Filed 11/17/14 Gutierrez-Hernandez v. McGills Warehouse CA2/5
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION FIVE


EMMANUEL GUTIERREZ-                                                  B252686
HERNANDEZ et al.,
                                                                     (Los Angeles County
         Plaintiffs and Respondents,                                 Super. Ct. No. BC459067)

         v.

MCGILLS WAREHOUSE, INC. et al.,

         Defendants and Appellants.




         APPEAL from an order of the Superior Court of Los Angeles County, Robert L.
Hess, Judge. Affirmed in part; reversed in part with directions.
         Gary Rand and Suzanne E. Rand-Lewis for Plaintiffs and Respondents.
         Donald C. Gallagher for Defendants and Appellants.
                                   I. INTRODUCTION


       Defendants, McGills Warehouse, Inc. and Donald C. Gallagher, appeal from
sanction orders and an October 10, 2013 default judgment entered in favor of plaintiffs,
Emmanuel Gutierrez-Hernandez (plaintiff) and Maria Gutierrez. In addition, defendants
challenge the orders denying their motions for reconsideration and relief from the default
judgment. We modify the judgment.


                                   II. BACKGROUND


                                        A. Pleadings


       On April 18, 2011, plaintiff and his wife filed a complaint against defendants for:
contract breach; implied covenant of good faith and fair dealing breach; wrongful
termination in violation of public policy; intentional emotional distress infliction;
violation of Business and Professions Code section 17200; violation of the Consumer
Legal Remedies Act; intentional and negligent misrepresentation; concealment; disability
discrimination and retaliation in violation of Government Code section 12900 et seq.; and
consortium loss. The complaint alleges plaintiff was a former employee of McGills
Warehouse, Inc. McGills Warehouse, Inc. is an importer and exporter that sells tools and
miscellaneous items online. Mr. Gallagher owned the business. A co-defendant, Tesson
Walker, was McGills Warehouse, Inc.’s manager.
       On September 7, 2008, plaintiff began his employment as a shipper and receiver.
The complaint alleges plaintiff entered into an oral employment contract with McGills
Warehouse, Inc. on September 7, 2008. Defendants allegedly promised plaintiff that they
would not act arbitrarily and his employment would not be terminated except for good
cause or reason.
       In March 2009, plaintiff seriously injured his finger. Plaintiff received a doctor’s
note. The note stated he would be unable to work from March 27 to May 1, 2009

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because of his injury. While on leave, plaintiff kept defendants informed of his medical
progress. On April 30, 2009, plaintiff received a letter signed by Mr. Walker. Plaintiff
expected to return to work the next day, May 1, 2009. Mr. Walker’s letter stated, “This
letter is to inform you that your position at McGills Warehouse has been replaced due to
your personal injury that preventing [sic] you to perform your duty for a length of time.”
In August and September 2009, plaintiff was denied access to his employment records.
The complaint further alleges: McGills Warehouse, Inc. breached the oral employment
contract by retaliating against plaintiff and terminating him without good cause;
defendants breached the covenant of good faith and fair dealing by terminating plaintiff’s
employment in bad faith; defendants violated the Consumer Legal Remedies Act through
unfair and deceptive practices by marketing itself as a “family business”; had plaintiff’s
co-workers and customers known of defendants’ mistreatment of him, they would not
have continued to work for or purchased items from McGills Warehouse, Inc.; defendants
failed to provide a reasonable accommodation and discriminated and retaliated against
plaintiff on the basis of his disability; and plaintiff suffered humiliation, mental anguish
and emotional distress as a result of the wrongful termination. The complaint requests
punitive, general and special damages in excess of the minimum jurisdiction of the court.
A damages statement was served detailing plaintiffs’ damages.
       On May 10, 2011, defendants filed their answer. Mr. Walker represented himself
and McGills Warehouse, Inc. Prior to July 15, 2013, Mr. Gallagher was ineligible to
practice law in this state.


                              B. Plaintiffs’ Sanctions Motions


       Most of the pertinent documents which we will describe are in the respondents’
appendix. Most pertinent documents, including many of the trial court’s rulings, were
omitted from the appellants’ appendix. On May 14, 2012, plaintiffs moved for orders:
compelling defendants’ depositions at their expense including the costs of expedited
transcripts; compelling verified responses to “all discovery” served by plaintiffs;

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reimbursement of court reporter fees for defendants’ April 6, 2012 depositions; imposing
monetary sanctions against defendants; and imposing issue, evidence and terminating
sanctions. On June 8, 2012, the trial court granted plaintiffs’ motion to compel: verified
responses to “discovery”; depositions; and document production at the deposition. In
addition, the trial court imposed monetary sanctions of $1,200 upon defendants. And
defendants were ordered to reimburse plaintiffs the cost of Mr. Gallagher’s deposition.
       On October 24, 2012, plaintiffs moved for an order imposing monetary and
terminating sanctions against defendants. Plaintiffs argued monetary and terminating
sanctions were warranted because defendants violated the trial court’s order to mediate
and comply with various civil discovery provisions. Defendants’ discovery-related
violations included failure to: properly verify discovery responses; meet and confer; and
produce witnesses and new documents at deposition. In addition, plaintiffs asserted Mr.
Gallagher improperly instructed defendants’ primary witness, Susan Walker, not to
answer deposition questions. Plaintiffs contended Mr. Gallagher drafted and signed all
pleadings and discovery responses for all defendants even though he was not an active
State Bar member.
       On November 21, 2012, plaintiff’s terminating sanctions motion was denied
because all parties’ counsel behaved badly during the depositions. However, monetary
sanctions of $1,500 were imposed against Mr. Gallagher for his unjustified instruction to
a witness not to answer. Also, the trial court noted Mr. Gallagher was not an active
member of the State Bar yet he was improperly representing McGills Warehouse, Inc.
On December 18, 2012, the trial court modified its November 21, 2012 ordering the
depositions of Mr. Gallagher, Ms. Walker and Wesley Gee. The depositions were
ordered to be taken in the trial court’s jury room on January 9, 2013. On January 8, 2013,
the trial court ordered these depositions rescheduled to February 1, 2013.
       On April 24, 2013, plaintiffs moved for an order imposing monetary and
terminating sanctions. Plaintiffs argued sanctions should be imposed because defendants
violated the trial court’s orders. Plaintiffs asserted Mr. Gallagher refused to answer
deposition questions and improperly terminated his February 1, 2013 court-ordered

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deposition. Plaintiffs also complained defendants failed to disclose “pertinent witnesses
during discovery” and had submitted false declarations.
       On May 16, 2013, the trial court heard argument on plaintiffs’ monetary and
terminating sanctions motion. On May 20, 2013, the trial court granted plaintiffs’
terminating sanctions motion. The trial court found defendants failed to timely identify
witnesses and documents in response to discovery. The trial court added: “Turning to
Mr. Gallagher’s February 1, 2013 deposition, it is utterly remarkable how much Mr.
Gallagher claimed to be unable to remember. He was by turns systematically evasive and
non-responsive. . . . [¶] The capstone of the deposition was Mr. Gallagher’s unilateral
decision to terminate it at approximately noon. Contrary to the suggestion made at oral
argument, he did not seek to adjourn it for a break. His exact words were: ‘The Court
says we’re going to terminate this deposition at 12:00 o’clock and that’s what we’re
doing.’ The Court had not made such an order, and Mr. Gallagher knew that the Court
had not made such an order. This was yet another instance of deliberate obstruction of
discovery.”
       The trial court stated: “After more than 13 years in an individual calendar civil
courtroom, the Court is unable to recall a case in which a party has so persistently
obstructed discovery by failures to respond, delays, improper conduct, concealment, as
have these defendants. The Court finds that conduct to have been deliberate, systematic,
and in bad faith. . . . [¶] Repeated admonitions from the Court, and the repeated
imposition of monetary sanctions, have been utterly unsuccessful in curtailing this course
of conduct. At oral argument, neither Mr. Gallagher nor Mr. Walker appeared to
acknowledge any improper acts or derelictions on their part, nor any responsibility, nor
did they display any contrition. Indeed, Mr. Gallagher’s physical demeanor and tone of
voice, and to a lesser extent that of Mr. Walker, are well described as ‘defiant.’ [¶] At
oral argument, the Court pressed plaintiffs’ counsel why terminating sanctions were
required, rather than lesser sanctions such as evidence or issue sanctions. Having
carefully considered the matter, the Court is persuaded that the time has now come when
the consequences of defendants’ conduct must come home. The trial date has been

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repeatedly continued to allow plaintiffs to obtain the discovery necessary to allow the
issues to be addressed on the merits. The revelation on February 1st that there are
additional, previously undisclosed percipient witnesses and unproduced relevant
documents, coupled with Mr. Gallagher’s conduct at his deposition, is the final straw. [¶]
For repeated and unexcused misuse of the discovery process within the meaning of [Code
of Civil Procedure sections] 2023.010[, subdivisions] (d), (e), (f), and (g), the Court finds
that the appropriate sanction is under [Code of Civil Procedure section] 2023.030[,
subdivision] (d)(1). The answers of McGills Warehouse, Inc., Tesson Walker, and
Donald Gallagher are ordered stricken, and their defaults entered forthwith. Plaintiffs
shall arrange with the clerk for [a] date within 60 days for an oral default prove-up, at
which plaintiffs and any other necessary witness on damages shall testify. [¶] No
monetary sanctions are awarded at this time. However, following entry of judgment,
plaintiffs may seek an award of attorneys fees, which may include sums sought in this
motion.”


                          C. Defendants’ Reconsideration Motion


       On May 30, 2013, defendants moved for reconsideration of the May 20, 2013
order striking their answers. Defendants argued reconsideration was warranted because
the trial court did not have: the certified deposition transcript that was the subject of
plaintiffs’ sanctions motion; their opposition to plaintiffs’ motion for terminating
sanctions; Mr. Gallagher’s notice of unavailability; and a new declaration from Ms.
Walker explaining the difference between her testimony and her prior declaration. On
July 15, 2013, Mr. Gallagher became eligible to practice law during this litigation. On
July 22, 2013, the trial court held a hearing and denied the reconsideration motion. The
trial court ruled: “No new facts or law [was] presented, which could not have been
presented at the time of the original hearing. The Court is not persuaded that the
documents which had not been filed with the Court as of the last hearing date were in fact
filed. The Notice of Unavailability attached as Exhibit 1 contains a proof of service

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supposedly signed March 27, 2013, but which bears a scratched out ‘5/30.’ This
necessarily raises issues as to the [genuineness] of the documents submitted. The Court
does not believe the Gee declaration to the effect these documents were filed. . . . [¶]
The argument by Mr. Gallagher is that the partial transcript of the depositions on
February1, 2013 is incomplete or misleading. However, Mr. Gallagher has not submitted
the transcript, although he purports to quote from [the] proceedings.”


                         D. Default Prove-Up Hearing and Order


       On July 31, 2013, a default prove-up hearing was conducted. Plaintiffs had
previously served a damages statement on defendants on June 27, 2011. Plaintiffs were
sworn and examined, and exhibits were received and reviewed by the trial court. The
matter was then submitted.
       On August 2, 2013, the trial court issued an order awarding damages to plaintiffs:
“The Court finds the following elements of compensatory and statutory damages have
been proved: Total wage loss, includ[ing] unpaid wages and wage loss following
wrongful termination-- $9,780.00. [¶] Unpaid reimbursements for materials and
expenses -- $1,255.10. [¶] Statutory penalties for failure to timely pay wages-- $885.00.
[¶] Emotional distress of Mr. Gutierrez-Hernandez-- $25,000 [¶] Loss of Consortium of
Ms. Gutierrez-- $10,000.00 [¶] These damages total $46,920.10.” The trial court also
awarded punitive damages to plaintiffs: “The Court further finds by clear and convincing
evidence that defendants McGills Warehouse, Inc. and Donald Gallagher each acted with
oppression, malice and fraud. The Court finds that the appropriate award of punitive
damages is $15,000.00 against McGills Warehouse and the additional sum of $15,000.00
against Mr. Gallagher personally.”
       On October 10, 2013, judgment was entered in plaintiffs’ favor. Plaintiffs were
awarded $79,447.84, which included damages and prejudgment interest. In addition,
plaintiffs were awarded attorney fees and costs pursuant to a post-trial motion as to all
defendants.

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                  E. Defendants’ Motion to Set Aside Default Judgment


       On August 23, 2013, defendants moved to set aside the default and default
judgment. Defendants argued the default and default judgment should be set aside
because of their excusable neglect in failing to file two documents with the trial court.
At a November 15, 2013 hearing, the trial court denied defendants’ motion.


                                     III. DISCUSSION


                         A. The Propriety of the Sanctions Orders


       Defendants challenge the sanction orders and default judgment entered in favor of
plaintiffs. Defendants also contend default judgment is improper because the complaint
fails to state causes of action. In addition, defendants argue it was error to grant
plaintiffs’ terminating sanctions motion because there was no willful misconduct.
Defendants assert the trial court should have imposed lesser sanctions rather than a
terminating sanction. We review an order imposing discovery sanctions for abuse of
discretion. (Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 390; Doppes v.
Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992; Williams v. Russ (2008) 167
Cal.App.4th 1215, 1224.)
       Defendants also argue the trial court erred in denying their reconsideration motion.
We review the trial court’s ruling on a motion for reconsideration for abuse of discretion.
(Famers Ins. Exchange v. Superior Court (2013) 218 Cal.App.4th 96, 106; Phillips v.
Sprint PCS (2012) 209 Cal.App.4th 758, 769.) In addition, defendants contend the trial
court should have granted their motion to set aside the default judgment under Code of
Civil Procedure section 473, subdivision (b). Defendants argue they are entitled to
discretionary relief under Code of Civil Procedure section 473, subdivision (b), which
provides, “The court may, upon any terms as may be just, relieve a party or his or legal
representative from a judgment, dismissal, order, or other proceeding taken against him

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or her through his or her mistake, inadvertence, surprise, or excusable neglect.” We
review this ruling for an abuse of discretion. (Zamora v. Clayborn Contracting Group,
Inc. (2002) 28 Cal.4th 249, 257-258; Huh v. Wang (2007) 158 Cal.App.4th 1406, 1425;
Solv-All v. Superior Court (2005) 131 Cal.App.4th 1003, 1007.)
       Defendants have not provided this court with a reporter’s transcript, a settled
statement, or an agreed statement of the relevant hearings including: plaintiffs’ motions
for sanctions including terminating sanctions; defendants’ motion for reconsideration;
and defendants’ motion to set aside the default judgment. On August 13, 2014, we
requested the parties brief whether defendants’ failure to designate a reporter’s transcript
or suitable substitute warrants affirmance based on the inadequacy of the record. On
August 25, 2014, defendants filed a letter brief arguing they provided an adequate record
by including in the appeal record the same documents submitted to the trial court.
       A judgment is presumed to be correct and appellant has a duty to provide the
reviewing court with an adequate record to demonstrate error. (Denham v. Superior
Court (1970) 2 Cal.3d 557, 564; Williams v. Russ, supra, 167 Cal.App.4th at p. 1224;
Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 494; Fladeboe v. American
Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58.) Without a proper record, we cannot
determine whether the trial court abused its discretion in issuing sanctions and denying
defendants’ reconsideration and relief from default judgment motions. In numerous
situations, courts have refused to reach the merits of an appellant’s claims because
appellant failed to provide a reporter’s transcript of a pertinent proceeding or a suitable
substitute. (Walker v. Superior Court (1991) 53 Cal.3d 257, 273-274 [transfer order];
Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295-1296 [attorney fee motion hearing];
Ballard v. Uribe (1986) 41 Cal.3d 564, 574-575 (lead opn. of Grodin, J.) [new trial
motion hearing]; In re Kathy P. (1979) 25 Cal.3d 91, 102 [hearing to determine whether
counsel was waived and minor consented to informal adjudication]; Boeken v. Philip
Morris, Inc. (2005) 127 Cal.App.4th 1640, 1672 [transcript of judge’s ruling on an
instruction request]; Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th
440, 447 [attorney fee award affirmed where trial transcript not provided]; Estate of Fain

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(1999) 75 Cal.App.4th 973, 992 [surcharge hearing]; Hodges v. Mark (1996) 49
Cal.App.4th 651, 657 [nonsuit motion where trial transcript not provided]; Interinsurance
Exchange v. Collins (1994) 30 Cal.App.4th 1445, 1448 [monetary sanctions hearing];
Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1532 [reporter’s transcript fails
to reflect content of special instructions]; Buckhart v. San Francisco Residential Rent
etc., Bd. (1988) 197 Cal.App.3d 1032, 1036 [hearing on Code Civ. Proc., § 1094.5
petition]; Sui v. Landi (1985) 163 Cal.App.3d 383, 385 [order denying preliminary
injunction dissolution affirmed based on lack of reporter’s transcript]; Rossiter v. Benoit
(1979) 88 Cal.App.3d 706, 713-714 [demurrer hearing]; Calhoun v. Hildebrandt (1964)
230 Cal.App.2d 70, 71-73 [transcript of argument to the jury]; Ehman v. Moore (1963)
221 Cal.App.2d 460, 462 [failure to secure reporter’s transcript or settled statement as to
offers of proof]; Wetsel v. Garibaldi (1958) 159 Cal.App.2d 4, 10 [order confirming
arbitration award].) Without these numerous transcripts, we cannot find any abuse of
discretion occurred. The sanction orders and default judgment are affirmed.


                B. The Partial Jurisdictional Error as to the Judgment’s Amount


       Defendants argue the judgment’s amount exceeds the damages sought by the
complaint. Hence, according to defendants, the entire judgment must be reversed.
Defendants are only partially correct.
       There are two aspects of the judgment. First, monetary damages were awarded
for: wage loss; unpaid reimbursement; and statutory penalties. The total amount of
wage-related losses in the judgment totals $11,920.10. The damages statement dated
June 27, 2011, alleges a $5,000 loss of earnings as a result of Mr. Gutierrez-Hernandez’s
personal injury claims. Further, it alleges an additional $2,000 for independent contractor
work. (In the next paragraph, we explain why the personal injury claims must be
affirmed in their entirety.) Thus, because the $7,000 in wage losses listed in Mr.
Gutierrez-Hernandez’s damages statement is attributable to his personal injury claim
discussed below, it is properly included in the judgment. None of the other wage-related

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damages awarded are fairly listed in Mr. Gutierrez-Hernandez’s damages statement. Nor
is a damages amount listed in the complaint. As to these other wage-related claims, the
terminating sanction order and the judgment must be reversed in part. (Greenup v.
Rodman (1986) 42 Cal.3d 822, 826; Julius Schifaugh IV Consulting Services, Inc. v.
Avaris Capital, Inc. (2008) 164 Cal.App.4th 1393, 1396.)
       Thus, the judgment is reversed in part as to: $2,780 for lost income (after
deducting the $7,000 listed in Mr. Gutierrez-Hernandez’s damages statement); $1,255.10
for unpaid reimbursement; $885 in statutory wage related penalties; and prejudgment
interest. Upon remittitur issuance, the orders granting terminating sanctions and striking
defendant’s answer are to be set aside in part. The trial court is to then promptly rule on
the issue and evidentiary sanctions requested in plaintiffs’ April 24, 2013 sanctions
motion. These other forms of sanctions were rendered moot when the trial court issued
its terminating sanction. Defendants’ conduct has been egregious and unacceptable,
nothing in this opinion may be taken as expressing a different point of view.
       Second, there were personal injury, intentional emotional distress infliction and
consortium loss claims. Damages for all of these claims must be affirmed. Damages
statements on behalf of plaintiffs were served and those claims were properly the subject
of the judgment. As to Ms. Gutierrez, the damages awarded by the court, $10,000, is
below that listed in her damages statement. And, there are no grounds for setting aside
the intentional emotional distress award in Mr. Gutierrez-Hernandez’s favor. It was a
stand-alone claim in the fourth cause of action and was covered by the damages
statement. The damages statement listed $250,000 in emotional distress damages on
behalf of Mr. Gutierrez-Hernandez. The judgment only awards $25,000 in emotional
distress damages to Mr. Gutierrez-Hernandez. And there is a separate claim in the prayer
for relief for “emotional distress and other economic and non-economic losses” sustained
by plaintiffs.   (See Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428, 432.) This is in
addition to the two separate $15,000 punitive damages awards imposed on Mr. Gallagher
and McGills Warehouse, Inc. Further, defendants’ refusal to provide a proper record of
the prove-up hearing bars any contention any challenged claims are not a personal injury

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action or closely related to one. (See Jones v. Interstate Recovery Service (1984) 160
Cal.App.3d 925, 930.) In a similar vein, the failure to provide a proper record of the
prove-up hearing bars any argument that the punitive damages were related to any non-
personal injury cause of action. Thus, the aspects of the judgment discussed in this
paragraph are affirmed. (Code Civ. Proc., §§ 425.11, 425.115; see Weil & Brown, Cal.
Practice Guide: Civil Procedure Before Trial (The Rutter Group 2014) ¶¶ 5:82, 5:104,
pp. 5-23, 5-30 [rev. # 1, 2009 and 2014].) As to the personal injury damages, the trial
court is free to issue a writ of execution or other enforcement of judgment documents.


                                   IV. DISPOSITION


       The sanctions orders and default judgment are modified as discussed in the body
of this opinion. Plaintiffs, Emmanuel Gutierrez-Hernandez and Maria Gutierrez, shall
recover their appeal costs from defendants, McGills Warehouse, Inc. and Donald C.
Gallagher.
                            NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS



                            TURNER, P. J.



We concur:



       MOSK, J.



       KRIEGLER, J.




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