Leeyer v. Pro Circuit Products CA4/1 ( 2013 )

Filed 3/19/13 Leeyer v. Pro Circuit Products CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
ELY LEEYER, D059660
Plaintiff,
v. (Super. Ct. No. 37-2009-97053)
PRO CIRCUIT PRODUCTS, INC.,
Defendant and Respondent;
DAVID C. SKYER,
Real Party in Interest and Appellant.
APPEAL from an order of the Superior Court of San Diego County, Lisa A.
Foster, Judge. Affirmed.
Attorney David C. Skyer appeals from an order imposing sanctions on him in the
amount of $6,400 for misuse of the discovery process under Code of Civil Procedure
section 2023.030.1 We conclude that the trial court did not abuse its discretion in
imposing sanctions, and accordingly we affirm the sanctions order.
I
FACTUAL AND PROCEDURAL BACKGROUND
Ely Leeyer, represented by Skyer, filed a complaint against Pro Circuit Products,
Inc. (Pro Circuit), alleging that he was physically injured by a defective motorcycle
handlebar mount sold by Pro Circuit.
During discovery, Leeyer sought to obtain from Pro Circuit a list of its customers
who had purchased the bar mount at issue. In its opposition to Leeyer's motion to compel
production of the bar mount customer list, Pro Circuit requested a protective order
concerning the customer list, including "an order limiting the manner and means such any
[sic] customers may be contacted."
At the hearing on the motion to compel, the trial court ruled that Pro Circuit would
be ordered to turn over the customer list, but that contact with the customers would be
through a letter drafted by the parties and approved by the court, asking whether the
customers had complained to Pro Circuit about the bar mounts. The parties submitted
proposed customer letters and objections to the trial court.
At a subsequent hearing, the trial court ordered that Pro Circuit's draft customer
letter be used. The trial court ruled that the letter could instruct customers to send
responses to Skyer's address instead of to a third party service, but that Skyer's letterhead
1 Unless otherwise indicated, all further statutory references are to the Code of Civil
Procedure.
2
and telephone number were not to appear on the letter. Specifically, the trial court stated,
that the letter is "not on Mr. Skyer's letterhead. His phone number is not to appear on the
face of the letter." Skyer agreed to send out the customer letter as approved by the trial
court.
Pro Circuit found out when it received a call from a customer that Skyer had sent
out a customer letter that, in two different ways, did not conform to what the trial court
had approved. First, the customer letter was on Skyer's letterhead, which contained his
phone number, fax number and Web site address. Second, Skyer changed the phase "We
are trying to determine if you ever contacted Pro Circuit" about problems with the bar
mount to "I am trying to determine of you ever contacted Pro Circuit." (Italics added.)
Pro Circuit filed an ex parte application seeking an order shortening time for a
sanctions motion, the issuance of an OSC for contempt and an order compelling
compliance with the court order for any future customer letters. At the hearing on the ex
parte application Skyer stated, "I forgot about the fact that you had said it shouldn't go out
on my letterhead" and claimed "I never saw the letter before it went out . . . ." The court
expressed the view that "it was not a minor issue that should have been missed," and
granted ex parte relief by ordering Skyer to refrain from speaking with any Pro Circuit
customers who called because of the letter.
Pro Circuit then filed a noticed motion for monetary, issue and evidentiary
sanctions. Specifically, pursuant to section 2023.030, subdivision (a), Pro Circuit sought
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(1) monetary sanctions against Skyer for discovery misuse in the amount of $6,460;2 and
(2) issue and evidentiary sanctions preventing Leeyer from introducing evidence obtained
as a result of the customer letter. Further, pursuant to section 177.5,3 Pro Circuit sought
a monetary sanction against Skyer in the amount of $1,500 for violating a court order. In
support of its position that Skyer intentionally violated the court's order, Pro Circuit's
motion included a discussion of other instances of Skyer's conduct during the litigation
that it believed showed a pattern of intentional misconduct.
In Skyer's opposition to the sanctions motion, he stated that he inadvertently sent
out the customer letter on his letterhead because he forgot what the trial court had said at
the hearing and therefore did not correctly instruct his staff. He also argued that he did
not engage in any other instance of misconduct throughout the litigation. Skyer did not
take issue with the amount of monetary sanctions requested by Pro Circuit, either in his
written opposition or at the hearing on the motion.
The trial court's tentative ruling on the sanctions motion denied the monetary
sanctions that Pro Circuit sought under section 177.5, and it denied the request for
evidence and issue sanctions. The trial court cited Skyer's claim in his declaration that
his noncompliance with the court's order was unintentional, and it observed that
2 As explained in a declaration from Pro Circuit's counsel, the request for sanctions
in the amount of $6,460 was based on 32.3 hours of attorney time spent researching and
preparing the ex parte application and subsequent noticed motion for sanctions.
3 Section 177.5 provides for sanctions of up to $1,500 for "any violation of a lawful
court order . . . done without good cause or substantial justification."
4
imposition of issue and evidentiary sanctions is a drastic measure. However, the tentative
ruling indicated that the trial court would grant the request for monetary sanctions against
Skyer for misuse of the discovery process, with the amount of sanctions to be considered
at the upcoming hearing.
At the hearing on the sanctions motion, the court expressed doubt as to Skyer's
excuse for violating the court order, but explained that it did not need to decide — for the
purpose of imposing monetary sanctions on Skyer — whether Skyer acted intentionally.
The trial court stated, "I have my concerns about whether the excuse proffered is
valid. . . . [A]nd frankly I'm not sure I care because it was a court order. In the court's
view, it was explicit, it was done for a reason, and it was violated. And under discovery
sanctions or misuse of the discovery device, it doesn't matter whether it was intentional or
unintentional. It was done. But counsel's conduct can't, in the court's view, in this
instance prejudice the client and the client's right to have a fair trial. So that's why the
court is not . . . prepared at this point . . . to impose issue sanctions or evidentiary
sanctions." Later the court stated, "It's impossible, Mr. Skyer, for me to believe that you
forgot. I'm sorry, Mr. Skyer, it's not credible. We went through this letter for a very long
time. It was the focus . . . ."
The trial court imposed monetary sanctions on Skyer in the amount of $6,400.
Skyer appeals from the sanctions order under the provision allowing immediate
appeal of discovery sanctions exceeding $5,000. (§ 904.1, subd. (a)(12).)
5
II
DISCUSSION
A. Standard of Review
We apply an abuse of discretion standard of review to the trial court's order
imposing discovery sanctions. (Sinaiko Healthcare Consulting, Inc. v. Pacific
Healthcare Consultants (2007) 148 Cal.App.4th 390, 401.) "A court's decision to impose
a particular sanction is 'subject to reversal only for manifest abuse exceeding the bounds
of reason . . .' " (Electronic Funds Solutions, LLC v. Murphy (2005) 134 Cal.App.4th
1161, 1183), as is the trial court's decision on the amount of sanctions (Parker v. Wolters
Kluwer United States, Inc. (2007) 149 Cal.App.4th 285, 294 (Parker) [abuse of discretion
review]). To the extent that we review the trial court's findings of fact, we apply a
substantial evidence standard of review (In re Marriage of Feldman (2007) 153
Cal.App.4th 1470, 1479), and if "reviewing the sanction order requires us to construe the
applicable discovery statutes, we do so de novo, without regard to the trial court's ruling
or reasoning" (Sinaiko, at p. 401).
B. The Sanctions Were Properly Issued for Misuse of the Discovery Process
The trial court imposed sanctions on Skyer pursuant to section 2023.030,
subdivision (a), which states that "[t]he 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. . . . If a monetary sanction is authorized by any
provision of this title, the court shall impose that sanction unless it finds that the one
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subject to the sanction acted with substantial justification or that other circumstances
make the imposition of the sanction unjust." Skyer contends that sanctions were not
authorized by that provision because, in acting contrary to the trial court's order to omit
his letterhead from the customer letter, he was not engaged in a "misuse of the discovery
process" as that term is used in section 2023.030, subdivision (a).
Skyer specifically argues that he cannot be sanctioned for misuse of the discovery
process because he was not engaged in any of the recognized discovery methods
identified in the Code of Civil Procedure when the sanctionable conduct took place.
Skyer argues that sending out the customer letter did not involve interrogatories,
depositions, document production, physical or mental examinations, requests for
admission or expert witness exchanges, which are the discovery methods listed in section
2019.010, and therefore he did not engage in misuse of the discovery process in
connection with the customer letter. We disagree.
Section 2023.010 explains the meaning of the term "misuse of the discovery
process." It states that "[m]isuses of the discovery process include, but are not limited to"
a list of the following nine items:
"(a) Persisting, over objection and without substantial justification, in an
attempt to obtain information or materials that are outside the scope of
permissible discovery.
"(b) Using a discovery method in a manner that does not comply with its
specified procedures.
"(c) Employing a discovery method in a manner or to an extent that
causes unwarranted annoyance, embarrassment, or oppression, or undue
burden and expense.
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"(d) Failing to respond or to submit to an authorized method of
discovery.
"(e) Making, without substantial justification, an unmeritorious objection
to discovery.
"(f) Making an evasive response to discovery.
"(g) Disobeying a court order to provide discovery.
"(h) Making or opposing, unsuccessfully and without substantial
justification, a motion to compel or to limit discovery.
"(i) Failing to confer in person, by telephone, or by letter with an
opposing party or attorney in a reasonable and good faith attempt to resolve
informally any dispute concerning discovery, if the section governing a
particular discovery motion requires the filing of a declaration stating facts
showing that an attempt at informal resolution has been made."
(§ 2023.010, italics added.)
Importantly, the list is nonexhaustive, and it establishes that the Legislature
intended the term "misuse of the discovery process" to apply broadly to a wide range of
misconduct related to the conduct of discovery during litigation. As the list shows, the
Legislature defined the term "misuse of the discovery process" in an expansive manner
rather than, as Skyer argues, limiting it to misconduct that occurs while engaged in one of
the methods of discovery described in section 2019.010. Case law similarly recognizes
that the Legislature's list of misuses of the discovery process is illustrative, not exhaustive
and includes many types of misconduct occurring in the course of discovery practice.
(Palm Valley Homeowners Assn., Inc. v. Design MTC (2000) 85 Cal.App.4th 553, 563-
564 [the statutory list of sanctionable discovery abuses is not exclusive, so that misuse of
the discovery process included nonenumerated misconduct of knowingly participating in
discovery on behalf of a suspended corporation]; Mattco Forge, Inc. v. Arthur Young &
8
Co. (1990) 223 Cal.App.3d 1429, 1441 [motion for reconsideration of a discovery
sanction award is a misuse of the discovery process even though not constituting a type
of misconduct enumerated in the statute].)
Here, Skyer's misconduct was committed within the discovery process because the
order that he violated was made as part of the parties' litigation of discovery disputes.
Specifically, the trial court's order regarding the content of the customer letter was part of
a ruling on a motion to compel production filed by Skyer to obtain Pro Circuit's customer
list. As a motion to compel production is a recognized part of the discovery process, it is
clear to us that the trial court's ruling on that motion was also part of the discovery
process in this action, as was Skyer's failure to comply with the terms of the trial court's
discovery order. Skyer's lack of compliance with the trial court's discovery order
constituted a misuse of the discovery process, just as "[d]isobeying a court order to
provide discovery . . ." constitutes a misuse of the discovery process as described in
section 2023.010. (Id., subd. (g).)
Instead of focusing on the fact that he violated an order in this case that was made
in a ruling on a discovery motion, Skyer argues that the conduct for which he was
sanctioned was not a misuse of the discovery process because he was "sanctioned . . . for
the manner in which he conducted an investigation of third party witnesses outside the
discovery process."4 This argument lacks merit because it mischaracterizes the basis for
4 Similarly, Skyer argues that he should not have been sanctioned for how he chose
to conduct third party witness investigation, which he characterizes as attorney "work
product."
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the trial court's sanctions award. Skyer was not sanctioned because of how he chose to
investigate third party witnesses; he was sanctioned because he violated a court order
made in connection with a motion to compel the production of Pro Circuit's customer list
and therefore misused the discovery process.
C. Monetary Sanctions Do Not Require a Finding of Intentional Misconduct
Skyer also contends that the trial court erred in imposing sanctions for misuse of
the discovery process because it did not make a finding that he committed intentional
misconduct. This argument fails because monetary sanctions for misuse of the discovery
process may be imposed regardless whether the misconduct was willful. The applicable
statute "does not require a misuse of the discovery process to be willful before monetary
sanctions may be imposed." (Kohan v. Cohan (1991) 229 Cal.App.3d 967, 971 (Kohan),
italics added; see also Reedy v. Bussell (2007) 148 Cal.App.4th 1272, 1291 ["willfulness
is no longer a requirement for the imposition of discovery sanctions"].)
Instead, current law removes the willfulness requirement present in the former
law, and places the burden on the sanctioned party to justify his conduct, in that the law
now "allows one against whom sanctions are sought to show substantial justification to
avoid the imposition of sanctions." (Kohan, supra, 229 Cal.App.3d at p. 971, italics
added; see also § 2023.030, subd. (a) [monetary sanctions to be imposed unless court
finds that the subject of the sanctions "acted with substantial justification"].)5 Further,
5 Some case law states that, absent exceptional circumstances, nonmonetary
sanctions should not be ordered absent a finding of willful misconduct (Lee v. Lee (2009)
175 Cal.App.4th 1553, 1559; Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315,
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the trial court was not required to make a specific finding that Skyer acted without
substantial justification. (Parker, supra, 149 Cal.App.4th at p. 294 ["The court need not
make an explicit finding the exception [for acting with substantial justification] does not
exist as this is implied in the order awarding sanctions."].) It is clear from the trial court's
comments that it was not making a finding that Skyer was substantially justified in
violating the court's order.6
We therefore conclude that the trial court properly imposed monetary sanctions for
Skyer's misuse of the discovery process regardless of whether Skyer intentionally
violated the court's order.
D. Skyer's Challenge to the Amount of the Sanctions Is Without Merit
Skyer contends that the trial court abused its discretion in imposing sanctions in
the amount of $6,400.
As we have explained, the amount of $6,400 is based on the attorney fees incurred
by Pro Circuit when it filed its ex parte application and a noticed motion for sanctions
1327), but those cases do not apply here because the trial court imposed only monetary
sanctions.
6 In his brief, Skyer states that "[t]he trial court accepted that Skyer's mistake was
inadvertent and unintentional." That description is not accurate. The trial court did not
state that it found it credible that Skyer made an inadvertent mistake. Instead, the trial
court's tentative ruling simply observed that Skyer had claimed in his declaration that he
made an inadvertent mistake, and at the hearing the trial court explained that it did not
need to decide whether Skyer acted intentionally, as such a finding was not required for
the imposition of monetary sanctions. Indeed, if anything, the record suggests that the
trial court disbelieved Skyer's excuse, as it stated, "It's impossible, Mr. Skyer, for me to
believe that you forgot. I'm sorry, Mr. Skyer, it's not credible."
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after it discovered Skyer's violation of the court order. Skyer contends that the trial court
improperly imposed sanctions in the full amount of attorney fees incurred associated with
those proceedings because Pro Circuit was "largely[ ]unsuccessful" insofar as it did not
prevail in obtaining evidentiary or issue sanctions, or in obtaining relief under section
177.5. We disagree.
Section 2023.030, subdivision (a) authorizes sanctions constituting "the reasonable
expenses, including attorney fees, incurred by anyone as a result of" a misuse of the
discovery process. (Ibid.) Based on this provision, "[a] monetary discovery sanction
may be based not only on attorney's fees and costs, but also on any other reasonable
expenses incurred." (Argaman v. Ratan (1999) 73 Cal.App.4th 1173, 1179.) As relevant
in this case, monetary sanctions may include the reasonable attorney fees incurred in
seeking the imposition of sanctions following a party's violation of a court's discovery
orders. (In re Marriage of Niklas (1989) 211 Cal.App.3d 28, 38.)
Here, the trial court could reasonably conclude that (1) the portion of the motion
seeking evidentiary and issue sanctions was filed as a direct result of Skyer's violation of
the court order, and (2) it was reasonable for Pro Circuit to incur the attorney fees
associated with that portion of the motion, as there was a valid legal argument for the
imposition of issue and evidentiary sanctions.7 Further, Skyer presented no evidence that
the rates charged by Pro Circuit's counsel were unreasonable. Thus, the imposition of a
7 We reject, as completely unsupported and speculative, Skyer's claim that, if he had
been approached by Pro Circuit prior to its filing of the sanctions motion, he would have
agreed to make admissions of misconduct that could have saved some of the expense of
litigating the sanctions motion.
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sanction in the full amount of the attorney fees incurred by Pro Circuit as a result of
Skyer's violation of the court's order was well within the discretion of the trial court.
DISPOSITION
The order imposing sanctions on Skyer is affirmed.
IRION, J.
WE CONCUR:
MCCONNELL, P. J.
HUFFMAN, J.
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