AARON, J.
North County Communications Corporation (North County)
A discovery referee and the trial court issued several orders determining that records related to the business and financial relationships among North County, HFT and Jartel were discoverable. North County refused to comply with these orders. Eventually, the trial court entered an order imposing monetary sanctions in the amount of $74,653 and costs in the amount of $18,313.45 on North County and its president, Todd Lesser, "due to their repeated willful misuse of the discovery process which has prevented Vaya from discovering facts essential to defend itself against [North County's] claims for compensation." The trial court also imposed an issue sanction against North County establishing that "[North County] has for 100 percent of the traffic at issue in this case, and for all periods at issue, . . . engaged in access stimulation ('traffic pumping'). . . ."
North County appeals the monetary sanction order. North County contends that monetary sanctions are improper because Vaya did not need the discovery. Specifically, North County notes that because North County elected not to carry its burden to prove that it was not engaged in access stimulation and was also precluded from doing so by the imposition of an issue sanction, Vaya was not required to prove the defense of access stimulation. As a result, North County maintains the monetary sanctions were improper. North County also maintains that the monetary sanctions were impermissibly punitive and that the amount of sanctions is not reasonable. We conclude that North County's claims are entirely without merit and that the trial court acted well within its discretion in imposing monetary sanctions in the amount of $92,966.45 due to North County's recalcitrant refusal to comply with its discovery obligations.
North County filed the underlying action against Vaya in January 2011. Although the complaint is not in the record, it is undisputed that North County sought to recover payment for call termination services that it allegedly provided to Vaya.
During the discovery portion of the litigation, Vaya sought to obtain evidence that North County engaged in access stimulation with HFT and Jartel. According to the trial court, such evidence could have application with respect to various issues in the case, including potentially "defeat[ing] [North County's] claim entirely." Vaya's efforts to obtain such discovery were largely thwarted by North County and Lesser's repeated misuse of the discovery process, which included repeated failures to comply with discovery orders issued by both a discovery referee and the trial court.
In May 2014, Vaya filed a motion for sanctions with the discovery referee against North County and Lesser. Vaya outlined numerous discovery abuses in its motion, including that North County had failed to comply with the trial court's April 14, 2014 order compelling production of various accounting records detailing the financial relationships between North County, and HFT and Jartel. Vaya requested that the court impose terminating sanctions against North County and monetary sanctions against North County and Lesser in the amount of $127,842.21, consisting of $109,528.76 in attorney fees and $18,313.45 in costs. Vaya supported its motion with declarations from its counsel outlining the attorney fees that Vaya had incurred in connection with its attempt to obtain relevant discovery as well as copies of relevant discovery pleadings and court orders. Among those documents were North County's responses to Vaya's interrogatories in which North County stated, "No documents show revenue sharing because there is no revenue sharing."
In response, North County provided the discovery referee with copies of a March 2014 motion that it had filed with the trial court seeking a stay of further production of documents.
As an alternative to requiring the production of discovery related to access stimulation, North County contended that the court could "simply find that [North County] has not met its burden of disproving revenue sharing and, subsequently, that it has engaged in access stimulation."
Vaya filed a proposed order granting monetary and terminating sanctions that outlined North County's repeated failures to comply with discovery orders. In its proposed order, Vaya also stated that North County's recent admission that it engaged in revenue sharing with HFT and Jartel was contrary to North County's previous discovery responses and that North County made the admission only after being "faced with the obligation to produce relevant records."
The discovery referee held a hearing on the motion for sanctions. After the hearing, the referee issued a report recommending monetary sanctions in the amount of $92,966.45, consisting of $74,653 in attorney fees and $18,313.45 in costs. The referee also recommended that the trial court deny the request for terminating sanctions, but impose an issue sanction establishing that North County had engaged in access stimulation with respect to 100 percent of the call traffic at issue in the case.
In support of its order, the referee noted that both it and the trial court had issued numerous orders directing North County to provide various types of discovery, and that North County had repeatedly failed to comply with such orders. For example, the referee noted that on April 14, 2014, the trial court adopted the referee's ruling compelling North County, HFT and Jartel to produce all of the following financial records:
The referee found that North County had failed to comply with these orders.
North County filed an objection to the referee's recommendation, Vaya filed a response to North County's objection, and the trial court held a hearing at which the parties were given the opportunity to address the referee's recommended sanctions.
On July 15, 2014, the trial court issued an order adopting the referee's recommendation to impose issue and monetary sanctions, without modification. North County appeals the July 15 order.
North County claims that the trial court erred in imposing monetary sanctions in the amount of $92,966.45.
Code of Civil Procedure section 2023.010
Section 2023.030 authorizes a trial court to impose sanctions, including monetary sanctions, for the misuse of the discovery process. Section 2023.030 provides in relevant part:
"`"[T]he purpose of discovery sanctions `is not "to provide a weapon for punishment, forfeiture and the avoidance of a trial on the merits,"' . . . but to prevent abuse of the discovery process and correct the problem presented. . . ."' [Citation.] Monetary sanctions encourage `voluntary compliance with discovery procedures by assessing the costs of compelling compliance against the defaulting party.'" (Pratt v. Union Pacific Railroad Co. (2008) 168 Cal.App.4th 165, 183 (Pratt).)
"When imposing discovery sanctions, the trial court has broad discretion [citation] and its order will not be reversed on appeal in the absence of a manifest abuse of discretion that exceeds the bounds of reason, resolving all evidentiary conflicts in favor of its ruling." (Pratt, supra, 168 Cal.App.4th at p. 183.)
North County raises three arguments in support of its contention that the trial court erred in imposing monetary sanctions against it. We consider each argument in turn.
First, North County contends that the imposition of monetary sanctions was improper and amounted to "double punishment" because it elected not to carry its burden of proving that it had not engaged in access stimulation, and the trial court also imposed an issue sanction establishing that the call traffic at issue in this case resulted from access stimulation.
While North County contends that it "made a strategic business decision not to meet its burden" of proving that it had not engaged in access stimulation, it did so only after repeatedly failing to comply with discovery orders compelling it to provide discovery relevant to this issue. The monetary sanction was imposed in order to compensate Vaya for the expenses that it incurred in attempting to obtain discovery to which it was entitled. (See Pratt, supra, 168 Cal.App.4th at p. 183 ["Monetary sanctions encourage `voluntary compliance with discovery procedures by assessing the costs of compelling compliance against the defaulting party.'"].) The trial court's imposition of an issue sanction did not compensate Vaya for such expenses, but rather, relieved Vaya of having to obtain the evidence necessary to establish a defense that it sought to establish at trial. The court's imposition of a monetary sanction in addition to an issue sanction thus does not amount to double punishment.
North County also claims that the trial court's imposition of sanctions constitutes improper punishment. In support of this contention, North County argues that "[d]espite ruling that Vaya's initial [discovery] requests were drafted in an overly broad manner, the Discovery Referee and the Superior Court awarded monetary sanctions where they previously refused to provide Vaya with sanctions." The trial court's order imposing sanctions extensively and precisely details the discovery abuses for which it was sanctioning North County, including North County's failure to respond to requests for certain documents, its failure to produce requested documents at Lesser's deposition, and HFT and Jartel's failure to respond to Vaya's nonparty subpoenas.
Finally, North County argues that the amount of sanctions is not reasonable. Vaya supported its motion for sanctions with "detailed evidence of substantial costs and attorney's fees incurred by Vaya" related to North County's discovery abuses. Further, the trial court declined to award Vaya the full amount of attorney fees that it sought, awarding it $34,875.76 less than the $109,528.76 in fees that Vaya requested in its motion.
North County has not demonstrated that any portion of the fee award was unreasonable. North County contends that "despite the fact that the initial [discovery] hearing and related filings addressed many issues raised by both sides, the Order provided Vaya with $27,665 in fees and $2,682.89 in costs for matters related to that hearing," and that it is "fundamentally unfair for Vaya to recover all of its fees and costs related to that discovery hearing." (Italics added.) This argument fails for a number of reasons. First, as North County acknowledges in its brief, the trial court's order does not "allocate [the awarded] fees and costs to any particular motions or hearings." North County is thus incorrect in asserting that the court awarded Vaya $27,665 in fees and $2,682.89 in costs related to the initial discovery hearing. Second, Vaya did not seek all of its fees and costs related to the initial discovery hearing, but rather, sought fees related to its request for production of documents that North County failed to produce. Third, while Vaya sought $27,665 in fees related to its attempt to discover these documents, the request was not limited to the initial hearing, but also included time billed related to the ensuing motions to compel related to that request.
North County also contends that the "Order . . . provides Vaya with $40,280.26 in attorneys' fees and $9,900.85 in costs for Vaya's two-day deposition of Mr. Lesser," an amount that North County characterizes as "outrageous." This argument fails because the trial court made detailed findings in its April 14, 2014 order concerning Lesser's "non-responsive" deposition testimony and North County fails to demonstrate that these findings are without basis.
Finally, North County maintains that the trial court erred in awarding sanctions related to Vaya's third party subpoenas to HFT and Jartel and various discovery hearings because North County filed oppositions that resulted in modifications of Vaya's discovery requests. North County fails to establish that the modifications that it obtained were of any significance or that the modifications establish that the trial court abused its discretion in awarding monetary sanctions against North County in light of its repeated failure to comply with its discovery obligations.
The July 15, 2014 order is affirmed. Vaya is entitled to costs on appeal.
McINTYRE, Acting P. J. and O'ROURKE, J., concurs.
