Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County No. RCV 081741, Craig S. Kamansky and Shahla Sabet, Judges.
Law Offices of Kersten & Associates, William C. Kersten and Brandon R. Creel for Defendants and Appellants Buffalo Inn, Inc. and Richard Rinard.
Paul J. Cambio for Defendant and Appellant Forrest Rinard.
Law Offices of Lisa L. Maki and Lisa L. Maki for Plaintiff and Respondent.
OPINION
Gaut J.
1. Introduction
Plaintiff was employed by her former boyfriend, defendant Forrest Rinard, as a manager of a second defendant, the Buffalo Inn restaurant. The third defendant, Richard Rinard, Forrest’s brother, is the successor owner of the Buffalo Inn. Plaintiff sued all three defendants for sexual harassment and discrimination, wrongful termination, and related causes of action.
For ease of reference, we use the first names of Forrest and Richard.
Defendants appeal from a default judgment of $1,300,000. They contend the court abused its discretion by granting plaintiff’s motion to strike defendants’ answer, denying defendants’ motions to set aside their defaults and their reconsideration motions, and entering the default judgment against defendants.
We agree the trial court abused its discretion by striking defendants’ answer without proper notice as required by Government Code section 68608. The default judgment should be vacated and the answer reinstated so the case may proceed.
2. Preliminary Matters
Defendants’ second amended answer was sloppily drafted and purports to be filed both on behalf of all three defendants and on behalf of Forrest and Buffalo Inn only. As a threshold issue, plaintiff argues defendant Richard never filed an answer to the second amended complaint. We reject that contention because it was never raised below. Plaintiff and the court treated the answer as one filed by all the defendants. Any argument on this point has been waived for purposes of appeal by plaintiff’s express agreement or acquiescence. (Nevada County Office of Education v. Riles (1983) 149 Cal.App.3d 767, 779, citing Redevelopment Agency v. City of Berkeley (1978) 80 Cal.App.3d 158, 166; Sperber v. Robinson (1994) 26 Cal.App.4th 736, 742-743.)
Additionally, we disregard all references to postjudgment proceedings and we deny plaintiff’s request for judicial notice of plaintiff’s amended opposition, which was filed in the trial court after the notice of appeal: “As a general rule, documents not before the trial court cannot be included as part of the record on appeal and thus must be disregarded as beyond the scope of appellate review. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1.)” (Pulver v. AVCO Financial Services (1986) 182 Cal.App.3d 622, 632; Davis v. Thayer (1980) 113 Cal.App.3d 892, 912.) We also disregard plaintiff’s references to and arguments based upon a respondent’s appendix that was never filed with this court. (Davis v. Thayer, supra, at p. 912.)
3. Factual and Procedural Background
Although we base our decision on the trial court’s error in striking defendants’ answer, we offer a full account of the proceedings below to supply a context for our holding.
Plaintiff filed her original complaint in July 2004. Defendants Forrest and Buffalo Inn filed an answer in February 2005. Plaintiff filed an amended complaint naming Richard as a defendant. After the court sustained Richard’s demurrer with leave to amend, plaintiff filed a second amended complaint. Defendants filed a second amended answer on August 1, 2005.
a. Entry of Defendants’ Defaults
In the meantime, on July 13, 2005, the law firm of Angelo and White had filed a motion to be relieved as counsel for all three defendants. The motion asserted that defendants had ceased to communicate, pay their bills, or cooperate with their lawyers. The copy of the motion in the appellate record does not include a proof of service but the register of actions lists a proof of service filed on July 21, 2005, and the court discusses having a copy of the proof of service in the file.
On August 22, 2005, the court granted Angelo and White’s motion to be relieved as defendants’ attorneys. Angelo and White served defendants by mail with notice of the court’s order at addresses in Upland for the Buffalo Inn; in Etiwanda for Richard; and Laguna Beach, care of Jeanette Bosson, for Forrest. The notice included reference to a hearing set on September 6, 2005.
The next action in the case was the “hearing re: status of attorney as to defendants” on September 6, 2005. No defendants appeared and the court set another hearing for an order to show cause regarding sanctions. Plaintiff served defendants by mail at the same addresses with written notice of the hearing.
On September 13, plaintiff filed her motion to strike defendants’ answer, including a copy of her proposed request for entry of default, which she served by mail on defendants.
On October 13, the court conducted the hearing on the order to show cause and the motion to strike. The court commented on its “reluctan[ce] to impose ultimate sanctions, this is a classic case for it.” The court found proper notice had been given and defendants did not appear. Although the record is somewhat confused, it is ultimately clear that the court granted plaintiff’s motion and struck the answer as to all three defendants, who were then served with notice by mail.
On January 3, 2006, plaintiff’s request for entry of default was filed with the court and served by mail on defendants. The court entered defendants’ default the same day.
b. Defendants’ Motions to Set Aside Their Defaults
Defendants Richard and Buffalo Inn, represented by Paul Cambio, filed a motion to set aside their defaults, asserting that Richard is severely dyslexic. Without the assistance of Richard’s domestic partner, Janna Hickler Rinard, during a period of estrangement between June and November 2005, defendants Richard and Buffalo Inn did not receive any information or notice about the subject proceedings. Defendants did not discover plaintiff was seeking a default until December 20, 2005.
A separate motion to set aide the defaults of Forrest and Buffalo Inn was filed by another lawyer, Richard Anderson. The default motion explained that, throughout the course of the lawsuit, Forrest had been mentally disabled by bipolar disorder and posttraumatic stress syndrome. Forrest had been hospitalized and was incapable of fully understanding what was happening.
At the hearing on March 1, 2006, on the motions to set aside the defaults, Richard Anderson filed a substitution of attorney for Forrest and Buffalo Inn. Cambio made a special appearance on behalf of Forrest. Both motions were denied.
c. Defendants’ Reconsideration Motions
All three defendants, represented again by Angelo and White, filed two reconsideration motions. In support of the first motion, Forrest submitted a declaration in which he stated he had recently been treated for depression and alcoholism and had been hospitalized on a 72-hour suicide watch. On March 1, “my alcoholism at that time rendered me mentally and physically incapable of handling my affairs.” Jeanette Bosson submitted a declaration in which she stated she had been handling Forrest’s correspondence and that she had received the notice of ruling about the attorney withdrawal in August 2005 but she had not received notice of the September ruling, plaintiff’s motion to strike, plaintiff’s default request, or the notice of ruling on the motion to strike, although they were all addressed to Forrest care of her at her Laguna Beach address.
The second reconsideration motion included a request for judicial notice of a default judgment obtained by Richard against Ty Osborne. The second motion describes a host of personal and financial problems suffered by Richard, including him being a victim of identity theft by Osborn and anonymous death threats, and a code enforcement prosecution against him by the City of Rancho Cucamonga seeking jail time and a judgment for $80,000. Richard was also working two jobs, suffering health problems, and dealing with Forrest’s mental health and substance abuse issues.
In June 2006, the court denied the reconsideration motions.
d. The Default Judgment
In August 2006, the court conducted the prove-up hearing on the default judgment.
According to plaintiff’s attorney’s prove-up declaration, plaintiff was the single mother of a mixed-race child. She began dating defendant Forrest in July 1995 and began living with him and working at the Buffalo Inn. Forrest was abusive toward plaintiff in their personal life and as his employee. He called her a “Nigger lover” and told her she was fired. He continued to employ her until December 1999 when he beat her in the face with a mop. She moved out of their house but still managed the Buffalo Inn. In July 2001, plaintiff dated another man and Forrest fired her again. Forrest called plaintiff a thief, an embezzler, an extortionist, a liar, crazy, and incompetent. He failed to pay her wages. Plaintiff also filed transcripts of a number of angry, threatening, and profane phone messages from Forrest.
Additionally, plaintiff testified that she worked at the Buffalo Inn for two years between July 1999 and July 2001. Forrest was the owner and plaintiff was the manager. Forrest and plaintiff had a consensual sexual relationship during that period. She was paid $20,000 for about six months, based on an annual salary of $40,000. Forrest drank alcohol at work and his behavior toward plaintiff was “[a]busive, mean, angry, violent.” He made racist comments and was violent toward her child. When plaintiff dated another man, Forrest fired her on July 10, 2001, and began threatening and harassing her. He also evicted her. Plaintiff presented further evidence that, in 2003, Forrest transferred the Buffalo Inn to Richard, who agreed to accept the liabilities of the business.
Plaintiff initially requested general damages of $250,000, lost earnings of $100,000, and an award of attorney’s fees of $60,228.25. Subsequently she claimed wages, penalties, and interest of $200,000 for the time she worked for the Buffalo Inn without being paid and for another year and a half when she could not get a job. She asked for an award of attorney’s fees of $100,000. Finally, she asked for a general award of $500,000 in damages and $500,000 in punitive damages.
On August 31, 2006, the court rendered judgment as requested: special damages, $200,000; general damages, $500,000; attorney’s fees, $100,000; punitive damages against each defendant, $500,000. The total judgment against each defendant was $1,300,000.
Plaintiff concedes the punitive damages were unauthorized.
Defendants filed their notices of appeal on October 24, 2006.
4. Discussion
Plaintiff argues the court properly granted her motion to strike defendants’ answer when defendants did not appear at the hearings in September and October 2005. Defendants contend that the September hearing concerned only the Buffalo Inn and the issue of whether it had obtained a lawyer. Because the individual defendants had missed only the October hearing, terminating sanctions were unwarranted.
All of the parties rely upon and discuss the wrong statutes governing the trial court’s power to strike defendants’ answer. Defendants refer to Code of Civil Procedure section 581, subdivision (l), the general dismissal statute, which addresses dismissal of a complaint, providing: “The court may dismiss, without prejudice, the complaint in whole, or as to that defendant when either party fails to appear at the trial and the other party appears and asks for the dismissal.” Plaintiff relies on Code of Civil Procedure section 436, providing that “[t]he court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: [¶] . . . [¶] (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” There is no contention by plaintiff that defendants’ answer was deficient in how it was drawn or filed.
Neither Code of Civil Procedure section 436 nor section 581, subdivision (l), afforded the trial court the authority to impose terminating sanctions on defendants. Instead, as part of the Trial Court Delay Reduction Act, Government Code section 68608 provides:
“(b) Judges shall have all the powers to impose sanctions authorized by law, including the power to dismiss actions or strike pleadings, if it appears that less severe sanctions would not be effective after taking into account the effect of previous sanctions or previous lack of compliance in the case. Judges are encouraged to impose sanctions to achieve the purposes of this article.”
One limitation on the trial court’s power to strike pleadings is that the sanction is appropriate only if less severe sanctions would be ineffective. (Tliche v. Van Quathem (1998) 66 Cal.App.4th 1054, 1061-1062.) Sanctions may not be imposed without notice and an opportunity to be heard. (See Biondi, Flemming & Gonzales v. Braham (1990) 218 Cal.App.3d 842, 850.) A notice to appear for a continued status conference does not give parties adequate notice that a terminating sanction will be ordered for failure to appear on the continued date. Under such circumstances, striking a defendant’s answer violates the party’s due process rights. (Reid v. Balter (1993) 14 Cal.App.4th 1186, 1193-1194; see Moyal v. Lanphear (1989) 208 Cal.App.3d 491, 503.) A trial court abuses its discretion by requiring parties to attend a status conference and then applying a terminating sanction when the parties fail to attend the conference and the subsequent order to show cause hearing. (See Interinsurance Exchange v. Faura (1996) 44 Cal.App.4th 839, 844.)
In the present case, defendants were accorded the following types of notice. First, they were served with notice of their lawyers’ motion to be relieved as counsel. They did not appear at the hearing on August 22, 2005, for that motion. Next they were served with notice as follows: “THE COURT FURTHER ORDERED that Defendant, Buffalo Inn appear on September 6, 2005 at 8:30 a.m. in Department 20 for a Hearing on Status of Attorney by Defendants. If Defendant, The Buffalo Inn, fails to appear at the hearing on September 6, 2005 represented by counsel, Defendant’s Answer to the Second Amended Complaint will be stricken.” Arguably, the latter notice was sufficient to advise the Buffalo Inn of the threatened terminating sanctions but it did not give such notice to Forrest and Richard.
After none of the defendants appeared at the September hearing, plaintiff served all defendants with another notice, stating: “The court set a Case Management Conference and OSC re: sanctions for the Defendants’ failure to appear . . . .” But the notice did not clearly announce that terminating sanctions were being considered. That element arguably might have been supplied by plaintiff subsequently serving defendants with her motion to strike. But we conclude it did not because the motion to strike was not incorporated into the notice of the hearing on the order to show cause regarding sanctions.
At the October hearing, with all defendants absent again, the court made a finding, that is not supported by sufficient evidence in the record, that proper notice was given. The record demonstrates that striking “Defendant’s answer” was mentioned a single time as it pertained to Buffalo Inn only. The individual defendants were never given notice of a terminating sanction and any notice given to Buffalo was muddled by the subsequent notice of the October hearing that was prepared by plaintiff’s counsel. The latter notice could even be read to imply that striking defendants’ answer was not being contemplated by the court as a possible sanction. (Reid v. Balter, supra, 14 Cal.App.4th at p. 1194.) The notice of terminating sanctions for the October hearing was insufficient. (Reid v. Balter, supra, at pp. 1193-1194; see Moyal v. Lanphear, supra, 208 Cal.App.3d at p. 503.)
Under these circumstances, the trial court abused its discretion in striking defendants’ answer without proper notice. Additionally, the court did not consider at all whether less severe sanctions would be effective. (Gov. Code, § 68608.) In light of our finding that the initial order striking defendants’ answer was invalid, the propriety of the trial court’s rulings on defendants’ subsequent motions is no longer pertinent. (Tliche v. Van Quathem, supra, 66 Cal.App.4th at p. 1063.) Obviously, the default judgment must be vacated.
5. Disposition
We reverse the trial court’s rulings, vacate the judgment, and remand the case to the trial court with instructions to reinstate defendants’ answer and proceed as appropriate. We deem the parties shall each bear their own costs on appeal.
We concur: Hollenhorst Acting P. J. McKinster J.