Opinion
G044052 Super. Ct. No. 30-2008-00103152 Super. Ct. No. 30-2008-00105208
10-31-2011
USS CAL BUILDERS, INC., et al., Plaintiffs, Defendants and Respondents, v. THOMAS W. ENNIS, as Administrator, etc., Plaintiffs, Defendants and Appellants.
The David Epstein Law Firm and David G. Epstein for Plaintiffs, Defendants and Appellants. Feldman & Associate, Inc., Mark A. Feldman and Craig C. Lang for Plaintiffs, Defendants and Respondents USS Cal Builders, Inc. and Insurance Company of the West. Law Offices of Steven Ostrove, Inc. and Steven M. Ostrove for Plaintiff, Defendants and Respondents Arch Insurance Company.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
Appeal from a judgment of the Superior Court of Orange County, Steven L. Perk, Judge. Affirmed.
The David Epstein Law Firm and David G. Epstein for Plaintiffs, Defendants and Appellants.
Feldman & Associate, Inc., Mark A. Feldman and Craig C. Lang for Plaintiffs, Defendants and Respondents USS Cal Builders, Inc. and Insurance Company of the West.
Law Offices of Steven Ostrove, Inc. and Steven M. Ostrove for Plaintiff, Defendants and Respondents Arch Insurance Company.
After months of discovery violations, failing to comply with court orders, and failing to appear at hearings, the court finally imposed terminating sanctions on Thomas Ennis, administrator of the estate of Thomas J. Ennis (Thomas Jr.). Given the circumstances present in this case, we conclude the trial court properly exercised its discretion in granting terminating sanctions, and we therefore affirm the judgment.
I
FACTS
Thomas Jr., who did business as Rock Hard Concrete (RHC), was a concrete subcontractor for USS Cal Builders, Inc. (USS Cal) on several construction projects between January 2006 and November 2007. Thomas Jr. died in a car accident in November 2007.
In February 2008, USS Cal filed a breach of contract suit against Thomas Jr.'s estate and RHC alleging that they had breached various contracts by failing to complete work on time and refusing to pay material suppliers and other subcontractors. In May, Ennis, Thomas Jr.'s father, filed a first amended complaint in a separate lawsuit on behalf of the estate and RHC against USS Cal and a number of public school districts. Ennis alleged that USS Cal owed Ennis and RHC considerable sums for completed projects, pleading 52 separate causes of action under various theories including breach of contract, quantum meruit, and open book accounts. The two cases were eventually consolidated.
In July, USS Cal demurred to Ennis's complaint, arguing that Ennis had not been appointed as administrator of his son's estate and therefore lacked standing to sue. The court took the matter under submission after the August 19 hearing and stayed its ruling until September 5 to give Ennis the opportunity to demonstrate standing. On that date, the court extended Ennis's time once again, giving Ennis until October 3. On October 3, Ennis produced evidence that he had been appointed administrator, and the court overruled the demurrer.
USS Cal thereafter filed an answer, as did defendant Insurance Company of the West (West), who had been added to the case via Doe amendment. Ennis also amended the complaint to add Arch Insurance Company (Arch) via Doe amendment. Arch and West had each provided release bonds for the stop notices that Ennis was attempting to enforce in his complaint. Arch filed its answer to the first amended complaint in November 16, 2008.
The parties began discovery and it very quickly became apparent that receiving timely responses from Ennis and his counsel would be an issue. In December 2008, USS Cal propounded a request for a bill of particulars, two sets of special interrogatories, and a request for production of documents to Ennis. In March 2009, USS Cal filed a motion to compel regarding the interrogatories and documents, stating that despite a two-week extension to the due date, no response to the first set of special interrogatories had been received. No extension had been requested on the second set, and no response had been received. A meet and confer letter had also gone unanswered. At the hearing, neither Ennis nor his counsel appeared. The court granted the motion on April 10, ordering Ennis to answer the discovery requests by May 13, and imposed monetary sanctions of $1,080.
On June 10, nearly a month after the deadline, Ennis received unverified responses to the first set of special interrogatories and request for documents, and no response to the second set of interrogatories. Payment of sanctions had not been received. In July, USS Cal filed a motion for terminating sanctions to be heard on August 14. USS Cal received no response and no opposition until August 13, the eve of the hearing. The opposition stated that both Ennis and his counsel had been suffering from medical problems, and counsel had undergone a move of his office. The opposition did not state, however, why it was impossible to make a telephone call to USS Cal's counsel explaining why the discovery responses had not been served and requesting an extension.
The court ultimately denied the motion for terminating sanctions, but ordered additional monetary sanctions of $1640, in addition to the outstanding sanctions of $1080, to be paid by September 1. At the hearing, the court expressed concern that this was a client rather than an attorney issue, and that Ennis was "blowing [his counsel] off along with the case . . . ."
Meanwhile, in late June, with the court's leave, Ennis again amended his complaint, this time alleging 53 separate causes of action.
In October 2009, Ennis's counsel, David Epstein, did not appear at a trial-setting conference, and he was ultimately fined $200 at an order to show cause (OSC) hearing. A mandatory settlement conference and trial date were set for April and May 2010, respectively.
In December 2009, USS Cal brought a motion to compel responses to form interrogatories, which had been propounded in August 2009. No opposition was filed. The court granted the motion, and ordered Ennis to answer and pay sanctions of $880 by March 1, 2010.
In February 2010, USS Cal sought to have a set of requests for admissions deemed admitted due to Ennis's failure to respond to the request as well as a second set of form interrogatories. Although no opposition was filed, Ennis served responses by fax the day before the hearing after a tentative ruling granting the motion had been posted on the Internet. After hearing the parties briefly, the court took the matter under submission, and then ordered the parties to return for a hearing several days later.
This set included form interrogatory No. 17.1, which requires a party to explain each denial of a request for admission.
The court ultimately denied the motion, though it sanctioned Ennis and his counsel $2500. The court stated to Ennis's counsel: "You are borderline contemptuous in the way you have handled this case, in the way you have responded to discovery orders, in the way that you have responded to and dealt with sanctions. You've ignored that, you've ignored dates, you've ignored responding to discovery, you filed a 53-count complaint, you have refused to respond to discovery . . . ." Ennis was also ordered to respond to all outstanding discovery within a week. The court also set another hearing for March 22, based on Ennis's failure to respond to the form interrogatories, characterizing it as an "OSC re sanctions and to include evidentiary sanctions, monetary sanctions, discovery sanctions, and terminating sanctions."
On March 17, USS Cal submitted a declaration outlining all outstanding discovery issues as of that date. In sum, the issues included $3380 in unpaid sanctions, failure to provide a bill of particulars in response to the request in December 2008, and failure to respond to the two sets of form interrogatories. On March 19, Ennis provided answers to the interrogatories. On the morning of the hearing, a check for the outstanding sanctions was provided. The long-neglected bill of particulars had still not been provided.
At the hearing, USS Cal characterized Ennis's responses to the interrogatories as "incomplete or evasive," providing specific examples to the trial court. The court agreed that Ennis had answered "evasively." "[M]y view of it is the only way to get [Mr. Ennis] to respond to something is to continue to press [him] with OSCs that finally get some even remote attempt to respond to the interrogatories that are sent out." Despite its evident and well-deserved exasperation, the trial court was lenient with Ennis once again, and chose not to grant terminating sanctions. The court imposed additional sanctions in the amount of $1,192.50.
The mandatory settlement conference had been set for the case in November 2009. On the day of the conference, April 9, Epstein did not appear in court. Nor did Ennis. The judge who had been hearing the case and was familiar with its history, the Honorable Steven Perk, was not in court that day. The judge sitting for him, the Honorable David McEachen, was informed of the case's fractious history of discovery issues and sanctions by USS Cal's counsel. Judge McEachen stated that, "If this were my case, I wouldn't have a problem making a ruling today for terminating sanctions," but because it was not, he did not feel comfortable in doing so. He set an OSC as to why terminating sanctions should not be granted before Judge Perk for the following week, on April 14. USS Cal served notice of the hearing on Epstein.
At the April 14 hearing, USS Cal's counsel reviewed the history of discovery violations that had led to Ennis and his counsel being sanctioned on six occasions. He noted that Ennis had still not responded to the demand for a bill of particulars, despite the court's prior order. Epstein stated the failure to appear at the settlement conference was his fault and that he had failed to calendar it, characterizing it as "inexcusable neglect." The court noted that Epstein had repeated the same type of excuses on many occasions, and imposed terminating sanctions, striking Ennis's answer and his separate complaint and setting a date for a default prove-up.
The following day, Ennis filed a motion for relief under Code of Civil Procedure sections 1008 and 473. The main argument raised was that all of the various failures were Epstein's fault, rather than his client's. At a hearing on May 28, the court expressed concern that there may have been some procedural defects in the notice provided for the previous OSC (at the settlement conference) and the court's subsequent order imposing terminating sanctions. To address any problems, the court agreed to vacate its previous order and schedule a new hearing on the court's own motion for terminating sanctions on June 1.
Subsequent statutory references are to the Code of Civil Procedure.
At that hearing, USS Cal's counsel pointed out that "not one single set of discovery was responded to on time," and that some discovery (apparently the ever-elusive bill of particulars) was still outstanding. At the conclusion of argument, the court again imposed terminating sanctions. Noting that he had "been around this business for 30 years and . . . never seen anything like it" with respect to the disregard of Ennis and his counsel for discovery and court rules. The court's order identified three reasons that led to its decision: the failure to appear at the mandatory settlement conference, the failure to comply with discovery and discovery orders, and the lack of diligence in preparing for trial. The court therefore struck Ennis's complaint, struck his answer and entered his default on USS Cal's complaint, and entered a default judgment in USS Cal's favor. Ennis now appeals.
II
DISCUSSION
Standard of Review
We review a trial court's choice of discovery sanctions for abuse of discretion. (Sauer v. Superior Court (1987) 195 Cal.App.3d 213, 228.) "[T]he trial court has wide discretion to order discovery and broad powers to enforce those orders. Although such powers are not unlimited, they are presumed correct and will not be disturbed in the absence of an abuse of discretion." (Hartbrodt v. Burke (1996) 42 Cal.App.4th 168, 175.) "It is appellants' burden to affirmatively demonstrate error and, where the evidence is in conflict, this court will not disturb the trial court's findings. [Citations.]" (Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 487 (Laguna Auto Body), disapproved on another ground in Garcia v. McCutcher (1997) 16 Cal.4th 469, 478, fn. 4.) "'The power to impose discovery sanctions is a broad discretion subject to reversal only for arbitrary, capricious, or whimsical action.'" (Do It Urself Moving & Storage, Inc. v. Brown, Leifer, Slatkin & Berns (1992) 7 Cal.App.4th 27, 36.) The question is not whether the trial court should have imposed a lesser sanction, but "whether the trial court abused its discretion by imposing the sanction it chose." (Id. at p. 37.)
Terminating Sanctions
Ennis's brief purports to parse the court's order into as many as six different issues, attempting to pick away at its validity. There is really only one issue here, and that is whether terminating sanctions were properly granted. Terminating sanctions were not granted because of any single act on the part of Ennis or Epstein, but because of a pattern of disregard for both rules and fundamental civility that lasted well over a year. The court's order identified three intertwined reasons why terminating sanctions were appropriate — the failure of Ennis and his counsel to appear at the mandatory settlement conference, the failure to comply with discovery and discovery orders, and the lack of diligence in preparing for trial. We therefore examine whether those reasons, taken together or separately, justify terminating sanctions.
In our view, the most egregious conduct concerned the failure of Ennis and his counsel to participate in the discovery process and comply with the court's discovery-related orders, and that behavior alone justifies the court's actions. "This court has traditionally encouraged trial attorneys to adhere to their professional responsibilities of cooperating, stipulating, and working together within the law to move cases toward a prompt and fair resolution, consistent with the principle 'that justice delayed is justice denied . . . .' [Citation.]" (Laguna Auto Body, supra, 231 Cal.App.3d at pp. 486-487.) "We believe . . . firmly that attorneys . . . who fail to voluntarily comply with proper discovery requests and instead obstruct discovery, who fail to file, where appropriate, written opposition to motion to compel discovery, and who act in defiance of the courts, must be sanctioned appropriately." (Id. at p. 487.)
Terminating sanctions are authorized for misuses of the discovery process, which include failing to respond or to submit to an authorized method of discovery (§ 2023.010; Liberty Mutual Fire Ins. Co. v. L C L Administrators, Inc. (2008) 163 Cal.App.4th 1093, 1101.) In making such an order, the court considers the totality of the circumstances: whether the party's actions were willful; whether the propounding party will suffer detriment; and the number of formal and informal attempts to obtain the discovery. (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1246.) Discovery statutes suggest an "incremental approach to discovery sanctions . . . . If a lesser sanction fails to curb misuse, a greater sanction is warranted . . . ." (Doppes v. Bentley Motor, Inc. (2009) 174 Cal.App.4th 967, 992.)
The totality of the circumstances here support the trial court's decision. Given the nature of the case (53 separate causes of action in Ennis's complaint alone), the amount of discovery propounded by USS Cal was reasonable — two sets of form interrogatories, two sets of special interrogatories, one set of requests for admission, one set of document demands, and one demand for a bill of particulars. Because Ennis did not respond to a single request without a motion to compel being filed, we can only infer that such a failure represents "willful" disregard of his discovery obligations. He had many opportunities to correct his misbehavior, and the court was both restrained and lenient, imposing monetary sanctions on Ennis on at least four occasions for discovery abuse before imposing terminating sanctions.
Although strictly speaking, a bill of particulars is not a "discovery" device in the Code of Civil Procedure, it is functionally equivalent and we therefore treat it as such.
"In exercising its sanction power under the discovery statutes the trial court must keep a 'fundamental precept' fairly in mind. That is, that '"The penalty should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery [so that a] sanction should not operate in such a fashion as to put the prevailing party in a better position than he would have had if he had obtained the discovery sought and it had been completely favorable to his cause."' [Citations.]" (Thomas v. Luong (1986) 187 Cal.App.3d 76, 81.) Here, USS Cal was faced with an upcoming trial date and a complaint with 53 separate causes of action. Despite taking all of the appropriate steps, USS Cal was still missing crucial discovery because of Ennis's failure to comply with the trial court's orders. As the trial court stated: "53 causes of action under 17.1 of the form interrogatories deserve a response. They [USS Cal] are entitled to know what your claim is. And if you don't know, they are entitled to know that also."
When Ennis eventually complied with some of the court's orders, some of the attempts were at best half-hearted and evasive. (See Liberty Mutual Fire Ins. Co. v. L C L Administrators, Inc., supra, 163 Cal.App.4th at pp. 1096-1099 [inadequate discovery responses may justify terminating sanctions].) As of the final hearing, counsel for USS Cal stated that two sets of discovery were either still outstanding or incomplete. Given the history of Ennis's behavior, the court no longer had reason to believe that imposition of a lesser sanction would bring about Ennis's compliance. (R.S. Creative, Inc. v. Creative Cotton, Ltd. (1999) 75 Cal.App.4th 486, 496.) This is not a case where a party simply missed deadlines or failed to answer every discovery request as completely as the opposing party might have liked. The history of this case is replete with instances where Ennis simply failed to respond to the discovery requests altogether, failed to oppose motions to compel, and ignored court orders with respect to responding to discovery and paying sanctions. His inexcusable behavior and disregard for the legal process caused USS Cal and its counsel to waste time and money, and for the court to expend increasingly rare judicial resources in repeated attempts to compel his compliance.
With respect to Ennis's repeated claims that only his attorney is to blame and he should not be held accountable, we reject such arguments as not supported by the record. Epstein made numerous comments at hearings that indicated that his client had been a substantial part of the problem in complying with discovery obligations. At the August 2009 hearing, Epstein stated he "had to work basically without the help of [his] client, because [Ennis] had knee surgery." At the same hearing, he also admitted Ennis had failed to give him all the pertinent documents. Epstein accepted "a large part of the responsibility for the delay" in providing discovery responses, clearly inferring that not all of the fault was his. At another point during that same hearing, Epstein refers to not having "twisted [Ennis's] arm" enough. Further, even if Ennis's claim that everything was Epstein's fault was supported by the facts, the mandatory relief provision of section 473 is inapplicable in this case. (Jerry's Shell v. Equilon Enterprises, LLC (2005) 134 Cal.App.4th 1058, 1073.)
The court also noted that the claims about Ennis's health problems were unsupported by either a declaration under oath or other evidence.
--------
Finally, despite his attempts to argue otherwise, Ennis had more than adequate notice of the court's intent. Notice of the first OSC was served shortly after the mandatory settlement conference on April 9. Ennis had multiple opportunities between that point and the final hearing on June 1 to persuade the trial court that terminating sanctions were not appropriate. There is no evidence in the record that additional time was ever requested. Ennis had more than adequate notice and every chance to present his argument to the trial court.
III
DISPOSITION
The judgment is affirmed. USS Cal is entitled to its costs on appeal. We further direct the clerk of the court to forward a copy of this opinion to the State Bar of California.
MOORE, J.
WE CONCUR:
RYLAARSDAM, ACTING P. J.
FYBEL, J.