Timlick v. National Enterprise Systems CA1/3 ( 2023 )

Filed 12/28/23 Timlick v. National Enterprise Systems CA1/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
LISA ARLENE TIMLICK,
Plaintiff and Respondent,
v. A165127
NATIONAL ENTERPRISE (Lake County
SYSTEMS, INC., Super. Ct. No. CV-416920)
Defendant and Appellant.
National Enterprise Systems, Inc. (NES) appeals from a trial court
order awarding Lisa Arlene Timlick $20,950 in attorney fees — incurred
defending an appeal arising out of a discovery dispute — as a “discovery
sanction” pursuant to Code of Civil Procedure sections 2023.010 and
2023.030.1 We conclude NES did not receive adequate notice and opportunity
to be heard before the sua sponte award of fees as a “discovery sanction.” We
reverse.
1 Undesignated statutory references are to this code. The history of the
parties’ litigation is set forth in our two prior opinions, which we incorporate
here by reference: Timlick v. National Enterprise Systems, Inc. (2019)
35 Cal.App.5th 674 and Timlick v. National Enterprise Systems, Inc. (June
22, 2021, A160110) [nonpub. opn.] (Timlick II).
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BACKGROUND
Timlick filed a putative class action against NES — a third party debt
collector — for violating the Rosenthal Fair Debt Collection Practices Act
(Civ. Code, § 1788 et seq.). She served NES with interrogatories, inspection
demands, and requests for admission, and NES provided written responses.
Thereafter, she moved to compel further responses and requested monetary
sanctions against NES for misuse of the discovery process (discovery motion).
Before the trial court ruled on the motion, NES moved for summary
judgment. The court granted the summary judgment motion, and it denied
the discovery motion without prejudice. Thereafter, the court entered
judgment for NES. Timlick appealed; we reversed the grant of summary
judgment and remanded.
When the case returned to the trial court, Timlick revived the discovery
motion and sought monetary sanctions. Over NES’s opposition, the court
partially granted the motion and imposed sanctions on NES pursuant to
sections 2030.300, subdivision (c), 2031.310, subdivision (c), and 2033.290,
subdivision (c), which require a trial court to impose a monetary sanction
against a party who unsuccessfully opposes a motion to compel further
responses to written discovery unless the court finds the party acted with
substantial justification or that other circumstances make the imposition of
the sanction unjust. NES appealed, and we affirmed. We held the court
properly allowed Timlick to renew her discovery motion and did not abuse its
discretion in imposing sanctions. (Timlick II, supra, A160110.)
The case returned to the trial court for the second time, whereupon
Timlick moved for $26,580 in attorney fees. Her notice of motion identified
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no basis for the attorney fee award.2 In her memorandum of points and
authorities, however, she claimed she was entitled to fees as the prevailing
party in Timlick II. She briefly noted the Civil Discovery Act —
section 2016.010 et seq. — authorizes “the award of attorney fees on any
successful motion to compel,” and she asserted that when a statute
authorizes “ ‘recovery of attorney fees incurred at trial,’ ” it also includes
“ ‘attorney fees incurred on appeal unless the statute specifically provides
otherwise.’ ”
NES urged the trial court to deny the attorney fee motion. NES argued
Timlick was not entitled to prevailing party attorney fees because the lawsuit
hadn’t been resolved. NES also noted she had failed to identify an
“independent basis” for an attorney fee award, and the court’s previous order
imposing monetary sanctions did not support recovery of fees incurred in the
appeal from that order. Timlick could not — as NES explained — recover
“attorney’s fees as fees.” (Capitalization omitted.) In her reply, Timlick
maintained she was entitled to fees as a prevailing party in Timlick II. And
after making a passing reference to the Civil Discovery Act, she detailed
NES’s “misuse of the discovery process” in the trial court. At a hearing on
the motion, Timlick noted she sought attorney fees “under the discovery
statutes listed in the papers.”
The trial court took the matter under submission, and it then granted
the motion in a lengthy written order. As an initial matter, it concluded the
request for prevailing party attorney fees was premature because no
prevailing party had “been determined by judgment.” Next, the court
2 We augment the record on our own motion to include Timlick’s notice
of motion. (Cal. Rules of Court, rule 8.155(a)(1)(A); all further rule references
are to the California Rules of Court.)
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observed the word “sanctions” was “[n]otably absent” from the “confusing”
motion. Nevertheless, it sua sponte interpreted the motion as seeking
attorney fees incurred in Timlick II “as a discovery sanction.” Given that the
parties had cited no authority holding an unsuccessful appeal arising out of a
discovery dispute constituted a misuse of the discovery process under the
Civil Discovery Act, the court conducted its own research and concluded
NES’s appeal in Timlick II constituted a misuse of the discovery process
under section 2023.010. The court likened the appeal to an “opposition to the
motion to compel” and held NES was subject to “mandatory monetary
sanction[s] under the discovery statutes.” Lastly, the court found NES did
not act with substantial justification, imposition of a discovery sanction
would not be unjust, and a sanction in the amount of $20,950 was reasonable
under section 2023.030.
DISCUSSION
The Civil Discovery Act authorizes a trial court to impose monetary
sanctions for misuse of the discovery process. (Deck v. Developers Investment
Co., Inc. (2023) 89 Cal.App.5th 808, 829.) Unsuccessfully opposing a motion
to compel without substantial justification is a misuse of the discovery
process. (§ 2023.010, subd. (h).) “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.”
(§ 2023.030, subd. (a).) A court must “impose a monetary sanction against
‘any party, person, or attorney’ who unsuccessfully opposes a motion to
compel a further response to interrogatories, a motion to compel a further
response to an inspection demand, a motion to compel compliance with an
inspection demand, or a motion to compel further response to requests for
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admissions ‘unless [the court] finds that the one subject to the sanction acted
with substantial justification or that other circumstances make the
imposition of the sanction unjust.’ ” (Deck, at p. 829.)
A trial court, however, may impose a sanction for misuse of the
discovery process only “after notice to any affected party, person, or attorney,
and after opportunity for hearing.” (§ 2023.030.) The notice of motion must
“identify every person, party, and attorney against whom the sanction is
sought, and specify the type of sanction sought.” (§ 2023.040.) It is a “basic
rule of law and motion” that the notice of motion must “ ‘state in the opening
paragraph the nature of the order being sought and the grounds for issuance
of the order.’ ” (Sole Energy Co. v. Hodges (2005) 128 Cal.App.4th 199, 207;
see also rule 3.1110(a).)
“At its core, due process entitles a person to notice and the opportunity
to be heard before a neutral decision maker. . . . ‘ “Adequate notice prior to
imposition of sanctions is mandated not only by statute, but also by the due
process clauses of both the state and federal Constitutions.” ’ ” (Kwan
Software Engineering, Inc. v. Hennings (2020) 58 Cal.App.5th 57, 82.) “When
sanctions are at issue, due process can be satisfied if the court gives a clear
warning identifying the anticipated grounds for the sanctions or if those
grounds are identified by the opposing party, and the court provides counsel
with an opportunity to respond at least orally.” (Shenefield v. Shenefield
(2022) 75 Cal.App.5th 619, 631–632.) The adequacy of notice is “determined
on a case-by-case basis to satisfy basic due process requirements. The act or
circumstances giving rise to the imposition of [sanctions] must be considered
together with the potential dollar amount.” (Lesser v. Huntington Harbor
Corp. (1985) 173 Cal.App.3d 922, 932.) “We review procedural due process
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claims de novo because ‘ “ ‘the ultimate determination of procedural fairness
amounts to a question of law.’ ” ’ ” (Kwan, at p. 82.)
Based on our independent review of the record, we agree with NES that
it did not receive adequate notice or an opportunity to be heard before the
trial court awarded attorney fees on appeal as a “discovery sanction”
pursuant to sections 2023.010 and 2023.030.
Timlick’s notice of motion did not identify the party against whom the
discovery sanction was sought, indicate that the motion sought attorney fees
as a discovery sanction, or identify the code sections under which the motion
was brought. True, Timlick made a passing reference to the Civil Discovery
Act in her memorandum of points and authorities, and she stated in her reply
that she was “[g]enerally . . . entitled to a monetary sanction” against one
who engaged in the misuse of the discovery process. But in context, this
latter phrase seems most likely directed to NES’s conduct in the trial court,
not this one. Moreover, the word “sanction” is conspicuously absent from the
notice of motion and the memorandum of points and authorities. And at the
hearing, the court referred to Timlick’s motion as seeking “attorneys fees on
appeal.” When offered an opportunity to present argument, Timlick rested
on her moving papers and made only a fleeting reference to the availability of
attorney fees “under the discovery statutes listed in the papers.” For its part,
NES focused on whether Timlick was a prevailing party. Considering the
sizable sum of attorney fees at issue, neither Timlick’s briefing nor the
hearing provided NES with adequate notice or an opportunity to respond to
the imposition of sanctions under this novel theory.
The trial court’s sua sponte imposition of attorney fees — for fees
Timlick incurred defending an appeal arising out of a discovery dispute — as
a “discovery sanction” violated NES’s right to procedural due process.
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(See Sole Energy Co. v. Hodges, supra, 128 Cal.App.4th at pp. 207–209 [notice
of motion for terminating sanctions was insufficient where notice given was
for monetary and other unspecified sanctions]; Lesser v. Huntington Harbor
Corp., supra, 173 Cal.App.3d at pp. 933–935 [reversing award of sanctions
imposed pursuant to § 128.5 where party had insufficient notice and no
“opportunity to fully present [its] case at [a] hearing”]; Barrientos v. City of
Los Angeles (1994) 30 Cal.App.4th 63, 70–71 [reversing sanctions order
imposed on counsel for failing to reach settlement where trial court neither
“adequately conveyed . . . intent to impose sanctions [n]or granted counsel the
opportunity to respond”].) Timlick offers no argument to the contrary. We
elect to treat her failure to respond to NES’s due process argument as a
concession the contention has merit. (Rudick v. State Bd. of Optometry (2019)
41 Cal.App.5th 77, 89–90.)
Having reached this conclusion, we need not address NES’s assertion
that prosecuting an unsuccessful appeal arising out of a discovery dispute
does not constitute a misuse of the discovery process under the Civil
Discovery Act. And we express no opinion regarding Timlick’s entitlement to
attorney fees pursuant to a properly noticed motion.
DISPOSITION
The order is reversed. NES is entitled to costs on appeal. (Rule
8.278(a)(2).)
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_________________________
Rodríguez, J.
WE CONCUR:
_________________________
Tucher, P. J.
_________________________
Fujisaki, J.
A165127
Timlick v. National Enterprise Systems, Inc.
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