Caldwell v. Samuels Jewelers

• Decision Date: 02 August 1990
• Docket Number: No. H005409,H005409
• Citation: 272 Cal.Rptr. 126,222 Cal.App.3d 970
• Court: California Court of Appeals Court of Appeals
• Parties: Dale CALDWELL, Plaintiff, v. SAMUELS JEWELERS, et al., Defendants, Bley and Bley, et al., Appellants, James K. Roberts, Appellant, County of Santa Clara, Respondent.

Page 126

272 Cal.Rptr. 126

222 Cal.App.3d 970

Dale CALDWELL, Plaintiff, v. SAMUELS JEWELERS, et al., Defendants Bley and Bley, et al., Appellants James K. Roberts, Appellant County of Santa Clara, Respondent.

No. H005409.

Court of Appeal, Sixth District, California.

Aug. 2, 1990.

[222 Cal.App.3d 972] Margaret A. Pendergast, Bley and Bley, San Francisco, for appellants Bley and Bley.

James K. Roberts, San Jose, for appellant James K. Roberts.

Steven M. Woodside, County Counsel, Deborah A. Ryan, Deputy County Counsel, County of Santa Clara, San Jose, for respondent.

COTTLE, Associate Justice.

In separate appeals, plaintiff's attorney, James K. Roberts, and defendants' attorneys, Margaret Pendergast and Stephen Whitmore of the law firm of Bley and Bley (hereafter collectively Bley), seek reversal of a trial court order imposing monetary sanctions on them pursuant to Code of Civil Procedure section 177.5 ¹ and California Rules of Court, rule 227 ² fordisobeying an earlier court order. The attorneys contend the order is invalid because (1) the notice requirements of due process and section 177.5 were not met; (2) the evidence was insufficient to justify sanctions; (3) the order does not recite specific conduct and circumstances justifying sanctions; and (4) the statutory basis of the order is unclear. Although we agree with the trial court that substantial evidence supports the imposition of sanctions against counsel for both sides, we nevertheless reverse the order and remand to the trial court because (1) the sanction imposed, if it is based on violation of a lawful court order, exceeds the statutory maximum amount of $1,500, and (2) the order does not detail justification for the imposition of sanctions with the degree

of specificity required by due process and by section 177.5.

FACTS

Plaintiff Dale Caldwell filed a complaint for wrongful termination and breach of contract against his former employer, defendant Samuels Jewelers, on March 30, 1987. Defendants answered and cross-complained for damages for conversion. Subsequently, each party filed numerous motions attacking the other's pleadings and seeking enforcement of discovery.

Following a hearing on May 31, 1988, on defendants' motion to require plaintiff, a Pennsylvania resident, to appear at a deposition, the court entered the following order pursuant to the parties' stipulation: "Plaintiff will appear for his deposition no later than September 10, 1988. A tentative date is set for July 8, 1988. The parties will confirm an exact date.... [p] IT IS SO ORDERED."

Thereafter and prior to September 10, defendants' attorneys (Bley) attempted on numerous occasions to set up plaintiff's deposition. Most of their letters went unanswered. However, when plaintiff's attorney (Roberts) finally suggested a Saturday, July 23rd date, Bley informed him that they would not take plaintiff's deposition on any day other than a midweek day. On August 16, after Bley had heard nothing more from Roberts, Bley unilaterally set a date of September 2, 1988, to depose plaintiff at Roberts' office. On August 31, in a phone conversation to confirm the September 2 date, Roberts' associate explained that plaintiff could not fly out on the 2nd but would be available on the 9th. Roberts claims that Bley agreed to the latter date; Bley denies that there was agreement. On September 1, Bley wrote to Roberts: "I am writing to confirm your client's refusal to attend the scheduled deposition on September 2, 1988 at 10:00 a.m. in your office and to advise you that we shall seek sanctions against both you and your client." On September 8, when plaintiff was already on a plane en route to California, Roberts called Bley's office to find out which attorney should arrange for the court reporter. At that time Bley advised that he would not appear at the deposition. The parties subsequently exchanged correspondence by facsimile communication, but no agreement was reached. Ultimately, Bley failed to appear at plaintiff's September 9 deposition.

Roberts then brought a motion for sanctions under section 2023 and a protective order that plaintiff need not appear for deposition in California without prior payment of travel fees by defendant. Plaintiff sought sanctions for the unnecessary plane fare and for $6,108.14 in photocopying expenses incurred as a result of defendant's allegedly providing 19 boxes of largely irrelevant material in response to an earlier request for production of documents. Bley had advised Roberts that there were only "3 large and one medium size boxes" of materials. In support of plaintiff's motion, Roberts submitted an eight-page declaration chronicling his efforts at trying to set up the deposition and discussing discovery abuses.

Defendant reciprocated with its own motion, also seeking sanctions under section 2023 and for an order compelling plaintiff's attendance at a deposition. Bley submitted a declaration and letter exhibits setting forth their efforts at scheduling plaintiff's deposition and Roberts' response to those efforts.

The court heard the motions together on December 15, 1988. Immediately after calling the case, the court advised counsel that, based on their papers, it was considering the "payment of money ... to the clerk of the court" pursuant to California Rules of Court, rule 227 or Code of Civil Procedure section 177.5. ³ The court asked counsel On December 21, 1988, after taking the motions under submission, the court issued the following order: "Motions were heard and submitted on December 15, 1988. Counsel stipulated that the Court could consider sanctions pursuant to Code of Civil Procedure 177.5 and California Rule of Court 227 and other applicable provisions of law, in addition to discovery act sanctions, but not including sanctions pursuant to Code of Civil Procedure 128.5. [p] GOOD CAUSE APPEARING: [p] 1. Counsel of record for Plaintiff and counsel of record for Defendants shall each pay to the County of Santa Clara, payable by delivery to the Clerk of the Superior Court by February 1, 1989, the sum of $2,500. A copy of the receipt showing timely payment shall be delivered to the department of the undersigned by said date to verify compliance with this order. [p] 2. If counsel for either party desire to pursue their respective requests for sanctions or protective orders relating to discovery, those matters, along with all other discovery motions and disputes relevant to discovery in the action are directed, pursuant to Code of Civil Procedure 639(e), to Gerald Z. Marer, Attorney at Law, 250 Cambridge Avenue, Palo Alto, California 94306, telephone (415) 323- 5752."

                whether they agreed the [222 Cal.App.3d 975] "whole sanctions issue" was before the court, and counsel so stipulated.  The court then asked a number of questions concerning the photocopying bill for the 19 boxes of allegedly irrelevant material.  After a lengthy discussion in which neither Roberts nor Bley could agree on anything, the court asked:  "Is there something that you agree on here?   Some months ago I ordered that a deposition be taken no later than September 10, and that you were to confirm the date, and that didn't get done."   Both counsel agreed that the deposition had not been taken but placed the blame on opposing counsel (Roberts:  "This case is probably my worst experience in the practice of law after eight years [opposing] the Bley & Bley law firm";  Bley:  "So it has not been our fault.  It has been the fault of Mr. Roberts' firm.")
                

DISCUSSION

Preliminarily, we note that an order imposing sanctions on an attorney pursuant to section 177.5 and rule 227 ⁴ is appealable as a final order on a collateral matter directing the payment of money. (Bauguess v. Paine (1978) 22 Cal.3d 626, 634, fn. 3, 150 Cal.Rptr. 461, 586 P.2d 942.) While not parties to the underlying action, plaintiff's counsel and defendants' counsel are parties of record in the collateral matter by virtue of the trial court's order and consequently have standing to appeal. (Ellis v. Roshei Corp. (1983) 143 Cal.App.3d 642, 645, fn. 3, 192 Cal.Rptr. 57.)

We therefore turn to the substantive issues raised by appellants, i.e., whether they were given adequate notice and an opportunity to be heard, whether the evidence supports the imposition of sanctions, whether the order satisfies the specificity requirements of section 177.5 and, if not, whether the order may be justified under rule 227.

Adequate notice and an opportunity to be heard prior to the imposition of sanctions are mandated not only by section 177.5, which prohibits sanctions "except on notice contained in a party's moving or responding papers; or on the court's own motion, after notice and opportunity to be heard," but also by the due process clauses of both the federal and state Constitutions. (U.S. Const., 14th Amend.; Cal. Const., art. I, § 7; Bauguess v. Paine, supra, 22 Cal.3d at pp. 638-639, 150 Cal.Rptr. 461, 586 P.2d 942; see also In re Marriage of Flaherty (1982) 31 Cal.3d 637, 651-654, 183 Cal.Rptr. 508, 646 P.2d 179.) Indeed, due process protections must be afforded in every situation in which the state deprives an individual of property. (Annex British Cars, Inc. v. Parker-Rhodes (1988) 198 Cal.App.3d 788, 792, 244 Cal.Rptr. 48.) Thus, it matters not whether the sanctions were imposed pursuant to section 177.5, which specifically requires notice and an opportunity to respond, or pursuant to rule 227, which is silent on the issue, because the imposition of sanctions always requires procedural due process.

In the present case, the record indicates that the court gave appellants notice twice at the same hearing of its intent to consider sanctions payable to the court under section 177.5 and rule 227 despite the fact the attorneys had requested sanctions only under the discovery act, i.e., sanctions payable to opposing counsel, in their moving papers. Each side stipulated that the court could consider the "whole...