Hollywood Garden v. Li CA2/1

Filed 3/25/24 Hollywood Garden v. Li CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

HOLLYWOOD GARDEN, LLC, B322003

Plaintiff and Respondent, (Los Angeles County
v. Super. Ct. No. BC723015)

JI LI,

Defendant and Appellant.

APPEAL from a judgment of the Superior Court of Los
Angeles County, Michael P. Linfield, Judge. Affirmed.
InHouse Co. Law Firm, Alexander Chen and Katja M.
Grosch for Defendant and Appellant.
Fisher, Klein & Wolfe, David R. Fisher; Greines, Martin,
Stein & Richland and Jeffrey Gurrola for Plaintiff and
Respondent.
_________________________
 INTRODUCTION
Hollywood Garden, LLC (Hollywood Garden or the LLC)
sued its former managing member, Ji Li, for forging corporate
documents to secretly encumber its sole asset, real property
located on Hollywood Boulevard in Los Angeles (the Property),
with a $4 million hard money loan. The loan’s onerous terms
meant that after the LLC defaulted it eventually came to owe the
lender more than $12 million in principal, interest, and late fees.
Nearly three years into the case, Li’s counsel withdrew. Li
then failed to appear for his deposition three times, including
twice after being specifically ordered by the court to do so. The
LLC moved for terminating sanctions, which the trial court
granted, finding Li willfully and repeatedly failed to appear for
deposition. After a prove-up hearing, the court entered a default
judgment against Li, awarding the LLC $4 million plus
prejudgment interest, costs, and attorney’s fees.
Li appeals, contending that the court erred in granting
terminating sanctions for various reasons, including that Li was
not represented by counsel during the relevant period and made
an 11th hour offer before terminating sanctions issued to appear
for deposition. We conclude substantial evidence supports the
trial court’s finding that Li purposefully failed to comply with
multiple orders that he appear for deposition, and that the court
acted within its discretion in imposing terminating sanctions.
Li also contends we should reverse the default judgment
because it resulted in a duplicative recovery for another LLC
member, Kai Hou Liang, who had recovered his own judgment
against Li in a prior lawsuit. We find no merit in Li’s claim of
duplicative recovery, and therefore affirm.

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 FACTUAL AND PROCEDURAL BACKGROUND
A. The Agreement to Fund the LLC and the
Unauthorized $4 Million Loan
In March 2016, Li, Liang, and a third individual, Yong Bai,
agreed to invest in the LLC for the purpose of purchasing and
developing the Property. The Property’s purchase price was $9.5
million. The parties executed two agreements—a “Framework
Agreement” and an LLC “Operating Agreement.” Both
agreements provided that Liang would invest $7.3 million, Li
would invest $4.7 million, and Bai would invest $1.3 million, and
based on these investments Liang would own 51 percent of the
LLC, Li would own 40.3 percent, and Bai would own 8.7 percent.
The parties agreed the LLC would use the invested funds to
purchase the Property free and clear of any liens, and then to
develop it.
Liang made his initial $5.48 million investment.1 However,
neither Li nor Bai made their promised investments. Instead, in
March and April 2016, Li used Liang’s investment to make two
non-refundable deposits on the Property totaling $4.8 million.
Then, in May 2016, Li secretly obtained a $4 million hard money
loan from Lone Oak Fund, LLC (Lone Oak), secured by the
Property, to complete the purchase along with additional money
diverted from Liang’s investment. Li obtained the loan in the
LLC’s name without Liang’s knowledge or consent, and forged
Liang’s signature on a corporate resolution authorizing the loan.

1 The Framework Agreement provided that the funding
would be made in phases, with Liang contributing $5.48 million
as his first “installment.”

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 The loan required the LLC to make monthly interest
payments calculated at an annual rate of 7.9 percent, and to
repay the principal and pay all accrued interest by the
“[m]aturity [d]ate” of April 30, 2017. In the event of default, the
interest rate increased to 24 percent. In addition, the loan
provided for a late charge of 10 percent on any amount of interest
or principal not paid within 10 days of the applicable due date.
The purchase transaction closed in May 2016. As part of
the transaction, Li caused the LLC to pay $120,035 in origination
fees and points to Lone Oak and a loan broker. Li then caused
the LLC to make interest payments on the loan. The LLC did not
have sufficient funds to pay off the loan by the maturity date, so
in April 2017 Li agreed with Lone Oak to extend the loan’s
maturity date for one year, to April 30, 2018, with a modified
interest rate of 8.1 percent. Li caused the LLC to pay Lone Oak
$50,000 for the modification.
In July 2017, having discovered what Li had done, the
other LLC members voted to remove him as manager.
When the loan came due in May 2018,2 the LLC defaulted.
As a result, the 24 percent interest rate became applicable and
late payment fees began to be imposed.
B. Liang Sues Li and Bai
On June 15, 2018, Liang filed the Liang v. Li lawsuit
against Li and Bai for fraud and related claims. After trial, a
jury found in Liang’s favor. The trial court imposed a
constructive trust on Li’s ownership interest in the LLC as a
remedy for his unjust enrichment in owning a share of the LLC

2 Another company, BCP, Inc., purchased the loan from
Lone Oak on April 2, 2018, prior to the extended maturity date.

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despite not contributing his promised investment. Following an
appeal, Liang ultimately was awarded $2 million in
compensatory damages and $200,000 in punitive damages; we
also affirmed the constructive trust transferring Li’s LLC
membership interest to Liang. (Liang v. Li (Nov 10, 2022,
B305549) [nonpub. opn.].)
The $2 million amount compensated Liang for being
fraudulently induced to invest $5.48 million in the LLC and, as a
result, losing the opportunity to invest that money elsewhere and
obtain a profit; the award compensated Liang for the loss of use
of his investment money through the time of trial, which took
place in August 2019.
C. The LLC Sues Li
The LLC filed a separate lawsuit against Li and Bai on
September 24, 2018. It asserted claims for breach of the
Operating Agreement, breach of the covenant of good faith and
fair dealing, breach of fiduciary duty, and declaratory relief. The
LLC alleged that it was still in default on the loan and had
incurred damages of “at least” $7,019,000. As the constructive
trust remedy had not yet been imposed, the LLC also sought a
declaration that Li and Bai held no membership interest in the
LLC because they had failed to make their promised capital
contributions.
Li filed an answer on February 19, 2019.3

3 Bai did not respond to the complaint and the court
entered his default on April 9, 2019. The LLC’s claims against
Bai are not at issue in this appeal.

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D. Li Repeatedly Fails to Appear for His Deposition
On August 10, 2021, Li’s attorneys, Park & Lim, filed a
motion to be relieved as counsel in the LLC’s lawsuit. The
motion was set for hearing on September 10, 2021. At that point,
trial was scheduled for February 14, 2022.
On August 24, 2021, the LLC served Li, through his
counsel, with a notice of his deposition for September 14, 2021.4
Li did not object to the notice.
On September 10, 2021, the trial court granted Park &
Lim’s motion to be relieved. The court’s order relieving the firm
did not become effective until Park & Lim filed a proof of service
of the court’s order on Li. (See Cal. Rules of Court, rule 3.1362(e)
[“The court may delay the effective date of the order relieving
counsel until proof of service of a copy of the signed order on the
client has been filed with the court”].)
Neither Li nor any attorney from Park & Lim appeared for
the deposition on September 14, 2021. That day, the LLC’s
counsel e-mailed Park & Lim asking for alternative dates for the
deposition; an attorney at Park & Lim responded that the firm
did not have authority from Li to commit to a deposition date.
Li’s appellate briefing indicates that soon thereafter in
September 2021, Park & Lim were no longer representing him.
We treat this as an admission. (Mangini v. Aerojet-General Corp.
(1991) 230 Cal.App.3d 1125, 1152 [briefs “ ‘ “are reliable
indications of a party’s position on the facts as well as the law,

4 The LLC had previously served a deposition notice on Li
on May 6, 2021. Li, through his counsel, had objected to that
deposition notice on the ground the deposition date was not
acceptable, and the LLC apparently took no further action on
that initial notice.

6
and a reviewing court may make use of statements therein as
admissions against the party” ’ ”].) This accords with the
proceedings below in which Li, the LLC, and the court
understood that Li was unrepresented soon after the court
granted Park & Lim’s motion to be relieved.
On September 16, 2021, the LLC’s counsel e-mailed Li
personally indicating Li had failed to appear for his deposition
and requesting he provide his availability for an informal
discovery conference (IDC) with the court. On September 22,
2021, having not received any response, counsel sent Li a letter
by overnight delivery again requesting his availability for an
IDC. Li did not respond.
On September 29, 2021, the LLC moved to compel Li’s
deposition and for monetary sanctions. Li did not file any
opposition. On October 29, 2021, the trial court heard the motion
and ordered Li to appear for his deposition by November 12,
2021, and to pay $1,343.85 in sanctions. Li did not appear at the
hearing.
The LLC served Li with a notice of the court’s order along
with a notice of deposition for November 12, 2021. Li did not
serve an objection to the deposition notice or contact the LLC’s
counsel about it. Li did not appear for his deposition on
November 12, 2021.
The LLC filed a motion for terminating sanctions for Li’s
failure to appear for his court-ordered deposition. Li did not file
any opposition or appear at the hearing, which was held
December 13, 2021. The trial court denied the motion, finding it
premature to issue terminating sanctions, in part because Li was
a pro per litigant at the time. However, the court stated that
“should . . . Li continue to flaunt this [c]ourt’s discovery orders, a

7
future motion by [the LLC] for terminating sanctions might be
granted.”
On December 10, 2021, the LLC moved to compel Li’s
deposition, for additional monetary sanctions, and for evidentiary
or terminating sanctions in the event Li failed to appear for
deposition. The hearing was scheduled for January 5, 2022.
On December 15, 2021, the LLC filed an ex parte
application to advance the hearing on its motion to compel
because of the approaching February 14, 2022 trial date. Li filed
an opposition, contending that advancing the hearing date was
unnecessary and, due to his busy schedule managing various
projects, he did not have time to prepare an opposition to the
motion to compel on an expedited schedule.
The next day, the trial court held a hearing, denied the
application, and continued the trial date to April 18, 2022. Li
appeared at the hearing to oppose the application.
On January 5, 2022, the trial court granted the LLC’s
motion to compel Li’s deposition and imposed $2,002.50 in
additional monetary sanctions, but declined to prospectively
impose evidentiary or terminating sanctions in the event Li failed
to appear for deposition. Li did not file an opposition or appear at
the hearing.
The LLC served Li with a notice of the trial court’s order
and a notice of deposition for January 14, 2022. Li did not serve
any written objection to the deposition notice or request a
different date. Li failed to appear at the January 14, 2022
deposition.
E. The Trial Court Grants Terminating Sanctions
On February 3, 2022, the LLC moved for terminating
sanctions or, in the alternative, evidentiary sanctions and/or an

8
order compelling Li’s deposition, and further monetary sanctions;
the motion was set for hearing on March 3, 2022. The LLC relied
on evidence that Li had failed to appear for his deposition three
times, including twice after being ordered to appear, and had
failed to pay the monetary sanctions imposed by the court.
Li, through a limited scope counsel, filed an opposition to
the motion for terminating sanctions on February 22, 2022.5 The
opposition asserted Li had now offered to appear for his
deposition, but the LLC’s counsel had declined, and that he had
sent a check to pay the sanctions previously awarded. The
opposition further contended that Li’s failure to attend the
depositions was not willful, and that “given L[i]’s lack of fluency
in reading the English language and his prior counsel’s abrupt
withdrawal without giving L[i] clear communication on the next
steps, whether or not he received actual notice is debatable.” In a
declaration, Li’s limited scope counsel averred, “My experience
with L[i] has convinced me that he does not fully comprehend the
substance or legal significance of what he reads in English and is
reluctant to admit to that deficiency.” Li also submitted his own
declaration in which he averred only that he had caused the
sanctions to be paid; he did not provide sworn testimony as to any
of the other claims in the opposition.
At the hearing, Li’s counsel contended that Li’s business
organization was in “disarray” and Li did not know what was
going on with respect to the lawsuit. Counsel asserted that,
although Li appeared to understand English, he failed to
recognize the seriousness of the situation due in part “to his

5 Although the opposition was untimely, the court indicated
at the hearing that it had considered the opposition.

9
ability to comprehend English.” Counsel requested that, if the
court concluded Li’s conduct had been willful, it consider
evidentiary sanctions instead of terminating sanctions.
The court noted that because trial was set to commence in
about a month and Li would apparently not be represented by
counsel at trial (since his current counsel was representing Li
only in a limited capacity), if it issued evidentiary sanctions then
a judgment against Li appeared inevitable. Li’s counsel
responded that another attorney, who was currently “stuck in
Russia,” was purportedly willing to represent Li at trial.
The court ultimately decided to grant terminating
sanctions. The court observed that Li had not submitted any
declaration or other evidence to explain his conduct, and found
that Li had made “a conscious decision to ignore this court’s
efforts [and i]gnore this court’s orders.”
After the court announced its ruling, it allowed Li to make
a statement. Li indicated that he had limited legal knowledge
and did not know he “need[ed] to go to court for deposition.” He
claimed that he could not find a lawyer “during the pandemic
period” because he had personal issues and was dealing with
many business transactions. At the conclusion of Li’s statement,
the court indicated that it did not find Li credible.
The court later set forth its ruling in a minute order,
stating in part, “No explanation has been provided to the [c]ourt
for [Li’s] absences at three depositions, two of which were [c]ourt-
ordered. Twice this [c]ourt ordered Li to attend depositions;
twice Li ignored the [c]ourt’s orders. Trial is scheduled in this
matter to begin in forty-six (46) days, on April 18, 2022.” The
court also noted that Li had not provided any evidence to support
his claims that he lacked fluency in reading English or that his

10
prior counsel did not explain what would occur in the litigation
after they withdrew.
F. The LLC Obtains a Default Judgment
On April 26, 2022, the LLC filed an application for default
judgment. Seeking compensatory damages associated with the
loan, the LLC adduced evidence that Li was not authorized to
incur the debt, and the LLC was supposed to operate without
debt. It also adduced evidence that, due to the short term of the
loan, the high interest rate, and the late payment penalties that
became applicable when the LLC defaulted, by April 2022 the
balance due increased to $12,393,546.68—$4 million in principal
with the remainder from accrued interest and late fees. Although
the LLC asserted that it was entitled to damages for this entire
amount, it indicated that it was only requesting a judgment for
$4 million because it was also requesting a declaration that Li
had no ownership interest in the LLC due to his failure to make
his promised investment.
The trial court entered a judgment in favor of the LLC, and
against Li, for $4 million in compensatory damages, $2,380,274 in
prejudgment interest, $151,306.50 in attorney’s fees pursuant to
the Operating Agreement, and $14,936.49 in costs, for a total of
$6,546,516.99. The court declared Bai’s membership interest in
the LLC void ab initio but did not include any declaratory relief
as to Li’s membership interest.6

6 At a hearing on the default judgment application, the
trial court expressed concern that declaring Li had no ownership
interest in the LLC would be inconsistent with the constructive
trust it had imposed in the Liang v. Li case transferring Li’s LLC
membership interest to Liang.

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 Li timely appealed on June 29, 2022.
DISCUSSION
We first consider Li’s challenge to the trial court’s grant of
terminating sanctions, and then address his contention that the
judgment entered by the court resulted in a double recovery to
Liang.
A. Li’s Challenge to the Terminating Sanctions
1. Standard of Review
“ ‘We review the trial court’s order [imposing terminating
sanctions] under the abuse of discretion standard and resolve all
evidentiary conflicts most favorably to the trial court’s ruling.
We will reverse only if the trial court’s order was arbitrary,
capricious, or whimsical. It is appellant’s burden to affirmatively
demonstrate error and where the evidence is in conflict, we will
affirm the trial court’s findings. [Citation.] We presume the trial
court’s order was correct and indulge all presumptions and
intendments in its favor on matters as to which it is silent.’
[Citation.]” (Creed-21 v. City of Wildomar (2017) 18 Cal.App.5th
690, 702; see Doppes v. Bentley Motors, Inc. (2009) 174
Cal.App.4th 967, 991 [“Imposition of sanctions for misuse of
discovery lies within the trial court’s discretion, and is reviewed
only for abuse”].) We defer to any credibility findings made by
the trial court. (Osborne v. Todd Farm Service (2016) 247
Cal.App.4th 43, 51.)
2. Governing Legal Principles
“Misuses of the discovery process include . . . [¶] . . . [¶] . . .
[f]ailing to respond or to submit to an authorized method of
discovery [and] [¶] . . . [¶] . . . [d]isobeying a court order to provide

12
discovery.” (Code Civ. Proc., § 2023.010, subds. (d) & (g).)7
Pursuant to section 2025.450, subdivision (h), if a party fails to
appear for deposition after being ordered to do so, “the court may
make those orders that are just, including the imposition of an
issue sanction, an evidence sanction, or a terminating sanction
under Chapter 7 (commencing with [s]ection 2023.010).” Under
section 2023.030, subdivision (d)(4), “The court may impose a
terminating sanction by . . . [¶] . . . [¶] . . . [a]n order rendering a
judgment by default against” the offending party.
“The discovery statutes evince an incremental approach to
discovery sanctions, starting with monetary sanctions and ending
with the ultimate sanction of termination. . . . If a lesser sanction
fails to curb misuse, a greater sanction is warranted: continuing
misuses of the discovery process warrant incrementally harsher
sanctions until the sanction is reached that will curb the abuse.”
(Doppes v. Bentley Motors, Inc., supra, 174 Cal.App.4th at p. 992.)
“The trial court has broad discretion in selecting discovery
sanctions, subject to reversal only for abuse. [Citations.] The
trial court should consider both the conduct being sanctioned and
its effect on the party seeking discovery and, in choosing a
sanction, should ‘ “attempt[] to tailor the sanction to the harm
caused by the withheld discovery.” ’ [Citation.] The trial court
cannot impose sanctions for misuse of the discovery process as a
punishment. [Citation.]” (Ibid.)
“ ‘A decision to order terminating sanctions should not be
made lightly. But where a violation is willful, preceded by a
history of abuse, and the evidence shows that less severe

7 Unspecified statutory references are to the Code of Civil
Procedure.

13
sanctions would not produce compliance with the discovery rules,
the trial court is justified in imposing the ultimate sanction.’
[Citation.]” (Doppes v. Bentley Motors, Inc., supra, 174
Cal.App.4th at p. 992, fn. omitted.)
3. The Trial Court Did Not Abuse Its Discretion in
Imposing Terminating Sanctions
The trial court acted within its discretion in imposing
terminating sanctions. Lesser sanctions and warnings had failed
to ensure Li’s compliance with deposition notices. Li failed to
appear on September 14, 2021 for a noticed deposition, and then
failed to respond to requests to schedule a new date. Thereafter,
the court twice ordered Li to appear for his deposition and each
time Li failed to appear without explanation. Failing to obey a
court order is a “[m]isuse[] of the discovery process,” i.e., an
express statutory ground for terminating sanctions.
(§§ 2023.010, subd. (g), 2023.030, subd. (d), 2025.450, subd. (h).)
Furthermore, the court explicitly warned Li of the consequences
of failing to obey its orders: after the first time Li failed to appear
despite being ordered to do so, the court denied the LLC’s initial
motion for terminating sanctions but indicated in its order,
“should . . . Li continue to flaunt this [c]ourt’s discovery orders, a
future motion by [the LLC] for terminating sanctions might be
granted.”
Li makes four arguments in support of his claim that the
trial court abused its discretion when imposing terminating
sanctions, none of which we find persuasive. We discuss each of
these arguments below.

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 a. The trial court’s statements do not evince an
improper focus on punishment
Li contends that the trial court improperly sought to
punish him for his discovery misconduct based on the court’s
statement at the terminating sanctions hearing that, “I think [Li
has] taken a conscious position to ignore the court.” We are not
persuaded. Read in context, the court’s statement does not
evince punitive intent but instead reflected its rejection of Li’s
primary argument against terminating sanctions, which was that
Li did not fully understand what was happening and thus had
not willfully failed to obey the court’s orders.
Substantial evidence supports the court’s determination
that Li acted willfully. The LLC adduced evidence that it had
served Li with the court’s orders and deposition notices, utilizing
the address Li’s former counsel had used to serve Li. Evidence
showed that Li was monitoring the litigation, as he opposed an ex
parte application to advance the hearing on the LLC’s second
motion to compel and appeared at the hearing. Li did not deny
that he had received the deposition notices and notices of ruling
served by the LLC or aver under oath that he was unable to
understand them. In addition, the trial court could reasonably
find the claim that Li had trouble understanding documents
written in English (made only by counsel in the opposition brief
without evidentiary support) was not credible given that Li had
written professional articles in English.
Li also points out that the trial court referred to the Liang
v. Li case—which resulted in the jury finding that Li had
committed fraud and the court finding that Li was not credible—
and argues the court “essentially decid[ed] the motion [for
terminating sanctions] based on conduct not in the underlying

15
action.” This argument is meritless. The court expressly stated
that it was not relying on the findings against Li in the Liang v.
Li case, stating, “obviously the rulings in the prior cases don’t
cover this case.” While the court did refer to the Liang v. Li case
at the end of the hearing, it was after it had announced its
decision to impose terminating sanctions and Li had then
personally addressed the court. The context further makes clear
that the court referred to Li’s testimony in the Liang v. Li action
as an additional and supplemental ground on which it found Li’s
assertions about why he failed to appear for deposition in the
LLC action not credible, such that if we were to disregard that
ground the court’s credibility determination would not change.
Nothing in the record suggests that the court’s decision was
based on the findings against Li from the prior litigation.
b. Li’s pro per status
Li contends that terminating sanctions were inappropriate
because he was not represented by counsel. However, an
unrepresented party “is to be treated like any other party and is
entitled to the same, but no greater consideration than other
litigants and attorneys. [Citation.]” (Barton v. New United
Motor Manufacturing, Inc. (1996) 43 Cal.App.4th 1200, 1210; see
Rappleyea v. Campbell (1994) 8 Cal.4th 975, 985 [“A doctrine
generally requiring or permitting exceptional treatment of
parties who represent themselves would lead to a quagmire in
the trial courts, and would be unfair to the other parties to
litigation”].) Even so, the trial court denied the LLC’s first
motion for terminating sanctions in part because Li was
unrepresented, choosing instead to provide Li with an explicit
warning that if he continued to ignore the court’s orders then
terminating sanctions might be granted. Furthermore, Li’s lack

16
of counsel did not prevent him from participating in the litigation
or appearing for deposition. Not only did Li fail to appear for his
court-ordered depositions, he also did not communicate with
opposing counsel and did not appear at the discovery motion
hearings. Although Li’s appellate brief claims he was “avidly
attempting to retain counsel,” the record is bereft of any evidence
to that effect. (Fierro v. Landry’s Restaurant Inc. (2019) 32
Cal.App.5th 276, 283, fn. 9 [“we do not consider” statements
without record support].)
c. Li’s last-minute efforts to comply
Li argues that terminating sanctions were inappropriate
because, prior to the hearing, he had paid the monetary sanctions
and offered to appear for his deposition. However, the trial court
could reasonably conclude that these actions, taken at the 11th
hour and only after the LLC had filed yet another motion after Li
yet again failed to appear for deposition, did not ameliorate the
harm caused to the LLC by Li’s refusal to cooperate. Given his
past track record, whether Li would in fact appear for deposition
was highly questionable. In any event, the LLC had been
attempting to take Li’s deposition for more than six months and,
by the time of the hearing, had less than seven weeks to prepare
for trial. (See Collisson & Kaplan v. Hartunian (1994) 21
Cal.App.4th 1611, 1619, 1620 [affirming terminating sanctions
where the defendants’ refusal to provide discovery was
“persistent,” there was “an approaching trial date scheduled for
less than two months after the sanction hearing,” and “
‘imposition of a lesser sanction would have permitted [the
defendants] to benefit from their stalling tactics’ ”].) Not only did
the LLC need time to depose Li and incorporate his testimony

17
into its trial presentation, but also Li’s deposition testimony
might have disclosed the need for additional discovery.
Li relies on Crummer v. Beeler (1960) 185 Cal.App.2d 851,
to argue that it is an abuse of discretion to impose terminating
sanctions after a party has complied with the court’s orders.
Crummer is inapposite because it addressed vastly different
circumstances than those present here. In Crummer, the trial
court granted terminating sanctions for a single instance where
the defendant failed to appear for a deposition on a date
unilaterally selected by the plaintiff’s counsel, and had offered to
make himself available for deposition on a date about five weeks
later. (Id. at pp. 852-853.) Unlike this case, the defendant in
Crummer had not disobeyed a court order, let alone two court
orders. Notably, the Crummer court expressly distinguished the
situation before it from cases where “opposing counsel had
afforded the defaulting party additional opportunity to comply
[citations] or said party’s failure to appear involved disregard of a
specific court order” (id. at p. 859), which are exactly the
circumstances present here.8
d. Less drastic sanctions
Li lastly asserts that the trial court erred in imposing
terminating sanctions because issue or evidence sanctions were

8 Li also relies on Newland v. Superior Court (1995) 40
Cal.App.4th 608, where the court held “that it is an abuse of
discretion for a trial court to issue a terminating sanction for
failure to pay [a monetary] sanction.” (Id. at p. 610.) That
principle has no application here, as the trial court imposed
terminating sanctions based on Li’s failure to comply with two
court orders requiring him to attend his deposition and not his
failure to pay monetary sanctions.

18
available. However, “ ‘[T]he question before this court is not
whether the trial court should have imposed a lesser sanction;
rather, the question is whether the trial court abused its
discretion by imposing the sanction it chose. [Citation.]’
[Citation.]” (Collisson & Kaplan v. Hartunian, supra, 21
Cal.App.4th at p. 1620.) Li does not identify any specific issue or
evidence sanctions the court could have imposed in lieu of
terminating sanctions. The trial court could reasonably find that
such lesser sanctions would not adequately ameliorate the harm
caused by Li’s failure to appear for his deposition, which resulted
in the LLC being deprived of discovery on a potentially wide
range of topics to present its own case.9 The trial court could also
reasonably conclude that any issue or discovery sanctions
reflecting the scope of Li’s refusal to provide discovery would
essentially result in a judgment against him, and thus be

9 Evidentiary or issue sanctions are usually more
appropriate than terminating sanctions where it is “unlikely
[that] the responsive information [sought by the discovery] would
relate to at least some of the core issues at trial” such that lesser
sanctions can be crafted “to replace the information that would or
could be included” in the discovery not produced. (Lopez v.
Watchtower Bible & Tract Society of New York, Inc. (2016) 246
Cal.App.4th 566, 605-606; see also Caryl Richards, Inc. v.
Superior Court (1961) 188 Cal.App.2d 300, 305 [terminating
sanctions improper for the defendant’s failure to adequately
respond to a single interrogatory, which could have been
effectively ameliorated by an issue or evidence sanction regarding
the topic of the interrogatory].) Here, in contrast, Li’s deposition
testimony would have covered topics highly relevant to core
liability issues, and Li makes no showing that his refusal to
appear for deposition could have been effectively addressed with
issue or evidentiary sanctions.

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functionally equivalent to a terminating sanction. (See Miranda
v. 21st Century Ins. Co. (2004) 117 Cal.App.4th 913, 929
[rejecting the plaintiff’s argument that the trial court should have
imposed an issue sanction instead of terminating sanctions in
part because the only possibly appropriate issue sanction would
be “equivalent to a dismissal of [the] plaintiff’s claim”].)
B. The Default Judgment Does Not Award a Double
Recovery
Li separately challenges the default judgment on the
ground it results in an impermissible “double recovery.” (See
Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158 [a plaintiff “is
not entitled to more than a single recovery for each distinct item
of compensable damage supported by the evidence”].) More
specifically, Li contends that the default judgment’s award to the
LLC resulted in a double recovery to Liang, who as the sole
remaining member of the LLC stood indirectly to gain from the
LLC’s recovery in addition to and on top of Liang’s recovery in the
Liang v. Li judgment.
The LLC contends there is no double recovery because the
two judgments remedied different harms: the judgment Liang
obtained in Liang v. Li remedied harms caused to Liang
personally from Liang’s loss of use of his investment and Li’s
failure to make his capital contribution, while the default
judgment the LLC obtained compensated it for distinct harm
caused by the unauthorized loan such as interest and late fees.10

10 The LLC also contends that the rule against double
recovery applies to multiple awards to a single plaintiff, and thus
does not apply here because the judgments are in favor of two
distinct plaintiffs—the LLC and Liang individually. We need not

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 1. Standard of Review
A default judgment entered pursuant to section 585,
subdivision (b) is subject to reversal where it includes damages
that are contrary to law. (See Grados v. Shiau (2021) 63
Cal.App.5th 1042, 1053-1054.) Li’s challenge to the default
judgment presents a question of law for our independent review
because it involves facts not in dispute and “ ‘the inquiry requires
a critical consideration, in a factual context, of legal principles
and their underlying values.’ ” (Nguyen v. Calhoun (2003) 105
Cal.App.4th 428, 437-438, quoting Crocker National Bank v. City
and County of San Francisco (1989) 49 Cal.3d 881, 888.)
2. There Was No Double Recovery
The two judgments at issue here do not provide duplicative
relief for any “distinct item of compensable damage.” (Tavaglione
v. Billings, supra, 4 Cal.4th 1150 at p. 1158.) Li makes no
argument that the default judgment duplicates the $200,000 in
punitive damages awarded to Liang. Instead, he focuses on the
constructive trust and $2 million elements of the Liang v. Li
judgment, and contends they duplicate the $4 million awarded to
the LLC in this case.
We disagree. In Liang v. Li, the trial court awarded a
constructive trust transferring Li’s interest in the LLC to Liang.
This remedy was imposed to avoid Li being unjustly enriched by
continuing to hold an interest in the LLC despite not making the
required capital contribution in return for that ownership
interest. The constructive trust was in Liang’s favor because he

decide this issue, as each element of relief in the two judgments
compensated separate items of damage regardless of the
plaintiff’s identity.

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contributed essentially the entirety of the LLC’s capitalization.
The $2 million compensated Liang for the loss of use of funds he
committed to the LLC, funds which Li used to make non-
refundable deposits and origination payments to the hard money
lender to complete the purchase of the Property.
The $4 million awarded to the LLC was for entirely distinct
damages suffered by the LLC as opposed to Liang. Evidence
adduced at the default prove-up hearing showed that Li
improperly burdened the LLC with a hard money loan. The LLC
was unable to pay off that loan, and the loan’s terms imposed
interest and late fee costs on the LLC well in excess of the $4
million the LLC requested in damages. Indeed, by the time the
default judgment was entered, the LLC owed more than $8
million in interest and fees on top of the loan’s principal
balance—well in excess of the $4 million LLC judgment amount
at issue. This economic damage to the LLC is distinct from the
damages for which Liang was compensated, and thus does not
constitute a double recovery.
DISPOSITION
We affirm the judgment. Hollywood Garden is awarded its
costs on appeal.
NOT TO BE PUBLISHED

WEINGART, J.

We concur:

CHANEY, J. BENDIX, Acting P. J.

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