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Janis v. Gorry, Meyer & Rudd
Janis v. Gorry, Meyer & Rudd

Janis v. Gorry, Meyer & Rudd

Filed 6/25/07 Janis v. Gorry, Meyer & Rudd CA2/5


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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.





Plaintiffs, Cross-defendants and




Defendants, Cross-complainants

and Respondents.

B187991 (Consolidated with B188794)

(Los Angeles County Super. Ct.

No. SC079307)

APPEAL from a judgment of the Superior Court of Los Angeles County. Gerald Rosenberg, Judge. Affirmed in part and reversed in part.

Oldman, Cooley, Sallus, Gold, Ronald Gold; Law Offices of Richard P. Towne and Richard P. Towne for Plaintiffs, Cross-defendants and Appellants.

Murchison & Cumming, Michael J. Nunez; Venable LLP and Douglas C. Emhoff for Defendants, Cross-complainants and Respondents.


Plaintiffs and appellants Conrad Janis and Maria Janis filed a first amended complaint against defendants and respondents Gorry, Meyer, & Rudd and Timothy J. Gorry alleging causes of action for legal malpractice and breach of fiduciary duty. Defendants filed a cross-complaint for unpaid attorney fees. This is an appeal by plaintiffs from a summary judgment in favor of defendants on the first amended complaint, and from terminating sanctions and a money judgment in favor of defendants on the cross-complaint for unpaid attorney fees.[1] Plaintiffs contend summary judgment was improper in that the summary judgment motion addressed the superseded original complaint containing one cause of action for legal malpractice, rather than the operative first amended complaint which added a second cause of action for breach of fiduciary duty. Plaintiffs further contend the trial court erred in imposing terminating sanctions for plaintiffs failure to complete depositions as ordered. Plaintiffs also argue the unpaid attorney fees award was without notice, an abuse of discretion, and not supported by substantial evidence. We reverse the summary judgment on plaintiffs first amended complaint, because the motion for summary judgment did not address both causes of action of the first amended complaint. We reject plaintiffs contentions concerning terminating sanctions on defendants cross-complaint and affirm the judgment awarding unpaid attorney fees to defendants.


Plaintiffs Complaint and First Amended Complaint

On October 14, 2003, plaintiffs filed a complaint against defendants for damages for legal malpractice.

On June 8, 2004, plaintiffs filed a first amended complaint for legal malpractice and breach of fiduciary duty. Plaintiffs alleged that Gary Hamilton and his general contracting company, Gary D. Hamilton, Inc. (together, Hamilton) filed a lawsuit (Hamilton) against them in 1998 for breach of contract in connection with a mold remediation project on plaintiffs home. Plaintiffs, represented by defendants, filed an answer and a cross-complaint against Hamilton. Defendants withdrew as plaintiffs counsel in April 2002. In the cause of action for legal malpractice, plaintiffs alleged that defendants representation was below the standard of care, in that defendants failed to properly assert meritorious claims and defenses, name potential cross-defendants, conduct appropriate discovery and investigation, associate in expert cocounsel, preserve evidence, bring the case to trial in a timely manner in consideration of plaintiffs health concerns, and settle the case prior to their withdrawal. In the second cause of action, plaintiffs alleged that in addition to the conduct constituting legal malpractice, defendants breached their fiduciary duty by improper billing, failure to honor their fee agreement, disclosure of privileged and confidential information to plaintiffs adversaries during mediation, making misrepresentations to the trial court in connection with defendants motion to withdraw as counsel, and retaining as defense counsel in this action a law firm that represented one of the subcontractors in Hamilton and a related case. Plaintiffs alleged defendants malpractice and breach of fiduciary duty caused plaintiffs damages in an amount according to proof at trial.

Defendants Answer to the First Amended Complaint and Cross-complaint Against Plaintiffs

On October 28, 2004, defendants answered the first amended complaint and filed a cross-complaint. In the answer, defendants generally denied all the allegations, denied plaintiffs had been damaged by reason of any negligence or omission of defendants, and asserted affirmative defenses. In the cross-complaint, defendants sought unpaid attorney fees in the amount of at least $270,090.77, alleging causes of action for breach of contract, performance of services, quantum meruit, unjust enrichment, and open book account. Defendants alleged they entered into a retainer agreement with plaintiffs in April 1996 that contemplated such additional work in the future as plaintiffs required and provided that defendants rates were adjusted periodically, usually at the beginning of each year, and unpaid balances would accrue interest at the rate of one and a half percent per month. Defendants submitted monthly bills, and plaintiffs failed to keep their account current after February 2001.

Plaintiffs Answer to Defendants Cross-complaint

On November 8, 2004, plaintiffs filed an answer to the cross-complaint, generally denying the allegations and asserting affirmative defenses.

Defendants Motion for Summary Judgment

On May 2, 2005, defendants moved for summary judgment on plaintiffs original complaint, addressing only the legal malpractice cause of action. The motion argued there was no disputed issue of material fact that defendants acts or omissions were not a proximate cause of harm to plaintiffs, defendants representation did not fall below the standard of care, any harm caused by defendants representation was speculative, and plaintiffs failure to appear at trial was an intervening cause relieving defendants from liability. Asserting that the harm alleged by plaintiffs flowed from the adverse judgment in Hamilton, defendants contended the proximate or superseding cause of the judgment was plaintiffs abandonment of the case by not appearing for trial, and defendants were not responsible because they had been substituted out as counsel 18 months earlier. The plaintiffs failure to show up for trial is the sole and proximate cause of plaintiffs damages. Alternatively, the plaintiffs failure to show up for trial was an unforeseeable and superseding cause of plaintiffs damages, which relieves [defendants] from liability for any alleged negligence. There are no triable issues of fact that any act or omission on the part of [defendants] was a proximate cause of harm to plaintiffs.

In support of the summary judgment motion, defendants relied in part on the following documents: the Court of Appeal opinion filed January 11, 2005, in Hamilton; a retainer agreement dated April 1996 between plaintiffs and defendants and correspondence concerning the fee agreement, fees charged, work performed, and payment; letters and pleadings concerning substitution of counsel; plaintiffs discovery responses; a declaration of Timothy Gorry; and pleadings, transcripts and orders in Hamilton.

Statement of Decision, Court of Appeal Opinion, and Trial Court Proceedings in Hamilton

The following chronology comes from the trial courts statement of decision, the records of the trial court proceedings, and the appellate opinion in Hamilton, which were submitted in support of defendants summary judgment motion.

In Hamilton, on April 3, 2002, plaintiffs replaced defendants with Richard P. Towne as counsel of record. With trial set for November 14, 2002, plaintiffs, on November 12, 2002, requested a continuance on the ground Mrs. Janis would be medically unavailable for at least eight weeks due to the stress of litigation. The matter was continued, and trial was eventually set for August 26, 2003. On August 14, 2003, plaintiffs requested a continuance to September 5, 2003, for more time to prepare. The request was denied. On August 22, 2003, plaintiffs requested a 60-day continuance on the ground plaintiffs and Attorney Towne were medically unavailable. Plaintiffs supplied a doctors letter recommending plaintiffs rest for six to eight weeks. No medical documentation of his Attorney Townes condition was supplied. Noting that plaintiffs medical problems of long duration were such that plaintiffs may never be able to come into court and try the case, the trial court denied a continuance, observing that plaintiffs depositions could be used at trial if plaintiffs were unavailable. To accommodate plaintiffs, trial would proceed on a reduced schedule of three hours per day Monday through Thursday. Rejecting the accommodation, plaintiffs filed a petition for writ of mandate and request for stay in the Court of Appeal, which were summarily denied.

On August 27, 2003, counsel were directed to appear for trial. Plaintiffs filed an application to disqualify the trial judge for bias, which was denied. September 2, 2003, was set to discuss trial proceedings and September 3, 2003, was set for the commencement of trial.

Neither plaintiffs nor Attorney Towne appeared for the pretrial hearing or trial. The trial court had set aside two months of trial time to hear the case and, as plaintiffs requested a jury, a jury panel had been prescreened for the trial. Plaintiffs delivered a substitution of attorney form substituting themselves in pro per in place of Attorney Towne and a declaration requesting a continuance on the ground they needed to retain a new attorney as Attorney Towne was medically unavailable. The request for continuance was denied. [I]t is the courts opinion that [plaintiffs] in this matter do not wish to go to trial and have used a long series of motions to this court to continue this trial, and the appellate court has already ruled on this courts denial of the motion for a continuance, and this appears to be just another situation where its an attempt to get a continuance, which has been denied by this court on several occasions. The trial court granted Hamiltons motion to strike the answer to the complaint and the cross-complaint[2]and enter a default against plaintiffs. The matter was trailed to September 4, 2003, for a prove-up hearing.

On September 4, 2003, at Hamiltons request, the trial court vacated the prior orders, reinstated the answer to the complaint and the cross-complaint, found notice of trial was properly given, and conducted a court trial. Gary Hamilton testified; documents and photographs were admitted into evidence. The trial court granted judgment in favor of Hamilton for damages for breach of contract in the amount of $91,112.95, plus interest in the amount of $148,817.06. The trial court gave judgment to Hamilton and against plaintiffs on the cross-complaint and awarded Hamilton the costs of defending against the cross-complaint.

On September 12, 2003, plaintiffs substituted Attorney Towne back in as counsel of record, and subsequently, a new trial motion was filed. The motion for new trial was denied on December 22, 2003.

On plaintiffs appeal, the Court of Appeal affirmed the judgment awarding damages to Hamilton on the complaint and giving judgment to Hamilton on the cross-complaint. The Court of Appeal rejected the following arguments made by plaintiffs: it was an abuse of discretion to deny their request for a continuance based on their ill-health; plaintiffs had no notice of the proceedings in September 2003; there was a scheme to make a false record for an appeal; the default proceedings on September 3 and reinstatement of plaintiffs cross-complaint on September 4 were void; plaintiffs did not receive 15-days notice of the September 4, 2003 trial date; plaintiffs were denied the right to file objections to the proposed statement of decision; and the judgment on the cause of action for breach of contract was not supported by substantial evidence.

Plaintiffs Opposition to Motion for Summary Judgment

Plaintiffs opposed the motion for summary judgment on the following grounds: the motion attacked the wrong complaint in that it attacked the original complaint for legal malpractice and not the first amended complaint for legal malpractice and breach of fiduciary duty; the motion did not seek summary adjudication of the cause of action for legal malpractice; defendants failed to allege as an affirmative defense that plaintiffs failure to appear at trial was a superseding intervening cause; and the foreseeability of the superseding cause is a question of fact for the jury. Plaintiffs argued their failure to appear for trial was not voluntary but was due to medical incapacity, and defendants had known for years there was a risk plaintiffs illness would get worse and prevent them from attending the trial. Plaintiffs relied upon correspondence, deposition testimony, and declarations to support their opposition.

Defendants Reply to Opposition to Motion for Summary Judgment

Defendants contended that the motion applied to the first amended complaint and thus to both causes of action because the motion was based on all the pleadings in the file. Moreover, the absence of proximate cause and the presence of a superseding cause applied to both causes of action, and plaintiffs failed to establish that any act or omission or breach of fiduciary duty was the proximate cause of harm. Defendants contended that plaintiffs theory of causation of harm was speculative, there was no competent medical testimony before the trial court, and plaintiffs raised no evidence of damages proximately caused by defendants breach of fiduciary duty.

Hearing and Ruling on Summary Judgment Motion

At the hearing on the motion on September 1, 2005, plaintiffs requested an opportunity to prepare further opposition to the motion if the trial court construed the summary judgment motion as addressing the first amended complaint. Plaintiffs argued that, as they had responded to the motion that was made and the breach of fiduciary duty cause of action was nowhere addressed in the motion, summary judgment was improper as a matter of law. At the very least, plaintiffs argued they should be granted additional time to address the different argument.

The trial court denied plaintiffs request for additional time and granted summary judgment, ruling in part that defendants proximate cause argument applied to, and defeated, both causes of action. Plaintiffs damages arose from the judgment against them in Hamilton, and plaintiffs failed to raise a triable issue of material fact concerning causation of those damages.

Proceedings on Motion for New Trial re Summary Judgment

Plaintiffs made a motion for a new trial on the ground, inter alia, that the motion for summary judgment did not address the breach of fiduciary duty cause of action of the first amended complaint and the trial court failed to give plaintiffs an opportunity to respond. Through Attorney Townes declaration, plaintiffs contended the following breaches of fiduciary duties which caused damages to plaintiffs occurred. Defendants did not abide by their fee agreements, failed to protect plaintiffs health by failing to make a motion for trial priority, improperly raised their hourly rates, low-balled their fee estimate, billed plaintiffs for charity contributions, billed for unnecessary services, billed for the services of a new partner whom plaintiffs had specifically requested not to be assigned to the case, disclosed privileged and confidential information to adversaries, made misrepresentations to the trial court which caused the trial court to be prejudiced against plaintiffs, retained as defense counsel in this litigation a law firm representing a subcontractor involved in Hamilton and a related litigation, did not protect Mrs. Janis from harassing comments by the mediator, and failed to truthfully communicate with plaintiffs concerning the Hamilton litigation and defendants representation.

Defendants opposed the new trial motion on the ground that the issue of proximate causation of harm as to the first amended complaint was raised in the summary judgment motion, and, even if not, plaintiffs were afforded an opportunity to respond at the hearing. Defendants contended the declaration in support of the new trial motion was inadmissible and thus no admissible evidence was presented in support of the motion.

On November 8, 2007, the new trial motion was heard and denied. The trial court stated that the summary judgment motion was based entirely on the alleged lack of causation of plaintiffs damages [and] plaintiffs did not successfully dispute any of defendants facts, nor did plaintiffs facts show how defendants caused their damages.


I. Summary Judgment Was Improperly Granted

Plaintiffs contend the trial court erred in granting summary judgment because the motion did not address the cause of action for breach of fiduciary duty. We agree defendants motion for summary judgment did not comply with the statutory requirements and should not have been granted. Because defendants did not show they were entitled to judgment as a matter of law on the entire action, we reverse the summary judgment order.

A. Standard of Review

Summary judgment is granted when a moving party establishes the right to the entry of judgment as a matter of law. (Code Civ. Proc., 437c, subd. (c).)[[3]] In reviewing an order granting summary judgment, the appellate court independently determines whether, as a matter of law, the motion for summary judgment should have been granted. [Citation.] (Castillo v. Barrera (2007) 146 Cal.App.4th 1317, 1322.) In undertaking our independent review of the evidence submitted, we apply the same three-step analysis as the trial court. First, we identify the issues framed by the pleadings. Next, we determine whether the moving party has established facts justifying judgment in its favor. Finally, in most cases, if the moving party has carried its initial burden, we decide whether the opposing party has demonstrated the existence of a triable, material fact issue. (Stonelight Tile, Inc. v. California Ins. Guarantee Assn. (2007) 150 Cal.App.4th 19, 30.)

B. Summary Judgment Law

A party may move for summary judgment of a cause of action if it is contended that the action has no merit . . . . ( 437c, subd. (a).) Similarly, a party may move for summary adjudication as to one or more cause of action within an action if that party contends the cause of action has no merit. . . . (Id., subd. (f)(1).) A party may move for summary judgment or summary adjudication separately or in the alternative. (Id., subd. (f)(2).)

The motion must include a separate statement setting forth plainly and concisely all material facts which the moving party contends are undisputed. ( 437c, subd. (b)(1).) The separate statement must separately identify each cause of action, claim, issue of duty, or affirmative defense. (Cal. Rules of Court, rule 3.1350(d).) A failure to address a cause of action in a separate statement is fatal to a motion for summary judgment. This requirement has been referred to as the Golden Rule of summary judgmentif it is not set forth in the separate statement, it does not exist. (Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 929; United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337.) To prevail on a summary judgment motion that does not request summary adjudication in the alternative, the defendant must show conclusively that all of the plaintiff's causes of action or legal theories fail as a matter of law. (Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1527.)

A trial court does have discretion to consider evidence not referenced in the moving party's separate statement when ruling on summary judgment. (Hawkins v. Wilton (2006) 144 Cal.App.4th 936, 945-947; San Diego Watercrafts Inc. v Wells Fargo Bank (2002)102 Cal.App.4th 308, 315-316.) However, in exercising its discretion, the court should also consider due process concerns raised by not allowing the opposing party to address the missing evidence. (Hawkins v. Wilton, supra, 144 Cal.App.4th at pp. 945-947.) Where a remedy as drastic as summary judgment is involved, due process requires a party be fully advised of the issues to be addressed and be given adequate notice of what facts it must rebut in order to prevail. (San Diego Watercrafts Inc. v Wells Fargo Bank, supra, 102 Cal.App.4th at p. 316.)

The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) If the defendants moving papers fail to conclusively negate a necessary element of the cause of action or establish a complete defense, the plaintiff has no burden to file declarations or affidavits in opposition to the motion. (Tresemer v. Barke (1978) 86 Cal. App. 3d 656, 661-663, 666.)

[I]n alleging material facts which the moving party contends are undisputed, it is incumbent upon the moving party to show the materiality of the facts by identifying, in the summary judgment pleadings, how the undisputed facts apply to specific issues raised by the complaint or answer and how they entitle the moving party to judgment as a matter of law. [Citation omitted.] (Westlye v. Look Sports (1993) 17 Cal. App. 4th 1715, 1738.) One of the purposes of the separate statement requirement is to inform the opposing party of what issues and undisputed material facts they must address in order to defeat the motion. (Elcome v. Chin (2003) 110 Cal. App. 4th 310, 322.)

C. Defendants Failed to Establish a Right to Judgment as a Matter of Law

Defendants moved for summary judgment only as to the cause of action for legal malpractice. They did not move for summary adjudication of both causes of action in the first amended complaint, which as noted above, included a cause of action for breach of fiduciary duty. Plaintiffs specifically opposed summary judgment on the basis that defendants motion was not directed at the entirety of the operative first amended complaint.

It was defendants burden to establish that plaintiffs action had no merit. By failing to address the second cause of action, defendants failed to carry their burden. Merely defeating one theory of a plaintiffs case, while leaving another unanswered, does not warrant a grant of summary judgment. ( 437c, subds. (a), (c).) The factual allegations of plaintiffs two causes of action were not identical. The second cause of action contained distinct factual allegations, such as improper billing, failure to honor the fee agreement, and retainer of counsel who also represented a subcontractor in Hamilton. Those allegations arguably suggest plaintiffs suffered separate damages distinct from the damages from the adverse judgment in Hamilton.

In their moving papers, defendants did not contend the second cause of action had no merit. They did not include a separate statement of undisputed facts establishing that their alleged breach of fiduciary duty was not the proximate cause of all of defendants damages in the second cause of action. Defendants did not show that defendants failure to show up for the trial in Hamilton was the proximate cause of the damages that plaintiffs suffered as a result of the alleged improper billing, failure to honor the fee agreement, and retainer of counsel who also represented a subcontractor in Hamilton. Under the summary judgment procedure, plaintiffs were not required to divine from the moving papers that defendants were attacking the second cause of action, which was not mentioned or discussed. Plaintiffs were not required to speculate as to what facts defendants claimed were undisputed and in what way those undisputed facts defeated the breach of fiduciary duty cause of action. As defendants moving papers failed to address the merits of the second cause of action, plaintiffs had no burden to file declarations or affidavits and thereby create a triable issue of fact. The September 1, 2005 order granting summary judgment must be reversed.

II.Terminating Sanctions in the Cross-complaint Action was Not an Abuse of


Plaintiffs contend terminating sanctions for discovery violations was entered without notice and an opportunity to be heard and was an abuse of discretion. We conclude plaintiffs had ample notice and opportunity to be heard, lesser sanctions had proved ineffective, and terminating sanctions was reasonably imposed by the trial court.

A.Standard of Review

We review the trial courts ruling on sanctions for misuse of the discovery process under the abuse of discretion standard, resolving all evidentiary conflicts in favor of the ruling. (Sears, Roebuck & Co. v. National Union Fire Ins. Co. (2005) 131 Cal.App.4th 1342, 1350.) The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479.)

B.Terminating Sanctions

As relevant to this appeal, sanctionable misuses of the discovery process include failing to respond or submit to an authorized method of discovery, making an evasive response to discovery, disobeying a court order to provide discovery, and opposing, unsuccessfully and without substantial justification, a motion to compel discovery. ( 2023.010, subds. (d), (f)‑(h).) Sanctions that the trial court may impose in its discretion against one who misuses the discovery process include monetary, issue, evidentiary, and terminating sanctions. (Id., 2023.030, subds. (a)-(d).) Terminating sanctions include an order striking the partys pleading and an order rendering a judgment by default against that party. (Id., subds. (d)(1), (d)(4).) In choosing among its various options for imposing a discovery sanction, a trial court exercises discretion, subject to reversal only for manifest abuse exceeding the bounds of reason. (Kuhns v. State of California (1992) 8 Cal.App.4th 982, 988.) The power to impose discovery sanctions is a broad discretion subject to reversal only for arbitrary, capricious, or whimsical action. [Citations.] Only two facts are absolutely prerequisite to imposition of the sanction: (1) there must be a failure to comply . . . ; and (2) the failure must be wilful [citation]. [Citation.] (Do It Urself Moving & Storage, Inc. v. Brown, Leifer, Slatkin & Berns (1992) 7 Cal.App.4th 27, 36.) Terminating sanctions should be imposed only when the trial court concludes that lesser sanctions would not bring about the compliance of the offending party. (R.S. Creative, Inc. v. Creative Cotton, Ltd. (1999) 75 Cal.App.4th 486, 496.)

C. Discovery Orders and Proceedings

On June 7, 2005, the trial court ordered plaintiffs to comply with discovery. On June 16, 2005, the trial court ordered plaintiffs to provide additional discovery responses and pay monetary sanctions to defendants. The sanctions were not paid.

On August 5, 2005, plaintiffs depositions were noticed for August 24 and 26, 2005, after plaintiffs failed to cooperate in providing deposition dates agreeable to them, but they did not appear for their depositions.

On September 1, 2005, defendants sought an order to compel plaintiffs attendance at deposition. Trial was scheduled for November 28, 2005. By agreement of the parties, the trial court granted the application and ordered plaintiffs to appear on September 26, 2005, at 10:00 a.m. for deposition. Notice was waived.

Plaintiffs did not appear for their depositions on September 26, 2005. They claimed they had not received notice and the trial court had not ordered them to appear for depositions without notice. Defendants applied to shorten time to be heard on September 27, 2005, for an order to compel compliance with the September 1, 2005 discovery order and for sanctions including monetary sanctions. In the supporting memorandum of points and authorities, defendants stated they were moving for terminating sanctions in the form of striking plaintiffs answer to the cross-complaint or, alternatively, evidentiary sanctions. A letter to counsel sent by facsimile on September 26, 2005, advised plaintiffs that defendants would request monetary and terminating sanctions on September 27, 2005.

On September 27, 2005, defendants motions to compel compliance with the September 1, 2005 deposition order and for sanctions were set for October 25, 2005. Plaintiffs were served with a copy of the motions.

At the hearing on October 25, the trial court heard defendants motions. Plaintiffs opposed the application, stating that shooting on their new film began on October 4, 2005. Their daily participation was required, they were working 16 hours a day in every aspect of the production, and shooting would continue through at least November 17, 2005. The trial court granted the motion to compel compliance with the September 1, 2005 discovery order: one of the plaintiffs must appear on October 31, 2005, for deposition at 10:00 a.m., and the other plaintiff will appear for deposition following the completion of the first plaintiffs deposition, and if both were not completed on October 31, 2005, depositions would resume November 2, 2005, and continue thereafter from day-to-day until completed. The trial court stated: [Defendants are] asking for evidentiary and terminating sanctions, which I am not prepared to order, but because we are running so short of time before the trial in this case, I think what I would be prepared to do would be to consider putting the motion over for, say, a couple of weeks to make sure that there is compliance, and then if there is compliance, then there would be no terminating sanctions, but if there is noncompliance, I think we really need to address that issue. The motion for terminating sanctions was put over to November 8, 2005. The trial court also incorporated in the order the June 16, 2005 order for plaintiffs and Attorney Towne to pay $2,997.40 in discovery sanctions to defendants.

On October 27, 2005, plaintiffs made an ex parte application to change the date of their depositions. A lawyer for their production company advised the trial court that plaintiffs needed to film their current project six days a week in order to maintain a lower rate of pay to their actors and crew members. Plaintiffs stated they would not be shooting on November 1, 2005. Therefore, to allow plaintiffs to rest on their day off from shooting, the trial court ordered the depositions of plaintiffs to begin on November 2, 2005, at 9:00 a.m. with either plaintiff going first. The depositions were to continue that day until 2:00 p.m., unless the deponent became too tired, or the deposition was completed, whichever occurred first. If not completed that day, the depositions were to be continued to November 3, 2005, at 9:00 a.m. with the same time limit and again on November 4, 2005. The trial court explained to counsel, if [plaintiffs] tell you they are too tired, stop, and come the next day. The trial court stated, I want this deposition over so that everybody is prepared to go to trial [on November 28, 2005]. The trial court told the parties to report for trial on November 28, 2005, and trial would start December 5, 2005.

On October 31, 2005, plaintiffs asked the trial court to modify the order to allow them to appear on November 1, 2005, from 3:00 p.m. to 10:00 p.m. This request was denied.

Mrs. Janis appeared for deposition with her physician at 9:20 a.m. on November 2, 2005. Mr. Janis was present, resting or making telephone calls. Mrs. Janis was deposed until 1:30 p.m., when counsel claimed Mrs. Janis was too ill to continue. Defendants offered to let Mrs. Janis rest for a day and start Mr. Janiss deposition the next morning. Counsel rejected this offer, asserting plaintiffs were too ill to appear the next morning for deposition. Counsel stated plaintiffs might be available the following week on their day off from shooting. Mrs. Janiss doctor stated subsequently that Mrs. Janis had an elevated heart rate and Mr. Janis had not slept, and recommended neither plaintiff appear for deposition for one to two weeks. Plaintiffs attorney faxed a letter to defendants stating plaintiffs were adjourning their deposition schedule and, despite the doctors advice, plaintiffs counsel would try to have plaintiffs resume the deposition for several hours in the afternoon of their off day next week.

Plaintiffs did not appear for deposition on November 3, 2005.

Defendants served a declaration of counsel on November 4, 2005, in support of the motion for terminating sanctions which recited what took place at Mrs. Janiss deposition on November 2, 2005, and stated plaintiffs did not appear for deposition on November 3, 2005. The declaration reiterated that defendants would ask that plaintiffs answer to the cross-complaint be stricken. Plaintiffs had not paid the monetary sanctions ordered by the court on June 16, 2005, and October 25, 2005.

On November 8, 2005, the trial court heard defendants motion for terminating sanctions. The trial court advised the parties of a tentative ruling imposing terminating sanctions and striking the answer to the cross-complaint and, thereupon, gave plaintiffs counsel a full opportunity to be heard. Plaintiffs counsel argued plaintiffs had substantially complied with the deposition order and there is no basis for . . . terminating sanctions because they are doing the best they can. He did not request a continuance of the hearing. Attorney Towne acknowledged that plaintiffs went ahead and shot their movie all that night until six oclock in the morning, and filmed it again on each of the next two nights. The trial court stated: They are going out from 4:30 in the afternoon until late in the evening to produce, direct and star in this film. Attorney Towne explained the doctor recommended one to two weeks of rest so that they come in and are able to testify properly and do not put themselves at risk. The trial court stated it was very familiar with the litany of events starting in July 2005. The trial court granted the motion for terminating sanctions and ordered plaintiffs answer to the cross-complaint stricken. The matter was continued to November 28, 2005, for a prove-up hearing.

On November 18, 2005, plaintiffs filed a motion for reconsideration which was fully argued on January 5, 2005, and denied on January 6, 2005. Defendants filed a motion for a new trial which was denied January 31, 2006.

D. No Abuse of Discretion

Plaintiffs contend they were not provided with notice and an opportunity to be heard before terminating sanctions were issued on November 8, 2005. This claim is belied by the record.

The notice of a motion for sanctions shall specify the type of sanction sought and shall be supported by a memorandum of points and authorities. ( 2023.040.) Adequate notice and an opportunity to be heard prior to the issuance of discovery sanctions are required by statute and due process. (O'Brien v. Cseh (1983)148 Cal.App.3d 957, 960-961 [movant served and filed ex parte request for discovery sanctions on the day of the hearing at which the sanctions were ordered and the only notice given was telephonic notice to secretary one day prior].) Failure to comply with statutory notice requirements is subject to harmless error analysis. (Cal. Const., art. VI, 13.)

While defendants application to shorten time to hear their motion for sanctions on September 27, 2005, was served only one day before the hearing on September 27, 2005, and did not specify that terminating sanctions were sought, plaintiffs had more than adequate notice and opportunity to contest the sanctions. A letter faxed to counsel on September 26, 2005, and a memorandum of points and authorities in support of the application warned plaintiffs terminating sanctions were among the sanctions being sought for plaintiffs failure to comply with the September 1, 2005 deposition order. At the hearing on September 27, 2005, counsel for plaintiff acknowledged receipt of the application. After the hearing on September 27, 2005, defendants served a notice of ruling on plaintiffs stating the sanctions application would be heard on October 25, 2005, and the application was deemed to be the moving papers.

As the motion for terminating sanctions was continued for a month, plaintiffs had ample time to prepare opposition. They filed declarations and a memorandum of points and authorities in opposition. Defendants reply papers, filed October 18, 2005, again stated that terminating sanctions were being sought. At the hearing on October 25, 2005, the trial court ordered a schedule for plaintiffs depositions starting October 31, 2005, and expressly put the motion for terminating sanctions for failure to comply with the deposition orders over to November 8, 2005. Thus, it was clear that failure to complete their depositions as ordered could result in terminating sanctions. Indeed, at the hearing on November 8, 2005, plaintiffs did not object on the ground of lack of notice or surprise when the trial court stated its tentative ruling to issue terminating sanctions, nor did plaintiffs request a continuance. Plaintiffs were given a full opportunity to be heard on the tentative ruling. Subsequently, plaintiffs had a further opportunity to contest terminating sanctions when the trial court heard their motion for reconsideration.

Next, plaintiffs contend the terminating sanction was unwarranted. We see no abuse of discretion in imposing terminating sanctions in light of plaintiffs flagrant violations of the trial courts orders and the discovery process. Plaintiffs refused to cooperate or submit to authorized depositions. They willfully disobeyed the trial courts deposition orders. They unilaterally adjourned the November 2, 2005 deposition for an indefinite period without obtaining a modification of the trial courts order. The trial court reasonably concluded, within the scope of its broad discretion and fact-finding authority, that plaintiffs excuses, such as lack of notice, after they had waived notice, and ill-health during a period when they worked 16-hour days on a movie, six days a week, were devoid of merit. Court-ordered accommodations for plaintiffs work schedule and health, some specifically requested by plaintiffs, were tried, but plaintiffs refused to comply. A monetary discovery sanction had been imposed, but plaintiffs neither paid the sanction nor complied with subsequent discovery. Statutorily authorized notice of deposition on dates in August 2005 and court orders for deposition on dates in September and October 2005 did not succeed in bringing about compliance with depositions. The express threat of terminating sanctions if plaintiffs did not submit as ordered beginning November 2, 2005, did not result in completion of the depositions.

Any dilemma plaintiffs faced as a result of working on their film was of their own creation. Had plaintiffs submitted to the depositions scheduled August 24 and 26, 2005, or attended the depositions as ordered by the trial court for September 26, 2005, the depositions would have been completed prior to the October 4, 2005, start of filming. Instead, plaintiffs delayed the depositions and defense of the cross-complaint became secondary to work on their film. Plaintiffs made it clear the film, not the cross-complaint, was their priority, and long hours of work on the film explained any alleged fatigue and health concerns that prevented them from sitting for deposition. The film would occupy them at least until November 17, 2005. With this track record and the trial scheduled to begin November 28, 2005, the trial court was fully justified in concluding that lesser sanctions would serve no meaningful purpose and it would be futile to provide additional accommodation to plaintiffs schedule. There was no abuse of discretion in ordering terminating sanctions.

We reject plaintiffs contention that their physicians declaration stating they were too sleep-deprived to submit for deposition established that ill-health, not willful disobedience, was the reason plaintiffs did not comply with the deposition order. The record shows plaintiffs were spending 16 hours a day, six days a week, working on their film, and the trial court could reasonably conclude they could have attended the court-ordered accommodated deposition schedule if they had chosen to rearrange their priorities. We reject plaintiffs contention that defendants agreed on November 2, 2005, to postpone the depositions for an indefinite period. The reporters transcript of Mrs. Janiss deposition on November 2, 2005, does not reflect any such agreement. Rather, it reflects a dispute between defendants and plaintiffs over whether the trial court had ordered depositions to continue the next day. Defendants position was that depositions had been ordered to continue the next day, and plaintiffs position was that a medical declaration that plaintiffs were medically unavailable would suspend all depositions. The only agreement was that Attorney Towne would notify defendants prior to the next days depositions if plaintiffs were not going to show up.

III. The Award on the Cross-complaint was Not an Abuse of Discretion

The prove-up hearing was held on November 28, 2005. As modified, judgment was awarded: $270,090.77 in damages, $169, 291.41 in prejudgment interest, $8,400.28 in court costs, and $90,052.75 in attorney fees by contract. Plaintiffs contend the award was an abuse of discretion, in that substantial evidence does not support the damage award and the attorney fees award was not authorized.

A. Damages Award

On an appeal from the judgment rendered on default[,] a review of the sufficiency of the evidence is not available. . . . No issue of fact [is] raised by the pleadings . . . . [Citation.] (Heathman v. Vant (1959) 172 Cal.App.2d 639, 644-645.)  A default admits the material allegations of the complaint[.] (Ellis v. Rademacher (1899) 125 Cal. 556, 557.)

Plaintiffs contend that the evidence is not sufficient to establish that plaintiffs owed defendants $270,090.77 in damages for breach of contract as alleged in the cross-complaint, because there was no evidence of an enforceable fee agreement, promised testimony was not provided, and the hourly attorney fee rates were not based on agreement or explained to plaintiffs. We construe plaintiffs contention as an argument that the evidence of plaintiffs liability for the unpaid legal fees was insufficient to warrant the default judgment. Sufficiency of the evidence challenges are not reviewable in appeals from default judgments. The default of the defendant . . . admits . . . the absolute verity of all the allegations of the complaint giving rise to liability. (Bristol Convalescent Hosp. v. Stone (1968) 258 Cal.App.2d 848, 859.) The cross-complaint alleged that plaintiffs entered into a retainer agreement intended to cover the work in Hamilton and plaintiffs owed defendants $270,090.77 in unpaid legal bills, plus interest. We therefore conclude plaintiffs challenge to the sufficiency of the evidence is beyond the scope of appellate review of the default judgment.

B. Attorney Fees

Plaintiffs contend the attorney fees award was an abuse of discretion, because the attorney fees were awarded without a noticed motion, attorney fees are limited to the fee schedule set forth in Los Angeles Superior Court Local Rule 3.2(a), and the fees were not supported by substantial evidence. We reject the contentions.

The retainer agreement between plaintiffs and defendants provided for an award of reasonable attorney fees in an action to recover fees and costs.

Subdivision (a)(10) [of section 1033.5] provides that attorney fees are recoverable as costs WHEN AUTHORIZED BY ANY OF THE FOLLOWING: [] (A) Contract. [] (B) Statute. [] (C) Law. As here relevant, subdivision (c)(5) of the same section provides: . . . Attorneys fees allowable as costs pursuant to subparagraph (A) or (C) of paragraph (10) of subdivision (a) shall be fixed either upon a noticed motion or upon entry of a default judgment, unless otherwise provided by stipulation of the parties. [] Attorneys fees awarded pursuant to section 1717[[4]] of the Civil Code are allowable costs under Section 1032 as authorized by subparagraph (A) of paragraph (10) of subdivision (a). ( 1033.5, subd. (c)(5).) (Santisas v. Goodin (1998)17 Cal. 4th 599, 618.) As the attorney fees in this case were fixed upon entry of a default judgment, a noticed motion was not required. ( 1033.5, subd. (c)(5).)

Los Angeles Superior Court Local Rule 3.2(a) provides in pertinent part: Contract Provision or Note. When a promissory note or contract provides for the recovery of (or a statute authorizes the clerk to enter) a reasonable attorney fee, the following schedule shall (unless otherwise determined by the court) be applied to the amount of the new judgment exclusive of costs: [schedules for default cases and contested cases]. As the trial court determined the attorney fees in this case, this local rule does not apply.

A challenge to the amount of an attorney fee award is reviewed for abuse of discretion. (Reveles v. Toyota by the Bay (1997) 57 Cal.App.4th 1139, 1153.) The experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong. [Citation.] [Citation.] The only basis for reversal would be that the amount was so large (or so small) as to shock the conscience and suggest that passion and prejudice influenced the determination. . . . [Citation.] (Ibid.)

The trial court awarded attorney fees based on the fees that were billed to and paid by defendants and the fees for work performed but not yet billed. Evidence included the testimony of Timothy Gorry, managing partner of defendant law firm, the Pierson Law Firms paid invoices for work from October 2004 to October 2005, which were redacted to protect attorney-client privilege, and a declaration of John K. Pierson describing the work performed from October 24, 2005, through November 27, 2005, and to be performed at the hearing on November 28, 2005. The trial court was well aware of the extent of the work performed by the Pierson Law Firm in representing defendants on the cross-complaint. The fact that attorney Piersons hourly rate shifted in August 2005 from $175.00 to $350.00 does not establish the fees were manipulated to create a windfall. The increased rate was billed to and paid by defendants on the Pierson Law Firms invoices and revealed in declarations filed prior to entry of the terminating sanctions. There is no compelling reason to conclude the amount awarded was so large it shocks the conscience and suggests it was produced by passion and prejudice.


Summary judgment in favor of defendants and against plaintiffs on the first amended complaint is reversed. Judgment in favor of defendants and against plaintiffs on the cross-complaint is affirmed. The parties shall bear their own costs on appeal.


We concur:



[1] On April 10, 2006, we consolidated plaintiffs appeal from the summary judgment, filed December 7, 2005 (B187991), with plaintiffs appeal from the judgment on the cross-claim, filed January 20, 2006 (B188784).

[2] The cross-complaint sought damages for the cost of completing the repairs, liquidated damages, loss of benefit of the bargain, fraud and negligent misrepresentation, and attorney fees.

[3] Hereinafter, all statutory references will be to the Code of Civil Procedure unless otherwise indicated.

[4] Civil Code section 1717, subdivision (a) allows an award of attorney fees and costs to the prevailing party on a contract where the contract provides for an award of attorney fees and costs incurred to enforce the contract.

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