NSight, Inc. v. Oracle USA, Inc., A117900 (Cal. App. 5/14/2008)

• Decision Date: 14 May 2008
• Docket Number: A117900
• Parties: nSIGHT, INC. et al., Plaintiffs and Appellants, v. ORACLE USA, INC., Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

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nSIGHT, INC. et al., Plaintiffs and Appellants, v. ORACLE USA, INC., Defendant and Respondent.

A117900

Court of Appeals of California, First Appellate District, Division Two

May 14, 2008

NOT TO BE PUBLISHED

Appeal from Alameda County, Super. Ct. No. 2002-05-1531.

Haerle, J.

I. INTRODUCTION

What began as a simple effort to collect moneys due and owing under computer software contracts burgeoned into an acrimonious dispute in both state and federal court. Plaintiff nSight, Inc. eventually got its money from Oracle USA, Inc. (successor in interest to PeopleSoft, Inc.), but by then matters were spiraling out of control. nSight and its attorney were repeatedly assessed monetary sanctions for failure to provide discovery. Finally, although the trial court declined to impose a terminating sanction, it did impose the lesser sanction of deeming a large number of factual issues to be admitted by nSight. With no material issues of fact remaining, when the case was sent to trial the court granted Oracle's motion for judgment on the pleadings. After entering a net judgment of slightly less than $12,000 for nSight, the trial court awarded nSight slightly more than $30,000 in contractual attorney fees. Prior to entry of the judgment, nSight filed a notice of appeal from three of the sanction orders.

As we explain, only the final judgment is properly before us. nSight's appeal from the judgment permits review of most—but not all—of the sanction orders. We conclude that none of the intermediate sanction orders can be reversed as an abuse of the trial court's discretion to adopt sanctions for a party's failure to provide discovery. We affirm the judgment, and dismiss a purported appeal from a nonappealable order.

II. BACKGROUND

A concise summary of the origins of the dispute between nSight and Oracle is set out in Oracle's trial brief: "Plaintiff nSight, Inc. was a software implementation consultant that helped companies install and configure enterprise software provided by PeopleSoft. In some cases, companies engaged PeopleSoft as the lead implementation provider, and PeopleSoft subcontracted portions of the work to nSight. [¶] nSight brought this action to recover on invoices for work it allegedly performed as a subcontractor to PeopleSoft on projects for three PeopleSoft customers: Analogic Corporation, Radiant Systems, Inc., and East Bay MUD. nSight sought a total recovery of $61,462.40, comprised of $26,117.79 for the Analogic project, $34,313.74 for the Radiant Systems project, and $1,030.87 for the East Bay MUD project.¹ In addition to PeopleSoft, nSight named each of PeopleSoft's customers as defendants."

This litigation began in May 2002, when nSight filed a complaint against Oracle for breach of contract or unjust enrichment. By September 2003, nSight had filed its third amended complaint against Oracle and the three customers. This pleading had causes of action for breach of contract; restitution; fraud; "violation of Cal. Bus. & Prof. Code, § 17200" (hereafter "the section 17200 count"); and; a "common count" for the value of goods and services received. nSight sought $34,313.74 for the Radiant project; $26,117.79 for the Analogic project; and $1,030.87 for the East Bay MUD project. For the fraud and the section 17200 counts, nSight prayed for punitive damages from Oracle.

On June 21, 2006, Judge Winifred Smith ruled on three pending discovery-related motions. Two of the motions sought to quash a subpoena duces tecum generated by nSight. Judge Smith granted this relief, and Oracle's request for sanctions. The only record of the ruling is the minute order, which states that nSight "and . . . counsel Naren Chaganti, are ordered to pay $690 as reasonable sanctions to . . . Oracle and its counsel," on the ground that nSight's "position was not substantially justified." The third motion was Oracle's motion to compel further responses from nSight. Judge Smith granted this motion, and ordered nSight and Mr. Chaganti to pay additional sanctions of $1,240.

Oracle deemed nSight's responses so inadequate that, on July 7, 2006, two weeks before the scheduled trial date, Oracle filed a motion for "terminating or preclusive sanctions." As Oracle explained in its moving papers, if termination was deemed too severe a sanction, nSight asked that 18 "following facts be taken as established against Plaintiff in the action."²

Judge Smith heard argument on Oracle's motion at an unreported hearing conducted on July 20. Judge Smith's ruling, as stated in the minutes, is sufficiently important that it warrants quotation at length:

"The motion by Defendant . . . Oracle USA, Inc. for terminating sanctions is DENIED. Sanctions for failure to respond to discovery should not place the moving party in a better position that it would have enjoyed if the opposing party had responded to the discovery.

"The motion, in the alternative, for issue sanctions is GRANTED. The following facts are taken as established in this action:

"1. Radiant Systems, Inc. paid Plaintiff . . . $6,000 in settlement of this action.

"2. Analogic Corporation paid Plaintiff $12,500 in settlement of this action.

"3. nSight, Inc. invoices Nos. L3373-IN and L3394-IN have been paid in full by PeopleSoft, Inc.

"4. nSight, Inc. invoices Nos. L3373-IN and L3394-IN include all of the services provided by nSight, Inc. to PeopleSoft, Inc. for the benefit of Radiant Systems, Inc.

"5. nSight, Inc. invoices [N]os. L3373-IN and L3394-IN represent the entire amount billed by nSight, Inc. to PeopleSoft, Inc. for services rendered for the benefit of Radiant Systems, Inc.

"6. The original of PeopleSoft check No. 192994, dated March 1, 2001, in the amount of $67,335.94, is genuine.

"7. The original of PeopleSoft check No. 192994, dated March 1, 2001, in the amount of $67,335.94, paid nSight, Inc. invoices Nos. L3373-IN and L3394-IN in full.

"8. nSight, Inc. negotiated the original of PeopleSoft check [N]o. 192994, dated March 1, 2001, in the amount of $67,335.94.

"9. The original of the document entitled Statement of Work Exhibit A, dated as of November 28, 2000, by and between nSight . . . and PeopleSoft . . . is genuine.

"10. The original of the document entitled Statement of Work Exhibit A, dated as of November 28, 2000 by and between nSight . . . and PeopleSoft . . . defined the scope of subcontract consulting services provided by nSight, Inc. to PeopleSoft, Inc. for the benefit of Radiant Systems, Inc.

"11. nSight, Inc. invoices Nos. L3373-IN and L3394-IN represent the entire amount billed by nSight, Inc. to PeopleSoft, Inc. for services rendered pursuant to the Statement of Work Exhibit A, dated as of November 28, 2000 by and between nSight . . . and PeopleSoft USA, Inc.

"12. nSight, Inc. has been fully compensated for all subcontract consulting services provided to PeopleSoft, Inc. for the benefit of Radiant Systems, Inc.

"13. Radiant Systems, Inc. engaged nSight, Inc. to provide consulting services directly to Radiant Systems, Inc.

"14. PeopleSoft, Inc. had no responsibility for payment of consulting services that nSight, Inc. provided directly to Radiant Systems, Inc.

"15. nSight, Inc. invoices [N]os. L3415-IN, L3416-IN, and L3421-IN were for work that nSight, Inc. provided directly to Radiant Systems, Inc.

"16. PeopleSoft, Inc. had no responsibility for payment of nSight, Inc. invoices [N]os. L3415-IN, L3416-IN, and L3421-IN.

"[¶] . . . [¶] The [c]ourt finds that Plaintiff nSight, Inc., acting through its counsel Naren Chaganti, has willfully failed to make any attempt to respond to the [c]ourt's order of June 21, 2006 requiring further responses to Requests for Admissions, Requests for Production of Documents Nos. 21-26 and Form Interrogatory 17.1. Counsel does not contend that Plaintiff was unable to provide responses. In light of the impending trial date, Defendant would be unfairly prejudiced by Plaintiff's failure to provide discovery responses unless issue sanctions are granted with regard to the issues about which discovery was sought.

"[¶] . . . ¶] Defendant's request for monetary sanctions is DENIED. In light of the issues adjudicated in favor of Defendant in this order, the interests of justice do not support an award of additional monetary sanctions."

That same day, Judge Needham continued the trial date to September 1, 2006. There is no reporter's transcript for the events of September 1, when the case was sent for trial before Judge Sheppard, nor do we have the court's minutes detailing what occurred thereafter. All we have is what is recited in the judgment filed on September 12, 2006. Its relevant language is as follows:

"After consideration of the parties' written submissions and oral argument, the [c]ourt denied each of Plaintiff's motions in limine, granted each of Defendant's motions in limine, and granted Defendant's motion for judgment on the pleadings. As a result of such rulings, the issue sanctions ordered by the [c]ourt on July 20, 2006, and Defendant's concession of liability for payment of invoices totaling $26,117.79 for Plaintiff's services related to Analogic Corporation, $1,030.87 for Plaintiff's services related to East Bay MUD, and $3,163.74 for Plaintiff's expenses related to Radiant Systems, Inc., the [c]ourt determined that no factual issues remained for trial and judgment should be entered as a matter of law.

"NOW, THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that Plaintiff nSight, Inc. shall have and recover from Oracle, USA, Inc. the principal amount of $30,312.40, plus interest and costs as determined upon application by the parties, less $18,500.00 previously recovered by Plaintiff nSight, Inc. from former defendants Analogic Corporation and Radiant Systems, Inc., as required by Civil Code Section 877."

Three days later, on September 15, 2006, Judge Smith denied nSight's motion for reconsideration of the sanction orders of June 21 and July 20.

In October, the parties turned to the issue of...