Filed 5/9/13 City of Inglewood v. Inglewood Neighborhood Hous. Services CA2/2

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.



              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                     SECOND APPELLATE DISTRICT
                                                  DIVISION TWO

CITY OF INGLEWOOD et al.,                                               B238800

                   Plaintiffs and Respondents,                          (Los Angeles County
                                                                        Super. Ct. No. YC061161)
         v.

INGLEWOOD NEIGHBORHOOD
HOUSING SERVICES,

                   Defendant and Appellant;

LEO JAMES TERRELL,

                   Objector and Appellant.




         APPEAL from rulings of the Superior Court of Los Angeles County. Dudley W.
Gray II, Judge. Affirmed.
         Law Offices of Michael D. Payne and Michael D. Payne for and Defendant and
Appellant.
         Law Offices of Leo James Terrell and Leo James Terrell for Objector and
Appellant.
         Bergman Dacey Goldsmith, Gregory M. Bergman and Arash Beral for Plaintiffs
and Respondents.
       Leo James Terrell (Terrell) and Inglewood Neighborhood Housing Services, Inc.
(INHS) (collectively appellants) appeal from a ruling dated October 13, 2011, imposing
monetary sanctions in the total amount of $16,175 against appellants for discovery
violations.1 Terrell also challenges the trial court’s denial of his motion for
reconsideration of the sanctions order. We find no abuse of discretion in the trial court’s
rulings, therefore we affirm.
                                     CONTENTIONS
       Terrell argues that there is no evidence that he had any part in INHS’s
disobedience of the trial court’s orders or that he willfully advised INHS not to comply
with the trial court’s orders. Specifically, Terrell claims there was a breakdown in the
attorney-client relationship between himself and INHS such that he was unable to obtain
INHS’s cooperation.
       INHS argues that it had no knowledge of the trial court’s orders due to the
breakdown of the attorney-client relationship. INHS also argues that the record shows by
way of an absence of evidence that INHS had no knowledge of the orders of the court
and that upholding the trial court’s order of $16,175 of sanctions against INHS is unjust
and unfair as it effectively punishes the client when the client has no knowledge of the
orders of the court.

1       The City of Inglewood and the Redevelopment Agency of the City of Inglewood
(collectively respondents) argue that INHS did not file a notice of appeal, therefore we
have no jurisdiction to consider any argument made by INHS. The notice of appeal filed
by Terrell in this matter lists Terrell as counsel for Quantum Community Development
Corp. and Donnicus Cook, and former counsel for defendants INHS, Gil Mathieu,
Rochelle Tukes, and Martina S. Guilfoil.
        A notice of appeal is construed liberally, and the signing attorney need not be the
appellant’s attorney of record. (Estate of Hultin (1947) 29 Cal.2d 825, 832.) Any person
authorized by the appellant may sign the notice of appeal on the appellant’s behalf. (Toal
v. Tardif (2009) 178 Cal.App.4th 1208, 1216-1217.) Construed liberally, the notice of
appeal filed by Terrell suggests that Terrell was authorized to act on behalf of INHS. By
filing an opening brief in this appeal, INHS implicitly concedes that Terrell had such
authority. Absent clear evidence that such authority was lacking, we conclude that
Terrell was authorized to act on behalf of INHS for the purpose of filing a notice of
appeal, and that the notice thus perfected INHS’s appeal.
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                                    BACKGROUND
        Respondents, City of Inglewood and the Redevelopment Agency of the City of
Inglewood, filed a complaint against INHS and others (defendants) on December 1, 2009,
alleging breach of contract, conversion, accounting, and breach of fiduciary duty.
Respondents alleged that they entered a series of one-year contracts with INHS relating
to the administration of loans made pursuant to various grant programs that provided
funding for loans for the purchase and improvement of real property located in the City
of Inglewood. Respondents sought damages against INHS based on alleged
mismanagement and poor administration of certain loan programs.
        In March 2010, respondents served one set of requests for production of
documents to each defendant in the case. The defendants failed to comply with the
discovery request, and respondents filed a motion to compel. On September 2, 2010, the
parties filed a stipulation in which defendants agreed to produce and/or provide access to
all of the requested loan documents and allow the respondents to take custody of those
documents. The defendants stipulated that should they fail to provide possession and
access in accordance with the stipulation, they would pay respondents $2,000 in sanctions
for each failure to comply.
        On September 2, 2010, the trial court entered an order in accordance with the
terms of the stipulation.
        Despite the order, defendants did not provide respondents with access to the
required documents. On April 26, 2011, respondents filed a motion to enforce the
September 2, 2010 order. The motion was heard on June 14, 2011, and the court granted
the motion, ordering defendants to allow respondents access to the documents within 30
days.
        INHS provided access to its basement one day before the deadline, on July 13,
2011. During the inspection, INHS refused to allow access to two locked cabinets and
computer equipment. Respondents requested access to the locked cabinets and
equipment.


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       Regarding the inspection of the cabinets, INHS’s counsel agreed on July 14, 2011,
to allow the inspection, but never provided dates for respondents to do so. When
respondents inquired of INHS’s counsel on August 10, 2011, counsel informed them that
he believed the inspection was moot in light of his announcement that INHS intended to
file for bankruptcy and that he had filed a motion to disqualify the judge.2
       As to the computer equipment, INHS filed a motion for protective order with the
court seeking to protect certain laptop computers from inspection. However, the motion
for protective order did not cover all of the computer equipment to which respondents
had been denied access. Later, after respondents had filed their objections and opposition
to the motion for protective order, INHS took the motion off calendar. In their opposition
to the motion for protective order, respondents sought monetary sanctions in the amount
of $5,300 for their expenses in responding to the motion.
       On July 28, 2011, respondents moved to compel the deposition of an INHS person
most knowledgeable (PMK). The court granted the motion and INHS was ordered to
provide a qualified PMK for deposition before August 17, 2011. INHS did not produce
or designate such an individual within the time allowed. After respondents noticed the
deposition, on August 17, 2011, Terrell wrote to respondents to inform them that he
would not be attending the deposition, and presumably not producing a PMK.
       On August 18, 2011, respondents filed a motion notifying the court of the above
discovery violations and seeking enforcement of three prior discovery orders: (1) the
September 2, 2010 stipulated order; (2) the June 14, 2011 order enforcing compliance
with the September 2, 2010 order; and (3) the July 28, 2011 order compelling INHS to
produce a qualified PMK for deposition. Respondents argued that imposition of
monetary sanctions was appropriate in the amount of $10,875 against INHS and its
attorney of record for failure to obey prior court orders.



2      On August 12, 2011, the trial court issued an order striking Terrell’s statement of
disqualification, finding that on its face, and as a matter of law, the statement did not
present lawful grounds for disqualification.
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       On October 13, 2011, the trial court granted respondents’ motion for order
enforcing its prior court orders and imposed the requested sanctions of $10,875. The
court also granted respondents’ request for monetary sanctions of $5,300 contained in
respondents’ opposition to appellants’ motion for protective order. The court’s ruling
imposed a total of $16,175 in sanctions against Terrell and INHS.
       On September 27, 2011, Terrell filed motions to be relieved as counsel for INHS
and other defendants. On November 18, 2011, the court granted those motions.
       On October 20, 2011, Terrell filed a motion for reconsideration of the trial court’s
October 13, 2011 ruling imposing monetary sanctions totaling $16,175 against Terrell.
Terrell argued that (1) monetary sanctions should not be imposed on Terrell because he
never advised his clients to disobey the court’s orders, nor was there willful disobedience
on his part; and (2) sanctions may only be imposed on the party, not the party’s attorney,
especially where there the attorney has no control over the clients.
       On December 19, 2011, the trial court issued an order denying Terrell’s motion for
reconsideration.
       The notice of appeal from the trial court’s rulings dated October 13, 2011, and
December 19, 2011, was filed on January 31, 2012.3
                                      DISCUSSION
I. Standard of review
       The standard of review for a motion imposing discovery sanctions is abuse of
discretion. (Britts v. Superior Court (2006) 145 Cal.App.4th 1112, 1123.) The standard
for review of a ruling on a motion for reconsideration is also abuse of discretion. (Glade
v. Glade (1995) 38 Cal.App.4th 1441, 1457.)
       Under the abuse of discretion standard, the appropriate test is whether the trial
court exceeded the bounds of reason, all circumstances before it being considered. (In re

3     The trial court’s October 13, 2011 ruling imposing a total of $16,175 in sanctions
is immediately appealable under Code of Civil Procedure section 904.1, subdivision (a).
Because the underlying order was appealable, and the motion for reconsideration was
based on new and different facts, the motion for reconsideration is also appealable.
(Rabbitt v. Vincente (1987) 195 Cal.App.3d 170, 174.)
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Marriage of Connolly (1979) 23 Cal.3d 590, 598.) Appellate courts should disturb
discretionary rulings only when there is a clear abuse of the trial court’s discretion and a
miscarriage of justice. (Blank v. Kirwan (1985) 39 Cal.3d 311, 331.)
II. The trial court did not abuse its discretion in awarding sanctions
       Appellants have not established that the trial court abused its discretion in granting
the motions for sanctions in the total amount of $16,175. Despite the trial court’s order
dated September 2, 2010, appellants still had not complied as of April 26, 2011,
necessitating a motion to compel and a second order from the court. When appellants
continued to refuse to allow access to all of the subject documents, respondents were
forced to file a third request for enforcement. It was only at this time, a year after the
court’s initial stipulated order, that the court imposed sanctions. This act did not exceed
the bounds of reason. It appears to be a rational and necessary use of the trial court’s
discretion under the circumstances.
       A. Sanctions against Terrell
       Terrell acknowledges that monetary sanctions may be imposed against the
disobedient party’s attorney for advising noncompliance with a court’s order. (Code Civ.
Proc., § 2023.030, subd. (a); Corns v. Miller (1986) 181 Cal.App.3d 195, 200.) To
escape sanction, the burden is on the attorney to prove that he or she did not advise the
client to disobey the discovery order. (Id. at p. 201.)
       Terrell argues that the imposition of sanctions against him is based on the
assumption that there was unity of action between the attorney and the client. He claims
that he lacked control over INHS. He explains that INHS’s insurance company dropped
coverage for INHS’s litigation costs in July 2011. Terrell offered to continue to provide
legal services for a set fee, but the offer was never accepted. This caused a breakdown of
the attorney-client relationship. Terrell states that INHS’s failure to pay him, and its
anticipated bankruptcy filing, suggested to him that INHS had abandoned its case.
Terrell also states that INHS ignored his communications. Terrell argues that INHS’s
lack of cooperation with him hindered his ability to gain compliance with the court’s
orders. He also points out that even after he was relieved as counsel in November 2011,

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$6,500 more in discovery sanctions were imposed on INHS. Terrell argues that this is
evidence that he had no control over his client’s discovery abuses.
       First, we note that Terrell makes no effort to explain INHS’s noncompliance with
the court’s orders during the time period between September 2, 2010 and July 2011,
when the alleged breakdown of the attorney-client relationship occurred. Since Terrell
has provided no explanation for INHS’s failure to respond to discovery during this time
period, he has failed to defeat the presumption that the failure to respond was willful.
       Second, Terrell has failed to cite a case where an insurance company’s decision
not to fund litigation, and an anticipated bankruptcy filing, were considered an adequate
excuse for failure to comply with discovery orders. The trial court’s decision that
Terrell’s actions were worthy of sanctions under Code of Civil Procedure section
2023.030, subdivision (a), was not an abuse of discretion under the circumstances.
       B. Sanctions against INHS
       INHS argues that it had no knowledge of the prior orders of the court. Like
Terrell, INHS points to the lack of insurance coverage and its inability to pay for its
defense. INHS admits that its insurer did not withdraw funding until July 2011. Like
Terrell, INHS does not attempt to explain why it did not comply with the court’s
September 2, 2010 order in the previous 10-month period.
       INHS presents no legal authority for its position that its insurer’s withdrawal of
coverage provides an excuse for noncompliance with a discovery order. Under the
circumstances, we decline to find an abuse of discretion.
       INHS argues that the fact that no further sanctions have been issued in the last
year demonstrates that INHS has been in compliance with the orders of the court since
the time that it became aware of those orders.4 INHS raises the issue of its recent
compliance with court orders as evidence that it must have been unaware of the orders
dated September 2, 2010, June 14, 2011, and July 28, 2011. Again, INHS fails to provide

4      In connection with this argument, INHS requested that we take judicial notice of
the docket sheet in this matter, showing a record of the proceedings up to the current
time. We granted the request.
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any legal authority suggesting that subsequent compliance with court orders demonstrates
that a previous discovery sanction may be considered an abuse of discretion. We
therefore find that no abuse of discretion occurred.
III. The trial court did not abuse its discretion in denying the motion for
reconsideration
       In his motion for reconsideration, Terrell provided the trial court with additional
facts and circumstances that were not before the trial court when it made its October 13,
2011 rulings. The additional facts and circumstances were: (1) In July 2011, INHS’s
insurance company withdrew its funding of litigation and ordered Terrell to stop working
on the matter; (2) INHS avoided and ignored Terrell’s communications since August
2011; (3) Terrell requested that INHS allow him to withdraw from the case; and (4)
Terrell informed INHS that due to INHS’s refusal to allow him to withdraw from the
case, the nonpayment of fees and abandonment of the case, he would seek a court order
to be relieved as counsel.
       It is Terrell’s position that the trial court did not give due consideration to these
additional facts raised in his motion for reconsideration. Terrell argues that the trial court
identified no conduct on his part supporting the imposition of sanctions against him, and
in fact the record is devoid of any facts suggesting that any conduct on his part would
warrant the imposition of sanctions. Terrell insists that he never advised INHS not to
obey court orders, nor did he willfully fail to comply with court orders.
       As discussed above, it is Terrell’s burden to prove that he did not advise his client
to disobey the court’s order. (Corns v. Miller, supra, 181 Cal.App.3d at p. 201.)
Terrell’s citation to a lack of evidence of improper conduct does not meet this burden.
This is especially true where, as here, appellants’ failure to comply with the discovery
orders spanned a year’s time and necessitated repeated orders of compliance. Under the




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circumstances, and taking into account all new facts that were placed before the trial
court at the time of the motion for reconsideration, no abuse of discretion occurred.5
                                     DISPOSITION
       The rulings are affirmed. Respondents are awarded their costs of appeal.
       NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.



                                                 ______________________________, J.
                                                 CHAVEZ

We concur:



_____________________________, P. J.
BOREN



_____________________________, J.*
FERNS




5       Because we have determined that the trial court did not abuse its discretion in
denying Terrell’s motion for reconsideration, we decline to address INHS’s argument that
in the event we should reverse this ruling, it should be afforded an opportunity to be
heard on this subject.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
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