Legal News and Appellate Tips

Each week, TVA appellate attorney Tim Kowal reviews several recent decisions out of the appellate courts in California, and elsewhere, and reports about the ones that might help you get an edge in your cases and appeals.

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Tag: Sanctions

$2.5M Discovery Sanction Reversed Because Not Authorized by a Specific Statute, But Justice Grimes Pens a Strong Dissent

Unless there is a specific section of the Discovery Act authorizing it, an award of sanctions may not be imposed. So the $2.5 million in sanctions awarded for the City of Los Angeles’s “egregious” abuses in City of Los Angeles v. PricewaterhouseCoopers, LLC (D2d5 Oct. 20, 2022 No. B310118) ---- Cal.Rptr.3d ---- (2022 WL 12010415) was reversed. The city’s attorneys had colluded with a nominally adverse party in a separate class action in order to enrich the attorneys and orchestrate damages against PricewaterhouseCoopers, and successfully hid that fact for two-and-a-half years through discovery abuse.

Bad as this was, the sanctions for the egregious abuse could not stand. The statutes generally providing for sanctions, sections 2023.010 and 2023.030, are only a definitional and do not themselves authorize any sanctions.

But dissenting, Justice Grimes raised this devastating point: There is no specific provision of the Discovery Act that sanctions spoliation of evidence, either. So if sections 2023.010 and 2023.030 do not authorize sanctions, then the majority’s holding has rendered spoliation—and here, the city attorneys’ two-and-a-half-years-long campaign of “obstruction, obfuscation, and outright lies”— as mere wrongs without a remedy. Just another one of those bummer things about the practice of law that no one can do anything about.

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The 21-Day Safe Harbor Means 21 Days: Motion Filed Day 21 Is Too Early, Court Holds

should come to mind is a motion for sanctions. But the operative statute requires giving opposing counsel a 21-day warning first, known as a safe harbor.

How long is the 21-day safe harbor? There is now a published decision to tell us. The answer, according to Transcon Financial, Inc. v. Reid & Hellyer, APC (D4d2 Jul. 22, 2022 no. E076728) 81 Cal.App.5th 547, is that the 21-day safe harbor is no less than 21 days. A sanctions motion filed on the 21st day is too early. So the order granting that sanctions motion was reversed on appeal.

But I have a question about this.

The opinion contained no real analysis how the shortened safe harbor prejudiced the plaintiff or its attorney here. The purpose of the safe harbor is to provide a reasonable time for the offending party to reconsider its pleading. True, the plaintiff was deprived one day of that period. But there was no mention in the opinion that the plaintiff withdrew its pleading after the sanctions motion was filed. And a review of the docket indicates the offending complaint was not withdrawn. To the contrary, the defendants filed a demurrer to the complaint, and the plaintiffs opposed the demurrer.

So where is the prejudice? The court did not say that the safe-harbor provision is jurisdictional. The court also did not say that the error defies review for harmlessness. And there was pretty clearly no prejudice. So what is going on here?

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Attorney Sanctioned Over $24K for Frivolous SLAPP & Appeal

Earlier this year, the almost $25,000 in sanctions turned heads in Clarity Co. Consulting, LLC v. Gabriel (D2d6 Apr. 12, 2022) 77 Cal.App.5th 454. (Jeff Lewis and I covered Clarity in episode 31 of the California Appellate Law Podcast.)

But there are two important lessons about anti-SLAPP motions in the case, involving a garden-variety contract complaint for failing to pay a service agreement. They are worth bookmarking, as they still come up too often in anti-SLAPP motions:

1. Just because there is litigation-related activity alleged in the complaint, that does not necessary make the complaint a SLAPP. It is only a SLAPP if the activity is the “principal thrust or gravamen” of the cause of action. Yes, you already knew that. And that is what Clarity held: everbody knows that, so if you don’t know it by now and file an anti-SLAPP motion based on incidental litigation activity, get ready to get sanctioned.

2. Just because there is speech alleged in the complaint does not mean it is subject to the SLAPP statute. The speech has to be relate to a public issue or issue of public interest. (That is why there are two “Ps” in the acronym.) Yes, you already knew that, too. But that is Clarity’s point: everybody knows that, so if you insist on filing an anti-SLAPP motion based on private speech, get ready to get sanctioned.

Finally, the Clarity court offers this PSA on behalf of appellate attorneys everywhere:

“[T]rial attorneys who prosecute their own appeals … may have ‘tunnel vision.’ Having tried the case themselves, they become convinced of the merits of their cause. They may lose objectivity and would be well served by consulting and taking the advice of disinterested members of the bar, schooled in appellate practice." (Estate of Gilkison (1998) 65 Cal.App.4th 1443, 1449-1450, 77 Cal.Rptr.2d 463.)”

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Order Excluding Party’s Sole Witness Held an Abuse of Discretion

You really ought to follow a court’s pre-trial order, but say you overlook something, like a witness list. The judge came down hard on the forgetful plaintiff in Harber v. Williams (D4d2 Sept. 12, 2022 No. E077036) ___ Cal.Rptr.3d ___, 2022 WL 4129702. Harber didn’t have any witnesses other than herself, but the judge prevented her from testifying, which had the effect of a terminating sanction.

Fortunately for Harbert, the Court of Appeal reversed. In a partially published opinion, the court rejected the Harber’s “maximalist” view that a trial court could never deny a party’s right to present evidence and testify. But the court nonetheless concluded that, here, the trial court had abused its discretion.

The most interesting of the factors the court identified was the fact that the pre-trial order indicated a “one size fits all” sanction when it stated that “you will not be permitted to call any witnesses not included in the witness statement.” “In other words,” the court went on, “the trial court announced, up front, that it would not exercise any discretion. The inherent power to dismiss, however, is a discretionary power. “A trial court's failure to exercise discretion is itself an abuse of discretion. [Citation.]””

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Attorney Sanctions for Violating Appellate Stay (But the Stay Was Probably Void)

This recent case involving the underappreciated topic of appellate stays has me heartened on one point, but dismayed on another. What is heartening: Appellate stays have teeth. In Stupp v. Schilders (D1d2 Jan. 25. 2022 no. A161177) 2022 WL 213774 (nonpub. opn.), the trial court imposed a rather large discovery sanction against Stupp totaling over $27,000. The court stayed the sanctions order pending appeal. Undaunted, the respondent’s attorney, Ester Adut, applied for a writ of execution anyway. The trial court imposed $1,050 in sanctions under Code of Civil Procedure section 177.5, and the sanctions were affirmed on appeal.

So the appellate stay was vindicated. That is the good news.

What is dismaying about Stupp is the court ignored the rule that requires a bond to effect a stay of a money judgment on appeal. The maximum stay the court could have ordered here could extend only until 10 days after the deadline to file a notice of appeal.

By operation of law, then, the stay order here had expired by the time Adut sought the writ of execution. But Adut did not raise that argument in her appellate brief. And the court did not address it, either.

The Upshot: Pay close attention to the appellate bond and stay rules. They are complicated. And you cannot rely on the courts to understand them for you.

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Court Imposes $32,000 in Sanctions For Frivolous Appeal in Acrimonious Probate Dispute

The Court of Appeal awarded over $25,000 in appellate attorney fees as sanctions against the unsuccessful appellants in Trumble v. Kerns (D4d1 Jun. 28, 2021) no. D076490 (nonpub. opn.), and an additional $8,500 in court costs as further sanctions.

The appellants are sisters, and one side of a "dysfunctional family" engaged in a ten-year dispute over their mother's estate. (Anyone bothering to put their assets in a trust ought to give a thought to appointing an independent fiduciary as successor trustee. Otherwise, the trust might as well name the attorneys as beneficiaries.)

The Fourth District Court of Appeal concluded the appellants had forfeited all their arguments by failing to raise them in the trial court and by failing to include a proper statement of facts, supported by record citations, in their appellate brief. What sealed the deal for sanctions: in their opposition to the motion for sanctions, the appellants made their own (untimely) request for $4 million sanctions (based on a precluded issue). That did not sit well with the court.

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Court Dismisses Two Appeals in One Case: One as Moot, One as Premature

This recent opinion discusses two appeals, both of them dismissed on procedural grounds. The first appeal was dismissed as moot because the appellant failed to obtain a stay of the […]

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Court Abused Its Discretion by Denying $4M Sanctions Request for Abusive Discovery

The Discovery Act provides for mandatory sanctions for discovery abuses unless the court finds the offending party acted with substantial justification or the sanction would be "unjust." Plaintiffs in Kwan Software Eng'g, Inc. […]

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Attorney Sanctions Must Be Supported by Statement of Reasons

Most attorneys will, at some point or another in their careers, find they have failed to make a court appearance. When that happens, an order to show cause (OSC) will […]

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No Safe Spaces: Arbitrator Not Disqualified Due to Claimed Political Bias; Appellant Sanctioned $56,000 for Frivolous Appeal

Appellant and attorney sanctioned a blistering $56,000 for their frivolous appeal. (Malek Media Group LLC v. AXGC Corp. (D2d3 Dec. 16, 2020) No. B299743.) After a business dispute was decided against […]

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No Safe Harbor Required to Sanction Frivolous Anti-SLAPP Motion, Fourth District Holds

Anti-SLAPP motions are powerful remedy, and litigants sometimes cannot resist filing even frivolous motions. Can a plaintiff faced with a frivolous anti-SLAPP motion get sanctions in light of the difficult […]

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Appeal Held Not Frivolous, But Lawyer Argued It Frivolously

The 10th Circuit sanctioned the attorney of a homeowner tenaciously trying to avoid foreclosure on her home. The court noted that "an appeal may be frivolous as filed or as […]

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