Trio of Sanctions Totaling $7,335 Is Non-Appealable

Wednesday, November 23, 2016

Page 3

Court of Appeal Declares:

Trio of Sanctions Totaling $7,335 Is Non-Appealable

Panel Rejects 1993 Dictum From Its Then-Presiding Justice That Contemporaneous Sanctions Can Be ‘Aggregated’ to Meet Threshold Amount for Pre-Judgment Appeability

By a MetNews Staff Writer

A statute permitting pre-trial review of a sanction that exceeds $5,000 is not authority for an appeal of three sanctions, in a single order, totaling $7,335, where none of the individual sanctions was in the threshold amount, the Court of Appeal held yesterday.

Div. Three of the Fourth District Court of Appeal, in an unpublished opinion by Justice Eileen Moore, dismissed the appeal by Ruth McClamma Stueve and other heirs to the Alta Dena Dairy fortune, of sanctions imposed by Orange Superior Court Judge Robert J. Moss.

A defendant in the case, the law firm of Berger Kahn, had made motions to compel further production of documents and further responses to requests for admissions and form interrogatories, seeking sanctions in connection with each of the three motions. A discovery referee, in a single document, recommended the granting of each motion, with a proposed sanction attached to each failure to comply with discovery requests, and the judge signed a single order.

“In this case,” Moore wrote, “the trial court directed the Stueves to pay three discovery sanctions ($2,835, $1,800, and $2,700). Because none of the pretrial sanctions exceeded the $5,000 appealability threshold, this court lacks jurisdiction to proceed on this appeal.

Sanctions Separately Stated

The jurist rejected the Stueves’ contention that the reality was that Moss slapped them with a $7,335 sanction. She said:

“The combined total of the three sanction amounts ($7,335) was never stated in either the referee’s recommendation or the court’s final order. Further, it is apparent that the three monetary sanctions were adjudicated separately. To adopt the Stueves’ characterization of the three sanction awards as a combined amount simply because they were each included in a single written order would place form over substance.”

The Stueves argued that the three sanctions should be “aggregated,” citing this dictum in a 1993 opinion from the same division in Champion/L.B.S. Associates Development Co. v. E–Z Serve Petroleum Marketing, Inc. (1993) 15 Cal.App.4th 56.

There, Presiding Justice David Sills (since deceased) said the appeal from a $315 sanction order could not be entertained because the minimum amount was (at that time) $750, even though the $315 sanction was imposed in tandem with one for $1,500.

Sills’ Dictum

“Having said this,” Sills wrote, “we recognize that there may be situations where ‘aggregating’ separate sanction awards in order to reach the $750 minimum may be appropriate.”

He continued, at 59-60:

“Let us assume that a defendant simultaneously propounds a set of interrogatories, a set of requests for admission, and a request for production of documents to a plaintiff, and defendant believes plaintiff’s responses are inadequate. Defendant files a motion (or perhaps two or three motions) to compel further discovery. Plaintiff then opposes the motion (or motions), asserting the responses are complete. The trial court sides with defendant and issues three separate sanction awards of $600 each. In such a case, it could well be that it is the same conduct which is being sanctioned three times. If so, we think ‘aggregation’ would be proper. Absent such circumstances (which are certainly not present in the instant appeal), the $750 bright line test applies.”

Moore noted that Justice Thomas Crosby (also deceased) said in a concurring and dissenting opinion:

“I vehemently disagree…with the majority’s dictum concerning aggregation of a series of minuscule discovery sanctions awards to reach what they characterize as a ‘$750 bright line.’”

Moore also pointed out that Sills’ dictum was “squarely rejected in Calhoun v. Vallejo City Unified School Dist. (1993) 20 Cal.App.4th 39, 45. She commented:

“We agree with the reasoning of Calhoun and similarly reject the dictum in Champion/L.B.S. If appellate courts allowed parties to aggregate multiple pretrial sanctions amounts in order to file an appeal it would: 1) run counter to the Legislature’s intent to limit the number of interlocutory appeals from sanctions orders; 2) create uncertainty as to when sanction awards could be appealed; and 3) violate the “bright line” rule of appealability created by the Legislature.

“Further, we note that [Code of Civil Procedure] section 904.1 has been amended several times since Champion/L.B.S. and Calhoun were published, and the amendments have not rejected Calhoun’s “bright line” rule or adopted Champion/L.B.S.’ suggestion of allowing aggregation of separate sanction orders in certain situations….Moreover, the Legislature has increased the appealability threshold from $750 to $5,000, which further indicates its intent to limit the number of interlocutory appeals.”

Writ Review Sought

The Stueves also argued that if the sanction orders are nonappealable, the court could treat the appeal as a writ petition. (In Campion, then-Justice Donald King (now retired), wrote for the First District Div. Five in observing: “These ‘small potatoes’ sanction cases—whether or not meritorious—properly call for us to put on our writ hats, not our appeal hats.”)

Moore found there to be no basis for writ relief. She explained:

“Here, the Stueves argue there is ‘more than enough time’ before final judgment to address the three discovery sanctions by way of writ proceeding. While that may be a true statement, it is simply not an extraordinary circumstance. More importantly, the Stueves have not justified a departure from the Legislature’s intent—and our general preference—that ancillary pretrial issues (such as discovery sanctions) should ordinarily be reviewed only after a final judgment.”

Craig Simon, managing partner of Berger Kahn, commented yesterday:

“Berger Kahn respects aggressive advocacy, but the attempted appeal of the discovery sanctions here wasted judicial and party resources. The court of appeal got it right; Berger Kahn’s motion to dismiss the appeal was properly granted.”

Plaintiffs’ Contentions

Moore, in one of three opinions in the case is 2013, provided this description of the litigation:

“The Stueves have sued many parties, including several attorneys and law firms, on a plethora of grounds. The Stueves generally assert that they have been wrongfully deprived of their fortunes through a seemingly endless series of nefarious devices. In short, Attorney Raymond A. Novell, a lifelong friend of the Stueve family, allegedly teamed up with estate planning Attorney Jay Wayne Allen to drain off the family assets through a Pandora’s box of actionable wrongs. Over the years, Attorney Allen jumped from one law firm to another, perchance to avoid detection or perhaps because of detection. One of the law firms to which Attorney Allen took his tantalizing book of business was Berger Kahn. If the allegations are to be believed, Berger Kahn turned its back and happily collected fees while allowing Attorney Allen to help himself to its clients’ assets.”

The case is Stueve v. Berger Kahn, G052689.

Robert E. Barnes and Keobopha Keopong represented the Stueves and Allen L. Michel of Gipson Hoffman & Pancione acted for Berger Kahn.