Manlin v. Milner ( 2022 )

Filed 8/10/22; Certified for Publication 9/7/22 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
ROGER MANLIN, B313253, B315077
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 19STCV08154)
v.
STEVE MILNER, et al.
Defendants and Respondents.
APPEALS from orders of the Superior Court of Los Angeles
County, Robert B. Broadbelt, Judge. Affirmed in part, reversed
in part, and remanded with directions.
Roger A. S. Manlin, in pro. per., for Plaintiff and Appellant.
Hamburg, Karic, Edwards & Martin, Gregg A. Martin and
Ann S. Lee for Defendants and Respondents.
___________________________________
In a dispute between members of a limited liability
company (LLC), plaintiff alleged that the LLC’s managing
member engaged in self-dealing to the detriment of both plaintiff
and the company. After the managing member, represented by
the LLC’s attorneys, cross-complained against the plaintiff, the
plaintiff cross-complained against both the managing member
and the attorneys for further self-dealing and breach of fiduciary
duty, alleging they misappropriated funds from the LLC to
finance the litigation.
Cross-defendants specially moved to strike the complaint
under the anti-SLAPP statute (Strategic Lawsuit Against
Protected Activity; Code of Civil Procedure section 425.16 (section
or § 425.16)), arguing the alleged conduct occurred as part of the
litigation, which was protected activity.
Cross-defendants also moved for discovery sanctions.
The trial court found that a portion of the cross-complaint
arose from litigation activity, and thus granted cross-defendants’
special motion to strike. Plaintiff appeals from that ruling.
The trial court also entered discovery orders in 2019 and
2021 imposing monetary and evidentiary sanctions against the
plaintiff. Plaintiff separately appeals from these rulings, and we
consolidated the appeals.
We conclude that appropriation of funds to finance
litigation is not protected activity. Accordingly, we reverse in
part the order granting cross-defendants’ special motion to strike.
We conclude that only the 2021 discovery order imposing
monetary sanctions is appealable, and that order is affirmed.
Finally, we conclude that the 2019 discovery order for monetary
sanctions and the 2021 order insofar as it imposed nonmonetary
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sanctions are nonappealable, but we will deem the appeal to
constitute a petition for extraordinary relief, which we deny.
BACKGROUND
A. Litigation
We take the facts from the complaints, accepting them as
true for purposes of these appeals.
Roger Manlin, an attorney, and Steven Milner jointly own
and are the only members of eight real estate investment LLCs.
Milner is the sole managing member of each LLC. Milner,
without Manlin’s knowledge or consent, engaged in self-serving
conduct in breach of both his fiduciary duties and the eight LLC
operating agreements.
Manlin sued Milner for breach of contract, breach of
fiduciary duty, fraud, unfair competition, conversion, and
financial elder abuse, and sought an accounting.
Milner and the LLCs, represented by the law firm
Hamburg, Karie, Edwards & Martin, and attorneys Ann Lee and
Gregg Martin (collectively “Attorneys”), cross-complained for
legal malpractice and breach of fiduciary duty, and sought
declaratory relief and rescission of the LLC agreements.
In response, Manlin cross-complained on behalf of himself
and the LLCs against Milner and the Attorneys for further acts
of self-dealing and elder abuse.
As pertinent here, Manlin’s cross-complaint alleged in the
first cause of action, for breach of written operating agreements,
that Milner breached the LLC operating agreements “by his
diversion of funds from the LLCs in order to pay legal expenses of
defending himself in the Manlin complaint against him, and
suing Manlin in the Milner cross-complaint, and his refusal to
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provide and concealment of information relating to the retention
of and payment to the Attorneys of their legal fees.”
The second cause of action, for breach of fiduciary duty
against only Milner, alleged that Milner breached his fiduciary
duty by failing to “stipulate to continue any currently existing
hearing date, response date, notice date, motion cut off date, or
other date associated with the presently scheduled January 8,
[2020] trial.”
The third cause of action, for breach of fiduciary duty
against the Attorneys, alleged the Attorneys breached a fiduciary
duty owed to Manlin because they “concealed [their] agreements
with the LLCs, concealed the payments made by the LLCs to
themselves without Manlin’s knowledge or consent, wrongfully
diverted and continue to divert funds from each of the LLCs to
Attorneys in order to pay all of Milner’s personal legal expenses
of defending the Manlin complaint against him, individually, and
proceeding with [the] Milner cross-complaint against Manlin in
the names of the LLCs.”
The fourth cause of action, for elder abuse, against Milner,
alleged that Milner’s conduct constituted elder abuse.
B. Anti-SLAPP Motion
Milner and the Attorneys specially moved to strike
Manlin’s cross-complaint or, in the alternative, portions thereof,
arguing that funding litigation constitutes protected petitioning
activity, and Manlin could not show a probability of prevailing on
any cause of action.
Manlin opposed the motion, supporting the opposition with
Milner’s deposition testimony indicating the Attorneys were paid
from LLC funds.
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The trial court found that the first and third causes of
action arose from Milner and the Attorneys “allegedly diverting
funds from the LLCs to pay [Milner’s] legal expenses in this
litigation. . . . Thus, the first and third causes of action are based
on the payment of funds to maintain a lawsuit, i.e., the attorney’s
fees incurred by Steve Milner in this lawsuit.”
The court found that Manlin made no attempt to establish
the legal sufficiency of his second and fourth causes of action and
presented no evidence of diversion of LLC funds to pay Milner’s
legal fees. Accordingly, the court granted the anti-SLAPP motion
and ordered that Manlin’s cross-complaint be stricken in its
entirety. The court awarded attorney fees to cross-defendants.
Manlin appeals from that ruling.
C. Discovery Issues
On June 7, 2019, Milner and the LLCs served their first set
of document requests on Manlin. We set forth the relevant
request categories, followed by pertinent individualized requests:
Request Nos. 11-19 sought all documents showing any
capital contribution Manlin made to the LLCs.
Request Nos. 20-28 sought all documents showing
distributions Manlin received from the LLCs.
Request Nos. 31-38 sought agreements for any legal
services Manlin performed for the LLCs.
Request Nos. 41-48 sought documents relating to legal
services Manlin performed for the LLCs, including Manlin’s
client files.
Request Nos. 50-59 sought all invoices for legal services
Manlin performed for Milner and the LLCs.
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Request Nos. 60-69 sought all checks or other documents
showing payment for legal services Manlin performed for Milner
and the LLCs.
Request Nos. 72-80 sought all communications regarding
legal services Manlin performed for the LLCs.
Request No. 29 sought all agreements between Manlin and
defendants.
Request No. 30 sought all agreements for any legal services
Manlin performed for defendants.
Request No. 40 sought all documents reflecting any legal
service Manlin performed for the defendants, including Manlin’s
client files.
Request No. 70 sought all communications regarding any
business transaction between Manlin and the defendants.
Request No. 71 sought all communications with Milner
regarding any legal service Manlin performed for the defendants.
Request No. 81 sought all documents regarding any
business transaction between Manlin and the defendants.
Manlin’s responses included essentially the same objection
to each request. As an exemplar, his response to Request No. 2,
which sought “all documents relating to Nadeau LLC,” was the
following: “Objection. The request fails to identify documents
requested to be produced with reasonable particularity; its use of
the defined terms ‘relate, related or relating to’, ‘all’, ‘documents’
and ‘communications’ (1) is unduly burdensome and harassing to
the extent that the burden, expense, intrusiveness of providing a
complete response clearly outweighs the likelihood that the
information sought will lead to the discovery of relevant and
admissible evidence, and (2) renders the request susceptible to
numerous inconsistent and duplicative interpretations; is vague,
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ambiguous, and overbroad in scope; seeks information not
relevant to the subject matter of this action and not reasonably
calculated to lead to the discovery of admissible evidence; seeks
information which is a matter of public record and as readily
available to propounding party as to responding party, including
information which propounding party has a fiduciary and
contractual obligation to maintain; seeks information that is
protected by the attorney work product doctrine; is duplicative of
each other request referring to the LLC identified in this request.
Subject to and without waiving the foregoing objections and any
applicable General Objections, responding party responds as
follows: Responding party is in the process of conducting a
reasonably diligent search and is assembling and will produce
documents which it believes are responsive to this request that it
locates in its possession, custody and control, to be produced at a
mutually agreeable time and place.”
As another exemplar, Manlin’s response to Request No. 11,
which sought “ALL DOCUMENTS showing any capital
contribution YOU made to NADEAU LLC,” was the following:
“The request fails to identify documents requested to be produced
with reasonable particularity; its use of the defined terms ‘relate,
related or relating to’, ‘all’, ‘documents’ and ‘communications’ (1)
is unduly burdensome and harassing to the extent that the
burden, expense, intrusiveness of providing a complete response
clearly outweighs the likelihood that the information sought will
lead to the discovery of relevant and admissible evidence, and (2)
renders the request susceptible to numerous inconsistent and
duplicative interpretations; is vague, ambiguous, and overbroad
in scope; seeks information not relevant to the subject matter of
this action and not reasonably calculated to lead to the discovery
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of admissible evidence; seeks information which is a matter of
public record and as readily available to propounding party as to
responding party, including information which propounding
party has a fiduciary and contractual obligation to maintain;
seeks information that is protected by the attorney work product
doctrine; is duplicative of each other request referring to the LLC
identified in this request. Subject to and without waiving the
foregoing objections and any applicable General Objections,
responding party responds as follows: Responding party is in the
process of conducting a reasonably diligent search and is
assembling and will produce documents which it believes are
responsive to this request that it locates in its possession, custody
and control, to be produced at a mutually agreeable time and
place.”
Manlin provided no documents.
On September 3, 2019, the trial court entered a stipulation
between the parties for Manlin to produce within 10 days
“documents to which no objection is made responsive to
Defendant’s Document Requests, Set One.”
On September 13, 2019, Manlin served further responses,
12 out of 81 of which asserted essentially the same objections as
before. For example, his further response to Request No. 2 was
the following: “Objection. The request fails to identify
documents requested to be produced with reasonable
particularity; its use of the defined terms ‘relate, related or
relating to’, ‘documents’ is vague, ambiguous, and overbroad in
scope; seeks information which is a matter of public record and as
readily available to propounding party as to responding party,
including information which propounding party has a fiduciary
and contractual obligation to maintain; seeks information that is
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protected by the attorney work product doctrine; is duplicative of
each other request referring to the LLC identified in this request.
Subject to and without waiving the foregoing objections and any
applicable General Objections, responding party responds as
follows: the production will be allowed in part and all documents
that are in the possession, custody or control of responding party,
to which no objection has been made, will be included in the
production.”
Manlin’s response to Request No. 11 was the following:
“The production will be allowed and all documents that are in the
possession, custody or control of the responding party will be
included in the production.”
In responding to other requests, Manlin stated separately
with respect to Request Nos. 20-28 (distributions), 31-38
(agreements for legal services), 41-48 (documents relating to legal
services, including client files), 50-59 (invoices), and 60-69
(payment), that “After diligent search and reasonable inquiry,
responding party has been unable to comply with or locate any
documents responsive to this request, and believes that any
responsive documents are no longer in his possession, custody, or
control. Plaintiff [sic: Defendant] has possession, custody, or
control of the documents requested.” (Italics added.)
With respect to Request Nos. 11-19 (capital contributions),
Manlin stated he would produce responsive documents. Later, in
opposition to Milner’s sanctions motion, post, Manlin declared he
had produced “all documents in full compliance with the Court’s
September 3 order.”
With respect to Request Nos. 72-80 (communications
regarding legal services), Manlin produced some responsive
documents and stated that “all documents that are in the
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possession, custody or control of responding party, to which no
objection has been made, will be included in the production.”
Later, in opposition to cross-defendants’ sanctions motion, post,
Manlin declared he had produced “all documents in full
compliance with the Court’s September 3 order.”
On September 15, two days after the stipulated production
deadline, Manlin produced a thumb drive containing
approximately 2,165 pages of documents, none of which
responded to Request Nos. 11-28, 41-48, or 50-69. Furthermore,
although Request Nos. 72-80 sought all communications relating
to legal services Manlin performed for the LLCs, he produced
only 489 pages of emails—most from the years 2018 and 2019,
and none dating before 2016—out of the over 3,300 the parties
were known to have exchanged dating from 2010.
Manlin never explained why documents he could be
expected to access—such as his own bank records—might be
beyond his control.
On November 8, 2019, Milner sent a meet and confer letter
to which Manlin did not respond, although on November 13
Manlin asked Milner to agree to continue trial because he had
been in an accident and was hospitalized on November 12.
On November 13, 2019, Milner moved to compel further
responses to Request Nos. 29, 30, 40, 70, 71 and 81, and sought
$5,395 in monetary sanctions. In support of the motion, Ann Lee,
one of the Attorneys, declared that Manlin’s thumb drive
contained no “documents relating to Plaintiff’s representation or
agreement for legal services with Defendant.”
On November 27, 2019, before the first motion was
resolved, Milner moved for issue, evidence and/or monetary
sanctions (in the amount of $14,472) based on Manlin’s failure to
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serve proper supplemental responses with respect to Request
Nos. 11-19 and 72-80, and failure to serve further code compliant
responses to Request Nos. 2-10, 20-28, 31-39, 41-48 and 50-69.
On December 9, 2019, after a hearing Manlin did not
attend, the trial court granted Milner’s first motion, to compel
further responses, and imposed sanctions against Manlin in the
amount of $4,110.
On December 19, 2019, Manlin moved for reconsideration
of the December 9 order, arguing that he had been involved in an
accident on November 12, was hospitalized to December 3, and
was unable to defend against the November 13 discovery motion.
On December 3, 2020, the court granted Manlin’s motion
for reconsideration. Upon reconsideration the court found that
Milner had requested Manlin’s client file relating to his
representation of Milner and the LLCs, but Manlin initially
failed to respond or provide the file, and meritlessly objected to
and refused to comply with Milner’s document requests Nos. 29,
30, 40, 70, 71 and 81. In his supplemental response pursuant to
the September 3, 2019 stipulated order, Manlin raised blanket
meritless objections and produced a thumb drive that contained
“no documents relating to Manlin’s representation or agreement
for legal services with” Milner or the LLCs. Manlin thereafter
failed to respond to Milner’s November 8, 2019 meet and confer
letter.
The court therefore affirmed its December 9, 2019 order in
its entirety.
On March 2, 2020, the trial court held a hearing on
Milner’s motion for issue, evidence and monetary sanctions.
Because Manlin’s discovery response that “Plaintiff” had
possession of the requested documents contradicted his
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representation that he had no such possession (in that Manlin is
the plaintiff), the court continued the hearing to afford him an
opportunity to provide amended supplemental responses
correcting the apparent typo.
On April 1, 2020, Manlin served amended supplemental
responses in which he addressed Milner’s requests by category—
e.g., requests Nos. 20-28, 31-38, 41-48, 50-59 and 60-69,
pertaining to legal services Manlin performed for the LLCs—and
changed “plaintiff” to “defendant.”
On April 6, 2021, after several continuances due to the
COVID 19 pandemic, the trial court found Manlin’s amended
supplemental responses failed to comply with Code of Civil
Procedure section 2031.230 by failing to “respond separately to
each item or category of item, and instead provides a single
amended further response to several groups of requests.” It
therefore disregarded the supplemental responses and looked to
Manlin’s September 13 and 15, 2019 further responses.
The court found Manlin’s September 13, 2019 further
responses were “inconsistent and contradictory, and [did] not
comply with . . . section 2031.230 for statements of representation
of inability to comply,” because “[o]n the one hand, Manlin states
that he does not have possession, custody or control of the
documents,” but “[o]n the other hand, Manlin states that he does
have possession, custody or control of the documents.” The court
credited Lee’s declaration that Manlin’s thumb drive contained
no documents responsive to several requests, and therefor
concluded that Manlin had misused the discovery process in his
responses to Request Nos. 11-19, 20-28, 31-38, 41-48, 50-59, 60-
69, and 72-80.
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The court found Manlin’s failure to comply with Code of
Civil Procedure section 2031.230 and failure to produce
responsive documents constituted willful disobedience of the
court’s September 3, 2019 order.
The court denied Milner’s request for issue sanctions but
granted the request for evidence sanctions, ordering that Manlin
be prohibited from introducing evidence of any capital
contributions he made to the LLCs (Request Nos. 11-19), any
distributions he received from the LLCs (Request Nos. 20-28), or
any communications regarding legal services he performed for
the LLCs (Request Nos. 72-80). The court also granted in part
Milner’s request for $18,018 in monetary sanctions, awarding
him $11,850.
Manlin appeals from the trial court’s December 9, 2019 and
April 6, 2021 discovery orders.
DISCUSSION
I. Anti-SLAPP Appeal
Manlin Argues the trial court improperly granted Milner’s
and the Attorneys’ anti-SLAPP motion because the gravamen of
the cross-complaint, that Milner and the Attorneys diverted
funds from the LLCs to pay Milner’s legal fees, does not
constitute protected activity. We agree.
A. Anti-SLAPP Analysis and Standard of Review
The “anti-SLAPP statute is designed to protect defendants
from meritless lawsuits that might chill the exercise of their
rights to speak and petition on matters of public concern.”
(Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 883-
884.) Thus, a “cause of action against a person arising from any
act of that person in furtherance of the person’s right of petition
or free speech under the United States Constitution or the
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California Constitution in connection with a public issue shall be
subject to a special motion to strike, unless the court determines
that the plaintiff has established that there is a probability that
the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).)
In evaluating an anti-SLAPP motion, courts conduct a two-
step analysis. First, the court decides whether a defendant has
met its “burden of establishing that the challenged allegations or
claims ‘aris[e] from’ protected activity in which the defendant has
engaged.” (Park v. Board of Trustees of California State
University (2017) 2 Cal.5th 1057, 1061 (Park).) For these
purposes, protected activity “includes: (1) any written or oral
statement or writing made before a legislative, executive, or
judicial proceeding, or any other official proceeding authorized by
law, (2) any written or oral statement or writing made in
connection with an issue under consideration or review by a
legislative, executive, or judicial body, or any other official
proceeding authorized by law, (3) any written or oral statement
or writing made in a place open to the public or a public forum in
connection with an issue of public interest, or (4) any other
conduct in furtherance of the exercise of the constitutional right
of petition or the constitutional right of free speech in connection
with a public issue or an issue of public interest.” (§ 425.16,
subd. (e).)
Second, if a defendant meets its burden on the threshold
showing, the court decides if the plaintiff “has established that
there is a probability that the plaintiff will prevail on the claim.”
(§ 425.16, subd. (b)(1).) To satisfy this burden, the plaintiff
“ ‘must demonstrate that the complaint is both legally sufficient
and supported by a sufficient prima facie showing of facts to
sustain a favorable judgment if the evidence submitted by the
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plaintiff is credited.’ ” (Soukup v. Law Offices of Herbert Hafif
(2006) 39 Cal.4th 260, 291.) At this stage of the proceedings, a
plaintiff “need only establish that his or her claim has ‘minimal
merit.’ ” (Ibid.) Although “ ‘the court does not weigh the
credibility or comparative probative strength of competing
evidence, it should grant the motion if, as a matter of law, the
defendant’s evidence supporting the motion defeats the plaintiff’s
attempt to establish evidentiary support for the claim.’ ” (Ibid.)
“In making its determination, the court shall consider the
pleadings, and supporting and opposing affidavits stating the
facts upon which the liability or defense is based.” (§ 425.16,
subd. (b)(2).)
“Analysis of an anti-SLAPP motion is not confined to
evaluating whether an entire cause of action, as pleaded by the
plaintiff, arises from protected activity or has merit. Instead,
courts should analyze each claim for relief — each act or set of
acts supplying a basis for relief, of which there may be several in
a single pleaded cause of action — to determine whether the acts
are protected and, if so, whether the claim they give rise to has
the requisite degree of merit to survive the motion.” (Bonni v. St.
Joseph Health System (2021) 11 Cal.5th 995, 1010 (Bonni).) “[T]o
the extent any acts are unprotected, the claims based on those
acts will survive.” (Id. at p. 1012.)
We review the trial court’s order granting the anti-SLAPP
motion de novo, applying the same two-step analysis. (Oasis
West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.) We
independently review whether a moving party has made a
threshold showing that the challenged cause of action arises from
protected activity. (Grewal v. Jammu (2011) 191 Cal.App.4th
977, 988.)
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B. Application
1. First, Third, and Fourth Causes of Action
Here, the gravamen of the first and third (and derivatively
the fourth) causes of action in Manlin’s cross-complaint is that
Milner and the Attorneys breached fiduciary duties owed to
Manlin and the LLCs by diverting the LLCs’ money to fund
Manlin’s legal expenses. In the first cause of action, Manlin
alleges Milner wrongfully diverted “funds from the LLCs in order
to pay legal expenses of defending himself in the Manlin
complaint against him, and suing Manlin in the Milner cross-
complaint,” and concealed information relating to the Attorneys’
employment. In the third cause of action, Manlin alleges the
Attorneys “wrongfully diverted and continue to divert funds from
each of the LLCs to [themselves] in order to pay all of Milner’s
personal legal expenses.”
Cross-defendants argue that funding litigation constitutes
protected petitioning activity (Rusheen v. Cohen (2006) 37 Cal.4th
1048, 1056), and that Manlin’s cross-complaint arose from that
activity. We disagree.
To determine whether a challenged allegation or claim
“arises from” protected activity we must determine whether
protected activity was the alleged injury-producing act forming
the basis for the claim. (Park, supra, 2 Cal.5th at pp. 1062-1063.)
“ ‘The only means specified in section 425.16 by which a moving
defendant can satisfy the [“arising from”] requirement is to
demonstrate that the defendant’s conduct by which plaintiff
claims to have been injured falls within one of the four categories
described in subdivision (e) . . . .’ ” (Id. at p. 1063.)
“[I]n ruling on an anti-SLAPP motion, courts should
consider the elements of the challenged claim and what actions
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by the defendant supply those elements and consequently form
the basis for liability.” (Park, supra, 2 Cal.5th at p. 1063.) In so
doing, the courts should be “attuned to and . . . respect the
distinction between activities that form the basis for a claim and
those that merely lead to the liability-creating activity or provide
evidentiary support for the claim.” (Id. at p. 1064.)
Here, the element of Manlin’s claim for breach of fiduciary
duty is the self-dealing act of diverting funds from the LLCs in
which Manlin owns an interest. The allegation that the cross-
defendants engaged in this self-dealing completes the claim. Why
they did so, for example to fund litigation,—is not an element of
the claim, and therefore forms no basis for liability.
In Park, for example, the plaintiff alleged that a university
discriminated against him in denying him tenure. The complaint
also alleged that “a school dean ‘made comments to Park and
behaved in a manner that reflected prejudice against him on the
basis of his national origin.’ ” (Park, supra, 2 Cal.5th at p. 1068.)
The university specially moved to strike the complaint, arguing
Park’s suit arose from the numerous communications that led up
to and followed its decision to deny him tenure, and these
communications were protected activities. (Id. at p. 1061.)
The Court held that the elements of Park’s claim depended
not on any statements about or specific evaluations of him in the
tenure process, “but only on the denial of tenure itself and
whether the motive for that action was impermissible. The
tenure decision may have been communicated orally or in
writing, but that communication does not convert Park’s suit to
one arising from such speech. The dean’s alleged comments may
supply evidence of animus, but that does not convert the
statements themselves into the basis for liability. As the trial
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court correctly observed, Park’s complaint is ‘based on the act of
denying plaintiff tenure based on national origin. Plaintiff could
have omitted allegations regarding communicative acts or filing a
grievance and still state the same claims.’ ” (Park, supra, 2
Cal.5th at p. 1068.)
Here, cross-defendants allegedly breached fiduciary duties
owed to Manlin and the LLCs by diverting the LLCs’ money. No
element of Manlin’s claim depends on the purpose for that
diversion, but only on the diversion itself and whether it
constituted self-dealing. The diversion may have been to further
some protected activity—for example to fund a political campaign
or publish a newsletter or fund litigation—but that purpose does
not convert Manlin’s suit to one arising from the protected
activity. The protected use to which cross-defendants put the
diverted funds may supply evidence of the selfishness of their
self-dealing but does not convert the use itself into the basis for
liability. Manlin’s complaint is based on the act of diverting
funds from the LLC for selfish purposes. Manlin could have
omitted allegations regarding funding lawsuits and still state the
same claim. (See Baharian-Mehr v. Smith (2010) 189
Cal.App.4th 265, 273 [where a plaintiff alleges that a defendant
misused corporate funds to finance wrongful litigation, the
gravamen is the misuse of corporate funds, not the wrongful
litigation]; see also Gaynor v. Bulen (2018) 19 Cal.App.5th 864,
887 [injury-producing conduct, not merely motivating conduct,
must constitute protected activity].) We therefore conclude the
anti-SLAPP motion was improperly granted as to Manlin’s first,
third and fourth causes of action.
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2. Second Cause of Action
The gravamen of Manlin’s second cause of action is that
Milner breached his fiduciary duty by failing to “stipulate to
continue any currently existing hearing date, response date,
notice date, motion cut off date, or other date associated with the
presently scheduled January 8, [2020] trial.” In this instance, the
alleged injury-producing conduct—failure to conduct litigation in
a certain way—constitutes protected petitioning activity.
Manlin offers no explanation how he could prevail on a
cause of action challenging the way a party conducts litigation.
He could not, as litigation conduct is privileged. (Civ. Code, § 47,
subd. (b) [communications made during judicial proceedings are
privileged]; Kettler v. Gould (2018) 22 Cal.App.5th 593, 607
[privilege applies to any communication designed to achieve the
objects of the litigation].)
“A plaintiff cannot establish a probability of prevailing if
the litigation privilege precludes a defendant’s liability on the
claims.” (Optional Capital, Inc. v. Akin Gump Strauss, Hauer &
Feld LLP (2017) 18 Cal.App.5th 95, 115.) Therefore, the anti-
SLAPP motion was properly granted as to Manlin’s second cause
of action.
II. Discovery Appeal
Manlin contends the only evidence supporting the trial
court’s December 9, 2019 order (compelling further responses and
imposing $4,100 in sanctions) and April 6, 2021 order (imposing
evidentiary and monetary sanctions) was Lee’s declaration that
the thumb drive Manlin produced contained no “documents
relating to Manlin’s representation or agreement for legal
services with Cross-Complainants.” Manlin argues this evidence
was insufficient to justify either order, and further argues the
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court abused its discretion in refusing to consider Manlin’s April
1, 2020 responses, in which he corrected the plaintiff/defendant
typo.
A. Dismissal and the Scope of Appeal
Manlin purports to appeal from both the December 9, 2019
and April 6, 2021 orders. (He expressly abandons any appeal as
to the reconsideration order.) We first consider whether the
December 9 order, compelling further responses and imposing
$4,100 in sanctions, and the April 6 order imposing evidentiary
and $11,850 in sanctions are appealable. Milner argues the
December 9, 2019 order and the April 6, 2021 order—insofar as it
imposes evidentiary sanctions— are not appealable, and Manlin’s
appeal as to them must be dismissed.
“A trial court’s order is appealable when it is made so by
statute.” (Griset v. Fair Political Practices Com’n (2001) 25
Cal.4th 688, 696.) Under Code of Civil Procedure section 904.1,
an appeal may be taken from “an interlocutory judgment
directing payment of monetary sanctions by a party or an
attorney for a party if the amount exceeds five thousand dollars
($5,000)” (§ 904.1, subd. (a)(11)) or from “an order directing
payment of monetary sanctions by a party or an attorney for a
party if the amount exceeds five thousand dollars ($5,000).”
1
(§ 904.1, subd. (a)(12)).
No statute authorizes direct appeal from an order imposing
under $5,000 in monetary sanctions, nor from an order
compelling compliance with a discovery order. “An attempt to
appeal from a nonappealable order does not give this court
1
Undesignated statutory references will be to the Code of
Civil Procedure.
20
jurisdiction or authority to review it.” (Sherman v. Lewis (1913)
166 Cal. 524, 525.)
However, we need not dismiss a direct appeal from such
orders if circumstances suggest the appeal should be treated as a
petition for an extraordinary writ. (Olson v. Cory (1983) 35
Cal.3d 390, 400.) Here, to require the parties to wait for the
complaint and cross-complaints to be resolved before resolving
Manlin’s challenges to the court’s sanctions orders is an
inadequate legal remedy, as it might lead to unnecessary trial
proceedings, skew evidence presented at trial, or influence
settlement negotiations or any final award of attorney fees.
Further, the monetary sanctions issue is final between the
parties and ripe for early resolution, and the record on them is
sufficiently developed to afford adequate appellate review. To
dismiss the appeal rather than exercising our power to reach the
merits through a mandate proceeding would, under the unusual
circumstances before us, be “unnecessarily dilatory and
circuitous.” (Id. at p. 401.) Accordingly, we treat the appeal as a
petition for writ of mandate.
In any event, the April 6, 2021 order is appealable insofar
as it imposes a monetary sanction exceeding $5,000. (See § 904.1,
subd. (a).) In reviewing it, we necessarily consider the
correctness of the entire April 6, 2021 order, as well as the
December 9, 2019 order, because both the December 9 order and
the appealable portion of the April 6 order are founded on the
same reasoning underlying the April 6 monetary sanction.
B. Discovery Misuse
Manlin contends the trial court abused its discretion in
determining he misused the discovery process by disobeying the
court’s September 3, 2019 order. We disagree.
21
1. Applicable Law
“Misuses of the discovery process include, but are not
limited to,” “[d]isobeying a court order to provide discovery” and
“opposing, unsuccessfully and without substantial justification, a
motion to compel . . . discovery.” (§ 2023.010, subds. (g), (h).) The
Civil Discovery Act (§ 2016.010 et seq.) provides in pertinent
part: “To the extent authorized by the chapter governing any
particular discovery method . . . , the court, after notice . . . and
after opportunity for hearing, may impose the following sanctions
against anyone engaging in conduct that is a misuse of the
discovery process: [¶] (a) . . . If a monetary sanction is
authorized by any provision of this title, the court shall impose
that sanction unless it finds that the one subject to the sanction
acted with substantial justification or that other circumstances
make the imposition of the sanction unjust.” (§ 2023.030, subd.
(a).)
Section 2031.210, subdivision (a), provides that a party to
whom a demand for inspection has been directed “shall respond
separately to each item or category of item.”
Section 2031.230 provides that “A representation of
inability to comply with the particular demand for inspection . . .
shall affirm that a diligent search and a reasonable inquiry has
been made in an effort to comply with that demand. This
statement shall also specify whether the inability to comply is
because the particular item or category has never existed, has
been destroyed, has been lost, misplaced, or stolen, or has never
been, or is no longer, in the possession, custody, or control of the
responding party. The statement shall set forth the name and
address of any natural person or organization known or believed
22
by that party to have possession, custody, or control of that item
or category of item.”
Section 2031.310, subdivision (i), authorizes a monetary
sanction if a party fails to obey an order compelling further
response. (See also § 2023.030.)
We review an order imposing monetary sanctions “under
the deferential abuse of discretion standard. [Citation.] ‘A
court’s decision to impose a particular sanction is “subject to
reversal only for manifest abuse exceeding the bounds of
reason.” ’ ” (Doe v. United States Swimming, Inc. (2011) 200
Cal.App.4th 1424, 1435.) We resolve all evidentiary conflicts in
favor of the trial court’s ruling. (Sears, Roebuck & Co. v.
National Union Fire Ins. Co. (2005) 131 Cal.App.4th 1342, 1350.)
2. Application
a. December 9, 2019 Order
Here, Manlin engaged in gamesmanship by providing
incomplete and noncompliant responses, necessitating multiple
efforts to compel compliance with a basic discovery obligation and
needlessly prolonging the discovery dispute. His first response
contained boilerplate objections having little pertinence to the
actual requests. The second response contained more frivolous
objections, and the ultimate production was sparse and two days
late. The trial court was very familiar with the case and the
parties and was in the best position to evaluate Manlin’s stated
reasons for his discovery activities. It certainly could have
deemed his initial discovery responses to be so frivolous as to
have been in bad faith, such that any subsequent professions of
good faith would be suspect. Under these circumstances, we
cannot conclude that the trial court’s decision to impose $4,100 in
monetary sanctions constituted a “ ‘manifest abuse exceeding the
23
bounds of reason.’ ” (Doe v. United States Swimming, Inc., supra,
200 Cal.App.4th at p. 1435.)
b. April 6, 2021 Order
Manlin argues the April 6, 2021 order was impermissibly
punitive. We disagree.
A trial court has broad discretion to impose discovery
sanctions, but they “ ‘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.’ ” (Biles v.
Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1327.) A
discovery sanction should only be such as is “ ‘suitable and
necessary to enable the party seeking discovery to obtain the
objects of the discovery he seeks,’ ” and may not be designed to
impose punishment. (Ibid.)
Here, although the April 6, 2021 order was long delayed
and ostensibly preceded by several discovery proceedings
occurring after the December 9, 2019 order, because of
peculiarities in the proceedings both orders pertained to the same
discovery response: Manlin’s further responses propounded on
September 13 and 15, 2019. (Manlin had attempted to
supplement these further responses, but the court eventually
disregarded the supplement and again found that the September
13 further responses were inadequate.) The court thereafter
ordered that Manlin be prohibited from introducing evidence of
any capital contributions he made to the LLCs, any distributions
he received from the LLCs, or any communications regarding
legal services he performed for them. The court also ordered that
he pay Milner $11,850.
Given the deferential standard of review, we cannot
conclude that the evidentiary sanction was punitive. The object
24
of discovery is to prevent surprise at trial, but Manlin engaged in
conduct that the trial court could have reasonably found was
designed to conceal. With respect to both disputed and
undisputed transactions, Manlin delayed producing what was
clearly in his possession and failed to make a diligent search for
records he could easily have obtained. For example, the lack of
Manlin’s own bank records was an objective indicator that he
could have searched more diligently for records. A trial judge is
in the best position to develop a sense of the parties and whether
they are engaging in delay or misconduct. Here, over the course
of two years the judge patiently presided over a stipulated
production schedule, a first motion to compel further responses,
and a second motion, for sanctions, all of which resulted in only a
tepid production. The court was therefor well within its
discretion to finally impose evidentiary sanctions.
The April 6, 2021 monetary sanction was also permissible.
“The court may impose a monetary sanction ordering that one
engaging in the misuse of the discovery process, or any attorney
advising that conduct, or both pay the reasonable expenses,
including attorney’s fees, incurred by anyone as a result of that
conduct. . . . [T]he court shall impose that sanction unless it finds
that the one subject to the sanction acted with substantial
justification or that other circumstances make the imposition of
the sanction unjust.” (§ 2023.030, subd. (a); see also § 2031.310,
subd. (i) [monetary sanction may be imposed in lieu of or in
addition to issue or evidence sanction].) For a trial court to
decline to award any amount of monetary sanctions when it finds
discovery misconduct has occurred is arbitrary and an abuse of
discretion. (Kwan Software Engineering, Inc. v. Hennings (2020)
58 Cal.App.5th 57, 77.)
25
Here, the court found: (1) Manlin’s amended supplemental
responses failed to comply with Code of Civil Procedure section
2031.230 by failing to “respond separately to each item or
category of item, and instead provides a single amended further
response to several groups of requests”; (2) Manlin’s September
15, 2019 drive contained no documents responsive to several
requests; (3) Manlin had misused the discovery process in his
responses to Request Nos. 11-19, 20-28, 31-38, 41-48, 50-59, 60-
69, and 72-80; and (4) his failure to comply with section 2031.230
and failure to produce responsive documents constituted willful
disobedience of the court’s September 3, 2019 order.
As discussed above, the court was in the best position to
evaluate Manlin’s justifications for deficient responses, and as
with the December 9, 2019 order, we cannot conclude that the
trial court’s findings and decision on April 6, 2021 to impose
additional monetary sanctions constituted a manifest abuse
exceeding the bounds of reason.
DISPOSITION
The April 6, 2021 order imposing monetary sanctions is
affirmed. The appeal as to other discovery orders is deemed a
petition for an extraordinary relief, which is denied.
The anti-SLAPP order striking Manlin’s cross-complaint
is affirmed as to the second cause of action but otherwise
reversed. The trial court is directed to vacate its order awarding
Milner anti-SLAPP attorney fees and reconsider that order in
26
light of our holding. Both sides are to bear their own costs on
appeal.
CHANEY, J.
We concur:
BENDIX, Acting P. J.
*
MORI, J.
*
Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
27
Filed 9/7/22
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
ROGER MANLIN, B313253, B315077
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 19STCV08154)
v.
CERTIFICATION AND ORDER
STEVE MILNER et al., FOR PUBLICATION
Defendants and Respondents. [NO CHANGE IN JUDGMENT]
The opinion in the above-entitled matter filed
August 10, 2022, was not certified for publication in the
Official Reports. For good cause it now appears that the opinion
should be published in the Official Reports and it is so ordered.
There is no change in the judgment.
CERTIFIED FOR PUBLICATION.
____________________________________________________________
BENDIX, Acting P. J. CHANEY, J. MORI, J.*
*
Judge of the Los Angeles County Superior Court, assigned by the Chief
Justice pursuant to article VI, section 6 of the California Constitution.