Leeyer v. Pro Circuit Products CA4/1

• Court: California Court of Appeal
• Decided: March 19, 2013
• Docket: D059660
• Status: Unpublished

Opinion

Filed 3/19/13 Leeyer v. Pro Circuit Products CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

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

3 (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

6 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.

7 "(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." 9 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, 10 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."

11 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. 12 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.