Opinion
A125955
March 26, 2010, Filed
In this case we hold that the lower court's imposition of evidentiary and issue sanctions--effectively precluding petitioner from presenting a significant portion of its case--is disproportionate to the deficiencies in petitioner's discovery responses. For the reasons stated below, we direct the trial court to vacate that portion of the challenged order issuing evidentiary and issue sanctions.
FACTUAL AND PROCEDURAL BACKGROUND
Petitioner Hung on Tong Society (HOTS) is a nonprofit corporation whose purpose is to assist Chinese immigrants and their descendants living in the San Francisco Bay Area. HOTS sued real party in interest Dick W. Wong, an architect whom HOTS retained to design and supervise the construction of its San Francisco headquarters. Specifically, the first amended complaint below states causes of action for declaratory relief, professional negligence, negligent negotiation and administration of the construction contract, and breach of fiduciary duty.
On June 17, 2008, Wong served extensive discovery requests on HOTS, including document requests, special and form interrogatories, and requests for admission. After several extensions of time, HOTS initially responded to the discovery requests on August 29, 2008. As a result of the meet and confer process, HOTS voluntarily served amended responses November 3, 2008. Wong remained dissatisfied with some of the responses and brought a motion to compel and for sanctions. After conducting a hearing, the trial court entered an order on March 18, 2009, compelling HOTS to provide specified further responses by April 23, 2009. It also awarded Wong $ 1,190 in monetary sanctions. HOTS's counsel requested an additional extension of time, which Wong declined to grant. On April 23, 2009, HOTS applied ex parte for an extension of time to respond to the discovery, and the court denied the application.
Despite the court's denial of HOTS's request for an extension of time, HOTS failed to amend its responses by the April 28 deadline, and on or about May 15, 2009, Wong moved for evidentiary, issue, and monetary sanctions. Wong sought to prohibit HOTS from introducing evidence of Wong's purported breaches of alleged fiduciary duty, negligence and misrepresentation in his dealings with HOTS. The motion also sought an order establishing as true numerous facts relating to Wong's role and responsibilities in the design and construction of the HOTS San Francisco headquarters. Wong also sought $ 3,460 in monetary sanctions.
The hearing on Wong's motion was set for June 23, 2009. On June 23, at 12:30 a.m.--10 hours before the hearing--HOTS served supplemental responses on Wong via email. Without ruling on the pending motion, the trial court continued the hearing to allow Wong to review the responses. When the hearing reconvened on July 1, 2009, Wong contended that the supplemental responses were still inadequate. During the hearing, the court indicated HOTS's supplemental responses were not "remotely timely" and "provide[d] almost nothing more than" had the previous responses. Indicating it was "prepared to grant sanctions to some extent," the trial court took the matter under submission.
The court's July 2, 2009, order granted Wong's motion in part, providing that HOTS was precluded from introducing certain evidence, and deeming the following to be established: Wong was not retained by plaintiff to supervise construction of the project and did not have control over the acts of general contractor TCI in connection with TCI's construction of the project. The trial court also awarded $ 1,040 in monetary sanctions against HOTS and its attorney.
The evidence included that Wong had: (1) "certified materials as having been used by [general contractor Transworld Construction, Inc. (TCI)] which he knew had not been used"; (2) "certified work as having been performed competently and correctly by TCI which he knew had not been performed competently and correctly"; (3) "recommended that plaintiff sign a contract for construction that he knew did not provide enough money for reductions in scope fro[m] the original bid"; (4) "counseled plaintiff against having any contractor revise any architect's drawings"; (5) "represented that his services included supervision of the work"; (6) created plans and/or specifications contain[ing] errors and/or omissions"; (7) "concealed any problems related to the construction of the project"; (8) "knew of claimed substitutions of items from construction documents"; and (9) "did not ensure that plaintiff receive the proper amount of credit for items deleted from TCI's scope of work . . . ."
On August 31, 2009, HOTS filed its petition for mandate or prohibition in this court, challenging the lower court's imposition of evidentiary and issue sanctions. On September 24, 2009, we requested informal opposition and gave notice, pursuant to Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 177-180 that, we may choose to act by issuing a peremptory writ in the first instance. As explained below, we now determine that the lower court abused its discretion and issue a peremptory writ directing it to vacate its July 2, 2009, order and issue a new order denying the request for evidentiary and issue sanctions.
The monetary sanctions awarded by the court are not contested.
DISCUSSION
I. WRIT REVIEW IS APPROPRIATE
Generally, discovery orders are not reviewable by writ. ( Sav-On Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 5.) Writ review, however, is appropriate when a trial court's order effectively deprives a litigant of the chance to present a substantial portion of its case. ( Brandt v. Superior Court (1985) 37 Cal.3d 813, 816.). Here the trial court's order essentially eliminates major portions of HOTS's case. For example, the first issue sanction alone--establishing that Wong was not retained to supervise construction of the project--effectively dismisses at least the second cause of action (negligent supervision), and much, if not all, of the third and fourth causes of action (breach of fiduciary duty and concealment).
The negligent supervision claim alleges that Wong negligently supervised TCI. The breach of fiduciary duty claim alleges that HOTS relied on Wong "to supervise the work to be done under the construction contract between [HOTS] and [TCI] . . . .The concealment claim alleges that Wong concealed from HOTS "the fact that the work of [TCI] was performed in an improper, incompetent, and unworkmanlike manner, that the credits and price reductions which defendants had obtained from [TCI] for the items which were eliminated from the project were too low and insufficient, and that plaintiff was entitled to further deductive change orders for post-contractual reductions in scope."
Other than an order imposing more than $ 5,000 in monetary sanctions, an order imposing discovery sanctions is not appealable except upon an appeal from a final judgment. (Code of Civ. Proc. § 904.1, subd. (a)(12); Guillemin v. Stein (2002) 104 Cal.App.4th 156, 161.) Where an order is not immediately appealable, the expense of proceeding to trial, which will be subject to ultimate reversal, may justify writ relief. ( Phelan v. Superior Court (1950) 35 Cal.2d 363, 370; City of Glendale v. Superior Court (1993) 18 Cal.App.4th 1768, 1776.) If a second trial were necessary as a result of the trial court's erroneous order, petitioner could suffer irreparable harm. (See Marron v. Superior Court (2003) 108 Cal.App.4th 1049, 1056.) Because the challenged order effectively eliminates a major portion of petitioner's case, a second trial would be necessary if the order is erroneous. Thus, we exercise our discretion to review the lower court's order via the extraordinary writ procedure.
We review orders imposing discovery sanctions under an abuse of discretion standard. ( Britts v. Superior Court (2006) 145 Cal.App.4th 1112, 1123.) Where a court's action is unsupported by any legal justification or reasonable basis, an abuse of discretion occurs. ( Baggett v. Gates (1982) 32 Cal.3d 128, 143; Carlson v. Superior Court (1961) 56 Cal.2d 431, 438.) If a litigant is thereby deprived of the opportunity to litigate his case fully, mandate is appropriate to correct the abuse of discretion. ( Schweiger v. Superior Court (1970) 3 Cal.3d 507, 517-518.)
Courts are authorized to award discovery sanctions for the abuse of the discovery process. (Code Civ. Proc. §§ 2023.010 & 2023.030.) "However, the court's discretion must be exercised in a manner consistent with the basic purposes of such sanctions: to compel disclosure of discoverable information. Discovery sanctions cannot be imposed to punish the offending party or to bestow an unwarranted 'windfall' on the adversary." ( In re Marriage of Economou (1990) 224 Cal.App.3d 1466, 1475.) Sanctions should be designed to remedy discovery abuses, but should not put the moving party in a better position than he would have been had he received the requested discovery. ( Williams v. Russ (2008) 167 Cal.App.4th 1215, 1223.)
A review of the record demonstrates that petitioner abused the discovery process. The discovery at issue was initially served on HOTS June 17, 2008, but final responses had yet to be served by June 23, 2009, more than a year after the discovery requests were made, nearly two months after the deadline set by the court, and mere hours before the hearing on Wong's request for sanctions. To obtain these tardy responses, Wong had to file two motions to compel and oppose one ex parte application for an extension of time. Wong, however, is the defendant in this case and presents no argument as to why the delay was prejudicial to him. By having to engage in motion practice to obtain this discovery, he incurred additional litigation expenses. However, he will presumably be reimbursed for those costs by the monetary sanctions awarded by the court. So, given there was no specific prejudice accruing from the delay and Wong was adequately compensated for the additional costs incurred, we must ascertain what, if any, basis exists for the evidentiary and issue sanctions.
The thrust of Wong's opposition is that the petition omits critical facts, including that HOTS (1) continues to be in violation of the trial court's sanction order, (2) did not serve supplemental discovery responses as it had been ordered to do until 12:30 a.m. on the day of the sanctions hearing, and (3) previously sued the general contractor, TCI, at one point requesting consolidation of the two cases "arguing . . . that the actions involved the same facts and evidence." Having already litigated "the same facts and evidence," HOTS should have been prepared to respond to discovery of such facts and evidence in a timely manner.
Wong also makes an unclean hands argument that because HOTS had not timely paid the monetary sanctions ordered on July 2, it should be precluded from obtaining the relief it seeks here, and its entire case should be dismissed. We disagree.
At times delay can be highly prejudicial. In Sauer v. Superior Court (1987) 195 Cal.App.3d 213, the court of appeal determined that a two-week delay in responding to discovery, coming after the trial date was already set and the trial court had imposed an issue-preclusion sanction, failed to cure the prejudice to the opposing party and also prejudiced other litigants who were seeking time on the court's busy docket. ( Id. at p. 230.) Although he filed both a Preliminary Opposition and an Opposition to the Petition, Wong, presents no facts establishing that the delay prejudiced his defense.
To do so we turn to specific examples of the challenged interrogatory responses. Special Interrogatory No. 2 states: "IDENTIFY all PERSONS with information in support of YOUR contention that WONG certified work as having been performed by TCI which he knew had not been performed, as alleged in P 46 of YOUR First Amended Complaint." HOTS's initial response to this interrogatory was: "This information is known to WONG and to employees of TCI whose identities are presently unknown to HOTS; David Ross, 1160 Industrial Road, Suite 2, San Carlos, California; Peter G. Scott, 1047 Alvarado Road, Berkeley, California." HOTS's supplemental response was: "This information is known to WONG, Diane Hsia of TCI, 1178 Folsom Street, San Francisco, CA 94132, and possibly other employees of TCI whose identities are presently unknown to HOTS; David Ross, 1160 Industrial Road, Suite 2, San Carlos, California; Peter G. Scott, 1047 Alvarado Road, Berkeley, California."Thus, the initial response identified three relevant individuals who allegedly knew the information: Wong, Ross, and Scott. The supplemental response reiterated that information and added Hsia to the list of knowledgeable individuals. To that extent the response was responsive and completely appropriate. The issue with the response arises from the phrase "possibly other employees of TCI whose identities are presently unknown to HOTS." Wong points to the statutory requirement that each answer "be as complete and straightforward as the information reasonably available to the responding party permits," (Code Civ. Proc. § 2030.220, subd. (a).) and to the obligation that if the responding party lacks personal knowledge to respond fully to an interrogatory, that party must so state, but also make a reasonable and good faith effort to obtain the information, unless "the information is equally available to the propounding party." ( Id., subd. (c).) Wong contends that this interrogatory response "directly contravenes the primary goal of the discovery statutes, which is to avoid unfair surprise" and that his ability to conduct further discovery and mount a defense is adversely affected by this evasion.
To support his argument Wong primarily relies on Juarez v. Boy Scouts of America, Inc. (2000) 81 Cal.App.4th 377. In Juarez, Division Two of this court upheld the trial court's exercise of discretion in imposing an evidentiary preclusion sanction due to the plaintiff's misuse of the discovery process. In Juarez, however, the plaintiff ultimately filed three sets of discovery responses, after extensive motion practice, consisting of "objections, non-specific incorporations of other information, and a long ephemeral statement simply reiterating the allegations made in the complaint." ( Id. at pp. 387-388.) The Juarez discovery responses differed significantly from HOTS's responses in that they contained no specific, responsive information. Unlike the responses in Juarez, most of HOTS's responses do contain at least some relevant information (see, e.g., Plaintiff's Supplemental Response to Interrogatory No. 2 [identifying four individuals with pertinent information]; Plaintiff's Supplemental Response to Special Interrogatory No. 4 [identifying a brick system, window materials, roof windscreen, roof handrail system, and interior handrail systems that were not built in conformance with contract drawings]; Plaintiff's Supplemental Response to Special Interrogatory No. 5 [identifying four individuals with pertinent information]; Plaintiff's Supplemental Response to Special Interrogatory No. 43 [identifying specific documents, including the second amended complaint filed by TCI in a related case, inspection reports by Peter Scott, an estimate of variances between construction contract documents and actual construction by David Ross, and a report by TCI-retained expert Jax Kneppers as documents supporting the allegation that Wong's construction documents contained innumerable errors].) Thus, unlike in Juarez, the evidentiary and issue sanctions here are disproportionate because they effectively eliminate much of HOTS's case even though HOTS provided specific information sufficient for Wong to have prepared his defense.
Some responses are difficult, without more information, to evaluate. For example, Special Interrogatory No. 7 seeks all facts supporting the allegation that Wong certified work as having been competently performed, when he knew it had not been done properly. The supplemental response does not directly identify facts supporting this allegation, but, relying on section 2030.230 (allowing responding party to specify documents from which the answer can be derived), references documents which petitioner contends contain those facts. It identifies "Memoranda of site visits, project correspondence between WONG and TCI, RFI's and TCI daily logs" which allegedly "indicate discussions between TCI and WONG regarding work that had not been performed competently and correctly." It also references TCI payment requests which Wong allegedly certified for payment even though the work had not been performed competently and correctly. These are general categories of documents and no specific dates or other identifying information is given. This court, however, has no information about how many documents there are which fall into each category. For example, whether there were two site visit memoranda or 100 would make a significant difference in evaluating the specifics of this response. Knowing whether HOTS alleges that each document in the enumerated categories supports its allegation, or just a few do, is similarly important. Our review is also more difficult because the trial court's order does not tie specific sanctions to particular interrogatory responses. However, even if we assume that the trial court correctly determined that this response failed adequately to identify particular facts supporting the allegation, we cannot say that that response alone justifies an individual sanction. That is, even if this individual response is deficient, given that four specific individuals were identified as having knowledge that Wong certified work as having been properly performed when he knew it had not been, the supplemental interrogatory responses still provides other information upon which HOTS bases its claim that Wong dishonestly certified work as having been done properly. Thus, as explained more fully below, the issue sanction imposed by the court is excessive.
Wong argues correctly that the discovery rules are intended to facilitate truth-seeking and eliminate gamesmanship and surprise. A defendant has the right to ascertain the specifics of a plaintiff's case before trial, and interrogatories, such as the ones Wong served, seek to effect that goal. The responses at issue here frustrate that legitimate goal to some extent by referencing vague categories. For example, in response to Special Interrogatory 5, (seeking the identity of all people with information supporting HOTS's allegation that Wong certified materials as having been used by the general contractor which he knew had not actually been used), in addition to identifying four specific individuals, HOTS asserts that the information is known "possibly [by] other employees of TCI whose identities are presently unknown to HOTS . . . ." This serves to broaden the response to include unidentified individuals. Wong, however, does not dispute that there may be TCI employees who have knowledge supporting this allegation; furthermore, if HOTS did not know their identities, it could not identify them when it filed its supplemental responses. There is nothing improper about mentioning such a possibility in the interrogatory response. On the other hand, if before trial HOTS learns the identity of such an individual and seeks to call that person as a witness, having adverted to the possible existence of this unidentified person in its interrogatory response will not be sufficient to ensure that the trial court will allow the proffered testimony. Rather, the court will have to inquire as to the reasons for the tardy identification of the proposed witness, whether the opposing party has had an opportunity to depose the witness, and generally weigh the reasonableness of allowing the testimony. We cannot pre-judge the results of that inquiry. However, the fact that HOTS, in responding to these interrogatories, has left open the possibility of additional knowledgeable witnesses does not justify the imposition of the severe evidentiary and issue sanctions.
Arguably HOTS's most inadequate interrogatory response was to Special Interrogatory 48, which required it to "describe with specificity each and every claimed omission" which HOTS "contend[s] was contained in WONG's construction documents. . . ." HOTS's supplemental response reads: "At this time HOTS's architectural expert has yet to identify all errors and omissions but reserves the right to do so. The answer to this interrogatory would necessitate the preparation or the making of a compilation, abstract, audit, or summary of or from the documents of TCI and/or DBI, and the burden and expense of preparing or making it would be substantially the same for WONG as for HOTS. No such compilation, abstract, audit, or summary currently exists. Pursuant to Code of Civil Procedure § 2030.230, HOTS hereby offers WONG an opportunity to examine and inspect any such documents in its possession and to make copies, compilations, abstracts and/or summaries thereof." This response is deficient because it utterly fails "to specify the writings from which the answer may be derived or ascertained." (Code Civ. Proc. § 2030.230.) Furthermore, the response does not list the alleged omissions, as required by the interrogatory, but responds as if the responses were prematurely seeking an expert opinion. Finally, the burden on the demanding party in making such a compilation would not be the same as the burden on the responding party, as is required for a responding party to avail itself of section 2030.230's provisions. The interrogatory requires the application of judgment in reviewing the documents and determining what constitutes an omission. To prepare his case, Wong is seeking to learn from HOTS what the alleged relevant omissions were. Without being allowed to pose that question to HOTS, this likely constitutes an insurmountable burden for Wong. Despite these problems, because other interrogatory responses related to the same evidentiary sanction point to specific evidence in support of this allegation, even this deficient interrogatory response does not justify the overly punitive sanctions ordered by the trial court.
HOTS's response to Special Interrogatory 44 is similar. The analysis as to why that deficient response does not support an evidentiary sanction is analogous to the discussion concerning Interrogatory 48.
Specifically, other interrogatory responses provide information that is relevant to HOTS's allegation of omissions in the construction documents. In order to justify that sanction on the ground the court was simply "prohibit[ing] [HOTS] from producing at trial the evidence that [it] repeatedly refused to produce during discovery," Juarez, supra, 81 Cal.App.4th at p. 389, one would need to show that HOTS did not produce evidence or direct Wong to evidence supporting the claim that the construction documents contained errors. But, in response to Interrogatory No. 47, HOTS identified specific documents that support the claim the construction documents contain omissions: a TCI September 12, 2007 Second Amended Complaint, inspection reports by Peter Scott, an estimate of variances between construction Contract documents and actual construction by David Ross, DBI project records, a report by Jax Kneppers, testimony of Jax Kneppers and Diane Hsia etc. Interrogatory 46 requires HOTS to identify individuals with information that support its contention that Wong's construction documents contained innumerable omissions. Again, HOTS responded with specific information: Wong, Hsia, David Ross, Peter Scott and Jax Kneppers. Admittedly, it also included less specific responses, such as presently unknown TCI employees and presently unknown San Francisco Building Department Inspectors. As suggested above, whether the trial court ultimately allows those generically identified individuals to testify at trial--assuming their testimony is proffered--is an open question. These responses, however, provide specific back-up information which Wong may use to understand the details of HOTS's case and to prepare his defense. In light of these responses, a sanction barring the introduction of any evidence to support the claim that Wong's architectural plans contained numerous errors is an abuse of discretion because it is disproportionate to the shortcomings of the discovery responses. It puts Wong in a better position than he would have otherwise been because it effectively dismisses HOTS's claim concerning the errors in the construction documents even though HOTS has produced some evidence that allegedly supports its claim.
A similar analysis applies to all the other sanctions issued by the trial court. That is to say, despite some vague and overly general responses, no sanction is justified by a complete and total lack of proffered support for the relevant, underlying issue. Although the trial court may be zealous in ensuring that those vague discovery responses are not parlayed into a means for HOTS to obscure the specifics of its case, they do not justify precluding HOTS from putting on its case based on the evidence and witnesses it has properly disclosed.
The fact that Wong's attempt to obtain evidentiary and issues sanctions fails does not mean that his having served these interrogatories and insisted on a suitable response was a futile exercise. To the extent HOTS responded with particularity, Wong can use that information to fashion his defense. If HOTS attempts to introduce evidence or testimony that should have been identified in its interrogatory responses but was not, it will face a heightened burden in doing so, having to justify the introduction of evidence not fully disclosed in a timely manner. The trial court will then evaluate what is reasonable under the circumstances and issue its ruling bearing in mind the twin guiding principles that: (1) Wong should not be subjected to unfair surprise as a result of HOTS's incomplete discovery responses, and (2) HOTS should not be disproportionately sanctioned for partially responsive answers.
DISPOSITION
This court will generally employ "the accelerated Palma procedure . . . when petitioner's entitlement to relief is so obvious that no purpose could reasonably be served by plenary consideration of the issue . . . ." ( Ng v. Superior Court (1992) 4 Cal.4th 29, 35; see also Lewis v. Superior Court (1999) 19 Cal.4th 1232, 1236-1237, 1240-1241.) Here no purpose would be served by further argument or briefing.
Therefore, let a peremptory writ of mandate issue directing the superior court to vacate that portion of its July 2, 2009 order imposing evidentiary and issue sanctions and to issue a new and different order denying those sanctions. That portion of the July 2 order concerning monetary sanctions shall remain in effect. Petitioner and Real Party in Interest shall each bear their own costs.
McGuiness, P.J.
We concur:
Pollak, J.
Jenkins, J.