C.A. Upholds $25,000 Sanction for Deposition Conduct

Thursday, December 17, 2009

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C.A. Upholds $25,000 Sanction for Deposition Conduct

By SHERRI M. OKAMOTO, Staff Writer

The Fourth District Court of Appeal has upheld the imposition of over $25,000 in sanctions against a San Diego attorney for misuse of the discovery process based on his conduct during the deposition of the opposing parties.

In an unpublished decision Tuesday, Div. One ruled that San Diego Superior Court Judge Ronald L. Styn had not abused his discretion in ordering Matthew B. Butler of Nicholas & Butler LLP and his clients to pay the costs of taking the depositions but that the trial judge had erred in issuing sanctions related to the anticipated costs of future depositions.

Butler represented Haddenn Construction and its owner Terry Johnson in a construction defect suit brought by Bob and Linda Hallam, who had hired the company to build a single-family residence.

The attorney also represented Johnson’s wife, Carlsbad attorney Maria Johnson, in defending against allegations of conversion and legal malpractice, based on the Halllams’ claim that Maria Johnson had represented them in connection with the construction project.

During the depositions of his clients, Butler allegedly instructed the Johnsons not to answer numerous questions on the grounds that the questions sought information protected by the attorney-client privilege and/or the spousal privilege and raised over 300 additional objections unrelated to any assertion of privilege.

The Hallams claimed that Butler also engaged in numerous discovery abuses during the depositions which unnecessarily delayed the questioning, such as posing improper objections as to the form of questions asked, attempting to limit the scope of the depositions, demanding offers of proof as to particular lines of questioning, posing an excessive number of “nuisance-value” objections in order to impede the flow of questioning, “coaching” the witnesses, and providing “speaking” objections.

They subsequently filed a motion to compel the Johnsons to answer the questions to which Butler had raised privilege objections and to impose sanctions based on Butler’s misuse of the discovery process during the depositions.

A discovery referee recommended that the trial court grant the motion to compel, and also recommended imposition of $35,607.03 in monetary sanctions against Butler and the Johnsons, including $11,907.03 for costs incurred in taking the depositions, $10,000 for costs to be incurred in the taking of future depositions, $10,500 in attorney fees related to the prior depositions, and $3,200 for the referee’s time in preparing his recommendation.

Styn made a few modifications to the referee’s evidentiary rulings and adopted the recommendation.

Butler and the Johnsons filed an interlocutory appeal arguing that Styn had abused his discretion in granting the motion to compel and challenging the imposition of sanctions.

Writing for the appellate court, Justice Cynthia Aaron explained that the panel could not review Styn’s order compelling discovery since such an order is not directly appealable. However, she said that the appellate court had jurisdiction to review the sanctions award because that order was based on conduct other than that at issue in the motion to compel.

Although the motion to compel and the motion for sanctions both arose from Butler’s invocation of the marital privilege and attorney-client privilege, Aaron emphasized “at no place in his recommendation did the referee state that he was recommending the imposition of sanctions based on Attorney Butler’s assertion of privilege objections, or the Johnsons’ unsuccessful opposition to the Hallams’ motion to compel,” reasoning that the trial court’s imposition of sanctions was therefore not premised on conduct related to the privilege objections.

Aaron further reasoned that the trial court had not abused its discretion in determining that Butler’s conduct warranted the imposition of sanctions for misuse of the discovery process.

Code of Civil Procedure Sec. 2023.010 authorizes the imposition of sanctions against anyone “[u]sing a discovery method in a manner that does not comply with its specified procedures” or “[e]mploying a discovery method in a manner or to an extent that causes unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.”

Aaron concluded that the terms “using” or “employing” as used in Sec. 2023.010 are broad enough to cover the actions of counsel defending a deposition and that Butler and the Johnsons had failed to demonstrate any error in the trial court’s adoption of the referee’s findings that Butler had made an excessive number of form objections which were invalid and disruptive, frequently engaged in speaking objections throughout the depositions, and improperly coached the witnesses.

But Aaron said the trial court was without statutory authority to impose sanctions for future costs.

Sec. 2023.030 authorizes a trial court to order a person who has engaged in the misuse of the discovery process to “pay the reasonable expenses…incurred by anyone as a result of that conduct.” As “[o]nly the expenses of the depositions that had already been conducted can be said to have been ‘incurred,’” Aaron opined that the trial judge erred in awarding sanctions for past and future depositions.

Presiding Justice Judith McConnell and Justice Alex C. McDonald joined Aaron in her decision.

The case is Hallam v. Johnson, D054852.