Scholz v.
Filed 6/21/12 Scholz v. Boston Herald Ca2/1
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
ONE
DONALD THOMAS SCHOLZ,
Plaintiff,
v.
BOSTON HERALD, INC.,
Defendant and Respondent,
MILLER, KAPLAN, ARASE &
CO.,
Objector and Appellant.
B231944
(Los Angeles
County
Super. Ct.
No. BS128973)
APPEAL from
an order of the Superior Court
of
County. Ramona G. See,
Judge. Reversed.
Robins, Kaplan, Miller &
Ciresi, Mark D. Passin and Rex D. Glensy for Objector and Appellant.
Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, Harvey I. Saferstein,
Shamonki, and Joseph D. Lipchitz for Defendant and Respondent.
___________________________________
Miller, Kaplan, Arase & Co.
(Miller Kaplan) appeals from a $4,500 sanctions order in a
Massachusetts, contending the trial court violated its due process rights by
failing to inform it what conduct or circumstances justified the imposition of
sanctions. It also contends the
sanctions order was substantively unsupported by
reach the second, and reverse the sanctions order.
BACKGROUND
In 2007, respondent Boston Herald
published three articles discussing Donald Scholz, one of the founders of the
rock band Boston, and his
connection with the suicide of Brad Delp, another founding member of Boston. In 2010, Scholz filed a defamation lawsuit
against the Herald in Massachusetts,
claiming the 2007 articles caused him to suffer economic damages, including
loss of anticipated income from album and concert sales. During discovery, the Herald sought financial
documents from Scholz’s accountants, Wolinsky, Becker & Hurewitz
(Wolinsky).
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On June 23, 2010, the Massachusetts Superior Court issued a
letter rogatory to enable the Herald to obtain documents and custodian
testimony from Wolinsky accountants in California. In July 2010, the Herald served a deposition
subpoena on Wolinsky pursuant to the Interstate and International Depositions
and Discovery Act, Code of Civil Procedure section 2029.100 et seq., seeking
documents, the deposition of Wolinsky’s custodian of records, and the
production of a privilege log describing any documents withheld pursuant to
assertion of a privilege.
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Based on Wolinsky’s agreement to
produce records responsive to the subpoena, the Herald granted a six-week
extension for the deposition. It later
extended the deposition date a second time based on Wolinsky’s representation
that it had over 30 boxes of documents plus emails to produce.
At the September 16, 2010 deposition, Wolinsky’s
custodian of records appeared with no documents but testified he had turned
over 13 boxes of records to Wolinsky’s attorney, along with CD’s containing
approximately 1,250 emails and 400 electronic files. The only records produced during the
deposition were a single box produced by Wolinsky’s attorney. Wolinsky refused to provide a privilege log
describing the withheld items and grounds on which they were being
withheld. Its attorney represented he
was withholding four and one-half boxes of royalty statements and related
material pending execution of a confidentiality
agreement and protective order.
After meet-and-confer efforts
failed to resolve the dispute, the Herald filed in Los Angeles County Superior
Court a petition for an order compelling Wolinsky to produce all remaining
responsive documents and, with respect to any withheld documents, a privilege
log. It sought $9,955 in sanctions to
cover the costs of preparing the petition.
After the Herald filed its
petition, Wolinsky produced 100 pages of handwritten notes, four and one-half
boxes of royalty statements, and 45 pages of emails, but no privilege log.
On December 20, 2010, the day before the hearing on the
Herald’s petition to compel, the trial court issued a seven-paragraph tentative
ruling in which it granted the petition and ordered Wolinsky to pay $4,500 in
sanctions. The portion of the tentative
ruling pertaining to sanctions provided as follows: “The Request for Sanctions is granted in the
amount of $4500 against Wolinsky. C.C.P.
§ 1987.2 provides that the court may, in its discretion, award the amount of the
reasonable expenses incurred in making a motion to compel production under
C.C.P. § 1987(c), if the court finds that the motion was opposed in bad faith
or without substantial justification.
Here, Wolinsky opposed this motion without substantial justification. Wolinsky was informed by the moving papers
that the Massachusetts Superior Court had specifically approved the document
requests, and yet argued extensively that it was not required to respond
because the requests were overbroad and unduly burdensome. Moreover, Wolinsky refused to comply with the
Subpoena’s explicit court-approved direction to explain its assertions of
privilege. Wolinsky also unreasonably
delayed in its production of documents by only completing its production on December 3, 2010 the day of a
scheduled deposition which Defendant’s counsel flew across the country to
attend.â€
At the hearing on December 21, 2010, the trial court
made no comment on its sanctions ruling.
On February 1, 2011, the court issued a final order granting
the petition. Unlike the tentative
ruling, the final order omitted the paragraph in which the court found Wolinsky
opposed the motion without substantial justification, replacing it with the
following: “The Court also finds that
sanctions are warranted, however, the Court in its discretion, awards the
reduced amount of $4,500.00 against Wolinsky.
See C.C.P. § 1987.2.â€
Wolinsky thereafter produced a
privilege log and paid the sanctions. It
now appeals the sanctions award.
DISCUSSION
I. Appealability of the Sanctions Order
Preliminarily, we consider whether
the order granting the Herald’s request for sanctions is appealable. The Herald contends the order is not
appealable because section 2029.650, subdivision (a), of the Interstate and
International Depositions and Discovery Act, pursuant to which the instant
discovery proceeded, provides that no order under the act is appealable, but
may be reviewed only by petition for an extraordinary writ.
We disagree. Here, the trial court imposed sanctions under
section 1987.2, subdivision (a), not the Interstate and International
Depositions and Discovery Act, which contains no sanctions provision. The question is whether a sanctions order
pursuant to section 1987.2 is appealable.
We conclude it is.
Pursuant to the one judgment rule,
an appeal may generally be taken only from a judgment. “‘“The theory is that piecemeal disposition
and multiple appeals in a single action would be oppressive and costly, and
that a review of intermediate rulings should await the final disposition of the
case.â€â€™ [Citation.] [¶]
‘“A necessary exception to the one final judgment rule is recognized
where there is a final determination of some collateral matter distinct and
severable from the general subject of the litigation. If, e.g., this determination requires the
aggrieved party immediately to pay money or perform some other act, he is
entitled to appeal even though litigation of the main issues continues. Such a determination is substantially the
same as a final judgment in an independent
proceeding. [Citations.]â€â€™ [Citation.]â€
(Brun v. Bailey (1994) 27
Cal.App.4th 641, 648, superseded by statute on other grounds as stated in
Food Markets, Inc. (2005) 127 Cal.App.4th 387, 396, fn. 7.) Final collateral orders that direct payment
of money are appealable. (
Here, the sanctions issue is a
collateral matter distinct and severable from the subject of the underlying
litigation. Because Wolinsky’s appeal
from the order “can have no effect on the course of the underlying litigation,â€
the order granting sanctions “finally determined the rights of the parties to
that collateral matter, leaving no further judicial action to be performed.†(Brun
v. Bailey, supra, 27 Cal.App.4th
at p. 650.) Accordingly, we hold the
order granting sanctions is appealable.
Process
Wolinsky contends the sanctions final order violated
its due process rights because it was unaccompanied by any statement of the
basis for the sanctions. We agree.
“Fairness and effective appellate
review require that where the court exercises its discretion to issue
sanctions, it delineate the specific acts upon which the sanctions are
awarded.†(First City Properties, Inc. v. MacAdam (1996) 49 Cal.App.4th 507,
515.) “[T]he purpose of detailed
findings ‘is to fulfill the “rudiments†of due process required for
governmental imposition of a penalty upon an attorney or party—both for
due-process’ own, constitutional sake and to ensure that the power conferred by
the statute will not be abused.
[Citations.]’ . . .
‘“[I]n some cases the court’s recitation will be an invaluable aid to a
reviewing court determining whether the trial court abused its discretion in
awarding sanctions. [Citation.]†[Citation.]’
[Citation.] . . . ‘Just
as with the issue of notice and opportunity to be heard, due process requires
that any order giving rise to the imposition of sanctions state with
particularity the basis for finding a violation of the rule. [Citation.]’â€
(Id. at p. 516.) These requirements pertain to sanctions
imposed pursuant to section 1987.2. (
“[W]hen an appeal is processed on a standard of abuse of discretion, the
party aggrieved must be put on notice of the acts for which it was sanctioned
in order to mount an effective review.
Failure to delineate the grounds for exercise of discretion precludes
meaningful review, a denial of due process.â€
(Ibid.)
The trial court here gave no
explanation for imposing sanctions, stating only that it found them to be
warranted. The court thus failed to
delineate the grounds for its exercise of discretion and precluded any
meaningful review of the ruling. This
was error requiring reversal.
The Herald argues written findings
are not required for issuance of sanctions in routine discovery disputes. We do not disagree. But those routine disputes generally involve
discovery statutes that mandate imposition of monetary sanctions against a
party “who unsuccessfully makes or opposes a motion to compel an answer or
production, unless . . . the one subject to the sanction acted with
substantial justification or . . . other circumstances make the
imposition of the sanction unjust.†(§
2025.480, subd. (f); see also § 2023.030, subd. (a).) These provisions create a presumption that
sanctions shall be awarded against a losing party and give notice that
unsuccessful, substantially unjustified opposition to a motion to compel
discovery is itself sufficient grounds for sanctions.
The sanctions ordered here were
imposed pursuant to section 1987.2, which contains neither a mandate for
sanctions nor an explanation of the specific conduct that would constitute
grounds for imposing them. Section
1987.2 provides only that the court may in its discretion award sanctions
against a party who unsuccessfully opposes a discovery motion in bad faith or
without substantial justification.
Unlike other discovery statutes, which by their language put the losing
party on notice of the reason for imposition of sanctions, section 1987.2 gives
no such explanation. (See
cannot agree that treatment of sanctions pursuant to section 1987.2 falls
within the same purview as issuance of discovery sanctionsâ€].) When in addition to statutory silence the
court is also silent as to the
specific acts upon which the sanctions are based, the sanctioned party is left
with no notice of the grounds for sanctions and no opportunity to mount an
effective review.
The Herald argues that even if a
statement of reasons is required for a discretionary award of sanctions, the
court gave “more than adequate notice†in its tentative ruling. We disagree.
Although in its tentative ruling
the court stated Wolinsky opposed the Herald’s motion in bad faith or without
substantial justification, giving examples, it conspicuously omitted that
explanation in the final order. The
omission was apparently deliberate, as the final order otherwise tracked the
seven-paragraph tentative ruling almost verbatim. Given that in the final order the trial court
adhered to its tentative ruling in all material respects except for the
explanation of grounds for sanctions, which was abandoned, we cannot agree that
the court intended to rely on its tentative rationale for imposing sanctions or
that the final order provided adequate notice of the grounds for the sanctions
award.
The Herald argues Wolinsky waived
the lack of notice issue by failing to raise the issue at the hearing on its
2010 hearing about deficiencies in an order issued without further hearing in
February 2011.
In a situation such as this, where
it is unclear why the court issued discretionary sanctions, due process has not
been complied with. The sanctions order
is therefore reversed. We need not reach
Wolinsky’s argument that the sanctions were substantively unwarranted.
DISPOSITION
The sanctions order is
reversed. The parties are to bear their
own costs on appeal.
NOT TO BE
PUBLISHED.
CHANEY, J.
We concur:
ROTHSCHILD, Acting P. J.
JOHNSON, J.
was acquired by Miller Kaplan. Although
Miller Kaplan is now the objector and appellant, for ease of reference and to
harmonize our discussion with the briefs and the record below we will refer to
it as Wolinsky.
Code of Civil Procedure.
