Gottlieb v. Gottlieb CA2/1 ( 2024 )

Filed 1/25/24 Gottlieb v. Gottlieb CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION ONE
LAURA GOTTLIEB, Individually, B318443
and as Guardian, etc., (Los Angeles County
Super. Ct. No. 20STCV46738)
Plaintiff and Appellant,
ORDER MODIFYING MAJORITY
v. OPINION (CHANGE IN
JUDGMENT) AND DENYING
RICHARD J. GOTTLIEB, as RESPONDENT’S PETITION
Trustee, etc., FOR REHEARING; AND ORDER
MODIFYING DISSENTING
Defendant and Respondent. OPINION
The majority opinion in the above-entitled matter filed on
December 29, 2023 is modified as follows:
1. On page 16, the entire sentence beginning with “At
an evidentiary hearing, Laura could have further
explored” is deleted and replaced with the following
sentence:
At an evidentiary hearing, Laura could have further
explored the declarants’ general description of the
materials through cross-examination, or even requested
that the court assist in analyzing the issue of whether
the materials contained attorney-client privileged content
and whether any privileged materials were germane to
Laura’s claim, to the extent permitted by applicable law.
2. On page 20, the disposition is deleted and replaced
with the following:
DISPOSITION
The trial court’s order granting Richard’s motion for
terminating sanctions is reversed. Upon remand, if a
ruling on the motion for terminating sanctions is still
necessary to resolve the action, the trial court shall hold an
evidentiary hearing on Richard’s motion for terminating
sanctions, and conduct any further proceedings that it
deems necessary and proper.
The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED.
_______________________________
These modifications constitute a change in the judgment.
Respondent’s petition for rehearing filed on January 10,
2024 is denied.
____________________________________________________________
ROTHSCHILD, P. J. WEINGART, J.
2
The dissenting opinion filed on December 29, 2023 is
modified as follows:
On page 2, the first two sentences of the first full
paragraph, beginning “As to the issue” are deleted and the
following two sentences are inserted in its place:
As to the issue of whether the materials Laura took
contained attorney-client privileged information, the majority
holds that an evidentiary hearing was required so Laura could
“explore” the general descriptions submitted of those materials or
could ask the court to help analyze whether the materials were
privileged and, if so, whether they were germane to Laura’s
claim. Laura did not need an evidentiary hearing to request the
court’s aid—such a request could have been made in writing, or
orally by Laura’s counsel at the hearing.
I would grant respondent’s petition for rehearing filed on
January 10, 2024.
___________________________
CHANEY, J.
Filed 12/29/23 Gottlieb v. Gottlieb CA2/1 (unmodified opinion)
NOT TO BE PUBLISHED IN THE 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
SECOND APPELLATE DISTRICT
DIVISION ONE
LAURA GOTTLIEB, Individually, B318443
and as Guardian, etc.,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. 20STCV46738)
v.
RICHARD J. GOTTLIEB, as
Trustee, etc.,
Defendant and Respondent.
APPEAL from an order of the Superior Court of
Los Angeles County, Jonathan L. Rosenbloom, Judge.
Reversed with directions.
Oldman, Sallus & Gold, Mary-Felicia Apanius and
Marshal A. Oldman for Plaintiff and Appellant.
Sacks, Glazier, Franklin & Lodise, Robert N. Sacks
and John A. Scheerer for Defendant and Respondent.
Appellant Laura Gottlieb initiated two lawsuits against
her brother, respondent Richard Gottlieb, concerning their father
Daniel Gottlieb’s trust: a civil case (resulting in the instant
appeal) and a petition in probate court.1 The court found the
two cases were related and based on the same factual allegations.
Richard filed motions seeking terminating sanctions
in both cases. The motions were identical in substance, both
claiming that the case could not continue because, before Laura
filed the complaint and petition, she had improperly removed
attorney-client privileged files from Daniel’s office. At a
consolidated hearing on both motions, the court denied Laura’s
request for a full evidentiary hearing and granted both of
Richard’s sanctions motions.
Laura appealed the sanctions order in the instant civil
case, but not the corresponding order in the probate case. On
appeal, Laura argues the court reversibly erred by granting
the motion for terminating sanctions, both because the court
improperly refused to hold a full evidentiary hearing on it,
and because terminating sanctions were too harsh a penalty.
Richard disagrees and also argues the unappealed order
imposing terminating sanctions in the probate case collaterally
estops Laura from challenging the sanctions ruling in the instant
case.
We conclude that the parties did not “actually litigate”
the findings necessarily underlying the court’s sanctions order
in the probate case, as they must have done in order for these
findings to have collateral estoppel effect in the instant case.
1 Because several individuals relevant to the instant
appeal share the surname Gottlieb, we refer to them by their
first names. No disrespect is thereby intended.
2
(DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 825
(DKN Holdings).) We therefore reach the merits of Laura’s
appeal and conclude the court abused its discretion in denying
Laura an evidentiary hearing to resolve material factual
disputes. Accordingly, we reverse the order imposing
terminating sanctions, remand with instructions that the trial
court hold an evidentiary hearing on the motion for sanctions
in the instant civil case, and need not reach Laura’s remaining
arguments on appeal.
FACTUAL AND PROCEDURAL BACKGROUND
A. Laura’s Lawsuits Against Richard
1. The Instant Civil Case
On December 7, 2020, Laura filed a verified complaint on
behalf of herself and Daniel2 against Richard (as an individual,
as the trustee to Daniel’s trust, and as the trustee to Richard’s
own trust) and others (the civil case). Laura alleged that Richard
had taken advantage of Daniel’s failing health to install himself
as sole trustee of Daniel’s trust, and then administered the
trust to benefit himself personally at the expense of the other
beneficiaries, including Laura. Laura alleged Richard engaged
in numerous types of misconduct, including “exert[ing] undue
influence over a third party to forge [Laura’s] signature on
pertinent documents.”
2 Based on the current record, Laura is not the guardian
ad litem for her father, although she did serve in this capacity
from approximately December 2020 through April 2021. In June
2021, the court appointed an independent, third-party guardian
ad litem.
3
The defendants demurred to the complaint, and the court
sustained the demurrer without leave to amend as to Richard in
his capacity as the trustee of Daniel’s trust only, but with leave
to amend as to Richard in his personal capacity and all other
defendants.3
2. The Trust Case
A day after filing her civil complaint against Richard,
Laura filed a verified petition in probate court to: (1) suspend
and remove Richard as trustee, (2) recover trust assets,
(3) compel redress of breaches of trust, (4) appoint an
independent trustee, and (5) recover attorney fees and costs
(the trust case).
The court deemed the cases related, finding “[t]he same
operative facts are alleged in both cases,” that “both cases clearly
‘arise from the same’ series of specific events” and that both cases
would “ ‘requir[e] the determination of the same or substantially
identical questions of . . . fact.’ ”4
3 The record on appeal does not appear to contain the
amended complaint that, based on the parties’ representations
in their appellate briefing, Laura presumably filed following this
demurrer ruling.
4 The court sustained Richard’s demurrer to an amended
petition in the trust case without leave to amend and denied
the amended complaint with prejudice. An order to this effect
was filed on November 29, 2021. It is unclear from the record
on appeal what aspects of the trust case the parties were still
litigating after that point, although the court’s order did indicate
that it would hold a hearing related to expunging certain lis
pendens that Laura later removed voluntarily.
4
B. Richard’s Motions for Terminating Sanctions
1. Motions and Supporting Declarations
In July 2021, Richard filed two substantively identical
motions for terminating sanctions, one in the civil case and one
in the trust case. Richard alleged that, prior to filing the civil
case, Laura broke into Daniel’s office and “stole at least four
computer hard drives, one large file cabinet and numerous
other files, all containing private and confidential information,
including attorney-client privileged materials relating to the
exact issues in this case.” (Boldface omitted.) Richard argued
that this constituted “substantial litigation misconduct” that
nothing short of terminating sanctions could address, because
there was no way to purge Laura’s mind of the privileged
information she had learned by taking the materials.
Richard supported the motions with his own declaration,
as well as the declarations of David Hamer (controller and chief
financial officer of one of Daniel’s companies), Jolene Kearns
(Daniel’s personal assistant and bookkeeper), and Kenneth Wolf
(Daniel’s estate-planning attorney).
Richard’s declaration states that he has reviewed
“portions, but not all, of the documents contained on the
hard drives Laura stole from the office” and found “numerous
documents pertaining to [Daniel’s] private financial affairs,
confidential communications with numerous others, and a host
of communications [with] either Daniel or [Richard], or [both]
of [them] together, had with various lawyers we had retained
to provide legal advice regarding [Daniel’s] trust, various . . .
companies we have established, and concerning Laura.”
(Capitalization omitted.) Richard further declared that he
had “found numerous communications on the computers with
5
[Daniel’s] long-time estate planning attorney and my attorney,
Kenneth Wolf,” and that he “uncovered several otherwise
privileged communications with . . . Wolf pertaining to the exact
issues in this litigation,” including: (1) [Richard’s] appoint[ment]
as trustee and manager for various entities related to the trust;
(2) [Richard’s] manag[ement] [of] entities related to the trust,
including entities named as defendants in [the complaint];
(3) [Trust instruments, and related documents, including ones
concerning] Laura’s rights under the trust; (4) Laura’s role
in various entities related to the trust; (5) [M]onthly ongoing
expenses of the trust and various related entities; (6) [A]ssets
held by the trust, including assets discussed in the complaint;
(7) Engaging current litigation counsel; (8) [Daniel’s] health;
(9) [Daniel’s] and the trust’s finances; and (10) [A]ctions [Richard
has] taken on [Daniel’s] behalf.” (Capitalization omitted.)
Richard further declared that he had also found on the hard
drives emails with another attorney discussing “corporate issues
regarding . . . entities related to the trust,” “gift and estate issues
between [Daniel] and [Richard],” and “[Daniel’s] asset and debt
issues, including related tax issues.” (Capitalization omitted.)
Attorney Wolf declared that “[d]uring the course of [his]
attorney/client relationship with [Daniel], there have been many
emails between us that contain privileged information concerning
discussions regarding family members and [Daniel’s] estate
plan,” that he “believe[s] there have been email exchanges
between [Daniel] and [Wolf] that review and summarize various
encounters between [Daniel] and Laura,” and that “[t]hese
emails would be retained on [Daniel’s] computer, and possibly
on [Kearns’s] computer.” The Wolf declaration also includes a list
of topics Wolf believes the email exchanges that he has had with
6
Daniel and Richard over the years have addressed, including,
for example, Laura’s role in various entities in the trust.
The Hamer and Kearns declarations spoke generally to
the contents of the computer hard drives and files at issue in
a manner consistent with Richard’s declaration and the Wolf
declaration.
2. Notice of Non-Opposition and Supporting
Declarations
On July 29, 2021, Richard filed a notice of non-opposition
to his own motions relaying additional events that had taken
place since the filing of those motions. An additional Kearns
declaration filed in support of the notice described how, two
days after Richard filed and served the motions for terminating
sanctions, Kearns arrived at Daniel’s office to find that Laura
had entered the office without permission and taken 25 boxes
of files belonging to Daniel. Kearns further declared that she
physically wrestled another box of files from Laura’s hands
that Laura was attempting to take after being asked to leave
the office. In the notice of non-opposition, Richard argued
that these events further supported the relief he sought in his
sanctions motions.
C. Laura’s Opposition
In her opposition,5 Laura argued that terminating
sanctions would be unjustified because her actions did not
5 Although the record is unclear, Laura appears to
have filed a written opposition only in the trust case. Still, she
opposed the motions for sanctions in both cases in her argument
to the court at the consolidated hearing and explained then
that her written opposition was intended to be directed at both.
7
constitute extreme litigation misconduct, and because Richard
had failed to establish the files she took pertain to any causes of
action still viable after Richard’s demurrers.
Laura filed her own declaration as the sole support for
her opposition.6 In it, she declared that she had entered Daniel’s
office in December 2020 “using a key that [she] had been given
by [her] father long ago,” taken “a file cabinet which contained
documents that [she] believed might be important and relevant
to [her] case and [four] computer hard drives,” and placed them
in storage. She declared that she had done so because she had
feared Richard would destroy the files once he learned she was
suing him, and because her attorneys had advised her that, as
a family member, she had a right to possess trust records, and
could therefore take the files in order to assure they would not
be tampered with. According to her declaration, Laura had
“on several occasions informed [Kearns] and [Daniel’s] wife,
Susan . . . that [Laura] would be taking files from the office in
Moreover, the court indicated it considered Laura’s opposition in
deciding both motions. We thus treat the opposition in the record
as applicable to both motions.
6 Laura’s opposition references a declaration from Laura,
which was not included in her request for judicial notice or
the appendix she submitted on appeal. Included in Richard’s
appendix on appeal is a declaration from Laura “in support of
[the] opposition to [the] motion for order imposing terminating
sanctions.” (Boldface and capitalization omitted.) This
declaration contains no file stamp, and the case number thereon
is for the civil case, not the trust case. However, the proof of
service claims it was served on the same date the opposition
filed in the trust case was filed and served. The contents of the
declaration support the assertions made in Laura’s opposition.
8
order to preserve the information contained therein,” and had
advised Kearns “to take a copy of the files on her hard drive home
as [Laura] was going to take the computers.” (Capitalization
omitted.) Laura also claimed she had informed Kearns she would
be placing the files in a storage facility and offered Kearns the
key, but Kearns had declined. “Although [Kearns] knew [Laura]
was going to take the files and computers, [Laura] [did] not
believe that [Kearns] [had] disclosed this to Richard as [Kearns]
is extremely intimidated by and afraid of Richard and would
do nothing that would jeopardize her employment or the other
benefits she receives from Richard,” or her role as a beneficiary
of the trust he was administering. Laura declared that “[i]n
mid-January 2021, when [she] felt the files would be safe from
destruction, . . . [she] returned the file cabinet and the computers
completely intact.”
As to the second incident Richard described in his notice
of non-opposition, Laura further declared that in July 2021
she had been “informed that Richard had removed boxes of
documents from the storage area at [Daniel’s] office and had
put them out to be picked up for shredding. Concerned that
these boxes may contain documents that were important to [her]
case, [she] [had] decided to take them and put them in storage.”
Laura’s declaration describes Laura calling Daniel’s wife, Susan,
and “[telling Susan she] was going to take the boxes,” to which
Susan responded by confirming they were to be shredded,
discussing “how afraid [Kearns] was of Richard, [and] that
[Kearns] was stuck in the middle between Richard and [Laura],”
and “[telling Laura] to go ahead and take the boxes and [Susan]
would look back into what was going on.” Laura declared that
she had gone to Daniel’s office the next day, found it unlocked,
9
and removed the 25 boxes of files. “Several days after [Laura]
removed the boxes, Susan called [Laura] to tell [Laura] that
Richard’s lawyer had advised him that shredding documents
at this time made him look bad, therefore [Laura] did not need
to worry about Richard destroying any more documents.” Laura
therefore returned the boxes “intact.” Laura declared that she
had neither looked at, nor made any copies of, any documents
or files that she took from Daniel’s office on either occasion.
D. Richard’s Reply
Richard filed a reply to the opposition, as well as a Kearns
declaration in support of the reply. This Kearns declaration
states that, while Laura had spoken with Kearns about getting
access to the documents “for years,” she never acted on it, and
Kearns had no reason to believe she ever would. Kearns declared
she had called the police to report the theft of the files and
computer hard drives and “would not have done so if [she] had
known that Laura was coming to take documents and computers
and had agreed [Laura] could take them.”
E. Laura’s Unsuccessful Request for an
Evidentiary Hearing
Laura timely requested an evidentiary hearing on both
motions for terminating sanctions.7 (See Cal. Rules of Court,
rule 3.1306(b).) She identified specific witnesses, the live
testimony of which she argued was necessary to allow the court
to fairly resolve key factual disputes created by the declarations
7 On the court’s own motion, we hereby take judicial notice
of the request for an evidentiary hearing Laura filed in the trust
case.
10
in the record. These issues included, for example, whether
Laura had “[broke] into her father’s office and who is entitled to
possession of the documents in question.” Three of the witnesses
she identified had submitted declarations to support Richard’s
motions. She argued that requiring these declarants to
testify live would “allow [her] to demonstrate . . . that [their
declarations] . . . were carefully crafted and contrived and are
the result of manipulation by [Richard]” and “contain facts that
are colored by [Richard’s] unmitigated power over [them] as he
is their employer and holder of the purse strings.” She argued
that the court could only assess these declarants’ credibility
in light of these issues through live testimony and cross-
examination.
Laura’s request also identified three potential witnesses
from whom Laura represented she had not been able to obtain
declarations: Susan (Daniel’s wife), Elizabeth Gottlieb (Laura’s
daughter), and Daniel’s accountant, Alec Cast. Laura argued
that Susan and Elizabeth could offer testimony relevant to
“discussions [Susan and Elizabeth] had with [Laura] regarding
the documents in question, [Susan and Elizabeth’s] consent and
agreement as to the need to preserve documents, and to [Laura’s]
right to possession of these documents.” She described Cast as
able to offer testimony relevant to “unethical, manipulative and
coercive behavior[s] by [Richard],” which she argued was relevant
both to the credibility of Richard’s declarants’ testimony, and
to establish the basis for her fearing Richard would destroy the
documents.
11
F. Hearing and Ruling on Motions for
Terminating Sanctions
At a consolidated hearing on the two sanctions motions
on November 1, 2021, the court denied Laura’s request for an
evidentiary hearing. The court then heard arguments on, and
ultimately granted, the motion for terminating sanctions in
both the civil case and the trust case. The court asked counsel
to prepare “a findings and order,” to which counsel responded he
would do so “in both cases” and prepared two identical proposed
orders. The court signed the order in the trust case in November
2021, and the identical order in the civil case in December 2021.
Both orders contain findings that Laura “improperly obtained
confidential and attorney-client privileged documents that belong
to Richard . . . and/or Daniel . . . by removing [four] computer
hard drives and numerous paper files from [Daniel’s] office (the
‘documents’) on two separate occasions . . . . The documents
include attorney-client privileged communications that are
central to the issues in this litigation . . . . The court further
finds that no lesser sanction would be appropriate because
Laura’s improper knowledge cannot be purged and the litigation
thus cannot go forward given Laura’s improper actions which
have irrevocabl[y] tainted these proceedings. Accordingly, this
litigation must be dismissed with prejudice as a terminating
sanction.” (Capitalization omitted.)
Laura timely appealed the order granting terminating
sanctions in the civil case. She did not appeal the order granting
terminating sanctions in the trust case.
12
DISCUSSION
Laura argues the trial court abused its discretion by
imposing terminating sanctions in the civil case, both because it
did so without an evidentiary hearing, and because terminating
sanctions were too harsh on the facts presented. Richard
disagrees and further contends that Laura’s appeal is moot.
We conclude Laura’s appeal is not moot, and agree with her
that the court abused its discretion in denying her request
for an evidentiary hearing. We thus reverse and remand for
the court to conduct such a hearing and need not reach the
other issue Laura raises on appeal.
A. Issue Preclusion Does Not Render Laura’s
Appeal Moot
Richard argues the doctrine of issue preclusion bars Laura
from “relitigating” in the civil case the findings with which the
court justified the imposition of terminating sanctions in the
trust case. Because Laura is precluded from contesting these
findings, Richard argues, she cannot prevail on the motion for
sanctions in the civil case, and we cannot grant her effective
relief in her appeal from the civil case sanctions order, rendering
that appeal moot. The findings underlying the trust case
sanctions order that Richard contends have issue preclusive
effect are: (1) that Laura “improperly obtained” the hard drives
and documents at issue (that is, that she did not have authority
to take them), (2) that these materials “include attorney-client
privileged communications that are central to the issues in
[the civil case],” and (3) that Laura thereby obtained “improper
knowledge [that] cannot be purged.”
We disagree that the doctrine of issue preclusion applies
to these findings in the trust case. Issue preclusion “prevents
13
relitigation of previously decided issues.” (DKN Holdings, supra,61 Cal.4th at p. 824.) “[I]ssue preclusion applies (1) after final
adjudication (2) of an identical issue (3) actually litigated and
necessarily decided in the first suit and (4) asserted against
one who was a party in the first suit or one in privity with that
party.” (Id. at p. 825.) There can be no dispute that the first
two requirements are satisfied here: The sanctions order in the
trust case has become final, and the court made the exact same
findings in the two orders, so they address the same issues. The
key question for our purposes is whether these issues have been
“actually litigated.” (Ibid.)
In order for an issue to have been “actually litigated,”
the parties must have had a meaningful opportunity to present
evidence on the issue. (See Murphy v. Murphy (2008) 164
Cal.App.4th 376, 404 (Murphy) [“where, as here, the party to be
estopped was a party who participated in the earlier proceeding,
due process requires that this party . . . [citation] . . . must have
had a fair opportunity to pursue his claim the first time”]; accord,
Wright v. Ripley (1998) 65 Cal.App.4th 1189, 1193 [“collateral
estoppel should not be applied if there was no opportunity for a
full presentation of the issue in the first proceeding”]; Barker v.
Hull (1987) 191 Cal.App.3d 221, 226 (Barker) [discussed below].)
This does not require the party seeking estoppel to “establish
that any particular type of evidence, such as oral testimony,
was presented” or permitted, but rather that the opportunity to
present evidence was not unreasonably restricted. (See Barker,
supra, at p. 226.)8 Thus, “[a] mere showing that affidavits were
8 The holding of Barker—if taken literally—goes one step
beyond this proposition, holding that when a party’s opportunity
to present evidence on an issue in a prior proceeding is restricted
14
submitted may not be sufficient to carry the burden of proving
that the issue was actually litigated” (Barker, supra, at p. 226),
depending on the restrictions placed on the party’s ability to
present evidence and the overall circumstances of the proceedings
below.
Here, the court’s refusal to hold an evidentiary hearing in
the trust case improperly and unreasonably restricted Laura’s
ability to present evidence on the issues Richard argues she
is estopped from litigating including her authority to take the
materials, whether she believed she had permission to remove
the materials, whether the materials contained privileged
information relevant to the litigation, how important the
privileged communications were to the cases, and whether
Laura read the materials with such content. The declarations
presented to the court contained conflicting accounts of whether
Kearns and/or Susan had given Laura permission to remove the
documents from the premises. In her request for an evidentiary
hearing and supporting declaration, Laura explained her theory
that Kearns was either afraid of or financially beholden to
Richard, and that this motivated Kearns’s account of events
in her declaration. Such bias could only be explored through
cross-examination of Kearns at a hearing and/or through live
testimony from Susan, from whom Laura claims she was unable
to obtain a declaration. Laura had thus identified a specific
way in which live testimony, as opposed to declarations, was
at all, collateral estoppel will not apply. (See Barker, supra, 191
Cal.App.3d at p. 226 [“the party urging the estoppel must prove
that the issue was actually litigated and that evidence was not
restricted,” italics omitted].) Such an expansive proposition,
however, is not necessary to support our decision.
15
necessary in order to resolve a key factual dispute bearing on her
authority to take the materials at issue. Particularly given the
extreme nature of the relief sought, we see no reasonable basis in
the record for the court to deny her this opportunity.
As to the second issue Richard argues Laura is precluded
from litigating, to establish that the materials Laura took
included attorney-client privileged information relevant to
the litigation, Richard offered declarations generally describing
the types of documents contained in and the general topics
addressed in the materials Laura took. Laura could not
meaningfully contradict these declarations without the
evidentiary hearing she requested. She claimed to have never
reviewed the materials, so she could not offer a declaration
contradicting Richard’s declarants on this issue. The materials
were no longer in her possession, nor would she have a right
to review them to the extent they are indeed privileged. At
an evidentiary hearing, Laura could have further explored the
declarants’ general description of the materials through cross-
examination, or even requested that the court review portions
of the materials in connection with resolving this factual dispute
or order a reference for such examination. By denying her a
path to meaningfully contradicting the general and anecdotal
declarations Richard offered to establish the contents of the
materials at issue, the court improperly restricted Laura’s
ability to present evidence on the nature of those materials.
The parties thus did not “actually litigate” the first two
findings that form the basis for the court’s sanctions order in
the trust case. It follows that the sanctions order in the trust
case cannot estop Laura from arguing that the court should
have made different findings in assessing the same issues in
16
the civil case. And the third finding underlying the trust case
sanctions order relies on the prior two—that is, Laura cannot
have obtained improper knowledge relevant to the litigation
if she did not improperly take materials containing privileged
information relevant to the litigation. Thus, this third finding
was also not on an issue “actually litigated,” and none of the
court’s findings underlying the trust case sanctions order
preclude contrary findings in the civil case.
Finally, not only is a requirement for issue preclusion to
apply lacking, the “application of collateral estoppel will [not]
advance the public policies which underlie the doctrine”—namely,
“ ‘ “ ‘ “(1) to promote judicial economy by minimizing repetitive
litigation; (2) to prevent inconsistent judgments which undermine
the integrity of the judicial system; and (3) to provide repose
by preventing a person from being harassed by vexatious
litigation.” ’ [Citations.]” [Citation.]’ ” (Murphy, supra, 164
Cal.App.4th at p. 404.) The fact that the two rulings at issue
here were decided as one at a singular hearing and discussed
as one lessens the applicability of the first and third of these
policies. There is a risk of an apparent inconsistency between
rulings if, depending on the outcome of the instant appeal and
proceedings on remand, the court denies the sanctions motion in
the civil case even though the court granted a motion on the exact
same basis in the trust case. But through the actually litigated
requirement, the doctrine of issue preclusion permits inconsistent
rulings to the extent that the earlier of the two inconsistent
rulings was not actually litigated. That is the case here.
Accordingly, issue preclusion does not apply and we
conclude that Laura’s appeal is not moot.
17
B. Denial of Evidentiary Hearing
Turning to the merits of Laura’s appeal, Laura argues the
court reversibly erred by denying her request for an evidentiary
hearing on Richard’s motion for sanctions in the civil case.
Evidence “received at a law and motion hearing must be by
declaration or request for judicial notice without testimony or
cross-examination, unless the court orders otherwise for good
cause shown.” (See California Rules of Court, rule 3.1306(a).)
Therefore, to support her request for an evidentiary hearing,
Laura needed to identify good cause. We review the court’s
determination that Laura failed to make such a showing for an
abuse of discretion. (See California School Employees Assn. v.
Del Norte County Unified Sch. Dist. (1992) 2 Cal.App.4th 1396,
1405.) Richard correctly points out that a trial court enjoys
“broad discretion” to resolve an issue “on the basis of declarations
and other documents[,] rather than live, oral testimony,” and that
under the applicable rule, this is indeed the default procedure.
(Ibid.) Nevertheless, “[i]n exercising its discretion to either allow
or exclude oral testimony, . . . the trial court should be guided by
the constitutional principle that ‘[d]ue process guarantees “ ‘ . . .
[an] opportunity for hearing appropriate to the nature of the
case.’ ” [Citation.]’ ” (In re Marriage of Nadkarni (2009) 173
Cal.App.4th 1483, 1500.)
Here, the court did not limit or exclude testimony from
certain witnesses that was not material to the terminating
sanctions issued—it denied Laura any evidentiary hearing
whatsoever. Above, we explained our conclusion that the court’s
denial of an evidentiary hearing in the trust case improperly
restricted Laura’s ability to present evidence on the sanctions
motion in that case. For these same reasons, we conclude that by
18
denying Laura an evidentiary hearing on the sanctions motion in
the civil case, the court also denied her an adequate opportunity
to present evidence meaningfully opposing the motion, and thus
acted outside the scope of its admittedly broad discretion. (See
Bettencourt v. Los Rios Community College Dist. (1986) 42 Cal.3d
270, 275 [a trial court’s discretion must “ ‘ “be exercised in
conformity with the spirit of the law and in a manner to subserve
and not to impede or defeat the ends of substantial justice” ’ ”];
cf. California School Employees Assn., supra, at p. 1405 [finding
denial of evidentiary hearing not an abuse of discretion where
“[t]he facts were adequately presented by the declarations and
documents proffered by the parties”].)
This abuse of discretion also prevented Laura from
meaningfully challenging the evidence Richard offered to support
findings necessary to the court’s order imposing terminating
sanctions. Accordingly, the court’s order granting the sanctions
motion reflects an abuse of discretion as well.
19
DISPOSITION
The trial court’s order granting Richard’s motion for
terminating sanctions is reversed. Upon remand, the trial
court shall hold an evidentiary hearing on Richard’s motion
for terminating sanctions, and conduct any further proceedings
thereafter that it deems necessary and proper.
The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, P. J.
I concur:
WEINGART, J.
20
CHANEY, J., Dissenting.
I agree that “issue preclusion applies (1) after final
adjudication (2) of an identical issue (3) actually litigated and
necessarily decided in the first suit and (4) asserted against one
who was a party in the first suit or one in privity with that
party,” and that an issue is “actually litigated” if the opportunity
to present evidence was not unreasonably restricted. (DKN
Holdings, supra, 61 Cal.4th at p. 825; Murphy, supra, 164
Cal.App.4th at p. 404; Barker, supra, 191 Cal.App.3d at p. 226.) I
disagree that the trial court’s refusal to grant Laura’s eleventh-
hour request for an evidentiary hearing was an abuse of
discretion or unreasonably restricted her opportunity to present
evidence. I would therefore find that issue preclusion applies and
affirm the trial court.
Preliminarily, I note that Laura did not appeal the court’s
denial of her evidentiary hearing request in the trust case,
resulting in a final adjudication that the court did not err in
denying that request. I find that this final adjudication precludes
us from finding otherwise in this appeal.
Even were we permitted to consider the issue, the majority
states that the denial of Laura’s request prevented her from (1)
presenting evidence on whether Kearns and/or Susan had given
Laura permission to remove the documents from the premises
and Laura’s theory that Kearns was either afraid of or financially
beholden to Richard; and (2) exploring Richard’s general
descriptions of the materials taken, and concludes that these
issues could have been explored only through cross-examination
and live testimony. But another avenue was open to Laura—in
the more than two months that elapsed between the filing of the
motions and the court’s hearing of them, Laura could have
deposed Kearns, Susan, or any of the other witnesses whose
credibility and/or bias she wished to challenge or from whom she
had trouble securing a declaration. She could then have
submitted transcripts or video excerpts from those depositions
that she believed demonstrated bias or challenged the credibility
of their declarations. Although Laura had several months to
request an evidentiary hearing, she made her request on the last
possible day,1 without explaining why she could not obtain
declarations from the witnesses she wished to call, what efforts
she undertook to obtain such declarations, what other efforts she
expended to secure the allegedly relevant testimony, or,
alternatively, why she could not expend those efforts.2
As to the issue of whether the materials Laura took
contained attorney-client privileged information, the majority
holds that an evidentiary hearing was required so Laura could
“explore” the general descriptions submitted of those materials or
could ask the court to conduct an in camera review. Laura did
not need an evidentiary hearing to request an in camera review—
such a request could have been made in writing, or orally by
1 (Cal. Rules of Court, rule 3.1306(b) [“A party seeking
permission to introduce oral evidence [at a hearing] . . . must file,
no later than three court days before the hearing, a written
statement stating the nature and extent of the evidence proposed
to be introduced and a reasonable time estimate for the
hearing”].)
2 It is not rare for one party to suggest that another party
or witness lied or is biased. If such a charge precluded a trial
court from denying a request for an evidentiary hearing, then
virtually no motions supported by declarations could be resolved
without live testimony. This would place an unwarranted burden
on our already overburdened courts.
2
Laura’s counsel at the hearing. And Laura did not contend in
either her opposition to the motions or her request for an
evidentiary hearing that the descriptions of the materials were
too general, or that she wished to proffer evidence as to their
nature. On the issue of privilege, she argued only that the
material she took no longer related to the issues that remained in
the case. Moreover, as discussed above, if Laura wanted to
“explore” the privileged nature of the material she took, she could
have deposed the individuals whom she believed possessed that
information.
On this record, I find that the trial court acted within its
discretion in denying Laura’s last-minute request for an
evidentiary hearing, and that this denial did not improperly
deprive her of a meaningful opportunity to present evidence. I
therefore respectfully dissent.
CHANEY, J.
3