Sauer v. Superior Court

• Decision Date: 30 September 1987
• Citation: 195 Cal.App.3d 213,240 Cal.Rptr. 489
• Court: California Court of Appeals Court of Appeals
• Parties: H.K. SAUER, Petitioner, v. SUPERIOR COURT, etc., County of San Diego, Respondent. OAK INDUSTRIES, INC., Real Party in Interest. D005627.

Page 489

240 Cal.Rptr. 489

195 Cal.App.3d 213

H.K. SAUER, Petitioner, v. SUPERIOR COURT, etc., County of San Diego, Respondent OAK INDUSTRIES, INC., Real Party in Interest.

D005627.

Court of Appeal, Fourth District, Division 1, California.

Sept. 30, 1987.

Review Denied Dec. 16, 1987.

Monaghan & Metz and Brian D. Monaghan, San Diego, for petitioner

No appearance for respondent.

Latham & Watkins and David F. Faustman and Kristine L. Wilkes, San Diego, for real party in interest.

KREMER, Presiding Justice.

Petitioner H.K. Sauer seeks a writ of mandate to reverse the superior court's orders imposing monetary sanctions and excluding all evidence of economic loss in Sauer's action against real party in interest Oak Industries, Inc. for wrongful termination of employment. We issued an alternative writ of mandate directing Oak to show cause why the relief prayed for should not be granted. Upon return and replication, oral arguments were heard. For the reasons set forth below, we deny the writ.

ISSUES

Sauer challenges the propriety of three orders. The first is the proposed order of Referee Higgs granting part of Oak's motion to compel discovery and recommending $8,000 in monetary sanctions and costs against Sauer for willful failure to follow the rules of discovery. The second is Judge Jones' order adopting Referee Higgs' recommendations. The third, and perhaps most significant, is Judge Woodworth's order granting Oak's motion in limine to exclude all evidence of economic loss as a sanction for Sauer's willful noncompliance with court ordered discovery.

Sauer contends the monetary sanctions imposed by Referee Higgs were improper as being without statutory basis and without proper findings or reasons for their imposition. Sauer contends Judge Jones, who entered an order adopting Referee Higgs' proposed order compelling discovery and imposing monetary sanctions, acted arbitrarily. Sauer asserts Judge Jones failed to conduct an independent review of Referee Higgs' proposed order and also failed to afford Sauer an opportunity to argue the matter. Sauer further contends Judge Woodworth acted arbitrarily and capriciously in dismissing his claim for economic damages as a sanction because the evidence shows his failure to produce certain documents requested by Oak was

inadvertent and because less onerous sanctions were more appropriate.

FACTUAL AND PROCEDURAL HISTORY

Trial on Sauer's complaint for wrongful termination was originally set for August 27, 1986. In late May of 1986 counsel for all parties met to discuss the possibility of a continuance. Sauer's attorney, Brian Monaghan, strongly opposed a continuance, indicating a desire to proceed with the trial date regardless of whether all contemplated discovery was completed. The parties therefore entered into two stipulations setting forth the ground rules for the intensive discovery that was to take place over the next two and a half months. The first stipulation, approved by the court, provided for altered discovery cutoff dates and extended the time in which summary judgment motions could be heard prior to trial. The second stipulation provided, inter alia, that Sauer would respond to Oak's first set of interrogatories and produce all documents identified in the interrogatories no later than June 27, 1986. The stipulated discovery cutoff date was August 1, 1986.

Sauer had testified at his deposition in April 1985 about the existence and location of his personal financial records. Oak asked that these be preserved. A week later, Oak wrote Sauer requesting he produce copies of his personal financial records as well as his SEC notes (four pages of handwritten notes Sauer took while reviewing his deposition testimony taken during a Securities Exchange Commission investigation of Oak) and his calendar for 1982.

In a letter to Sauer dated June 17, 1986, Oak confirmed the expectation that Sauer would respond to the request for interrogatories and production of documents including his "personal financial statements, bank statements, tax returns, and the like, by the close of business June 27, 1986...." (Emphasis added.) Despite the agreement between the parties concerning the significant discovery cutoff dates, Monaghan brought an ex parte motion on June 26 requesting a continuance of the trial date. The motion was denied.

Sauer produced documents on June 27, but according to a letter from Oak's attorneys, the production was totally inadequate. The letter stated the documents provided consisted of thirteen pages, most of which Oak claimed it had already produced for Sauer. In addition, the few documents that were produced were illegible in part. The letter further specified the various documents requested for production including "(f) Mr. Sauer's bank statements and personal and business financial records since his resignation from Oak." (Emphasis added.) Also, the letter advised that Sauer's bank statements were "not privileged in cases of this type."

Finally, on July 2, Sauer provided Oak with his answers to interrogatories. Oak contends answers concerning damages were not provided. For example, Sauer referred Oak to Black's Law Dictionary in answer to interrogatories asking him to define his damages and to specify the damages he alleges he suffered. Also, Oak claims interrogatories addressing Sauer's post-employment income, Nos. 84, 85, and 86, were not answered based on Sauer's assertion he had already provided documentation to Oak in this area. Oak, however, asserts it never received such documentation.

Thereafter, on July 10, 1986, Oak served Sauer with a formal "Second Request for Production of Documents." Request No. 18 specifically sought "[a]ll documents and writings which constitute, reflect, discuss, mention, comment upon or otherwise refer or relate to plaintiff's bank statements and personal and business financial records since his resignation from or termination by Oak, including but not limited to: (a) All personal and business checking, savings and other account records from Great American and Glendale Federal or any other bank where plaintiff has or had an account; (b) Plaintiff's 'bank file' where he keeps financial documents as identified in his deposition; and (c) All documents referring or relating to plaintiff's 'IRA' accounts."

Sauer had until July 30 to respond and produce.

In a letter dated July 16, Oak advised Sauer that certain documents had not been produced as requested including Sauer's bank records and financial statements. The letter further advised that "other documents located in Mr. Sauer's unsearched eleven boxes of documents in his garage" had not been produced. Sauer responded by claiming bank statements are privileged personal financial information. ¹

On August 1, Oak sent yet another letter to Sauer advising that his response to the second request for production of documents was due on July 30, and had not been received. According to a letter from Oak's attorneys dated August 4, Monaghan had "stipulated to shorten time for service and filing of defendant's motion to compel and for other relief." Thus, on August 5, 1986, Oak filed a motion to compel further answers to interrogatories and for production of documents. Oak's moving papers were voluminous. Sauer's opposition, however, filed on August 7, consisted of only four pages. Since Monaghan was to be out of town from August 6-14, the parties stipulated the matter would be heard by Referee Higgs on August 15. ²

On August 7, Sauer responded to Oak's second request for documents, but the documents produced did not include three specific items: Sauer's SEC notes, his 1982 calendar or his personal financial records. Sauer's personal financial records were not produced on the ground they were confidential.

At the hearing before Referee Higgs, Oak outlined the instances of Sauer's failure to meet the stipulated discovery deadlines, his failure to produce requested documents and his failure to adequately answer certain interrogatories, specifically those pertaining to his post-employment income. Oak played a video tape of one of Sauer's expert witnesses showing she was unprepared at her deposition. Oak also informed the referee that another of Sauer's expert witnesses had failed to appear at his noticed deposition.

On August 18, Referee Higgs issued a proposed order in which he noted the brevity of Sauer's opposition papers. The referee also noted Sauer's opposition papers contained no supporting correspondence, declarations or citations, but only unsupported conclusory statements. Referee Higgs observed that Sauer's response to Oak's second request for production of documents was made only after the motion to compel was filed and was not only untimely and non-responsive, but also unverified. Referee Higgs recommended that Sauer be ordered to

"A) Identify those documents which are responsive to defendant's first set of interrogatories;

"B) Produce those documents identified pursuant to the terms of the parties' stipulation;

"C) Produce documents responsive to defendant's first and second requests for production to the extent those documents have not already been produced and to specifically provide the documents listed and described in OAK's Separate Statement Re Documents...."

Oak's Separate Statement Re Documents specified the documents yet to be produced, including Request No. 13 in the Second Request for Production of Documents for "Sauer's financial records and bank statements including those regarding his real estate and business endeavors, banking transactions and loan documents, and his 'bank file.' " ³ Item C of the proposed order The next day, Sauer appeared ex parte before Judge Jones to object to the order. However, he objected only to the imposition of the monetary sanctions, not to the substance of the order compelling discovery or the procedure followed by the referee.

requiring production of documents responsive to Oak's first and second...