in Williams upheld the trial court’s terminating sanctions after Williams destroyed critical and irreplaceable evidence—his client file—in a legal malpractice case. (Williams, supra, 167 Cal.App.4th 1215.) Though the misconduct constituted a single act, the trial court found Williams highly and permanently prejudiced his lawyer’s defense. (Id. at p. 1222.)
Here, the parties agree, and the record demonstrates that Ramirez’s and Cortez’s acts amounted to deliberate and egregious misconduct under the first prong of Slesinger. As the trial court noted during its March 4, 2010, hearing, the couple “willfully and purposefully misidentified Plaintiff Palacios and repeatedly presented false testimony and false written discovery responses in support of the claimed identity.” However, the trial court failed to consider sanctions short of dismissal, and the record shows insufficient evidence to support such a finding. Dismissal was, on this record, an abuse of discretion.
I. The Trial Court Abused Its Discretion by Imposing Terminating Sanctions Without Considering Whether Lesser Sanctions Were Inadequate
The second prong of Slesinger requires the trial court to “consider” the “availability of other sanctions to cure the harm” and whether the misconduct “renders any remedy short of dismissal inadequate to preserve the fairness of the trial.” (Slesinger, supra, 155 Cal.App.4th at p. 764.) Here, the record shows no evidence that the trial court considered any lesser sanctions.
In sharp contrast to the “comprehensive statement of decision” in Slesinger, supra, 155 Cal.App.4th at pp. 741, the trial court made no factual findings in its March 26, 2010, minute order that would explain its reason for imposing the terminating sanction. During the March 4, 2010 hearing, it briefly addressed only two alternative actions: granting Ramirez leave to amend his complaint and correct his name, and continuing the trial to a later date. Neither constitutes a lesser sanction that would serve to cure the discovery abuse. The court acknowledged this, noting that amending the complaint to change Ramirez’s name “really does not go to the heart of the matter, ” which dealt with the false testimony and written discovery responses. The court failed to address possible orders that might cure the abuse, such as monetary, issue or evidentiary sanctions. (See Code Civ. Proc., §§ 581, 2023.030.)
Ramirez contends that, under Slesinger, “before a trial court may issue a terminating sanction it must first make detailed factual findings... as to why lesser sanctions are not feasible.” In light of the fact that there is no evidence to support such findings in this case, we need not address this issue. Nor need we, for the same reason, imply such findings, as any such findings would find no support in the evidence.
II. Defendants Have Shown Insufficient Evidence to Support a Terminating Sanction
Even had the trial court considered lesser sanctions before dismissing Ramirez’s claims, Defendants have not shown sufficient evidence to support a finding that “any remedy short of dismissal [is] inadequate to preserve the fairness of the trial.” (Slesinger, supra, 155 Cal.App.4th at p. 764.) Unlike Slesinger, Williams and Doppes, Defendants have not produced a record to support a finding of prejudice from Ramirez’s and Cortez’s false testimony that would prevent a fair trial.
At the March 4, 2010, hearing, the trial court noted two principal factors motivating its decision: the vast reach of Ramirez’s and Cortez’s false testimony; and the conclusion that the deception might have lasted indefinitely, but for Ramirez’s arrest.
On this first issue, the trial court characterized the case as “one of wholesale deceit” and stated, “These lies, from both plaintiffs, go beyond simply attempting to conceal the true state of the plaintiff’s [sic] injuries, but, in fact, permeate their entire case, including any claims plaintiffs might have had as to lost earnings, future loss of earnings, loss of consortium, and so on, as well as to the identities of the potential percipient witnesses as to any of the plaintiffs’ claims.” This finding is relevant to the first prong of Slesinger, but does not address the showing of lasting prejudice necessary to justify dismissing the case.
While the trial court correctly noted appellants’ false statements potentially undermine their claims, the issue of whether these claims survive scrutiny belongs in a trial on the merits. To date, Defendants have not shown evidence Ramirez’s claimed injuries have not occurred, but have simply used Ramirez’s work records to impeach appellants’ claims that Ramirez could no longer work.
Defendants’ argument in the motions to dismiss amounts to a claim that the couple’s lies prevented proper discovery in the past. Without information about Ramirez’s family, they could not interview witnesses; without his truthful employment information, they could not investigate his earnings; and without proper information about his identity, their subpoenas to 13 hospitals, medical providers, police, ambulance, DMV and employers proved fruitless. In comparing their case to Slesinger, Defendants note Ramirez’s and Cortez’s actions “span a significant period of time and involve egregious conduct” and were committed “with the intent to mislead.”
Regarding the subpoenas, Ramirez notes that because he has lived under the assumed name Palacios since 2005, Defendants already possess the relevant records.
Defendants fail to understand, however, that it is not only the pervasiveness and egregiousness of the misconduct but the impact of the misconduct that is critical to the second part of the Slesinger analysis. In Slesinger, the trial and reviewing courts emphasized that at trial Disney would suffer continuing prejudice from SSI’s illegal actions no court order could rectify. Not only was the misconduct egregious, by its nature it was irreparable: SSI principals conceded reviewing litigation-related documents and possessing thousands of pages of stolen files. (Slesinger, supra, at p. 774) They also admitted discarding documents such that neither Disney nor the court could ever know the extent of SSI’s knowledge. (Ibid.) This information fundamentally undermined the integrity of the judicial process and “could not be purged” from the principals’ minds. (Id. at pp. 756, 772.) Similarly, in Williams, the defendant lawyer could not prepare a defense to new claims brought by Williams because the plaintiff destroyed his client file and neither party had a full copy of its contents. (Williams, supra, 167 Cal.App.4th at p. 1215.)
By contrast, the nature of Ramirez’s and Cortez’s misconduct has not prejudiced or impeded Defendants in an ongoing or permanent manner. The couple has now disclosed their truthful information, and Defendants have in their possession the proper information to prepare a defense. They can interview percipient witnesses and have already obtained Ramirez’s work records. At worst, Defendants’ ability to mount a defense has been delayed, and their investigation made more costly, an effect monetary sanctions can cure.
The trial court’s second concern, that Ramirez’s false testimony would have gone unchecked without his arrest, speaks to Defendants’ unsupported assertions that Ramirez and Cortez continue to lie and “are and remain incapable of honesty.” Defendants emphasize that Ramirez’s jailhouse deposition—the testimony in which he revealed the couple’s deception—conflicts with his employment records, insofar as the records show he worked throughout October and could not have traveled to Mexico. The employment records, they claim, also show falsehoods in Cortez’s claims under oath that Ramirez could not take care of himself after the accident. Defendants even question whether Ramirez and Cortez are further aliases for the couple, noting she spells her name differently than he does. “The facts in this case show that Plaintiffs are and remain incapable of honesty and that they have and will... go to great lengths to lie.”
This speculation is not evidence of ongoing misconduct that requires a terminating sanction rather than another discovery sanction. In Doppes, the reviewing court found a terminating sanction appropriate only after repeated monetary sanctions did not deter Bentley from continued misconduct. (Doppes, supra, 174 Cal.App.4th 967.) In Slesinger, the years of evasiveness, duplicity and continued claims of innocence led the trial court expressly to find SSI’s arguments disingenuous and its principals untrustworthy. (Slesinger, supra, 155 Cal.App.4th at pp. 755-756, 773.) SSI insisted, for instance, that the investigator had taken the documents from publically accessible dumpsters at one Disney site despite “considerable evidence” that the documents came from multiple secure locations. (Id. at pp. 752-753, 755.) Despite SSI’s protestations that it had produced all the documents in its possession, “the trial court cogently noted: ‘SSI is dishonest and shows no remorse.’” (Id. at p. 773.)
Here, Defendants did not produce, and the trial court did not rely on, evidence that Ramirez’s and Cortez’s acts continue to prevent a fair trial. Rather than showing ongoing lies, the defendants have matched the couple’s past statements with new information to shed further doubt on the past statements. Their suggestion that Ramirez and Cortez cannot be trusted because of how they spell their last names is speculative at best. Throughout their filings, Defendants have also misrepresented Ramirez’s police record to paint him as devious, asserting at least half a dozen times that Ramirez was “arrested for identity theft, ” though the actual charge was grand theft of a commercial floor buffer. This incorrect identity theft charge proved persuasive with the trial court, which erroneously relied on the misinformation at the hearing to judge Ramirez’s credibility.
Most importantly, Defendants have not shown that imposing lesser sanctions would not ensure a fair trial. The couple’s conduct has shown the opposite: that they will disclose truthful information moving forward. Since the January deposition, they have provided extensive documentation about themselves and their family, effectively establishing Ramirez’s identity, which the trial court did not question at the March 4, 2010 hearing.
Our courts have long recognized a policy favoring a trial on the merits. In such a trial, the parties here will have the opportunity to scrutinize and test Ramirez’s credibility. Taken together, the record shows insufficient evidence to justify a terminating sanction under Slesinger.
Given the trial court here failed to consider alternative sanctions and that the record fails to support the sanctions it did order, we reverse the judgment.
DISPOSITION
We reverse the trial court’s order dismissing Ramirez’s action and remand for proceedings consistent with this opinion. Appellants are to recover their costs on appeal.
We concur: WOODS, Acting P. J., JACKSON, J.