Filed 6/22/21 Timlick v. National Enterprise Systems CA1/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
LISA ARLENE TIMLICK,
Plaintiff and Respondent, A160110
v.
NATIONAL ENTERPRISE (Lake County
SYSTEMS, INC., Super. Ct. No. CV-416920)
Defendant and Appellant.
This is a putative class action by Lisa Arlene Timlick against National
Enterprise Systems, Inc. (NES), for violating the minimum type-size
requirements in its consumer collection letters (Civ. Code,1 §§ 1812.700–
1812.702). In a prior appeal, we held that debt collectors may utilize the
procedures under the Rosenthal Fair Debt Collection Practices Act
(Rosenthal Act; § 1788 et seq.) to cure their type-size violations. (Timlick v.
National Enterprise Systems, Inc. (2019) 35 Cal.App.5th 674, 678 (Timlick).)
We further held that while NES demonstrated it had cured its violation as to
Timlick, summary judgment in favor of NES was improper, as the trial
court’s dismissal of the entire putative class action allowed NES to
1 Unless stated otherwise, further section references are to the Civil
Code.
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wrongfully “pick off” the named plaintiff in order to avoid a class action. (Id.
at p. 690.)
The instant appeal arises from a discovery motion by Timlick that was
pending at the time NES obtained summary judgment. The discovery motion
was declared moot by the trial court after summary judgment, renewed by
Timlick after remand, and ultimately granted in substantial part, along with
an award of $8,400 in monetary sanctions against NES.
On appeal, NES argues that the renewed discovery motion was
untimely under the 45-day deadline to compel further responses to discovery,
and thus the trial court lacked jurisdiction to do anything but deny it. We
disagree. After Timlick, the parties were returned to the same positions they
would have been in had the summary judgment motion been defeated in the
first instance. As such, the trial court had jurisdiction to hear and grant the
renewed discovery motion. We further conclude the award of monetary
sanctions was not an abuse of discretion. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In 2016, Timlick filed a class action complaint alleging that NES had
sent her a debt collection letter that was not printed in the minimum type-
size required by section 1812.701, subdivision (b). (Timlick, supra, 35
Cal.App.5th at p. 679.) Timlick sought to represent a class of persons in
California who received an initial written communication from NES in an
attempt to collect on a consumer debt during the one-year period prior to the
complaint’s filing date. (Ibid.)
In August 2017, Timlick propounded written discovery requests on
NES, including form and special interrogatories, requests for admissions, and
requests for production of documents. NES served its responses to Timlick’s
discovery in September 2017. During the meet and confer process, NES
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agreed to extend the deadline for Timlick to move to compel further responses
to December 1, 2017.
Meanwhile, in November 2017, NES moved for summary judgment on
the basis that it had timely cured Timlick’s alleged type-size violation
pursuant to section 1788.30, subdivision (d) under the Rosenthal Act.
(Timlick, supra, 35 Cal.App.5th at p. 679.)
On December 1, 2017, Timlick filed a motion to compel NES to provide
further responses to Timlick’s written discovery. She requested monetary
sanctions against NES in the amount of $8,470, based on 21.2 hours of legal
work at her counsel’s stated hourly rate of $350. The hearing on the motion,
originally set for early January 2018, was eventually continued by stipulation
to March 12, 2018.
In February 2018, the trial court granted NES’s motion for summary
judgment. Before judgment was entered, however, the hearing on Timlick’s
discovery motion went forward on March 12, 2018. Timlick’s counsel did not
attend, but NES’s counsel appeared. The minute order of the March 12
hearing states, in relevant part: “The Court indicates a motion for summary
judgment was granted on 2/8/18 and defendant’s attorney was to prepare and
submit a form or order. [¶] . . . [¶] The motion to compel is moot and it is
dropped without prejudice.”
In April 2018, the trial court entered judgment in favor of NES and
Timlick appealed. In Timlick, we held the procedure for curing violations of
the Rosenthal Act set forth in section 1788.30, subdivision (d) is available to
debt collectors to correct curable violations of the minimum type-size
requirement for consumer debt collection letters. (Timlick, supra, 35
Cal.App.4th at pp. 678, 680–685.) However, despite NES’s act of curing its
type-size violation as to Timlick, we reversed the summary judgment in favor
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of NES and remanded, concluding the trial court erred in dismissing the
entire action without first affording Timlick the opportunity to amend her
complaint, redefine the putative class, or locate a suitable class
representative. (Id. at p. 690.)
After remand, Timlick filed a written application in the trial court to
reset the hearing on her discovery motion, which the court granted. NES
opposed the renewed discovery motion, arguing that Timlick rendered the
original discovery requests moot and that the discovery was premature until
Timlick amended her complaint, redefined the putative class, located a
suitable class representative, and obtained class certification. Timlick filed
reply papers addressing NES’s opposition arguments and seeking additional
monetary sanctions. In total, Timlick sought $11,115 in monetary sanctions,
based on 24.7 hours of legal work at her counsel’s then-current hourly rate of
$450.
The trial court granted the discovery motion in substantial part. In
overruling NES’s objections, the court noted: “Although the discovery
requests were served prior to the disposition of the individual claim of
Timlick, the discovery requests bearing on the nature of her claim are also
within [the] proper scope of discovery as to the alleged putative class
members[’] improper type size claim.”
The trial court also addressed the privacy interests of both NES and
the putative class: “[T]he argument of [NES], given the general privacy
protections afforded this type of information and records requires
consideration regarding the timing of an order for compliance under the
present circumstances of the case. The Court of Appeal determined the pick
off exception applied to this case on the cure by [NES] of the defective
collection notice sent to Timlick. [Citation.] Timlick now has the opportunity
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to locate a suitable class representative or otherwise amend the complaint
and redefine the putative class. By this order, Timlick will have discovery as
to the identification of putative class members, putative class claims,
potential proper class representatives and discovery on alleged pattern and
practices of violations of the statute by [NES]. In the application of the
balancing process, an order to provide the requested financial information
discovery is properly stayed and suspended pending the action of Timlick on
the class action case.”
The trial court awarded monetary sanctions to Timlick in the amount
of $8,400 based on her counsel’s hourly rate “at the time of the filing of the
motion” ($350/hour) and “24 hours invested in the motion proceeding.”
NES appealed. (Code Civ. Proc., § 904.1, subd. (a)(12) [sanctions order
in excess of $5,000 appealable].)
DISCUSSION
A. Timeliness of Motion
A motion to compel further responses to written discovery is untimely if
it is not filed within 45 days of the service of the verified response, any
supplemental verified response, or any specific later date to which the parties
have agreed in writing. (Code Civ. Proc., §§ 2030.300, subd. (c), 2031.310,
subd. (c), 2033.290, subd. (c).) Failure to bring the motion within the 45-day
deadline or the agreed-upon extended deadline “renders the court without
authority to rule on motions to compel other than to deny them.” (Sexton v.
Superior Court (1997) 58 Cal.App.4th 1403, 1410.)
There appears to be no dispute that Timlick’s discovery motion was
timely filed in December 2017 based on the parties’ agreement to extend the
deadline. The dispute concerns the effect of Timlick’s reversal of the
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summary judgment on the timeliness of the discovery motion once it was
renewed after remand.
We first reject NES’s contention that the trial court affirmatively
“denied” the discovery motion at the March 12 hearing. The minute order
indicates the court determined the motion was “moot” in light of the earlier
summary judgment ruling. Mootness is defined in terms of the court’s loss of
ability to grant effective relief due to a change in the law or in the material
circumstances of the case. (Wilson & Wilson v. City Council of Redwood City
(2011) 191 Cal.App.4th 1559, 1574; Breux v. Agric. Labor Relations Bd.
(1990) 217 Cal.App.3d 730, 743.) In other words, the trial court determined
that a change in the circumstances of the case removed the occasion for the
court to grant Timlick relief on her discovery motion. Furthermore, by
stating the motion was “dropped without prejudice,” the court contemplated
that the motion could be revisited. By all indications, the court exercised its
discretion under rule 3.1304(d) of the California Rules of Court to “take the
matter off calendar, to be reset only upon motion.”
Relying on Ramon v. Aerospace Corp. (1996) 50 Cal.App.4th 1233 and
Nave v. Taggert (1995) 34 Cal.App.4th 1173, NES argues that even if the
discovery motion remained technically pending after the March 12 hearing, it
was denied by operation of law when judgment was entered in NES’s favor.
But this analysis is incomplete, as neither of the cases cited by NES involved
the reversal of a judgment. As Timlick points out, the general rule is that an
unqualified reversal after trial remands the cause for a new trial and places
the parties in the same position as if the cause had never been tried, with the
exception that the opinion of the appellate court must be followed so far as
applicable. (Hall v. Superior Court (1955) 45 Cal.2d 377, 381.) “This
principle is equally applicable to a partial reversal of a judgment.” (Ibid.)
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More to the point here, the “[r]eversal of a summary judgment leaves
the parties ‘ “in a position no different from that they would have occupied if
they had simply defeated the defendants’ motion . . . in the trial court.” ’ ”
(Urbaniak v. Newton (1993) 19 Cal.App.4th 1837, 1844.) Applying this
principle to the facts before us, the timeliness of Timlick’s renewed discovery
motion becomes readily apparent. Had Timlick defeated NES’s summary
judgment motion in the trial court in February 2018, the March 12 hearing
on Timlick’s discovery motion would have proceeded quite differently:
Timlick’s counsel likely would have appeared to argue the motion; there
would have been no reason to deem the motion moot; and the trial court
would have proceeded to rule, presumably in the same way it did after
remand from Timlick. NES’s original opposition papers are not in the record,
and there is no indication that NES challenged the timeliness of the original
discovery motion; thus, the trial court’s jurisdiction to hear and grant the
motion would not have been in dispute. It is precisely this alternate scenario
that we effectuate in returning the parties to their appropriate positions after
Timlick. (See Urbaniak, at p. 1844.)
NES argues nonetheless that the parties cannot return to their
previous positions because “[t]he final judgment as to Timlick is still in full
force and effect.” It is true that Timlick’s holding on the curability issue—
which is now the law of the case and must be adhered to throughout
subsequent proceedings (Kowis v. Howard (1992) 3 Cal.4th 888, 893–894)—
was adverse to Timlick’s individual claim and ability to represent the class.
It does not follow, however, that this circumstance deprived the trial court of
jurisdiction to grant the renewed discovery motion.
Contrary to NES’s newly raised contention at oral argument, the trial
court did not lose subject matter jurisdiction to order precertification
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discovery after what NES characterizes as Timlick’s loss of standing as class
representative.2 Even in a “headless” class action where the lead plaintiff
becomes unqualified to serve as a class representative, he or she may still, “in
a proper case, move for precertification discovery for the purpose of
identifying a new class representative.” (Safeco Ins. Co. of America v.
Superior Court (2009) 173 Cal.App.4th 814, 828.) Before allowing
precertification discovery, however, the trial court must apply a balancing
test, weighing the actual or potential abuses of the class action procedure
against the potential benefits that might be gained. (Parris v. Superior Court
(2003) 109 Cal.App.4th 285, 300–301 (Parris).) As recounted above, it
reasonably appears the trial court engaged in the Parris weighing test and
concluded that Timlick’s precertification discovery—with the sole exception of
NES’s financial information and documents—was appropriate.3 Notably,
NES makes no contention on appeal that the trial court erred in its balancing
analysis or in concluding that the discovery requests bearing on Timlick’s
individual claim were also within the proper scope of discovery as to the
alleged putative class.
2 At oral argument, NES requested permission to provide supplemental
briefing on its “subject matter jurisdiction” argument, despite the lack of
previous notice to opposing counsel and the court. We decline to allow
further briefing, noting the absence of good cause for the request and the lack
of merit in NES’s citation of Saffer v. JP Morgan Chase Bank, N.A. (2014)
225 Cal.App.4th 1239 for the proposition that the trial court lacked subject
matter jurisdiction to enter its precertification discovery order.
3 We are unpersuaded by NES’s suggestion at oral argument that the
trial court did not engage in the Parris weighing test. Not only did NES
explicitly argue in opposition to the renewed discovery motion that the court
must engage in “[t]he so-called ‘Parris balancing test,’ ” but also the court’s
order, fairly read, indicated the court had considered “[t]he argument of
[NES]” in its “application of the balancing process” before ordering that
Timlick was entitled to certain precertification discovery.
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In sum, had the trial court denied summary judgment in the first
instance, it would have retained the discretion to order precertification
discovery, notwithstanding any adverse rulings as to Timlick individually.
Accordingly, after remand from Timlick, we return the parties to this very
position and conclude the trial court did not err in granting Timlick’s
renewed discovery motion.
B. Monetary Sanctions
NES alternatively contends the trial court abused its discretion in
imposing monetary sanctions. We are not persuaded.
The trial court “shall” impose a monetary sanction against any party
who unsuccessfully opposes a motion to compel a further response to
interrogatories, inspection demands, or requests for admission, unless the
court finds that the responding party acted with substantial justification or
that other circumstances make the imposition of the sanction unjust. (Code
Civ. Proc., §§ 2030.300, subd. (d), 2031.310, subd. (h), 2033.290, subd. (d).)
“[T]he phrase ‘substantial justification’ has been understood to mean that a
justification is clearly reasonable because it is well-grounded in both law and
fact.” (Doe v. United States Swimming, Inc. (2011) 200 Cal.App.4th 1424,
1434.) We review the trial court’s imposition of discovery sanctions for abuse
of discretion, subject to reversal only for manifest abuse exceeding the bounds
of reason. (Kuhns v. State of California (1992) 8 Cal.App.4th 982, 988.)
NES argues it was substantially justified in opposing the renewed
discovery motion because numerous appellate courts have held that
precertification discovery is not a matter of right, especially in “headless”
class actions. However, the circumstance that precertification discovery
might be denied in an appropriate case does not demonstrate that NES’s
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opposition here was well grounded in law and fact, particularly as NES does
not challenge the trial court’s balancing analysis.
NES’s reliance on First American Title Ins. Co. v. Superior Court (2007)
146 Cal.App.4th 1564 is unavailing. There, the appellate court reversed the
grant of precertification discovery to the plaintiff after concluding that the
potential for abuse of the class action procedure was “overwhelming” because
the plaintiff was “not a member of the class and never has been; he has no
cognizable interest in seeing this class action proceed.” (Id. at p. 1577.)
Timlick is not similarly situated to the plaintiff in First American, however,
as she lost her class representative status due to a “pick off” situation
involving a novel legal question in the California courts on the curability of
type-size violations. Thus, First American does nothing to demonstrate that
NES’s opposition to the renewed discovery motion here was well grounded in
law and fact.
NES further contends it was substantially justified in opposing
discovery of its financial information and records, as demonstrated by its
victory on this particular point. However, the financial discovery represented
a small fraction of the total discovery in dispute and therefore failed to
substantially justify NES’s broader opposition to the motion. Furthermore, it
appears the trial court reasonably reduced the sanctions award to account for
NES’s partial success.4
4 NES compares the amount of sanctions requested in the moving
papers ($8,470) to the amount awarded ($8,400) to conclude the trial court
gave Timlick “virtually everything she asked for in sanctions without even
considering” NES’s partial success. This is incorrect. Timlick’s total request
for monetary sanctions was $11,115 based on 24.7 hours of legal work at $450
per hour. The trial court calculated its award using counsel’s 2017 hourly
rate of $350, and 0.7 hours less than the total time expended. Thus, we may
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DISPOSITION
The order granting Timlick’s motion to compel further responses and
imposing monetary sanctions on NES is affirmed. Timlick is entitled to her
costs on appeal.
infer the trial court reasonably reduced the sanctions award by $245 ($350 x
0.7) to account for NES’s partial success on the financial discovery issue.
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_________________________
Fujisaki, Acting P. J.
WE CONCUR:
_________________________
Jackson, J.
_________________________
Wiseman, J.*
A160110/Timlick v. National Enterprise Systems, Inc.
*Retired Associate Justice of the Court of Appeal, Fifth Appellate
District, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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