On March 24, 2023, the California Fourth District Court of Appeal, Division Three, issued an opinion in Deck v. Developers Investment Co., Inc., et al. (G061287), severing an appeal to an award of monetary discovery sanctions from an order of issue sanctions.
The matter originated as an elder abuse case. The plaintiff served as the successor-in-interest to an 85 year-old woman who had fallen and sustained severe injuries while living in a retirement community. This resulted in her placement in a nursing home. The plaintiff asserted that the nursing home, in an effort to maximize profits, under-staffed the facility. Due to neglect, the elderly woman fell a second time while in the nursing home. She died 23 days later.
Due to the complexity and seriousness of the case, the trial court appointed a discovery referee. The defense felt that the plaintiff had resorted to scorched earth discovery; indeed she filed 82 discovery motions. This resulted in defendants producing 25,000 pages of documents, and submitting to over 40 depositions. However, defendants failed to comply with numerous discovery orders in the process. Ultimately defendants (and not their counsel) paid $50,550 in monetary sanctions. This discovery battle culminated in an order of issue sanctions, brought about by defendants’ violation of a discovery order.
The discovery referee made some telling factual findings against defendants: “Never have I seen such blatant disregard of discovery and discovery Orders as the conduct by these Defendants.” The referee at one point also wrote “Defendants have consistently, repeatedly, unabashedly, and without apology blatantly disregarded nearly every Report & Recommendation and the corresponding Court Orders.”
The Fourth District Court of Appeal ultimately severed the issue sanction order from the preceding $37,000 monetary sanction order. The Court noted the existing rule, that issue sanctions are separately appealable only when the monetary sanctions and issue sanctions are “based on the same conduct” and “the two are inextricably intertwined.” While the same conduct in Deck gave rise to both sets of sanctions, the Court held that the orders were not “inextricably intertwined.” The Court distinguished an order of monetary sanctions, which are mandatory in the absence of substantial justification, and an order of issue sanctions, which are based on a willful violation of a prior court order. “The appeal from the order imposing monetary sanctions therefore can be examined and resolved independently of the order imposing issue sanctions.”
Separately, the Court also concluded that the trial court did not abuse its discretion in ordering the monetary sanctions. Defendants argued that they had substantial justification in opposing the underlying discovery motion because they produced documents on the eve of a discovery law and motion hearing. The Court wrote: “Defendants argue monetary sanctions against them were impermissible because on the night before the hearing on Motion No. 82 they served several lengthy discovery responses which they claim constituted ‘full but untimely production.’ Untimely compliance is not compliance. And the untimeliness in this case was extreme and the product of bad faith.”
This decision makes clear that in most instances an order of monetary sanctions will be immediately appealable, while an order of issue sanctions is only appealable after entry of final judgment. It also signals a rule of law tantamount to the longstanding rule on unverified discovery – “unverified discovery is no discovery.” Now, “untimely compliance is not compliance.”
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