Opinion
NOT TO BE PUBLISHED
Monterey County Super. Ct. No. M68579
OPINION
ELIA, J.
This case involves a contractor's lawsuit arising from new residential construction. Noel McNamee, a general contractor, appeals from a judgment in his favor and against owners Donald and Carolyn Stewart. McNamee's complaint included a cause of action for breach of contract, a quantum meruit claim, and an action to foreclose a mechanics' lien. McNamee obtained a judgment awarding damages and allowing foreclosure of the mechanics' lien.
In his appeal, McNamee claims that he was entitled to an even greater recovery. McNamee asserts that the trial court improperly failed to award damages for lost profits based upon its misapplication of former Business and Professions Code section 7164 and improperly denied penalties warranted under Civil Code section 3260.1, subdivision (b). We find these assignments of error without merit and affirm the judgment.
All further statutory references are to the Civil Code unless otherwise stated.
The Stewarts appeal from the court's order after judgment imposing monetary sanctions of $26,576 against them for discovery abuses based upon the court's finding that their abuses "needlessly" "extended the trial," which had occurred more than a year earlier. They assert that the motion for sanctions was untimely and statutorily barred and the trial court's order imposing monetary sanctions constituted an abuse of discretion. We conclude that the trial court exceeded its discretion in finding the motion was timely and reverse the order.
I
H030260
A. Factual and Procedural History
McNamee filed a lawsuit against the Stewarts in January 2004. In a contract cause of action, McNamee sought to recover $34,503.01 for work performed plus $35,708 in lost profits and overhead, and a two percent per month penalty on the sum of $34,503.01 and attorney fees and costs under section 3260.1. In a quantum meruit action, McNamee sought to recover $35,891.68 for the reasonable value of his services plus interest from October 5, 2003, and attorney fees and costs. In a third cause of action, McNamee sought to foreclose a mechanics' lien claim for $34,503.01.
An 11-day court trial began on January 25, 2005 and concluded on March 21, 2005. On May 12, 2005, the trial court filed its tentative decision in favor of McNamee. In the tentative decision, the court stated that McNamee "may seek attorney's fees and costs under section 3260(g) through a noticed motion." Under section 3260.1, a contractor is entitled to the penalty specified in subdivision (g) of section 3260 (applicable to retentions wrongfully withheld from payment) if an owner wrongfully withholds any amount of a progress payment in violation of section 3260.1, subdivision (b).
The record on appeal does not include reporter's transcripts of the full court trial.
A proposed statement of decision prepared by McNamee's attorney was filed on August 12, 2005. Under the proposed statement, McNamee was entitled to penalties and attorney's fees and costs pursuant to sections 3260 and 3260.1 for the Stewarts' failure to promptly pay McNamee. The Stewarts filed their objections.
On October 20, 2005, the trial court held a hearing on the proposed statement of decision and objections. After the court indicated that sections 3260 and 3260.1 did not apply to nonpayment of an amount that was neither a progress payment nor a retention, McNamee's attorney asked the court to consider Sherman v. Kinetic Concepts, Inc. (1998) 67 Cal.App.4th 1152. In that case, the plaintiffs had sought discovery sanctions or a dismissal upon learning after the jury verdict that defendant "had falsely answered discovery inquiries and 'intentionally failed to disclose highly relevant and material information and documents directly bearing on the fundamental issues of this action.' " (Id. at p. 1159.) The appellate court in Sherman determined that the trial court had "erred in determining the request came too late." (Id. at p. 1163.) The trial court, after considering Sherman, clarified that its determinations regarding the inapplicability of sections 3260 and 3260.1 was not a ruling on whether Sherman applied in the present case.
A revised proposed statement of decision prepared by McNamee's attorney was filed on October 26, 2005. It stated that McNamee was not entitled to penalties and attorney's fees and costs pursuant to section 3260.1. The Stewarts filed their remaining objections and McNamee filed a reply.
On February 2, 2006, the court issued a "decision" adopting the revised proposed statement of decision and McNamee's reply as its "final statement of decision" except as to one change pertaining to prejudgment interest. McNamee was directed to prepare the judgment.
On March 2, 2006, the court issued its ultimate statement of decision, including findings of fact and law, which had been prepared by McNamee's counsel. The court described McNamee's various written proposals and cost breakdowns for "phase 1 construction" of the Stewarts' "dream home." Phase 1 included "site work, concrete, foundation, deck piers, rough structural hardware, rough plumbing, framing, and windows, but no doors or roofing materials."
The trial court found that McNamee began work without a formal written contract. It determined that, "[a]s of September 8, 2003, the parties had a definite oral agreement as to the scope of work, the fixed price for the work to be done, and the start date of construction." The oral contract was based upon an August 26, 2003 letter proposal, which modified an August 15, 2003 letter proposal, and a cost breakdown provided to the Stewarts. "This oral contract was for a fixed fee of $258,888.00 plus optional items at the Stewarts' election, inclusive of profit at ten percent (10%) and overhead at six percent (6%), all work to be performed in conformance with the plans and specifications . . . prepared by Architect Matthams . . . ."
According to the statement of decision, the parties' relationship quickly deteriorated and McNamee stopped working on the project on October 7, 2003 by mutual agreement with the Stewarts and the Stewarts orally promised to pay him the value of his work through that date. The trial court found that the original "oral contract was revised by mutual assent of the parties" and the Stewarts' payment was conditioned only upon the architect's approval of McNamee's invoice for his work
On October 9, 2003, McNamee submitted an invoice for $35,891.68 to architect Matthams. On October 23, 2003, after being asked to reduce his demand to $34,503.01 by the architect as a compromise in order to obtain prompt payment, McNamee submitted a revised invoice for $34,503.01. The Stewarts did not pay but rather asked for a further reduction and McNamee's agreement to indemnify them for all claims arising during the course of construction.
On October 30, 2003, after the Stewarts failed to pay the revised invoice, McNamee filed a mechanics' lien for $34,503.01 plus legal interest. On March 8, 2004, the Stewarts paid McNamee $14,392.10 "in return for release of [a subcontractor's] mechanics lien" and the reduction of McNamee's mechanics' lien to $20,110.91.
The trial court determined that the Stewarts had breached the second oral contract to pay McNamee for the value of his work when they "refused to pay any amount without attaching new conditions to payment of a lower amount than that which had been approved by the architect." It concluded that McNamee's "remedy for breach of both oral contracts" was recovery of the amount necessary to avoid the Stewarts' unjust enrichment.
The court decided that McNamee was entitled to $27,534.58, consisting of $21,499.58 plus $6,035 in damages, together with specified prejudgment interest for breach of contract. The $21,499.58 was calculated by subtracting the Stewarts' payment of $14,392.10 from the October 9, 2003 invoice for $35,891.68. The $6,035 was intended to compensate McNamee for his time preparing his proposals and managing the project during the course of construction. The sum was calculated by multiplying an hourly rate of $85 times the estimated 71 hours expended. The court also determined the amount recoverable under the mechanics' lien claim together with prejudgment interest and concluded the Stewarts' real property "shall be sold forthwith" to satisfy the lien.
The court's judgment, dated and filed March 2, 2006, awarded appellant $34,539.69 consisting of $27,534.58 in damages and prejudgment interest. It also determined the amount recoverable on the mechanics' lien and ordered the immediate sale of the Stewarts' real property "by the Sheriff of Monterey County, according to law . . . ."
A notation entered by the clerk of the court on the judgment specifies that it was fully satisfied on April 21, 2006.
B. Former Business and Professions Code section 7164
Former Business and Professions Code section 7164, which was in effect until January 1, 2006 (Stats. 2005, ch. 48, § 18, p. 1139), required that "every contract and any changes in a contract between an owner and a contractor, for the construction of a single-family dwelling to be retained by the owner for at least one year" to be "evidenced in writing signed by both parties." (Stats. 2000, ch. 1005, § 11, p. 5538.) The court determined that the section applied "where, as in this case, the general contractor constructs everything except the exterior finish, roofing materials, and the interior improvements" since the purpose of the section was "to provide the owner of a new home the same protections . . . afforded to homeowners in home improvement contracts."
A new Business and Professions Code section 7164, similar to the former section, was added in 2005 and became operative January 1, 2006. (Stats. 2005, ch. 48, § 19, pp. 1139-1140.)
The trial court explained in its statement of decision that, if not for former Business and Professions section 7164, it would have allowed "damages pursuant to Civil Code section 3300 in the sum of $35,891.68, the amount set forth in the October 9, 2003 invoice," and lost profits "at ten percent (10%) ($22,318.00) reduced by that profit included in the $35,891.68 invoice." The court indicated that otherwise it would have concluded that equitable estoppel principles and Civil Code section 1512 supported appellant's recovery of "lost profits on the entire Phase 1 project." The trial court concluded that it was compelled by Arya Group, Inc. v. Cher (2000) 77 Cal.App.4th 610 "to limit [McNamee's] recovery under his breach of contract cause of action to only the $41,926.68," the same amount available in quantum meruit.
Section 1512 provides: "If the performance of an obligation be prevented by the creditor, the debtor is entitled to all the benefits which he would have obtained if it had been performed by both parties." The California Supreme Court has explained in reference to this section: "Performance by the party not in fault is always excused by the wrongful refusal to perform by the other party. The rights of the party in fault come to an end, but the contract is nevertheless kept in force so as to protect the rights of the innocent party and to enforce the obligations of the delinquent party. (Civ. Code, secs. 1511, 1512, 1514.)" (Central Oil Co. v. Southern Refining Co. (1908) 154 Cal. 165, 167.) "It is well settled in this state that one who has been injured by a breach of contract has an election to pursue any of three remedies, to wit: 'He may treat the contract as rescinded and may recover upon a quantum meruit so far as he has performed; or he may keep the contract alive, for the benefit of both parties, being at all times ready and able to perform; or, third, he may treat the repudiation as putting an end to the contract for all purposes of performance, and sue for the profits he would have realized if he had not been prevented from performing.' [Citations.]" (Alder v. Drudis (1947) 30 Cal.2d 372, 381-382.) "If the owner has . . . unjustifiably broken the contract and thereby prevented the contractor from performing the same, the contractor who has been and is ready and willing to perform may sue to recover the damages sustained from the breach by the owner. The damages in such a case would consist of the profits he would have made if he had been permitted to complete the work according to the contract. This would not be the entire contract price, but the difference between the unpaid part of the contract price and the reasonable cost of completing that part of the work which he was not allowed to perform. [Citations.]" (Connell v. Higgins (1915) 170 Cal. 541, 549.) "If the owner's conduct constituted a breach of the contract, the contractor would have the further remedy of treating the contract as rescinded and suing upon the quantum meruit for the value of the work performed. [Citation.]" (Id. at p. 550.)
Arya Group held that a contractor's failure to comply with the writing requirement imposed by former Business and Professions Code section 7164 did not absolutely preclude the contractor from pursuing a breach of contract claim and the contractor was allowed to "seek to enforce its contract claim . . . to the extent [the property owner] would otherwise be unjustly enriched as a result of her failure to compensate [the contractor] for the reasonable value of its work on the . . . construction project." (Arya Group, Inc. v. Cher, supra, 77 Cal.App.4th at pp. 616, 618, fn. omitted.) The court further stated: "If, for whatever reason, failure to compensate the contractor will not result in the unjust enrichment of the owner, there will be no recovery, regardless of what the contractor might have been entitled to collect under a contract which conformed with the requirements of section 7164." (Id. at p. 618, fn. 4.)
The appellate court in Arya Group extensively relied upon Asdourian v. Araj (1985) 38 Cal.3d 276. In Asdourian, the Supreme Court observed that "[g]enerally a contract made in violation of a regulatory statute is void" and the court ordinarily will not aid the enforcement of an illegal agreement or an agreement against public policy. (Id. at p. 291.) But the court recognized that the rule was not inflexible and there was an exception permitting the enforcement of illegal contracts "to avoid unjust enrichment to the defendant at the expense of the plaintiff. (Southfield v. Barrett, supra, 13 Cal.App.3d at p. 294 . . . .)" (Ibid.)
The Supreme Court concluded in Asdourian that a contractor's failure to comply with the statutory requirement under former Business and Professions Code section 7159 that home improvement contracts be in writing did not render oral agreements for residential remodeling absolutely unenforceable. The court explained: "In compelling cases, illegal contracts will be enforced in order to 'avoid unjust enrichment to a defendant and a disproportionately harsh penalty upon the plaintiff.' [Citation.] ' "In each case, the extent of enforceability and the kind of remedy granted depend upon a variety of factors, including the policy of the transgressed law, the kind of illegality and the particular facts." ' [Citation.]" (Id. at p. 292.) The court stated: "[I]n this factual context, enforcing the oral agreements does not defeat the policy of the statute. The penalty which would result from the denial of relief would be disproportionately harsh in relation to the gravity of the violations." (Id. at p. 294.) It found a number of factors supported enforcement: (1) the owners were not part of the class of unsophisticated consumers that the law was intended to protect, (2) misdemeanor penalties provided in the statute were adequate to protect the underlying public policy, (3) the contracts were not malum in se, and (4) the failure to comply with the statute was "perhaps, understandable" because the contractor and the owners had been friends and had past business dealings. (Id. at pp. 292-294.) The Supreme Court determined that the defendants' retention of the benefits without compensation would result in the unjust enrichment of the property owners. (Id. at p. 293.) It concluded that "[i]t will not defeat the statutory policy to allow plaintiff to recover for the reasonable value of the work performed." (Id. at p. 292.)
McNamee contends that his recovery is not limited by former Business and Professions Code section 7164 or Arya Group because that section was intended to apply to contracts for construction of an entire new single-family residence and, therefore, it was inapplicable to his contract with the Stewarts for construction of only a portion of a new residence. He emphasizes that the legislative history did not expressly indicate that the section applied to "contracts for construction of less than an entire new residence." McNamee makes much of the fact that several analyses or reports on the legislation referred to a contract between an owner and a "builder" rather than a "contractor." (See Sen. Rules Com., Off. of Sen. Floor Analyses, Rep. on Sen. Bill No. 618 (1991-1992 Reg. Sess.) as amended May 1, 1991; Assem. Com on Consumer Protection, Governmental Efficiency and Economic Development, Rep. on Sen. Bill No. 618 (1991-1992 Reg. Sess.) June 28, 1991; Sen. Rules Com., Off. of Sen. Floor Analyses, Rep. on Sen. Bill No. 618 (1991-1992 Reg. Sess.) as amended June 27, 1991.) He argues that this legislative history "clearly implies someone contracting for the entire dwelling to be 'built,' not merely a portion thereof."
McNamee further declares that is "inconceivable" that the law applies to "[speciality contractor's] contracts for construction of only a portion of a residence" in the absence of "a clear edict from the Legislature." He points out that former Business and Professions Code section 7159 explicitly applied to home improvement contracts between an owner and "a contractor, whether a general contractor or a specialty contractor" (Stats. 1991, ch. 1160, § 45, p. 5574), while former Business and Professions Code section 7164 did not refer to specialty contractors. He maintains that the trial court's misapplication of former Business and Professions Code section 7164 improperly deprived him of damages for lost profits to which he was entitled under Civil Code section 1512.
We are not persuaded. Former Business and Professions Code section 7164 was intended to "afford consumers who contract for the construction of a single-family dwelling (which will be retained by the owner for at least one year) safeguards already available under [former] section 7159 to consumers who contract for 'home improvement' work." (Arya Group, Inc. v. Cher, supra, 77 Cal.App.4th at p. 614; see Legis. Counsel's Dig., Sen. Bill No. 618 (1991-1992 Reg. Sess.) 4 Stats. 1991, Summary Dig., p. 142.) Former Business and Professions Code section 7159 established the contract requirements for home improvement contracts. (See Bus. & Prof. Code, §§ 7151 [defining "home improvement"]; 7151.2 [defining "home improvement contract"].) It was enacted "as a protection for consumers in an economic area which otherwise might well provide opportunity for abuse by contractors." (Calwood Structure, Inc. v. Herskovic (1980) 105 Cal.App.3d 519, 522, disapproved on another point in Asdourian v. Araj, supra, 38 Cal.3d 276, 293, fn. 11.)
The legislative history consistently states that the purpose of the bill enacting former Business and Professions Code section 7164 was "to give consumers who contract for the construction of a single-family dwelling . . . the same safeguards as those consumers who have work done on their home by home improvement contractors." (See Sen. Rules Com., Off. of Sen. Floor Analyses, Rep. on Sen. Bill No. 618 (1991-1992 Reg. Sess.) as amended May 1, 1991; Assem. Com on Consumer Protection, Governmental Efficiency and Economic Development, Rep. on Sen. Bill No. 618 (1991-1992 Reg. Sess.) June 28, 1991; Sen. Rules Com., Off. of Sen. Floor Analyses, Rep. on Sen. Bill No. 618 (1991-1992 Reg. Sess.) as amended June 27, 1991; Dept. Consumer Affairs, Enrolled Bill Rep. on Sen. Bill No. 618 (1991-1992 Reg. Sess.).) Nothing in the legislative history of former Business and Professions Code section 7164 suggests that the Legislature was making the distinctions now being made by McNamee or perceived that consumers using more than one contractor for various phases of new home construction were less in need of protection than owners hiring a single contractor for such project. To the contrary, the legislative history indicates that Legislature was seeking to expand consumer protection to owners contracting for new residential construction similar to the protection already statutorily provided for owners contracting for residential remodeling.
" 'When construing a statute, we must "ascertain the intent of the Legislature so as to effectuate the purpose of the law." ' (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 977 . . . .) '[W]e begin with the words of a statute and give these words their ordinary meaning.' (Hoechst Celanese Corp. v. Franchise Tax Bd. (2001) 25 Cal.4th 508, 519 . . . .) 'If the statutory language is clear and unambiguous, then we need go no further.' (Ibid.) If, however, the language supports more than one reasonable construction, we may consider 'a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part.' (People v. Woodhead (1987) 43 Cal.3d 1002, 1008 . . . .) Using these extrinsic aids, we 'select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences.' (People v. Jenkins (1995) 10 Cal.4th 234, 246 . . . .)" (People v. Sinohui (2002) 28 Cal.4th 205, 211-212.) The legislative history and purpose of former Business and Professions Code section 7164 support a broad reading of the phrase "construction of a single-family dwelling" to include contracts between an owner and a contractor for construction of a portion of a new home being built.
In addition, the use of the word "builder" instead of "contractor" in some of the legislative reports or analyses of Senate Bill 618 is not significant and does not support the inference of legislative intent suggested by McNamee. Former Business and Professions Code section 7164 used the term "contractor" rather than "builder." (See Stats. 1991, ch. 337, § 1, pp. 1948-1949; Stats. 2000, ch. 1005, § 11, pp. 5538-5539.) Moreover, when that section was first enacted and when it was subsequently amended, Business and Professions Code section 7126 broadly defined the term "contractor" and explicitly made the terms "contractor" and "builder" synonymous for purposes of the Contractors' State License Law (Bus. & Prof. Code, § 7000 et seq.). (See Stats. 1977, ch. 429, § 1, p. 1446; Stats. 1999, ch. 708, § 1, p. 4099, Stats. 2001, ch. 728, § 53, p. 4509.) "It is a fundamental rule of statutory construction that '[t]he Legislature . . . is deemed to be aware of statutes and judicial decisions already in existence, and to have enacted or amended a statute in light thereof.' (People v. Harrison (1989) 48 Cal.3d 321, 329 . . . .)" (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1096.)
Business and Professions Code section 7026 states in pertinent part: " 'Contractor,' for the purposes of this chapter, is synonymous with 'builder' and, within the meaning of this chapter, a contractor is any person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or herself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or other structures or works in connection therewith, or the cleaning of grounds or structures in connection therewith, or the preparation and removal of roadway construction zones, lane closures, flagging, or traffic diversions, or the installation, repair, maintenance, or calibration of monitoring equipment for underground storage tanks, and whether or not the performance of work herein described involves the addition to, or fabrication into, any structure, project, development or improvement herein described of any material or article of merchandise. 'Contractor' includes subcontractor and specialty contractor. . . ."
We also reject McNamee's argument that former Business and Professions Code section 7164 does not apply to him because it does not expressly apply to "specialty contractors." McNamee has not shown by reference to the appellate record that he was a specialty contractor. (See Bus. & Prof. Code, § 7058 [defining "specialty contractor"].) The trial court found McNamee was a general contractor, licensed under the laws of the State of California. (See Bus. & Prof. Code, §§ 7055 [the contracting business has three branches: general engineering, general building, and specialty contracting], 7057 [defining "general contractor"].) Furthermore, at all relevant times, Business and Professions Code section 7126 explicitly provided that the term "contractor" included "subcontractor and specialty contractor." (See Stats. 1977, ch. 429, § 1, p. 1446; Stats. 1999, ch. 708, § 1, p. 4099, Stats. 2001, ch. 728, § 53, p. 4509.)
C. Civil Code Section 3260.1
Section 3260.1 applies to "all contracts entered into on or after January 1, 1992, relating to the construction of any private work of improvement." Section 3260.1, subdivision (b), provides: "Except as otherwise agreed in writing, the owner shall pay to the contractor, within 30 days following receipt of a demand for payment in accordance with the contract, any progress payment due thereunder as to which there is no good faith dispute between the parties. In the event of a dispute between the owner and the contractor, the owner may withhold from the progress payment an amount not to exceed 150 percent of the disputed amount. If any amount is wrongfully withheld in violation of this subdivision, the contractor shall be entitled to the penalty specified in subdivision (g) of Section 3260." (Italics added.) Subdivision (g) of section 3260 establishes a penalty consisting of "a charge of 2 percent per month on the improperly withheld amount, in lieu of any interest otherwise due" and also entitles the prevailing party in "any action for the collection of funds wrongfully withheld" to attorney fees and costs. Section 3260.1 does not define "progress payment."
The trial court concluded that the respondents' failure to pay "cannot be deemed a failure to pay a progress payment" since there was no contract expressly calling for progress payments. McNamee argues that he was entitled to the two percent penalty and attorney fees and costs because the term "progress payments" includes a final payment regardless whether the final payment is "the only payment or the last of a series of installment payments." He asserts that the legislative history indicates section 3260.1 was enacted "to assure that all payments, of every kind" were made by the owner to the contractor and were not wrongfully withheld.
The language of section 3260.1 does not support the assertion that the provision applies to payments other than "progress payments." There is no reference to any other kind of payment other than "progress payments" in the statute. The legislative history of Assembly Bill No. 1608 also makes clear that the bill was intended to induce owners to make prompt progress payments to prime contractors under contracts for construction of private works of improvement. (See Assem. Com. on Consumer Protection, Governmental Efficiency and Economic Development, Rep. on Assem. Bill No. 1608 (1991-1992 Reg. Sess.) as amended May 15, 1991; Assem. 3d reading analysis of Assem. Bill No. 1608 (1991-1992 Reg. Sess.) as amended May 15, 1991, p. 2; Sen. Com. on Judiciary, com. on Assem. Bill No. 1608 (1991-1992 Reg. Sess.) as amended May 15, 1991, p. 2; Sen. Rules Com., Off. of Sen. Floor Analyses, analysis of Assem. Bill No. 1608 (1991-1992 Reg. Sess.) as amended July 11, 1991, p. 2; see also Legis. Counsel's Digest, Assem. Bill No. 1608 (1991-1992 Reg. Sess.) 4 Stats. 1991 Summary Dig., p. 151.)
One legislative committee comment stated that "[t]he bill would require owners to make the progress or other payments due under the contract within 30 days after receiving a demand for payment from the contractor . . . ." (Assem. Com. on Consumer Protection, Governmental Efficiency and Economic Development, Republican Analysis, com. on Assem. Bill No. 1608 (1991-1992 Reg. Sess.) as amended July 11, 1991, italics added.) This comment apparently failed to take notice that Assembly Bill No. 1608 had been amended on July 11, 1991 to refer to only "any progress payment due" under the construction contract rather than to "any amount due." (Assem. Bill No. 1608 (1991-1992 Reg. Sess.) as amended July 11, 1991.) This revised language was retained in the final version of the bill that was enacted. (Stats. 1991, ch. 337, § 1, pp. 1948-1949.)
"Frequently, building and construction contracts require payments to be made as the work progresses. These provisions are generally construed to entitle the builder to the specified payment, provided that performance has been carried forward to the point required by the contract." (15 Williston on Contracts (4th ed. 2007) § 46:8; cf. Bus. & Prof. Code, § 7159, subds. (d)(9)(A) ["If any payments, other than the downpayment, is to be made before the project is completed, the details of these payments, known as progress payments, shall be expressed in substantially the following form . . ."], (d)(9)(B) ["Each progress payment shall be stated in dollars and cents and specifically reference the amount of work or services to be performed and any materials and equipment to be supplied"].) There is no indication that the Legislature used the term "progress payments" in a sense other than its commonly understood meaning. "Excepting when clearly otherwise intended or indicated, words in a statute should be given their ordinary meaning and receive a sensible construction in accord with the commonly understood meaning thereof. [Citation.]" (Los Angeles County v. Frisbie (1942) 19 Cal.2d 634, 642.)
In this case, there was no contract calling for progress payments, as that phrase is commonly understood. Although the trial court found respondents orally accepted appellant's bid for $258,888, the court found that McNamee's standard form contract was not included in the initial oral contract and "there was no discussion by the parties of any limitation on the time for completion of Phase 1." The court made no finding that the parties had orally agreed to a payment schedule. Where a construction contract does not provide for progress payments, ordinarily there is no contractual obligation to pay the contractor until the construction is completed. (See Smoll v. Webb (1942) 55 Cal.App.2d 456, 458.) The Stewarts' and McNamee's oral agreement to discontinue construction and pay for work already completed was in essence a settlement to pay the reasonable value of the work already done. (Cf. Palmer v. Gregg (1967) 65 Cal.2d 657, 660 ["The measure of recovery in quantum meruit is the reasonable value of the services rendered"].)
Moreover, even if the term "progress payment" as used in section 3260.1 were construed to apply to a single payment due under a contract for "construction of any private work of improvement," the trial court did not find that the parties had agreed to payment of a specific amount at a specific time. Therefore, it cannot be said that the Stewarts failed to pay McNamee "within 30 days following receipt of a demand for payment in accordance with the [construction] contract, any progress payment due thereunder . . . ." (§ 3260.1, italics added.)
II
H030615
A. Factual and Procedural History
On March 8, 2006, after the judgment had been filed and almost a year after the trial had concluded, McNamee filed a motion for an order imposing monetary sanctions of $25,692 pursuant to former Code of Civil Procedure section 2023, subdivision (b)(1), and Code of Civil Procedure section 2023.030, subdivision (a), based upon the Stewarts' failure to produce documents in discovery before trial. The memorandum of points and authorities stated that documents that the Stewarts should have produced before trial were obtained during trial through a court order directing the Stewarts to produce and "through third party witnesses" "in possession of copies of communications sent by or to the [Stewarts]." McNamee asserted that, although the court had imposed an evidence sanction against the Stewarts, the sanction was insufficient "to remedy the harm."
It was argued that "[p]rior to, and even after, production of these documents, [the Stewarts] persisted in presenting false testimony . . . in support of their baseless contentions that the improvements constructed by [McNamee] were defective and/or not built pursuant to plans and specifications." It identified, by number, 16 plaintiff's trial exhibits and five defendants' trial exhibits that the Stewarts had failed to produce in discovery. McNamee asserted that the "documents and the supporting testimony as to their relevancy and materiality by witnesses directly refuted all of [the Stewarts'] baseless contentions" and the documents proved that Carolyn Stewart testified falsely. It was "estimated that at least 99 hours of . . . attorneys' time was needlessly expended knocking down [the Stewarts'] 'straw man' defenses . . . ." As to the timing of the motion, McNamee asserted that "[t]he nature, extent, and impact of the withheld documents could not be ascertained until [the trial court's] Statement of Decision was finally signed by the Court." McNamee requested an award of the $21,780 in attorney fees and a further award of $3,912 to cover the attorney fees for and the cost of the sanctions motion.
McNamee's attorney submitted his declaration in support of sanctions. He reported that form and special interrogatories had been served on the Stewarts in June 2004 and supplemental interrogatories had been served on the Stewarts in September 2004 but, "[a]t no time prior to December 27, 2004, did [the Stewarts] identify or claim in their Interrogatory Responses that any work by [McNamee] was defective, or not built in accordance with plans or specifications." He indicated that a demand for production of documents had been served on the Stewarts in June 2004 and a supplemental demand for production had been served on the Stewarts in September 2004 but 21 of the trial exhibits had not been produced by them. Counsel indicated that the Stewarts "were ordered to produce 'additional documents' " after several days of trial, additional documents were presented by the Stewarts during trial, and additional documents were "obtained through [McNamee's] Trial Witness subpoenas."
The appellate record in H030260 indicates that McNamee brought an unsuccessful motion in limine for an evidence sanction that the Stewarts be precluded from presenting evidence in regard to allegedly defective work performed by McNamee or his subcontractors based upon their failure to mention the "alleged defects until they served their Settlement Conference Statement . . . ." (See Evid. Code, §§ 452, subd. (d), 459.)
McNamee's counsel asserted in his declaration that the documents that the Stewarts had failed to produce "were crucial to . . . proving that [the Stewarts'] claims of defective work were fabricated or known by them to be untrue" and these documents "destroyed their contentions that [McNamee's] work was defective or not built in accordance with plans and specifications." He indicated that numerous witnesses would have been eliminated and the trial would have been reduced to no more than two days if the Stewarts had not made "specious contentions."
McNamee's counsel submitted his billing records, which had contained handwritten notations identifying the "billing time which would have been eliminated had the issues at Trial not been expanded to include allegedly defective work." That additional, unnecessary attorney time, billed in increments of .10 of an hour and involving work done between September 2004 and April 2005, added up to 99 hours at a billing rate of $220 per hour for a total cost of $21,780. McNamee's counsel also stated that his client had incurred attorney's fees in the amount of $3,652 for preparation of the sanctions motion and it was anticipated that an additional hour of attorney's fees would be incurred at the hearing on the motion.
In opposition to the motion for sanctions, the Stewarts argued that the motion was untimely and without merit and Code of Civil Procedure sections 1008 and 128.7 barred the motion. The Stewarts' trial attorney submitted his declaration in opposition to the motion for sanctions.
In his declaration, the Stewarts' attorney conceded that the Stewarts had located additional documents during trial that "arguably, they should have located earlier." He indicated that the documents "first located and produced at trial did not change, and would not have changed if produced earlier, [his] trial strategy regarding the defect claims" and, even if those documents had been produced earlier, he would have "taken the same position with respect to the defective work" and he would have asserted at trial that the drainage system had "numerous deficiencies." He also pointed out that counsel for both parties had "grossly underestimated the length of trial" and "McNamee was on the stand nearly 2 days himself."
In McNamee's reply, it was maintained that the amount of monetary sanctions "measured by attorneys' time at Trial could not be established until the Trial was concluded, a Statement of Decision signed, and a Judgment executed." In a declaration filed subsequently, McNamee's counsel indicated additional attorney time had been invested in the sanctions motion, he requested that the award include an additional $924, and he asked for a total award of $26,616.
At the motion hearing on April 12, 2006, McNamee's counsel indicated that the Stewarts' failure to timely produce documents forced him to call certain witnesses to testify on behalf of McNamee and this was the principal reason he was requesting sanctions. He explained that he had gone through his billing and focused on the attorney time related to the additional witnesses that he had been required to call. As to the timeliness of the motion, counsel indicated that he could not bring the motion until he knew all the damages, which meant the motion could not be brought until the end of trial, and he also had to wait for the court's findings in its statement of decision because the Stewarts' conduct at trial was a basis for the motion.
The court expressed "great concerns about the timeliness" of the motion. It had "a difficult time understanding" why McNamee did not bring the motion for sanctions shortly after the trial. The court pointed out that even if its decision had been for the defense, the misconduct would still have been subject to sanctions. McNamee's counsel explained that he had to wait until at least the end of trial to "get a handle upon . . . the magnitude of the problem" and he had to wait for the court's decision because the truthfulness of Carolyn Stewart's testimony was an issue before the court and her false testimony was a basis for the motion.
The court asked McNamee's counsel to explain why he needed to call the additional witnesses rather than subpoenaing the documents from them, stating, "Again, my memory is a little fuzzy. I remember there were things that came out from those witnesses that arguably should have been in the possession of the defendants." McNamee's counsel explained that the Stewarts raised the issue of defective work after the discovery period had closed and he attempted to reach the architect "after it became apparent there was going to be a defective issue" and he needed someone to testify whether "the work . . . was done in accordance with [the Stewarts'] specifications." He told the court that the architect made records available for review and he had subpoenaed the records for trial but he conceded "there was nothing in the architects' file that was a surprise during trial . . . ."
Nevertheless, counsel contended that, if the Stewarts had timely produced the documents, "the trial would have been foreshortened because the records categorically eliminate—not eliminate but categorically contradicted what the defendants were saying . . . ." He explained he had to spend time [r]ebutting defenses, interviewing witnesses, obtaining documents from third parties, [and] in actually putting the witnesses and documents into evidence." He acknowledged, however, that McNamee still would have been required to address the issues of defective and deficient construction at trial if the Stewarts had persisted in making those arguments in the face of those documents.
The trial court took the sanction motion under submission.
On July 10, 2006, more than a year after the trial had ended and months after the judgment had been fully satisfied and McNamee had filed an appeal from the judgment seeking a greater recovery, the trial court issued a written ruling imposing monetary sanctions of $21,780 for costs incurred at trial and $4796 for costs incurred in bringing the motion. It stated: "Defendants' conduct amounted to more than just withholding a few documents during discovery. There were continuous, willful violations, even after the trial had commenced and defendants had been ordered to turn over all documents that came with the prior discovery requests." It believed that the case should have involved "a fairly straightforward trial on Plaintiff's mechanics lien claim and quasi-contract claims for work performed at Defendants' residential property" but the Stewarts deliberately attempted to thwart discovery to gain a tactical advantage at trial.
The court recognized that there had been "a significant passage of time since [the] last day of trial" but the motion was nevertheless timely "due to the protracted nature of the process for finalizing the statement of decision" and absence of any prejudice to the Stewarts. The court stated that the Stewarts' conduct "did needlessly extend the trial, rendering [McNamee's] judgment a pyrrhic victory at best." The court found that McNamee belatedly obtained documents at trial through its orders and through third party witnesses and "[t]hese documents and supporting testimony seriously undermined Defendants' claims of faulty workmanship and that Mrs. Stewart was unsophisticated in the construction bidding process." (Italics added.) Citing Sherman v. Kinetic Concepts, Inc., supra, 67 Cal.App.4th 1152, the trial court determined that monetary sanctions were "necessary to prevent abuse of the discovery process and to send the message that such tactics will not be tolerated." Although the court recognized that "it [could not] be precise in determining how much time the trial would have taken with the discovery abuses by defendants," it concluded that McNamee had "set forth a reasonable basis for assessing sanctions . . . ."
A formal sanctions order was filed on August 30, 2006. The order directed the Stewarts to pay monetary sanctions of $26,576 to McNamee.
B. Belated Post-Judgment Motion for Monetary Discovery Sanctions
The Stewarts maintain that McNamee's motion for discovery sanctions was untimely because it was brought more than a year after trial and nearly five months after the trial court indicated that, contrary to its prior position, attorney fees and costs were not available under sections 3260.1 and 3260, subdivision (g). The Stewarts argue that McNamee's motion was "an afterthought, a way to try to recover through a back door what was not available through the front door—attorney's fees." The Stewarts cite Colgate-Palmolive Co. v. Franchise Tax Bd. (1992) 10 Cal.App.4th 1768 (Colgate) as an example of an untimely motion for sanctions.
McNamee argues that the trial court did not abuse its discretion in finding that his motion for sanctions was timely. He points out that, under the tentative decision, there was "no need to seek attorneys fees as a sanction" because the court at that time had indicated that he could move for attorney fees under section 3260, subdivision (g). He also observes that the trial court found that the delay had not prejudiced the Stewarts and it was justified by the protracted process of finalizing the court's decision. McNamee cites London v. Dri-Honing Corp. (2004) 117 Cal.App.4th 999 for the principle that a trial court has discretion to determine the timeliness of a motion for monetary discovery sanctions.
Colgate, supra, 10 Cal.App.4th 1768, 1788, the case cited by the Stewarts, was a tax refund action involving the plaintiff's belated production of documents. The defendant brought a motion for discovery sanctions after the trial was over. (Ibid.) "[T]he trial court declined to award sanctions because the motion was untimely" and there was no showing of prejudice to the defendant. (Ibid.) After recognizing that a trial court "has broad discretion in imposing discovery sanctions, subject to reversal only for arbitrary, capricious or whimsical action[] [citations]" (ibid.), the appellate court determined that the "trial court did not abuse its discretion in denying the . . . motion for discovery sanctions." (Id. at p. 1789.)
"[I]t is generally accepted that the appropriate test of abuse of discretion is whether or not the trial court exceeded the bounds of reason, all of the circumstances before it being considered." (In re Marriage of Connolly (1979) 23 Cal.3d 590, 598.) On appeal, the burden is on the party complaining to establish an abuse of discretion. (See Denham v. Superior Court (1970) 2 Cal.3d 557, 564, 566; see also In re Marriage of Economou (1990) 224 Cal.App.3d 1466, 1475-1476 [appellant bears the burden of showing imposition of discovery sanctions constituted an abuse of discretion].) The appellate court's determination in Colgate that the trial court had not abused its discretion in denying the motion for discovery sanctions was consistent with the deferential standard of review generally applicable to judicial exercises of discretion. (See Stull v. Sparrow (2001) 92 Cal.App.4th 860, 864; People v. Williams (1998) 17 Cal.4th 148, 162 [standard of review for abuse of discretion is deferential].) Colgate does not establish that the trial court in this case necessarily abused its discretion in finding the request for sanctions was timely.
In London v. Dri-Honing Corp., supra, 117 Cal.App.4th 999, the case cited by McNamee, the plaintiff moved for a motion to compel further response to an inspection demand after the defendant refused to produce documents. (Id. at p. 1002.) The defendant chose to accept an evidentiary limitation rather than fully comply and the trial court invited the plaintiff to document the fees and costs incurred in litigating the motion so the court could impose a discovery sanction under former Code of Civil Procedure section 2031, subdivision (m). (Ibid.) After a separate, noticed motion and hearing, the court imposed a monetary discovery sanction. (Ibid.)
On appeal, Dri-Honing asserted that "since a motion to compel further response under section 2031, subdivision (m), [now Code of Civil Procedure section 2031.310] must be made within a 45-day time limit, so too must the movant's request for monetary sanctions related to that motion; therefore, such a request must be part of that motion." (London v. Dri-Honing Corp., supra, 117 Cal.App.4th at p. 1004.) The appellate court rejected that argument and determined that "a motion for discovery monetary sanctions may be made after an underlying motion to compel further response to an inspection demand is litigated. (Code Civ. Proc., § 2031, subd. (m).)" (Id. at p. 1001.) The court acknowledged that, even though "a motion for monetary sanctions may be filed separately from a motion to compel further response under section 2031," the issue of "timeliness" was "still important" and "subject to the trial court's discretion." (Id. at pp. 1008-1009.) The court also recognized that "Dri-Honing [was] correctly concerned with protecting the Discovery Act's policy interest in speedy resolution of discovery disputes." (Id. at p. 1008.) The holding of London v. Dri-Honing Corp. does not establish that McNamee's motion for sanctions was necessarily timely.
In Sherman v. Kinetic Concepts, Inc., supra, 67 Cal.App.4th 1152, a case mentioned by McNamee, the plaintiffs learned after the jury verdict, that defendant "had falsely answered discovery inquiries and 'intentionally failed to disclose highly relevant and material information and documents directly bearing on the fundamental issues of this action.' " (Id. at p. 1159.) "Because the opportunity for issue, evidence or terminating sanctions was gone, they sought entry of a default judgment, a new trial, or monetary sanctions." (Id. at p. 1163.) The trial court believed it had no authority to impose "sanctions under [former] section 2023 for discovery violations 'after the case is over with.' " (Id. at p. 1160.)
After observing that "[n]either the code nor any case law mandates that discovery sanctions must be imposed prior to the rendering of the verdict" (Sherman v. Kinetic Concepts, Inc., supra, 67 Cal.App.4th at p. 1163), the appellate court determined that the trial court had "erred in determining the request came too late." (Ibid.) The court stated: "[C]ommon sense dictates sanctions cannot be pursued before the affected party finds out about the alleged discovery dereliction of his or her opponent. The true facts may not emerge until the end of the trial, as is the case here." (Ibid.) It concluded that the plaintiffs were "entitled to a new trial on the ground of newly discovered evidence" (id. at p. 1162) and directed the trial court to order monetary sanctions against the defendant "in an amount at least sufficient to compensate the [plaintiffs] for the costs, including attorney fees, of the first trial." (Id. at p. 1164.) The present case is easily distinguishable from Sherman in that McNamee knew the extent of the Stewarts' discovery abuses by the end of trial and long before the court rendered its statement of decision.
McNamee brought his 2006 motion for discovery sanctions pursuant to Code of Civil Procedure section 2023.030, subdivision (a), and former Code of Civil Procedure section 2023, subdivision (b)(1), repealed July 1, 2005 (Stats. 2004, ch. 182, § 22, p. 642, § 64, p. 719). Code of Civil Procedure section 2023.030, like its predecessor, provides for five types of sanctions of varying severity: monetary sanctions, issue sanctions, evidence sanctions, terminating sanctions, and contempt sanctions. (See Newland v. Superior Court (1995) 40 Cal.App.4th 608, 613.) "Monetary sanctions are the most common form of sanction because they are considered the least severe (in terms of their effect on the litigation) . . . ." (Cal. Civil Discovery Practice (Cont.Ed.Bar 4th ed. 2006) § 15.93, p. 1372.)
California's new Civil Discovery Act (Code Civ. Proc., § 2016.010 et seq.) went into effect on July 1, 2005. (Stats. 2004, ch. 182, § 23, pp. 642-696.) This enactment was not "intended to substantively change the law of civil discovery." (Stats. 2004, ch. 182, § 61, p. 719.)
"[T]he overall purpose of the discovery statutes [is] to reduce litigation costs, expedite trials, avoid surprise, and encourage settlement." (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 253.) The objective of discovery sanctions is to "prevent abuse of the discovery process and correct the problem presented [citations]." (Do v. Superior Court (2003) 109 Cal.App.4th 1210, 1213; see McGinty v. Superior Court (1994) 26 Cal.App.4th 204, 210.) "Discovery sanctions 'should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery.' [Citations.]" (Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 487, disapproved on other grounds in Garcia v. McCutchen (1997) 16 Cal.4th 469, 478, fn. 4.) The various sanctions allow a trial court to impose consequences commensurate with the harm resulting from misuse of the discovery process. "[P]unishment is not an appropriate aim of discovery sanctions. [Citations.]" (McGinty v. Superior Court, supra, 26 Cal.App.4th at p. 214.)
Under Code of Civil Procedure section 2023.030, subdivision (a), as under the previous provision, monetary sanctions for misuse of the discovery process are limited to "the reasonable expenses, including attorney's fees, incurred by anyone as a result of" discovery misconduct. (Italics added.) The term "reasonable expenses" refers to amounts expended directly as a result of a discovery misuse and an award of monetary sanctions may not ordinarily exceed the reasonable expenses actually incurred. (See Argaman v. Ratan (1999) 73 Cal.App.4th 1173, 1179; In re Marriage of Niklas (1989) 211 Cal.App.3d 28, 36-38; see also Kravitz v. Superior Court (2001) 91 Cal.App.4th 1015, 1020, but see Do v. Superior Court, supra, 109 Cal.App.4th at p. 1218 [court may impose monetary sanctions based on the reasonable value of pro bono attorney services].) Thus, monetary sanctions for discovery abuses are not intended to be a broad exception to the general rule that attorney's fees are not recoverable by the prevailing party. (See Code Civ. Proc., § 1021.)
It is useful to compare the cost-of-proof sanction available where a party receiving a request for admission fails to admit the truth of a fact later proven at trial. "Requests for admissions differ fundamentally from other forms of discovery. Rather than seeking to uncover information, they seek to eliminate the need for proof. [Citation.]" (Stull v. Sparrow, supra, 92 Cal.App.4th at p. 864.) " 'The primary purpose of requests for admissions is to set at rest triable issues so that they will not have to be tried; they are aimed at expediting trial. [Citation.] . . . .' " (Id. at p. 865.) The cost-of-proof sanction " '. . . is designed to reimburse reasonable expenses incurred by a party in proving the truth of a requested admission . . . [citations] such that trial would have been expedited or shortened if the request had been admitted.' [Citations.]" (Ibid.)
Code of Civil Procedure section 2033.420, subdivision (a), provides: "If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves the genuineness of that document or the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney's fees . . . ." (Italics added, see former Code Civ. Proc., § 2033, subd. (o).) A court's statement of decision following a court trial would be essential to a motion for cost-of-proof sanctions under Code of Civil Procedure section 2033.420.
No cost of proof sanction is imposed where the court finds that "[t]he party failing to make the admission had reasonable ground to believe that that party would prevail on the matter" or that "[t]here was other good reason for the failure to admit." (Code Civ. Proc., § 2033.420, subds. (b)(3), (b)(4).)
McNamee did not establish that any document, or group of documents, was tantamount to an admission of fact. The court did not find that timely production would have obviated the need for further proof on any issue of fact. Instead, it concluded that "documents and supporting testimony seriously undermined" certain of the Stewarts' claims. (Italics added.)
Insofar as McNamee's grievances concerned the Stewarts' pursuit of meritless defenses or their presentation of false testimony at trial, such misconduct did not constitute abuse of the discovery process. (See former Code Civ. Proc., § 2023, subd. (a), Code Civ. Proc., § 2023.010.) Since the trial court eventually determined that that the Stewarts attempted to " 'thwart discovery for the purpose of gaining a tactical advantage at trial,' " an issue sanction might have been appropriate for the Stewarts' failure to timely provide documents material to particular issues but neither party refers to any request for an issue sanction while the trial was in progress.
"[The California Supreme Court has] consistently refused to recognize a tort of 'malicious defense' that would be equivalent to that of malicious prosecution. . . . Instead, the Legislature has fashioned a more limited punishment to fit the 'crime' of bad faith defense to a civil action: the awarding of attorney fees and other reasonable expenses incurred by a party to litigation as the result of another's bad faith actions 'that are frivolous or solely intended to cause unnecessary delay.' (Code Civ. Proc., § 128.5, subd. (a).)" (Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 115.) But Code of Civil Procedure section 128.5, as amended in 1994, "does not apply to conduct arising from a claim initiated after December 31, 1994." (Olmstead v. Arthur J. Gallagher & Co. (2004) 32 Cal.4th 804, 807.)
A court may issue an order directing that "designated facts shall be taken as established in the action in accordance with the claim of the party adversely affected by the misuse of the discovery process" and it also may issue "an order prohibiting any party engaging in the misuse of the discovery process from supporting or opposing designated claims or defenses." (Code Civ. Proc., § 2023.030, subd. (b); see former Code Civ. Proc., § 2023, subd. (b)(2).) An issue sanction may be appropriate to redress the specific harm resulting from "impeded discovery" involving the failure to timely produce documents. (See Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1546-1548.)
In this case, the trial court initially seriously questioned the delay in bringing the motion for sanctions but then reversed itself in granting the motion. Its initial instincts were correct. The court's final factual findings were irrelevant to the issues (1) whether the Stewarts had committed discovery abuses involving their failure to timely produce documents in discovery, (2) whether McNamee had incurred reasonable expenses, including attorney's fees, to eventually obtain those documents from either the Stewarts or third party witnesses, and (3) whether McNamee, while lacking those documents, incurred reasonable expenses, including attorney's fees, to develop or present other evidence rendered irrelevant or unnecessary by those documents. Our review of the record indicates that McNamee had no need to wait until the trial court issued its statement of decision, almost a year after trial, before bringing the motion for sanctions.
Presumably, because McNamee's counsel anticipated recovering attorney's fees under section 3260.1, he did not seek monetary discovery sanctions promptly following trial even though he possessed all relevant facts by that time at the latest. In our view, the possible strategic consideration that monetary sanctions might duplicate attorney's fees that McNamee hoped to obtain under section 3260.1 is irrelevant to the issue of the timeliness of the sanctions motion.
Although Code of Civil Procedure section 2023.030, like former Code of Civil Procedure section 2023, does not fix a time for bringing a motion for monetary sanctions, the motion should be brought within a reasonable time after a party learns of a discovery abuse since the purpose of monetary sanctions is remedial rather than punitive. McNamee's delay of almost a year after trial in bringing the motion for monetary sanctions cannot be considered reasonable under the circumstances. The trial court's reliance on Sherman v. Kinetic Concepts, Inc., supra, 67 Cal.App.4th 1152 was misplaced because in that case, upon learning of the discovery abuses after the jury verdict, the Shermans moved for a new trial on the ground of newly discovered evidence (see Code Civ. Proc., §§ 659, 660 [time limits for bringing and ruling on a new trial motion]) and for discovery sanctions. We conclude that the trial court improperly found McNamee's belated motion for monetary sanctions to be timely. In light of our conclusion, we do not address the remaining issues raised by the Stewarts.
The judgment is affirmed. The order after judgment imposing monetary sanctions is reversed. Parties shall bear their own costs on appeal.
WE CONCUR: RUSHING, P. J., PREMO, J.