R.S.
CREATIVE, INC., Plaintiff and Appellant, v. CREATIVE COTTON, LTD., et al.,
Defendants and Respondents.
No.
B124163.
COURT
OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION FOUR
75 Cal. App. 4th 486; 1999 Cal. App. LEXIS 898; 89
Cal. Rptr. 2d 353; 99 Cal. Daily Op. Service 8192; 99 Daily
Journal DAR 10407
October
4, 1999, Decided
PRIOR HISTORY:
[**1] APPEAL from a
judgment of the Superior Court of Los Angeles County. Super. Ct. No. SC051449.
Stanley M. Weisberg, Judge.
DISPOSITION:
The order dismissing appellant's
complaint is affirmed. Defendants are to have their costs on appeal.
COUNSEL:
Lanahan & Reilley, Paul Raynor
Keating, John N. Zarian; Carroll, Burdick & McDonough and Donald T. Ramsey
for Plaintiff and Appellant.
Grace & Sater, Gregory J. Sater;
Kester & Isenberg and Charles F. Kester for Defendants and
Respondents.
JUDGES:
Opinion by Epstein, J., with Vogel (C.
S.), P. J., and Hastings, J., concurring.
OPINIONBY:
EPSTEIN
OPINION:
[*487] [***354]
EPSTEIN,
J.
The
trial court imposed terminating sanctions for misuse of discovery and
violations of court orders after it became evident that plaintiffs had
incorporated a forged contract in their complaint, had refused to [*488]
allow the completion of a principal's deposition after the forgery came
to light, and had destroyed evidence. We recount the activities of the
sanctioned party in detail to illustrate a kind of discovery abuse that is
intolerable in civil litigation. We find no abuse of the trial court's
discretion, and affirm the judgment (order of dismissal). [**2]
n1
n1 Although no
judgment was prepared, we treat the order of dismissal as a judgment for purposes
of review on appeal.
FACTUAL
AND PROCEDURAL SUMMARY
Renee
Sebastian is the chief executive officer, secretary, chief financial officer,
and sole director of R.S. Creative, Inc., a California corporation (RSC). There
are no other officers of RSC. RSC's offices are located in Ms. Sebastian's
home. RSC is in the business of designing, manufacturing [***355]
and distributing clothing. Respondents Creative Cotton, Ltd., and its
principal, Paul Shafran, also are in the clothing industry.
In
July 1995, RSC and Creative Cotton entered into a written contract. At one
point neither side to the contract was able to find its copy. Later, Ms.
Sebastian purported to have her copy, and sued on the basis of breach. The
contract she attached to her complaint, and which she claimed to be the actual
written agreement of the parties, was shown to be a forgery. Defendants located
their copy of the actual agreement and [**3]
used it to expose the fraud. RSC ultimately acknowledged that
defendants' copy is authentic. Because the authenticity of documents was a key
issue in the case, we refer to defendants' copy as the "genuine
contract."
In
February 1998, RSC and Ms. Sebastian sued Creative Cotton and Mr. Shafran for
breach of written contract, declaratory relief, an accounting, and breach of an
oral contract. The cause of action for breach of written contract alleged:
"Creative is a manufacturer of apparel, specializing in knitwear. On or
about July 26 and July 27, 1995, Shafran, individually and on behalf of Creative,
entered into a three-year agreement (the 'Commission Agreement') with
Sebastian, individually and on behalf of RSC. A true and correct copy of the
Commission Agreement is attached hereto as Exhibit 1." Plaintiffs alleged
that the defendants breached the express terms of the agreement by purporting
to terminate it in December 1997 without the required notice.
The
fourth cause of action, for breach of oral contract, alleged: "Beginning
in or about 1993 Sebastian and Shafran agreed that Shafran would convey ten
percent of the outstanding capital stock of Creative to Sebastian in
consideration [**4] of her services as
a sales representative for Creative (the 'Stock Agreement'). Shafran reiterated
his promise to convey stock to
[*489] Sebastian on numerous occasions
after 1993. Sebastian materially relied upon the promises made by Shafran and
continued to do work for Shafran and Creative in reliance thereon until and
including 1997." The complaint alleged that Ms. Sebastian had performed
her obligations under the terms of the Stock Agreement, but had not been given
the promised stock.
Significantly,
the first sentence of the agreement incorporated as exhibit 1 of the complaint
(the purported contract) is materially different from the genuine contract. The
genuine contract expressly provides that Ms. Sebastian relinquished any claim
to ownership or profit share in Creative Cotton: "This will confirm our
agreement on [Ms. Sebastian's] present, past and future compensation, instead
of my getting a percentage ownership or profit sharing in the business."
In contrast, the purported contract omits the language precluding an ownership
or partnership interest for Ms. Sebastian: "This will confirm the terms of
our agreement as we have discussed. You have agreed both personally [**5] and as President of Creative Cotton, Ltd.
('CCL') that Renee Sebastian/R.S. Creative, Inc. ('RSC') is entitled to and
will receive the following [setting out the commission structure from the
genuine agreement]." The alteration in the purported contract enabled Ms.
Sebastian to allege an oral agreement giving her an ownership interest.
Defendants
noticed Ms. Sebastian's deposition for April 8, 1998. She was asked to produce
numerous documents at her deposition, including all documents "which ...
constitute, refer to, provide evidence of, or reflect Exhibit 1 to the Complaint
[the purported contract]." Ms. Sebastian was also asked to produce all
documents which "provide evidence of, refer or relate to, or reflect in
any manner the negotiation, preparation, creation, drafting, editing, revising,
execution, performance, waiver, modification, repudiation, or breach of Exhibit
1 to the Complaint." The definition of "document" in the notice
of deposition included computer
[***356] tapes, discs and any
information stored in a computer.
Michael
Echevarria, counsel for plaintiffs, telephoned Gregory J. Sater, counsel for
defendants, and asked for a three-week continuance of Ms. [**6]
Sebastian's deposition because she would be traveling out of town for
that time. When Mr. Sater replied that his clients were unlikely to agree to
the postponement, Mr. Echevarria said that Ms. Sebastian was too ill to be
deposed. The parties finally stipulated that the deposition would be continued
until April 29 and 30, 1998; that Ms. Sebastian would produce the documents
requested by defendants unless objections were made on privilege or privacy
grounds; that defendants would not be required to file a responsive pleading
until the conclusion of Ms. Sebastian's deposition; and that plaintiffs would
not serve or conduct any discovery until 10 days after [*490]
the conclusion of Ms. Sebastian's deposition. On April 3, 1998, the
trial court entered an order in the terms of the stipulation.
Ms.
Sebastian's deposition began on April 29, 1998. Plaintiffs produced another
copy of the purported contract (exhibit B to Ms. Sebastian's deposition).
Counsel for defendants asked to see the original of the purported contract.
Plaintiffs' counsel stated that he did not have an original with him and did
not know whether his client had the original. Plaintiffs did not produce any
computer [**7] records at the
deposition.
Ms.
Sebastian testified that she and Mr. Shafran signed exhibit B at the same time
and that he took the original and she kept a copy. She said that she had typed
the contract on the desktop computer at the Creative Cotton showroom in Los
Angeles. Ms. Sebastian later took the computer home. When asked if she had
altered exhibit B, Ms. Sebastian said it was the agreement both she and Mr.
Shafran had signed. She also testified that the contract attached to the
complaint was a true copy of the commission agreement with Creative Cotton. Ms.
Sebastian denied having altered the genuine contract to produce the copy
attached to the complaint, or the copy marked as exhibit B at her deposition.
A copy
of the genuine contract was marked as exhibit YY on the second day of this
deposition. Ms. Sebastian identified both her signature and that of Mr. Shafran
on the document. She asked to see exhibit B, the altered document, while she
examined exhibit YY. She testified that she had prepared exhibit YY on her home
computer. She was unable to explain how the signatures on exhibit B and exhibit
YY could be in identical positions. When asked to explain the differences in
[**8] the first sentence of the two
versions, Ms. Sebastian said she did not know, and said that there were several
documents that went back and forth.
During
Ms. Sebastian's deposition on April 29, counsel for defendants sought a
stipulation that she would not use her laptop or desktop computer until a
computer expert for defendants had an opportunity to examine them. Absent a
stipulation, counsel for defendants stated that he intended to seek an
emergency order from the court the following morning to seek production of the
two computers, and all disks, floppy disks, and hard drives, in order to
determine the source of the two versions of the contract.
Ms.
Sebastian stipulated that the computers and diskettes would not be operated or
touched from April 29, 1998 until defendants' computer expert could examine
them.
Ronald
Kaplan, a computer expert for defendants, was available to conduct the
inspection of Ms. Sebastian's computers on May 2, 3, and 4, 1998, [*491]
but was not allowed to inspect them until May 5, 1998. His examination
revealed that the desktop computer had been used on Saturday, May 2 and Sunday,
May 3, and that the laptop had been used on April 30, May 2, and May [**9] 4. A word processing file was deleted from
the desktop computer on May 3. Although
[***357] Mr. Kaplan was told that
the plaintiffs had used the desktop computer between 1995 and 1997, it held no
word processing file dated prior to 1998. The hard disk either had been wiped
clean of all data, or a different hard disk had been installed in the desktop
computer. Mr. Kaplan could not pinpoint when this occurred; he was able to
determine only that the deletion was made between February 1998 and his
inspection on May 5. The desktop computer revealed that a floppy disk had been
loaded onto the hard drive at some point. When Mr. Kaplan asked Ms. Sebastian
where her floppy disks were so that he could inspect them, Ms. Sebastian said
that she did not have any and had never used them. Mr. Kaplan observed a large
plastic container next to the desktop which was of the sort used to store
floppy disks. It was empty. He could not determine what the person accessing
the computer on May 2 and 3, 1998 had done.
Mr.
Kaplan discovered that on May 2, 1998, a word processing file titled "_$
corp1.doc" was deleted from the laptop computer. Numerous other files were
deleted from the laptop between April [**10]
29 and his inspection on the morning of May 5.
Mr.
Kaplan was unable to find any documents or document fragments resembling the
purported contract on either the desktop or laptop computer. The deleted data
could not be recovered. Mr. Sater, counsel for defendants, told plaintiff's
counsel, Mr. Waller, that he wanted to take possession of the computers to
prevent further tampering or, alternatively, a commitment that plaintiffs'
counsel would take possession of the computers. Mr. Waller did not agree to
either option.
Mr.
Waller had agreed that Ms. Sebastian's deposition would resume on the following
day, May 6, 1998. At 9:00 a.m. on May 6, Mr. Waller called counsel for
defendants and said his client was stressed by the computer inspection and
would not appear for the deposition on that day, but that she would appear the
next day, May 7, to resume her deposition. Mr. Waller called again on the
morning of May 7 to say his client would not appear for the deposition. He
agreed to May 11, 1998, as the new date for the continued deposition. But on
May 8, Mr. Waller told counsel for defendants that his client would not appear
on May 11, and that she would be out of town for that entire [**11] week.
Counsel
for defendants continued to attempt to set a date for the resumption of Ms.
Sebastian's deposition, and to reach an agreement to allow him [*492]
to gain custody of the computers from Ms. Sebastian's house. He was
unsuccessful. On May 13, Mr. Waller told defendant's counsel, Mr. Sater, that
his client would not agree to any date for the resumption of her deposition
because she was ill. Mr. Sater replied that this was unacceptable.
On May
14, Mr. Waller faxed a letter from a psychiatrist who said that a
"constellation of physical symptoms" Ms. Sebastian was experiencing
would preclude her from testifying at deposition any time before May 25. The
following day, counsel for each side stipulated to extend the time defendants
had to file a response to the complaint, and to place Ms. Sebastian's desktop
computer in third party storage which could only be accessed by counsel for
both sides appearing together. The trial court signed a stipulated order
requiring Ms. Sebastian to appear for deposition on May 26, 1998, and
thereafter until it was completed.
Mr.
Sater went to Palm Springs over the Memorial Day weekend and prepared for Ms.
Sebastian's deposition. When he [**12]
arrived at work on Tuesday, May 26, the videographer and court reporter
were present and prepared to record Ms. Sebastian's deposition. Mr. Sater found
a fax which had been received by his office at 3:45 p.m. the preceding Friday
while he was in Palm Springs and the other attorney for defendants, Mr.
Friedman, was out of town. The fax, from attorney Bruce A. Nahin, enclosed an
executed substitution of attorney form naming him as new counsel. [***358]
Also enclosed was a first amended complaint, which deleted Ms. Sebastian
as an individual plaintiff. Neither the substitution of attorney nor the
amended complaint was conformed.
The
first amended complaint incorporated the genuine contract rather than the
purported contract, which had been incorporated in the original complaint. It
also omitted the cause of action for breach of an oral contract that had
claimed an ownership share in Creative Cotton, and added a cause of action for
infringement of trade secrets, confidential and proprietary information. The
fax expressed a "desire to coordinate" deposition dates for Ms. Sebastian
and for Mr. Shafran. It did not say that Ms. Sebastian would not appear for the
continuance of her deposition. [**13]
When
she did not appear by 10:22 a.m. on May 26 to complete her deposition, Mr.
Sater telephoned Mr. Nahin. Mr. Nahin stated that since Ms. Sebastian was no
longer a party to the complaint she would not appear for her continued
deposition. Mr. Nahin sent a letter to Mr. Sater stating in part:
"Enclosed please find the First Amended Complaint which will be filed
today and you will note Ms. Sebastian is no longer a party. Her medical
condition therefore is not at issue nor was the exhibit attached to the
original [*493] complaint. My client also has no need to
have the computer in storage and is prepared to release same to your
client." Mr. Nahin offered to meet and confer with Mr. Sater to bring the
discovery process "into a less warlike atmosphere."
Mr.
Sater objected to the position taken by Mr. Nahin and sent him a letter to that
effect. Mr. Nahin responded by offering to "make my self [sic] available
for deposition during the next few weeks for the party most knowledgeable at
R.S. Creative. Like wise [sic] I would ask you to provide me with dates
within 30 days to take the deposition for the party most knowledgeable at
Creative Cotton. [P] The Stipulation [**14]
and Court Order that I reviewed for the first time late Monday afternoon
seemed to imply that plaintiff Renee Sebastian made certain agreements. The
deposition noticed was for plaintiff Renee Sebastian. It had been my assumption
that once Renee was no longer a plaintiff that this Stipulation and Order would
no longer be in affect [sic]. Indeed nowhere in the file is there a
Notice of Deposition of a party most knowledgeable at R.S. Creative."
Mr.
Nahin acknowledged that the genuine contract provided by defendants was the
true and correct copy of the agreement between the parties. He said that the
genuine contract was now the attachment to the first amended complaint. An
exchange of correspondence between counsel for the parties followed, discussing
the outstanding issues between them.
On
June 15, 1998, defendants filed a motion for terminating sanctions or, in the
alternative, for lesser sanctions, based on the facts we have summarized.
Plaintiff RSC filed a declaration of Mr. Nahin in opposition to the motion. In
it, Mr. Nahin declared that counsel for defendants had not agreed to his
efforts to establish an "orderly deposition schedule" for the case.
He reiterated his position [**15] that
Ms. Sebastian was not obligated to complete her deposition because she was no
longer a plaintiff; that he did not represent her; and that the proper course
was for defendants to notice a new deposition of the party most knowledgeable
about RSC.
Mr.
Sater responded with a supplemental declaration in support of defendants'
motion for terminating sanctions. In it he stated that Mr. Nahin had taken the
position that a new deposition of the person most knowledgeable of RSC would
have to be noticed and that Mr. Nahin had not offered to complete the deposition
of Ms. Sebastian. He also pointed out that the first copy of the substitution
of attorney form from Mr. Nahin stated that he was coming into the litigation
as counsel for Renee Sebastian. A second copy of the [***359] substitution of
attorney sent to Mr. Sater by Mr. Nahin also states that Mr. Nahin is attorney
for Renee Sebastian. On each document, this was [*494] shown at the upper
left-hand corner where counsel is identified. The text of the substitution of
attorney states that RSC was substituting Mr. Nahin and his firm as counsel.
At
oral argument on the motion for terminating sanctions, Mr. Nahin repeated his
[**16] position that Ms. Sebastian was
not required to complete her deposition because she was omitted as a party from
the first amended complaint. The trial court asked Mr. Nahin to state Ms.
Sebastian's position in RSC. Mr. Nahin said: "I read the domestic stock
filing certificate that counsel presented and ... she's the officers [P] ...
and I have no reason to tell the court otherwise." THE COURT RESPONDED:
"Her activities should clearly be attributable to or attributed to the
corporation then." Mr. Nahin again repeated that the personal deposition
of Ms. Sebastian was not the same as a deposition noticed for the person most knowledgeable
about RSC. The trial court said: "But she is the corporation, from what I
understand here. It's not as though she was a minor stockholder and somehow
what she did would unduly prejudice a party. She is the party in the whole
process."
Mr.
Nahin argued that alternative sanctions would be more appropriate. He said:
"We're not disputing the issue of that first contract and the like."
The trial court expressly stated that it had considered all alternatives to
terminating sanctions and "they were presented to me in great detail by
the moving party. [**17] And as far as the options I have here, I
think the appropriate sanction is that of terminating the action because of the
conduct of the witness and the plaintiff in this matter. She is not just a
witness, she is the plaintiff and the principle [sic] on behalf of the
plaintiff." The trial court announced that it would grant the motion to
terminate, and awarded sanctions of $ 5,000 against plaintiff RSC, and the
formal order imposed those sanctions.
A
notice of appeal on behalf of RSC was filed which stated that "defendant
Renee Sebastian and R.S. Creative Incorporated" appeal from the order
granting terminating sanctions. The appeal by Renee Sebastian was later
abandoned.
While
the case was on appeal, RSC moved to vacate the dismissal in the trial court.
It submitted declarations in support of that effort, but eventually withdrew
the motion in May 1999. In April 1999, we denied RSC's "Motion for Factual
Determinations and Request to Take Evidence on Appeal" without prejudice
to raising such issues that are supported by the record on appeal.
DISCUSSION
This
is the first reported California case to consider terminating sanctions for
spoliation of evidence after the Supreme [**18] Court's decision in Cedars-Sinai [*495]
Medical Center v. Superior Court (1998) 18 Cal. 4th 1 [74 Cal. Rptr.
2d 248, 954 P.2d 511]. In that case, our high court ruled that there is no
tort cause of action for spoliation of evidence against a party to the
litigation. The court emphasized the availability of other remedies for
spoliation, including terminating sanctions under Code of Civil Procedure section
2023. n2 The court recognized the
strong public policy "favoring use of nontort remedies rather than
derivative tort causes of action to punish and correct litigation
misconduct." (18 Cal. 4th at p. 11.)
n2 All statutory
references are to the Code of Civil Procedure unless otherwise indicated.
The court
observed: "Destroying evidence in response to a discovery request after
litigation has commenced would surely be a misuse of discovery within the
meaning of section 2023, as would such destruction in anticipation of a
discovery request. [**19] " (18 Cal. 4th at p. 12.) The
Supreme Court examined the broad range of sanctions provided [***360]
in section 2023 for a misuse of the discovery process: "The
sanctions under Code of Civil Procedure section 2023 are potent. They
include monetary sanctions, contempt sanctions, issue sanctions ordering that
designated facts be taken as established or precluding the offending party from
supporting or opposing designated claims or defenses, evidence sanctions
prohibiting the offending party from introducing designated matters into
evidence, and terminating sanctions that include striking part or all of the
pleadings, dismissing part or all of the action, or granting a default judgment
against the offending party." (18 Cal. 4th at p. 12.)
The Cedars-Sinai
court also examined other deterrents to spoliation of evidence by a litigant,
including the evidentiary inference that evidence made unavailable was
unfavorable to the party responsible (Evid. Code, § 413); disciplinary sanctions by the
State Bar of California against the lawyers involved (Bus. & Prof. Code, § 6106, 6077; [**20] Rules Prof.
Conduct, rule 5-220); and prosecution for the misdemeanor of willful
destruction or concealment of evidence under Penal Code section 135. n3
n3 Penal Code section
135 states: "Every person who, knowing that any book, paper, record,
instrument in writing, or other matter or thing, is about to be produced in
evidence upon any trial, inquiry, or investigation whatever, authorized by law,
willfully destroys or conceals the same, with intent thereby to prevent it from
being produced, is guilty of a misdemeanor."
Section 2023 provides that dismissal may be
used as a sanction when there has been a misuse of the discovery process. The
statute states in pertinent part that "(a) Misuses of the discovery
process include, but are not limited to, the following: [P] ... [P] [**21]
(4) Failing to respond or to submit to an authorized method of
discovery. [P] (5) Making, without substantial justification, an unmeritorious
objection to discovery. [P] (6) Making an
[*496] evasive response to
discovery. [P] (7) Disobeying a court order to provide discovery."
RSC
would have us conclude that the dismissal of its complaint arose from
"misunderstandings" and that it was based "on a corporate
officer's failure to attend the third day of her individually noticed
deposition." IT ARGUES: "At the hearing dismissing appellant's case,
sideshows--regarding turnover of a computer hard drive, an incorrectly attached
contract to the initial complaint and confusion about attendance at a
deposition--became center stage in a lawsuit that merely asked for unpaid
commissions on a contract that had been in force and honored by defendants for
the previous three years." In light of the history we have summarized,
this characterization is a gross understatement of the record.
" ' "The power to impose discovery
sanctions is a broad discretion subject to reversal only for arbitrary, [**22]
capricious, or whimsical action. [Citations.] Only two facts are
absolutely prerequisite to imposition of the sanction: (1) there must be a
failure to comply ... and (2) the failure must be wilful ...." ' " ( Vallbona
v. Springer (1996) 43 Cal. App. 4th 1525, 1545 [51 Cal. Rptr. 2d 311].)
The record amply supports the trial court's
exercise of its discretion in dismissing the complaint as a sanction for the
repeated efforts of the plaintiffs to thwart discovery, including the violation
of two discovery orders. Renee Sebastian was the only principal of RSC. At all
times relevant to this appeal she acted on its behalf as well as her own. Under
these circumstances, we find no merit in the argument made in the trial court
that defendants were not entitled to complete the deposition of Ms. Sebastian
which it had begun. We reject the argument that Ms. Sebastian could further
delay the deposition by the expediency of filing a new complaint removing
herself as an individual party plaintiff. It is plain that she acted for RSC;
indeed, the evidence indicates
[***361] that she and RSC were
one and the same. For the same reason, there is no merit in RSC's related
[**23] argument that the dismissal was
improper because it was based on conduct of Ms. Sebastian rather than RSC.
We
recognize that terminating sanctions are to be used sparingly, only when the
trial court concludes that lesser sanctions would not bring about the
compliance of the offending party. The record demonstrates repeated violations
of stipulations and court orders, a forged document offered as true, and
deliberate destruction of evidence pertinent to exposing that fact.
RSC
acknowledges that the termination sanction was based, at least in part, on
forgery of the contract and the alleged destruction of evidence. It [*497]
argues that these are improper bases for the sanctions. But, once again,
RSC presents an overly simplified account of the record. Spoliation is the
intentional destruction or suppression of evidence ( Cedars-Sinai Medical
Center v. Superior Court, supra, 18 Cal. 4th at p. 4.) A traditional remedy
for spoliation of evidence is discovery sanctions under [**24] section 2023. (18 Cal. 4th at p. 12.) The trial court did not abuse its
discretion by basing its order, in part, on the alteration of the contract and
the use of the computers contrary to the stipulation of the parties.
RSC
also argues that it was prevented from obtaining a fair hearing on the motion
for terminating sanctions because its attorney, Mr. Nahin, had a conflict of
interest in that sanctions (in the amount of $ 40,200) were sought against both
him and his clients. n4 (Defendants
sought $ 13,275 as monetary sanctions for Ms. Sebastian's failure to appear at
her deposition. They also sought an additional $ 25,280 in fees and costs
related to the efforts to obtain computer records.) RSC may, of course, seek
its remedy against Mr. Nahin. (See Carroll v. Abbott Laboratories, Inc.
(1982) 32 Cal. 3d 892, 898 [187 Cal. Rptr. 592, 654 P.2d 775].) But a rule
preventing a remedy against a party and the party's attorney based on this sort
of "conflict" would eviscerate the statute, which expressly
authorizes such relief. We decline to adopt such a rule. We also observe that
RSC failed to present this argument to the trial court, in a motion for relief
[**25] under section 473 or otherwise.
It is not entitled to raise it for the first time on appeal.
n4 Neither Mr. Nahin
nor any of plaintiffs' other trial counsel represents RSC on appeal.
RSC
also argues that the dismissal of its case violated due process because
terminating sanctions should only be used as a last resort and because there
was no showing that Renee Sebastian would not complete her deposition. We do
not understand how RSC can make the second argument in light of its adamant
position that Ms. Sebastian would not appear to complete her deposition, and
that a new notice for the person most knowledgeable about RSC would have to be
served.
On the
record we have summarized, we find no due process violation. RSC and Ms.
Sebastian had ample opportunities to comply with discovery orders, but failed
to do so. Section 2023 authorizes terminating sanctions in the first instance
in egregious cases such as this one. Neither RSC nor Ms. Sebastian attempted to
take any affirmative steps to support their position. [**26] There is no
indication in the record that they sought a protective order to stop the
continued deposition of Ms. Sebastian, or that its position regarding the need
for a new notice after the filing of the amended complaint was presented to the
trial court until the motion for terminating sanctions was filed. [*498]
RSC
argues that there was no evidence before the trial court that the missing
computer files were destroyed in violation of the stipulation, or could not be
retrieved. The trial court implicitly rejected that argument. Properly so. The
parties had stipulated that Ms. Sebastian's computers would not be turned on or
operated [***362] between April 29th and the time the expert
for defendants could examine them. Contrary to the stipulation, they were
operated during that time period, some files were entirely deleted during this
period, and it is reasonably inferable that others were as well.
RSC
argues: "Of course, requesting a complete hard drive from someone's home
computer is, on its face overly broad. It is reasonable to assume that
individuals keep highly personal materials in their computer hard drive
(diaries, financial information and other items subject [**27] to privacy protections). Asking for the
complete hard drive at deposition suggests that the request was nothing more
than a fishing expedition meant to burden and intimidate--purposes clearly
beyond the scope of allowable discovery. The privacy protections in question
here are not waived, even if they were not asserted earlier. See Boler v.
Superior Court (1987) 201 Cal. App. 3d 467, 472 [247 Cal. Rptr. 185].)"
There
are three responses to this argument. First, Boler v. Superior Court (1987)
201 Cal. App. 3d 467 [247 Cal. Rptr. 185] is distinguishable. The privacy
issue, while not raised in the deposition, was argued thoroughly before the
trial court on a motion to compel responses to deposition questions. ( Id.
at pp. 470-471.) The Court of Appeal specifically limited its comments on
waiver to questions of sexual privacy and focused on the concern that the privacy
interests of third parties were at issue. ( Id. at p. 472, fn. 1.)
Second, having failed to seek a protective order to raise these issues, RSC is
precluded from raising them now. Finally, this was no fishing expedition. At
deposition, Ms. Sebastian testified [**28]
that she prepared both the genuine contract and the purported contract
on computers which she now had at home. Defendants were entitled to the
discovery they sought with respect to the computers.
This
case presents a particularly egregious example of an effort at discovery games
by plaintiffs. Indeed, the efforts of RSC's principal and only officer and
director went beyond gamesmanship and intruded into the area of actual fraud.
The terminating and monetary sanctions imposed by the court are fully
justified. [*499]
DISPOSITION
The
order dismissing appellant's complaint is affirmed. Defendants are to have
their costs on appeal.
Vogel
(C. S.), P. J., and Hastings, J., concurred.