City of
Services
Filed 5/9/13
City of Inglewood v. Inglewood Neighborhood Hous. Services CA2/2
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
TWO
CITY OF INGLEWOOD
et al.,
Plaintiffs and
Respondents,
v.
INGLEWOOD NEIGHBORHOOD HOUSING SERVICES,
Defendant and Appellant;
LEO JAMES TERRELL,
Objector and Appellant.
B238800
(Los Angeles County
Super. Ct. No. YC061161)
APPEAL
from rulings of the Superior Court
of
County. Dudley W. Gray
II, Judge. Affirmed.
Law
Offices of Michael D. Payne and Michael D. Payne for and Defendant and
Appellant.
Law
Offices of Leo James Terrell and Leo James Terrell for Objector and Appellant.
Bergman
Dacey Goldsmith, Gregory M. Bergman and Arash Beral for Plaintiffs and Respondents.
Leo
James Terrell (Terrell) and Inglewood Neighborhood Housing Services, Inc.
(INHS) (collectively appellants) appeal from a ruling dated October 13, 2011,
imposing monetary sanctions in the total amount of $16,175 against appellants
for discovery violations.
name="_ftnref1" title="">[1] Terrell also challenges the trial court’s
denial of his motion for reconsideration of the
court’s rulings, therefore we affirm.
Terrell
argues that there is no evidence that he had any part in INHS’s disobedience of
the trial court’s orders or that he willfully advised INHS not to comply with
the trial court’s orders. Specifically,
Terrell claims there was a breakdown in the attorney-client relationship
between himself and INHS such that he was unable to obtain INHS’s cooperation.
INHS
argues that it had no knowledge of the trial court’s orders due to the
breakdown of the attorney-client relationship.
INHS also argues that the record shows by way of an absence of evidence
that INHS had no knowledge of the orders of the court and that upholding the
trial court’s order of $16,175 of sanctions against INHS is unjust and unfair
as it effectively punishes the client when the client has no knowledge of the
orders of the court.
Respondents,
City of Inglewood and the
Redevelopment Agency of the City of Inglewood,
filed a complaint against INHS and others (defendants) on December 1, 2009, alleging breach of contract, conversion,
accounting, and breach of fiduciary duty.
Respondents alleged that they entered a series of one-year contracts
with INHS relating to the administration of loans made pursuant to various
grant programs that provided funding for loans for the purchase and improvement
of real property located in the City of Inglewood. Respondents sought damages against INHS based
on alleged mismanagement and poor administration of certain loan programs.
In
March 2010, respondents served one set of requests for production of documents
to each defendant in the case. The
defendants failed to comply with the discovery request, and respondents filed a
motion to compel. On September 2, 2010, the parties filed a
stipulation in which defendants agreed to produce and/or provide access to all
of the requested loan documents and allow the respondents to take custody of
those documents. The defendants
stipulated that should they fail to provide possession and access in accordance
with the stipulation, they would pay respondents $2,000 in sanctions for each
failure to comply.
On
September 2, 2010, the trial
court entered an order in accordance with the terms of the stipulation.
Despite
the order, defendants did not provide respondents with access to the required
documents. On April 26, 2011, respondents filed a motion to
enforce the September 2, 2010
order. The motion was heard on June 14, 2011, and the court granted
the motion, ordering defendants to allow respondents access to the documents
within 30 days.
INHS
provided access to its basement one day before the deadline, on July 13, 2011. During the inspection, INHS refused to allow
access to two locked cabinets and computer equipment. Respondents requested access to the locked
cabinets and equipment.
Regarding
the inspection of the cabinets, INHS’s counsel agreed on July 14, 2011, to allow the inspection, but never
provided dates for respondents to do so.
When respondents inquired of INHS’s counsel on August 10, 2011, counsel informed them that he
believed the inspection was moot in light of his announcement that INHS
intended to file for bankruptcy and that he had filed a motion to disqualify
the judge.
As
to the computer equipment, INHS filed a motion for protective order with the
court seeking to protect certain laptop computers from inspection. However, the motion for protective order did
not cover all of the computer equipment to which respondents had been denied
access. Later, after respondents had
filed their objections and opposition to the motion for protective order, INHS
took the motion off calendar. In their
opposition to the motion for protective order, respondents sought monetary
sanctions in the amount of $5,300 for their expenses in responding to the
motion.
On
July 28, 2011, respondents
moved to compel the deposition of an INHS person most knowledgeable (PMK). The court granted the motion and INHS was
ordered to provide a qualified PMK for deposition before August 17, 2011.
INHS did not produce or designate such an individual within the time allowed. After respondents noticed the deposition, on August 17, 2011, Terrell wrote to
respondents to inform them that he would not be attending the deposition, and
presumably not producing a PMK.
On
August 18, 2011, respondents filed a motion notifying the court of the above
discovery violations and seeking enforcement of three prior discovery
orders: (1) the September 2, 2010
stipulated order; (2) the June 14, 2011 order enforcing compliance with the
September 2, 2010 order; and (3) the July 28, 2011 order compelling INHS to
produce a qualified PMK for deposition.
Respondents argued that imposition of monetary sanctions was appropriate
in the amount of $10,875 against INHS and its attorney of record for failure to
obey prior court orders.
On
October 13, 2011, the
trial court granted respondents’ motion for order enforcing its prior court
orders and imposed the requested sanctions of $10,875. The court also granted respondents’ request
for monetary sanctions of $5,300 contained in respondents’ opposition to
appellants’ motion for protective order.
The court’s ruling imposed a total of $16,175 in sanctions against
Terrell and INHS.
On
September 27, 2011, Terrell
filed motions to be relieved as counsel for INHS and other defendants. On November
18, 2011, the court granted those motions.
On
October 20, 2011, Terrell
filed a motion for reconsideration of
the trial court’s October 13, 2011
ruling imposing monetary sanctions totaling $16,175 against Terrell. Terrell argued that (1) monetary sanctions
should not be imposed on Terrell because he never advised his clients to
disobey the court’s orders, nor was there willful disobedience on his part; and
(2) sanctions may only be imposed on the party, not the party’s attorney,
especially where there the attorney has no control over the clients.
On
December 19, 2011, the
trial court issued an order denying Terrell’s motion for reconsideration.
The
I. Standard of review
The
standard of review for a motion imposing discovery sanctions is abuse of
discretion. (Britts v. Superior Court (2006) 145 Cal.App.4th 1112, 1123.) The standard for review of a ruling on a
motion for reconsideration is also abuse of discretion. (Glade
v. Glade (1995) 38 Cal.App.4th 1441, 1457.)
Under
the abuse of discretion standard, the appropriate test is whether the trial
court exceeded the bounds of reason, all circumstances before it being
considered. (In re Marriage of Connolly (1979) 23 Cal.3d 590, 598.) Appellate courts should disturb discretionary
rulings only when there is a clear abuse of the trial court’s discretion and a
miscarriage of justice. (
331.)
II. The trial court did not
abuse its discretion in awarding sanctions
Appellants
have not established that the trial court abused its discretion in granting the
motions for sanctions in the total amount of $16,175. Despite the trial court’s order dated September 2, 2010, appellants still
had not complied as of April 26, 2011,
necessitating a motion to compel and a second order from the court. When appellants continued to refuse to allow
access to all of the subject documents, respondents were forced to file a third
request for enforcement. It was only at
this time, a year after the court’s initial stipulated order, that the court
imposed sanctions. This act did not
exceed the bounds of reason. It appears
to be a rational and necessary use of the trial court’s discretion under the
circumstances.
A. Sanctions against Terrell
Terrell
acknowledges that monetary sanctions may be imposed against the disobedient
party’s attorney for advising noncompliance with a court’s order. (Code Civ. Proc., § 2023.030, subd. (a);
195, 200.) To escape sanction, the
burden is on the attorney to prove that he or she did not advise the client to
disobey the discovery order. (
Terrell argues
that the imposition of sanctions against him is based on the assumption that
there was unity of action between the attorney and the client. He claims that he lacked control over INHS. He explains that INHS’s insurance company
dropped coverage for INHS’s litigation costs in July 2011. Terrell offered to continue to provide legal
services for a set fee, but the offer was never accepted. This caused a breakdown of the
attorney-client relationship. Terrell
states that INHS’s failure to pay him, and its anticipated bankruptcy filing,
suggested to him that INHS had abandoned its case. Terrell also states that INHS ignored his
communications. Terrell argues that INHS’s lack of cooperation with him hindered
his ability to gain compliance with the court’s orders. He also points out that even after he was
relieved as counsel in November 2011, $6,500 more in discovery sanctions were
imposed on INHS. Terrell argues that this
is evidence that he had no control over his client’s discovery abuses.
First,
we note that Terrell makes no effort to explain INHS’s noncompliance with the
court’s orders during the time period between September 2, 2010 and July 2011, when the alleged
breakdown of the attorney-client relationship occurred. Since Terrell has provided no explanation for
INHS’s failure to respond to discovery during this time period, he has failed
to defeat the presumption that the failure to respond was willful.
Second,
Terrell has failed to cite a case where an insurance company’s decision not to
fund litigation, and an anticipated bankruptcy filing, were considered an
adequate excuse for failure to comply with discovery orders. The trial court’s decision that Terrell’s
actions were worthy of sanctions under Code of Civil Procedure section 2023.030,
subdivision (a), was not an abuse of discretion under the circumstances.
B. Sanctions against INHS
INHS
argues that it had no knowledge of the prior orders of the court. Like Terrell, INHS points to the lack of
insurance coverage and its inability to pay for its defense. INHS admits that its insurer did not withdraw
funding until July 2011. Like Terrell,
INHS does not attempt to explain why it did not comply with the court’s September 2, 2010 order in the
previous 10-month period.
INHS
presents no legal authority for its position that its insurer’s withdrawal of
coverage provides an excuse for noncompliance with a discovery order. Under the circumstances, we decline to find
an abuse of discretion.
INHS
argues that the fact that no further sanctions have been issued in the last
year demonstrates that INHS has been in compliance with the orders of the court
since the time that it became aware of those orders.
compliance with court orders as evidence that it must have been unaware of the
orders dated September 2, 2010,
June 14, 2011, and July 28, 2011. Again, INHS fails to provide any legal
authority suggesting that subsequent compliance with court orders demonstrates
that a previous discovery sanction may be considered an abuse of
discretion. We therefore find that no
abuse of discretion occurred.
III. The trial court did not
abuse its discretion in denying the motion for reconsideration
In
his motion for reconsideration, Terrell provided the trial court with
additional facts and circumstances that were not before the trial court when it
made its October 13, 2011
rulings. The additional facts and
circumstances were: (1) In July 2011,
INHS’s insurance company withdrew its funding of litigation and ordered Terrell
to stop working on the matter; (2) INHS avoided and ignored Terrell’s
communications since August 2011; (3) Terrell requested that INHS allow him to
withdraw from the case; and (4) Terrell informed INHS that due to INHS’s
refusal to allow him to withdraw from the case, the nonpayment of fees and
abandonment of the case, he would seek a court order to be relieved as counsel.
It
is Terrell’s position that the trial court did not give due consideration to
these additional facts raised in his motion for reconsideration. Terrell argues that the trial court
identified no conduct on his part supporting the imposition of sanctions
against him, and in fact the record is devoid of any facts suggesting that any
conduct on his part would warrant the imposition of sanctions. Terrell insists that he never advised INHS
not to obey court orders, nor did he willfully fail to comply with court
orders.
As
discussed above, it is Terrell’s burden to prove that he did not advise his
client to disobey the court’s order. (
at p. 201.) Terrell’s citation to a lack
of evidence of improper conduct does not meet this burden. This is especially
true where, as here, appellants’ failure to comply with the discovery orders spanned
a year’s time and necessitated repeated orders of compliance. Under the circumstances, and taking into
account all new facts that were placed before the trial court at the time of
the motion for reconsideration, no abuse of discretion occurred.
The
rulings are affirmed. Respondents are
awarded their costs of appeal.
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS.
______________________________,
J.
CHAVEZ
We concur:
_____________________________, P. J.
BOREN
_____________________________, J.*
FERNS
name="_ftn1" title="">[1] The City of Inglewood and the
Redevelopment Agency of the City of Inglewood (collectively respondents) argue
that INHS did not file a notice of appeal, therefore we have no jurisdiction to
consider any argument made by INHS. The
notice of appeal filed by Terrell in this matter lists Terrell as counsel for
Quantum Community Development Corp. and Donnicus Cook, and former counsel for
defendants INHS, Gil Mathieu, Rochelle Tukes, and Martina S. Guilfoil.
A notice of appeal is
construed liberally, and the signing attorney need not be the appellant’s
attorney of record. (
832.) Any person authorized by the
appellant may sign the notice of appeal on the appellant’s behalf. (Toal
v. Tardif (2009) 178 Cal.App.4th 1208, 1216-1217.) Construed liberally, the notice of appeal
filed by Terrell suggests that Terrell was authorized to act on behalf of
INHS. By filing an opening brief in this
appeal, INHS implicitly concedes that Terrell had such authority. Absent clear evidence that such authority was
lacking, we conclude that Terrell was authorized to act on behalf of INHS for
the purpose of filing a notice of appeal, and that the notice thus perfected
INHS’s appeal.
name="_ftn2" title="">[2] On August 12, 2011, the trial court issued
an order striking Terrell’s statement of disqualification, finding that on its
face, and as a matter of law, the statement did not present lawful grounds for
disqualification.
