Second District, Division Two Discusses Aggregation Appealability Rule and Litigant’s Discovery Obligations.
The next case we discuss has an interesting discussion of the aggregation appealability rule (sanctions order must exceed $5,000) and a litigant’s discovery obligations (even an alter ego defendant must provide discovery information of which he is aware, even if the defendant was not individually a party to the operative contracts).
Uneeda Enterprises v. Dekar Industries (Karawia), Case No. B207614 (2d Dist., Div. 2 Dec. 30, 2008) (unpublished) involved an alter ego defendant stung with sanctions of
$6,000 for not responding to form interrogatories and a document production request. Defendant had objected to the discovery on the ground he was not a party to the contracts executed by his defendant business and was not obligated to respond to the discovery. Plaintiff had even agreed to stipulate that defendant would not be admitting alter ego status by responding to the discovery. Although requesting separate sanctions of $4,040 each against defendant and his attorney, the trial court entered one $6,000 sanctions order against at least defendant. The appellate panel sustained the award.
Plaintiff first argued that defendant’s appeal should be dismissed because the sanctions order was comprised of two $3,000 separate awards, which did not satisfy the $5,000 jurisdictional amount for appealing a sanctions award under Code of Civil Procedure 904.1(a)(12). Although plaintiff was correct in arguing that separate orders cannot be aggregated to reach the $5,000 threshold (Calhoun v. Vallejo City Unified School Dist., 20 Cal.App.4th 39, 45 (1993)), the trial court here only entered a singular $6,000 order which satisfied the jurisdictional threshold. (See also Champion/L.B.S. Associates Development Co. v. E-Z Serve Petroleum Marketing, Inc., 15 Cal.App.4th 56, 59, 60 (1993) [aggregation may be appropriate in situations where a motion to compel is granted with respect to simultaneously propounded discovery requests of different sorts].)
Once the merits were reached, defendant faced an uphill battle arguing the sanctions were an abuse of discretion given that he did fail to respond and that the failure was willful in nature. The appellate court rejected the notion that his nonsignatory status excused defendant from providing information of which he was aware especially in light of the fact that the signatory defendant was a company he controlled. (Cf. In re Marriage of Chakko, 115 Cal.App.4th 104, 107-109 (2004).) Also, plaintiff’s stipulation on the alter ego issue made it even more unreasonable for defendant to not produce responsive information.
The amount of the award was not found to be excessive upon review. Defendant failed to adequately provide a record to support his disproportionality argument, namely, the $6,000 award was excessive compared to the $30,000 overall in dispute. Although generally arguing that the time spent on the two motions was duplicative, the Court of Appeal found that the failure to raise specific challenges forfeited this claim on appeal, citing Premier Medical Management Systems, Inc. v. California Ins. Guarantee Assn., 163 Cal.App.4th 550, 54 (2008) [reviewed in our post of June 2, 2008 and discussing the specificity that needs to be satisfied in order to successfully bring a “duplicativeness” claim].