FOUR EMBARCADERO CENTER VENTURE, Plaintiff and Respondent, v. MR. GREENJEANS GALLERIA CORPORATION et al., Defendants and Appellants.
MR. GREENJEANS CORPORATION et al., Plaintiffs, Cross–Defendants, and Appellants, v. FOUR EMBARCADERO CENTER VENTURE et al., Defendants, Cross–Complainants, and Respondents.
The primary issue presented is whether a referee appointed pursuant to Code of Civil Procedure section 638, subdivision 1,1 for the purpose of resolving pretrial discovery disputes is, without additional action by the court which appointed the referee, authorized to enter a terminating sanction in the form of a default judgment for a party's noncompliance with the referee's discovery orders. We conclude that the referee has this power.
The following narrative, the distillation of an unnecessarily massive record of approximately 15,000 pages, is the minimum required for resolution of these appeals:
These controversies were spawned by defendants' unsuccessful attempt to open and operate a restaurant on property leased from plaintiffs.2 Generated by this dispute, and relevant to this appeal, were overlapping complaints and cross-complaints in four separate actions.3 The parties quickly became embroiled in acrimonious disagreements concerning discovery (three of the actions having been ordered consolidated for this purpose).
The crucial events occurred on July 18, 20, and 22 of 1983, during the course of hearings conducted on a motion by plaintiffs to sanction defendants and compel them to make discovery. Despairing that “this litigation is totally out of hand” and that “I do not have the time to make this case my full-time occupation,” the judge conducting the law-and-motion department mentioned the possibility of appointing a “master” to oversee the discovery process pursuant to section 639. The parties were amenable to this suggestion and accepted the individual proposed by defendants. In an order signed on July 22 and filed three days later, the court appointed attorney Lenard Weiss as a referee with the power to “make final and binding decisions with the same force and effect as orders of this Court” with respect to “any and all discovery matters and disputes that may in the course of these proceedings be raised by any [of the] parties.” 4
The referee entered into his task but almost immediately encountered difficulties. Having established in his “Order No. 1” dated August 3, 1983, a schedule for depositions and the production of documents, the referee determined in his “Order No. 2” of six days later that the failure of defendant Maury Kalen (a Canadian attorney who was the president and chief operating officer of several corporate defendants) to appear for a deposition warranted the imposition of monetary sanctions against defendants “in a future order in an amount to be determined.” In “Order No. 3” dated August 15, 1983, the referee determined that defendants' failures to produce the documents and Kalen for a scheduled deposition warranted the imposition of certain “discovery sanctions” in the form of (1) monetary reimbursement for plaintiffs' “costs and attorneys' fees to date regarding their efforts to complete discovery in these cases” and (2) directions that, with respect to the unlawful detainer action (see note 3 ante ), defendants' answer be stricken, the allegations of plaintiffs' complaint “are deemed admitted, and judgment shall be entered immediately for plaintiff[s].” Two weeks later the referee signed a “Judgment” declaring plaintiffs' entitlement to possession of the premises, and ordering that plaintiffs “shall recover ․ an amount of damages to be determined at a subsequent hearing on that issue.” This document was filed by the clerk of the trial court. Defendants promptly filed separate motions to have the judgment vacated by both the trial court and the referee. By the time the matter was called in the law-and-motion department on August 19th, the court advised the parties that the referee had made an order that same day “vacating the judgment that he had entered, or purported to enter, whatever the legal effect of that may have been.” Counsel for the parties then pressed the court to establish the nature and scope of the referee's authority, with particular emphasis on the issue of whether the referee was empowered to make orders imposing sanctions that would be binding without further action by the court. After making a series of highly ambiguous statements, the court concluded that the judgment had been set aside, thus mooting defendants' motion to vacate it.5
Matters were thereupon returned to the referee, who in the course of proceedings conducted during the ensuing 21 months became increasingly intolerant of defendants' refusal or inability to make discovery as directed. In a series of written decisions culminating with his “Order No. 14,” the referee again directed with respect to all of the actions that (1) all of defendants' “claims and defenses” be stricken; (2) all of plaintiffs' “claims and allegations ․ are deemed established;” (3) “default judgments in favor of [plaintiffs] and against [defendants] shall be so entered immediately on all the causes of action and claims asserted in each of these actions;” and (4) assessed monetary sanctions of slightly more than $200,000 against defendants.
After it had consolidated the three remaining actions (see note 3, ante ) for trial, the court conducted a brief hearing (at which defendants did not appear) and received evidence from plaintiffs with respect to their claimed damages. The court thereupon entered three judgments awarding plaintiffs $2,400,000 in punitive damages, $692,978.61 in costs and attorneys' fees, and compensatory damages of at least $4,007,586.77.6 Defendants filed timely notices of appeal from each of the judgments.7
Recognizing the centrality of the orders made by the referee, defendants contend that the judgments entered in direct consequence of those orders must be reversed because the trial court delegated “unreviewable powers” to the referee in derogation of constitutional and statutory authority. Relying upon Bird v. Superior Court (1980) 112 Cal.App.3d 595, 169 Cal.Rptr. 530 and Aetna Life Ins. Co. v. Superior Court (1986) 182 Cal.App.3d 431, 227 Cal.Rptr. 460, defendants claim that the referee's purported lack of power constituted “nonwaivable jurisdictional error.”
Our Constitution vests power in the Legislature to “provide for the appointment by trial courts ․ of officers such as commissioners to perform subordinate judicial duties.” (Cal. Const., art. VI, § 22.) Referees are within this class of subordinate judicial officers. (See In re Kathy P. (1979) 25 Cal.3d 91, 98, 157 Cal.Rptr. 874, 599 P.2d 65; In re Edgar M. (1975) 14 Cal.3d 727, 732, 734, 122 Cal.Rptr. 574, 537 P.2d 406; Rooney v. Vermont Investment Corp. (1973) 10 Cal.3d 351, 361–366, 110 Cal.Rptr. 353, 515 P.2d 297; Park Plaza, Ltd. v. Pietz (1987) 193 Cal.App.3d 1414, 1419, 239 Cal.Rptr. 51.)
The Legislature's exercise of this grant of power is expressed in sections 638 and 639. The latter deals with nonconsensual references with respect to specified matters.8 Consensual references are the subject of section 638, which provides:
“A reference may be ordered upon the agreement of the parties filed with the clerk, or judge, or entered in the minutes or in the docket, or upon the motion of a party to a written contract or lease which provides that any controversy arising therefrom shall be heard by a reference if the court finds a reference agreement exists between the parties:
“1. To try any or all of the issues in an action or proceeding, whether of fact or of law, and to report a statement of decision thereon;
“2. To ascertain a fact necessary to enable the court to determine an action or proceeding.”
References are traditionally classified as being either “special” or “general.” The distinction between the categories, which depends upon the presence or absence of the parties' consent, has important ramifications regarding the respective powers and duties of the referee and the appointing court. Special references are those conducted pursuant to either section 639 or subdivision 2 of section 638 in which the referee makes “advisory” findings which do not become binding unless adopted by the court. A general reference, which requires the consent of the parties, empowers the referee to make a conclusive determination without further action by the court. (See Holt v. Kelly (1978) 20 Cal.3d 560, 562, 143 Cal.Rptr. 625, 574 P.2d 441; Ellsworth v. Ellsworth (1954) 42 Cal.2d 719, 722–723, 269 P.2d 3; Dynair Electronics, Inc. v. Video Cable, Inc. (1976) 55 Cal.App.3d 11, 20, 127 Cal.Rptr. 268; Estate of Bassi (1965) 234 Cal.App.2d 529, 536–537, 44 Cal.Rptr. 541.) Consent is crucial. It accounts for the vital difference between section 638 and section 639—the vesting in the referee of the power to make a binding determination. Section 639 has a much more limited scope of operation because a party's right to jury trial cannot be subject to unilateral erasure by a court or the other party. (See Smith v. Polack (1852) 2 Cal. 92, 94.) Hence the concern evident in section 638 that, except for contracts or leases, the party's consent to a binding reference be judicially memorialized. The same concern also explains the rule requiring express statutory authorization for all nonconsensual references. (See In re Marriage of Galis (1983) 149 Cal.App.3d 147, 150–151, 196 Cal.Rptr. 659 and authorities cited.)
This distinction permeates, and largely explains, the decisions in Bird and Aetna. Bird is of particular interest because it involved the appointment of a referee to hear and determine all discovery motions. The appointment not having the consent of the parties, it could only be sustained if authorized by section 639. Apparently cognizant that the lack of consent to a general reference violates the constitutional right to trial by jury, the Court of Appeal invoked the rule that a nonconsensual reference is valid only if sanctioned by an express provision of section 639. In light of that statute's failure to authorize the type of reference ordered, the Court of Appeal ordered the issuance of mandamus to vacate the appointment. (Bird v. Superior Court, supra, 112 Cal.App.3d 595 at pp. 599–601, 169 Cal.Rptr. 530.) 9
Aetna involved the appointment of a special referee to rule on motions for summary judgment and make a recommendation to the trial court. The parties did not consent but subsequently appeared before the referee, whose recommendation was accepted by the trial court. The Court of Appeal ordered the issuance of mandamus to vacate the trial court's summary judgment order after finding the procedure invalid in that (1) the parties had not consented in writing to a general reference pursuant to section 638, (2) the subject matter of the reference was not expressly authorized by any provision of section 639, and (3) the presence of this “nonwaivable jurisdictional error” was not purged by the parties' participation in the reference without objection to its nature and scope. (Aetna Life Ins. Co. v. Superior Court, supra, 182 Cal.App.3d 431 at pp. 435–437, 227 Cal.Rptr. 460; see Sauer v. Superior Court (1987) 195 Cal.App.3d 213, 225–226, 240 Cal.Rptr. 489.)
Aetna is undoubtedly correct in its ultimate disposition. The reference ordered was not authorized by section 639 and was consequently ineffective according to a long line of authority culminating with Bird. (See In re Marriage of Galis, supra, 149 Cal.App.3d 147 at pp. 150–151, 196 Cal.Rptr. 659, and authorities cited.) Discussion of section 638 was thus dicta and therefore cannot be controlling here. (See Simmons v. Superior Court (1959) 52 Cal.2d 373, 378, 341 P.2d 13; Bryant v. Superior Court (1986) 186 Cal.App.3d 483, 495, 230 Cal.Rptr. 777; People v. Powell (1986) 180 Cal.App.3d 469, 479, 225 Cal.Rptr. 703.) The soundness of two aspects of that discussion is subject to considerable doubt.
First, the Aetna court noted that “although the parties apparently did not object to the reference, they did not agree to it in writing and therefore did not meet the statutory conditions [for a valid reference pursuant to section 638].” (Aetna Life Ins. Co. v. Superior Court, supra, 182 Cal.App.3d 431 at p. 435, 227 Cal.Rptr. 460.) The implicit premise underpinning this statement appears to be that the consent required by section 638 must be memorialized in a writing subscribed by the parties. This extrapolation is not compelled by the language of the statute. Section 638 speaks of “the agreement of the parties filed with the clerk, or judge, or entered in the minutes or in the docket, or upon the motion of a party to a written contract.” If there is an “agreement ․ filed with the clerk[ ] or judge,” or if there is a “motion of a party to a written contract,” the consent will almost certainly be in writing and probably signed by the parties. The same cannot be said of an “agreement ․ entered in the minutes or in the docket.” Taken to its logical conclusion, Aetna would afford no effect to an oral stipulation unless the parties' signatures accompany the recording of the stipulation in the minutes or the docket. Nothing in the language of section 638 requires the parties' agreement for a reference to be expressed with the attendant formalities required for the statute of frauds. A stipulation is, after all, nothing more than a species of agreement. (See Palmer v. City of Long Beach (1948) 33 Cal.2d 134, 142, 199 P.2d 952; Lovret v. Seyfarth (1972) 22 Cal.App.3d 841, 856; Black's Law Dict. (5th ed. 1979) p. 1269, col. 1.) There is no logical reason why an oral stipulation cannot be effective if it is recorded in some fashion, preferably by one of the means specified in section 638.
The parties' agreement for the appointment of referee Weiss was not recorded in any of the fashions specified by section 638,10 but this does not establish the appointment's invalidity. Several decisions have found constructive compliance with section 638 if agreement for a reference is memorialized in other court records. The parties' agreement for either a general or a special reference may be expressed in an order correcting the minutes (Garland v. Smith (1933) 131 Cal.App. 517, 524, 21 P.2d 688), or in a reporter's transcript (Estate of Doran (1956) 138 Cal.App.2d 541, 544–546, 292 P.2d 655), or in a recital in the final judgment or order. (Estate of Hart (1938) 11 Cal.2d 89, 91, 77 P.2d 1082; Estate of Doran, supra, 138 Cal.App.2d at p. 546, 292 P.2d 655.)
Second, and more troubling, is the Aetna court's novel announcement of “nonwaivable jurisdictional error.” The only authority cited for this proposition was Thompson v. Municipal Court (1958) 162 Cal.App.2d 676, 328 P.2d 514, which involved a judge authorizing a clerk over the telephone to act as a referee, but where no order to that effect was ever made. It was held that “[t]he [telephonic] order being an absolute nullity was ineffective for any purpose and the act of the plaintiff in giving his evidence before the clerk could not give it validity and could not constitute a waiver.” (Id. at p. 678, 328 P.2d 514.) Thompson involved an extraordinary if not unique situation. It constitutes only tangential support for the Aetna court's broad conclusion of “nonwaivable jurisdictional error.” That conclusion becomes even shakier when examined in light of the numerous instances where the Supreme Court has held that parties lose the right to complain about a defective reference order if they participate in proceedings before the referee. (See Estate of Hart, supra, 11 Cal.2d 89 at p. 91, 77 P.2d 1082; Shain v. Peterson (1893) 99 Cal. 486, 487, 33 P. 1085; Hendy Machine W. v. Pac. C.C. Co. (1893) 99 Cal. 421, 423, 33 P. 1084; see also Estate of Johnson (1970) 12 Cal.App.3d 855, 859, 91 Cal.Rptr. 116; Garland v. Smith, supra, 131 Cal.App. 517 at p. 525, 21 P.2d 688.)
The most obvious ground for concluding that Bird and Aetna do not govern the disposition of these appeals is that they involved special references ordered pursuant to section 639. By contrast, Mr. Weiss was appointed to conduct a general reference “pursuant to Section 638” as explicitly recited in the order.
The order for Mr. Weiss' appointment expressly recites that (1) “the parties have ․ agreed to the appointment of a referee pursuant to Section 638” and (2) the referee was thereby empowered “[t]o hear any and all discovery matters and disputes that may in the course of these proceedings be raised by the parties hereto, and to make final and binding decisions with the same force and effect as orders of this Court on all said matters and disputes.” (See note 4, ante.) The scope of the reference was as wide as language could reach, and made no provision for the trial court's subsequent involvement. It is thus apparent that this was not a special reference pursuant to subdivision 2 of section 638 because the referee was not confined to the limited task of ascertaining “a fact necessary to enable the court to determine an action or proceeding.” A fair reading of the order establishes that its import was to direct a general reference undertaken pursuant to the parties' consent and subdivision 1 of section 638. With the referee thus vested with plenary authority over all matters of discovery, it cannot be maintained that he lacked the ancillary power of enforcing compliance with his orders.11 No attorney could reasonably claim to be unaware that the powers of sanction thereby entrusted to the referee's discretion might ultimately extend to ordering entry of a default (see § 2023, subd. (b)(4), 2025, subd. (o ), 2030, subd. (k); Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 792, 795, 149 Cal.Rptr. 499; Thompson, Sanctions in California Civil Discovery (1968) 8 Santa Clara Law. 173, 184–185) or measures tantamount to a default. (See Puritan Ins. Co. v. Superior Court (1985) 171 Cal.App.3d 877, 884, 217 Cal.Rptr. 602; Karz v. Karl (1982) 137 Cal.App.3d 637, 648, 187 Cal.Rptr. 183.)
This conclusion is confirmed by subsequent events. As previously mentioned, the parties returned to the court after the referee filed his first order for entry of a default judgment against defendants. The court's comments concerning its understanding of the referee's power (see note 5 and accompanying text, ante ) are interesting but not dispositive: more important would be the parties' construction of their voluntary agreement for the reference. What is striking is the total absence of any protestation by the parties that the court's estimation of the referee's powers exceeded the scope of their agreement. Without a whimper, both sides returned to the referee and were actively engaged before him for 20 more months. Further indicia of a general reference were the circumstances of the defaults ordered by the referee being entered as a matter of course by the clerk (see § 644) and the failure of the parties to apply for an order of the court either adopting or refusing to confirm the referee's actions. (See Estate of Bassi, supra, 234 Cal.App.2d 529 at pp. 538–539, 44 Cal.Rptr. 541; Estate of Ruben (1964) 224 Cal.App.2d 600, 607, 36 Cal.Rptr. 752.) Those actions thus cannot be treated as the advisory recommendations characteristic of a special reference.
This case presented the worst nightmare of the civil bench and bar—complex commercial litigation threatening to become mired in a massive discovery swamp. The court's innovative solution was to craft a hybrid reference drawing its subject from the special reference provisions of section 639, subdivision (e) (quoted at note 8, ante ), conjoined with the finality of a general reference authorized by section 638, subdivision 1. The court's proposal had sufficient intrinsic attraction that it was accepted by the parties. The details of the procedure were not perfect: the parties' agreement should have been recorded in a manner specified by section 638 and the order could have been more carefully drafted to incorporate an explicit delineation of the referee's sanction powers for the purpose of securing compliance with his orders, which would have spared all concerned much subsequent difficulty. These minor defects lost importance when the parties participated in the subsequent reference proceedings. The Supreme Court has expressly held that such participation “is indicative either of a prior consent to the reference or a waiver of objection thereto.” (Estate of Hart, supra, 11 Cal.2d 89 at p. 92, 77 P.2d 1082; accord Shain v. Peterson, supra, 99 Cal. 486 at p. 487, 33 P. 1085; Hendy Machine W. v. Pac. C.C. Co., supra, 99 Cal. 421 at p. 423, 33 P. 1084.) Our obligation to follow that higher court (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937) compels us to reject the rule of “nonwaivable jurisdictional error” embraced in Aetna Life Ins. Co. v. Superior Court, supra, 182 Cal.App.3d 431, 227 Cal.Rptr. 460. Defendants' initial jurisdictional challenge fails accordingly.
As previously mentioned, it was defendants who first suggested Mr. Weiss as a referee. Mr. Weiss, whose firm had its office in the same complex where the restaurant had been located, advised the parties of several connections he and his firm had to several plaintiffs. Nevertheless, the parties discerned no problem with his serving as the referee, a fact verified by the court prior to making the appointment.12
On November 18, 1983, the referee convened a hearing to hear objections to his proposed “Order No. 6.” Defendants made an oral motion pursuant to section 170.6 for the referee to disqualify himself on the grounds that he and his law firm had a conflict of interest. The referee deferred a ruling until after the parties had briefed the issue. In their written points and authorities defendants (1) expanded the basis of their claim that the referee was disqualified by reason of former section 170, subdivision (a)(3), as well as section 170.6, and (2) asserted that their disqualification motion could not be decided by the referee but must be submitted to the trial court as provided by former section 170, subdivision (e). The referee conducted another hearing at which defendants advised him that they were “renew[ing] their motion under [section] 170.6 with respect to any subsequent motions that may be assigned to the referee in these proceedings.” The referee thereupon made an order in which he denied as untimely defendants' initial motion to disqualify him pursuant to section 170.6, and referred to the court for decision defendants' “renewed” motion under that statute and their motion pursuant to former section 170. These motions were in turn denied by the trial court.
Defendants' second jurisdictional challenge is their contention that the referee's disqualification should have been ordered. This contention, directed solely against the ruling made by the court, incorporates various arguments which require separate treatment.
At all relevant times section 170.6 has provided in pertinent part:
“(1) No judge, court commissioner, or referee ․ shall try any civil or criminal action or special proceeding of any kind or character nor hear any matter therein which involves a contested issue of law or fact when it shall be established ․ that such judge or court commissioner is prejudiced against any party or attorney or the interest of any party or attorney appearing in such action or proceeding.”
“(2) Any party to or any attorney appearing in any such action or proceeding may establish such prejudice by an oral or written motion․ Where the judge, court commissioner, or referee assigned to or who is scheduled to try the cause or hear the matter is known at least 10 days before the date set for trial or hearing, the motion shall be made at least five days before that date․ If the motion is directed to a hearing (other than the trial of a cause), the motion must be made not later than the commencement of the hearing. In the case of trials or hearings not herein specifically provided for, the procedure herein specified shall be followed as nearly as may be. The fact that a judge, court commissioner, or referee has presided at or acted in connection with a pretrial conference or other hearing, proceeding or motion prior to trial and not involving a determination of contested fact issues relating to the merits shall not preclude the later making of the motion provided for herein at the time and in the manner hereinbefore provided․”
Defendants contend that their motion was timely. As they see it, up to the time they sought referee Weiss' disqualification, he had not ruled on “contested fact issues relating to the merits” within the meaning of section 170.6, subdivision (2), thus making their motion timely. Aware that only one challenge is permitted by the statute (see § 170.6, subd. (3)), defendants argue that “[t]o be required to use the single peremptory challenge against a discovery referee at the time of his appointment ․ requires a party to ‘waste’ his challenge on a non-merits decisionmaker.” Although defendants' contention has a superficial allure, we believe there are special circumstances which vindicate the court's ruling that defendants had not invoked the protection of section 170.6 in a timely fashion.
The heart of defendants' contention is its treatment of the statutory language “contested fact issues relating to the merits,” as synonymous with the ultimate determination of guilt or liability. Much authority lends a color of support to this position. (See People v. Whitfield (1986) 183 Cal.App.3d 299, 304–305, 228 Cal.Rptr. 82; Bambula v. Superior Court (1985) 174 Cal.App.3d 653, 657, 220 Cal.Rptr. 223 and decisions cited.) The peculiar nature of the procedure employed here, however, resists resolution by conventional analysis making use of the merits versus nonmerits dichotomy.
It seems clear no one intended that the referee would try or otherwise decide the actual merits of the actions. (See note 5, ante.) What does appear to have been the aim of the reference was to provide a forum in which would be adjudicated all discovery-related disputes. Those disputes might implicate issues of law and fact (cf. Bird v. Superior Court, supra, 112 Cal.App.3d 595 at p. 600, 169 Cal.Rptr. 530), but they would be peripheral and foundational to determinations of the actual merits. It also seems clear that, because discovery looked to be an extensive and on-going process, all concerned contemplated the referee sitting in more or less continual session. It is therefore unrealistic to view that process as composed of a series of disputes which will respond to divisions based upon either chronology or the particularized subject matter of any given moment. A perusal of the referee's filed orders shows what might be expected in light of the termination sanction eventually imposed: the orders are incremental and cumulative, addressing recurrent specific instances of defendants' continued refusal or inability to make discovery.
This reference involved a series of hearings on a general subject, a situation not expressly covered by section 170.6. It is thus appropriate to apply the language of subdivision (2) which directs that “[i]n the case of ․ hearings not herein specifically provided for, the procedure herein shall be followed as nearly as may be.” The unifying theme of the proceedings conducted by the referee was the fixed and sole subject of discovery. Those proceedings may therefore be classified as a single “hearing” for purposes of section 170.6. (See Conn v. Superior Court (1987) 196 Cal.App.3d 774, 786, 242 Cal.Rptr. 148; cf. People v. Jarvis (1982) 135 Cal.App.3d 154, 156–157, 185 Cal.Rptr. 16.) That being the case, once defendants became aware that Mr. Weiss would be the referee, the statute obliged them to move for his disqualification “not later than the commencement of the hearing.” This, despite their full knowledge of Mr. Weiss' dealings and connections to plaintiffs, they failed to do. Defendants were thereby precluded from thereafter seeking the referee's disqualification.
Our Supreme Court has repeatedly expressed the common sense justification for the necessity of a prompt objection and the dangers of tolerating untimely challenges. “ ‘It would seem ․ intolerable to permit a party to play fast and loose with the administration of justice by deliberately standing by without making an objection of which he is aware and thereby permitting the proceedings to go to a conclusion which he may acquiesce in, if favorable, and which he may avoid, if not.’ ” (Caminetti v. Pac. Mutual L. Ins. Co. (1943) 22 Cal.2d 386, 392, 139 P.2d 930.) “We cannot permit a device intended for spare and protective use to be converted into a weapon of offense and thereby to become an obstruction to efficient judicial administration.” (McClenny v. Superior Court (1964) 60 Cal.2d 677, 689, 36 Cal.Rptr. 459, 388 P.2d 691; accord Solberg v. Superior Court (1977) 19 Cal.3d 182, 198, 137 Cal.Rptr. 460, 561 P.2d 1148.) The danger of wasted effort entailed by seriatim challenges is especially acute with respect to matters which are continuations of prior proceedings. The court has set its face against parties who would use section 170.6 “in the hope of securing a different ruling from another judge in supplementary proceedings involving substantially the same issues.” (Jacobs v. Superior Court (1959) 53 Cal.2d 187, 191, 1 Cal.Rptr. 9, 347 P.2d 9.)
The reference provided defendants with a forum for resolving discovery disputes, not “a perpetually fresh forum for testing disadvantageous decisions.” (McClenny v. Superior Court, supra, 60 Cal.2d 677 at p. 689, 36 Cal.Rptr. 459, 388 P.2d 691.) Having gone through four months of proceedings before the referee, and having discerned from the referee having twice decided to order a default judgment against them in the unlawful detainer action the unfavorable turn events were taking, defendants would nullify all of the time and labor expended by plaintiffs and the referee. To adopt defendants' terminology, the only “waste” that would occur is if defendants' belated dissatisfaction with their own hand-picked “decisionmaker” were accepted as a justification for their failure to make a timely use of section 170.6. There is at least a reasonable probability that much if not all of this effort would have to be duplicated, and possibly triplicated if plaintiffs had decided to emulate defendants' example. Such squandering of resources cannot be countenanced. The judicial system must not be held hostage to the whim of parties “seeking to avoid a day of reckoning.” (People ex rel. Air Resources Bd. v. Superior Court (1981) 125 Cal.App.3d 10, 17, 177 Cal.Rptr. 816.) Defendants, who agreed to the reference and suggested Mr. Weiss as the referee, obviously knew of his identity and the task he was appointed to perform, as well as his links to plaintiffs. (See note 12 and accompanying text, ante.) Defendants nevertheless waited four months, during which time Mr. Weiss had conducted numerous hearings and ordered entry of a default judgment against defendants, before they asked for his disqualification. If defendants confronted a dilemma in deciding whether to use their peremptory challenge against the referee or a robed judge, it was a problem of their own making. These circumstances of informed delay more than amply support the court's ruling. (See Conn v. Superior Court, supra, 196 Cal.App.3d 774 at p. 786, 242 Cal.Rptr. 148; Augustyn v. Superior Court (1986) 186 Cal.App.3d 1221, 1228–1229, 231 Cal.Rptr. 298; Swartzman v. Superior Court (1964) 231 Cal.App.2d 195, 199–200, 41 Cal.Rptr. 721.)
In late 1984 the Legislature undertook a comprehensive reorganization and modification of the judicial disqualification statutes. (Stats.1984, ch. 1555, §§ 1–9, pp. 5479–5484.) One of those changes was to add the current version of section 170.1, which became effective on January 1, 1985, and which provides in pertinent part: “(a) A judge [defined in section 170.5, subdivision (a) to include referees] shall be disqualified if any one or more of the following is true: ․ [¶] (2) The judge served as a lawyer in the proceeding, or in any other proceeding involving the same issues he or she served as a lawyer for any party in the present proceeding or gave advice to any party in the present proceeding upon any matter involved in the action or proceeding. [¶] A judge shall be deemed to have served as a lawyer in the proceeding if within the past two years: [¶] (A) A party to the proceeding ․ was a client of the judge․”
Defendants contend that the enactment of this statute ipso facto disqualified the referee as of its effective date. This claim is absurd.
There is a “general presumption that legislative changes do not apply retroactively unless the Legislature expresses its intention that they should do so.” (Wilke & Holzheiser, Inc. v. Dept. of Alcoholic Bev. Control (1966) 65 Cal.2d 349, 371, 55 Cal.Rptr. 23, 420 P.2d 735; see Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 153, 233 Cal.Rptr. 308, 729 P.2d 743; White v. Western Title Ins. Co. (1985) 40 Cal.3d 870, 884, 221 Cal.Rptr. 509, 710 P.2d 309.) Section 3 codifies this rule against retroactivity “unless expressly so declared.” Defendants have not cited, nor have we discovered, any indication in either the language or the legislative history of the 1984 amendment to section 170.1 which provides the slightest support for disregarding this rule.
The 1984 amendment is considerably broader than the version of section 170, subdivision (a)(3), upon which defendants relied in the trial court. That former version required disqualification if a judge was related to a party or “when he or she is indebted, through money borrowed as a loan” to either party. (See Stats.1982, ch. 1644, § 1, pp. 6678–6679.) The reasons against retroactive application of the 1984 amendment are compelling. A general objection is that to do so would endanger innumerable judgments entered in complete good faith and conformity with legal requirements in effect at the time of their entry. The expanded grounds for disqualification are not absolute and may be waived by the parties. (§ 170.3, subd. (b)(1).) A more particular objection against retroactivity is that defendants did in effect waive the disqualification they now urge: upon being advised by Mr. Weiss of his links to plaintiffs, defendants nevertheless agreed to his appointment. (See note 12 and accompanying text, ante.) Courts which have considered amendments to judicial disqualification statutes have uniformly found them not to be retroactive. (See Bambula v. Superior Court, supra, 174 Cal.App.3d 653 at pp. 657–658, 220 Cal.Rptr. 223; Brown v. Swickard (1985) 163 Cal.App.3d 820, 826–830, 209 Cal.Rptr. 844; Ball v. City Council (1967) 252 Cal.App.2d 136, 145–146, 60 Cal.Rptr. 139.) We reach the same conclusion.
Defendants' next contention is that the referee abused his discretion by imposing the draconian sanction of ordering entry of default judgments. Before turning to the various arguments comprising this contention, it is useful to establish the principles governing its review.
It must be remembered that these appeals are from default judgments, judgments which defendants took no steps in the trial court to have set aside. Defendants are therefore confined to challenging questions of jurisdiction, such fundamental defects in the pleadings as their sufficiency (Corona v. Lundigan (1984) 158 Cal.App.3d 764, 766–767, 204 Cal.Rptr. 846; City Bank of San Diego v. Ramage (1968) 266 Cal.App.2d 570, 582, 72 Cal.Rptr. 273; Lee v. Ski Run Apartments Associates (1967) 249 Cal.App.2d 293, 294, 57 Cal.Rptr. 496; Mackie v. Mackie (1960) 186 Cal.App.2d 825, 830, 9 Cal.Rptr. 173; 9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 274, p. 284), or excessive damages. (Uva v. Evans (1978) 83 Cal.App.3d 356, 362–364, 147 Cal.Rptr. 795.)
We now turn to defendants' arguments.
The first wave of defendants' attack is their claim that the referee committed various “procedural irregularities” in the course of fulfilling his duties. This contention is primarily based upon the provisions of former section 2034, which required the existence of an order to compel before noncompliance could be sanctioned. (See Duggan v. Moss (1979) 98 Cal.App.3d 735, 741–742, 159 Cal.Rptr. 425.) Defendants argue that the referee “short-circuited” these procedures by awarding sanctions in the absence of an order compelling discovery made in response to a motion. Defendants also assert that Mr. Weiss failed to make findings differentiating between defendants and making a precise allocation of responsibility for the discovery violations.
It must also be remembered that the appointment order vested the referee with the power to “determine in his sole discretion any and all procedures to be followed” and to act if necessary “without presentation of papers by the parties.” (See note 4, ante.) The whole purpose of the reference was to streamline the normal discovery procedures. It is thus inappropriate to fault the referee for his lack of slavish adherence to those procedures. Given the plenary power granted the referee by the express terms of the parties' agreement to the reference, we cannot assent to defendants' proposition that the “procedural irregularities” constituted a jurisdictional defect. (See Trail v. Cornwell (1984) 161 Cal.App.3d 477, 486–488, 207 Cal.Rptr. 679 [text & note 11].)
Defendants next contend that “it was an abuse of discretion for Mr. Weiss to strike pleadings and resort to default for alleged discovery violations ․ that could be cured with a lesser sanction” and that “the record is bereft of evidence in support of sanctions.” As may be inferred from defendants' use of the word “alleged,” the essence of these claims is a challenge to the validity of the referee's finding that plaintiffs had been incurably prejudiced by defendants' conduct. (See note 13, post.) The validity of that finding is dependent upon the sufficiency of the evidence to support it. That sort of issue is not reviewable on appeals from default judgments. (Corona v. Lundigan, supra, 158 Cal.App.3d 764 at pp. 766–767, 204 Cal.Rptr. 846; Heathman v. Vant (1959) 172 Cal.App.2d 639, 644, 343 P.2d 104; 9 Witkin, op. cit. supra, Appeal, § 274, pp. 284–285.)
A similar conclusion governs defendants' claim that the referee abused his discretion in entering a default in Action No. 816561. Defendants' make the very plausible claim that defendant Resemp Corporation, which was not made a party until this, the last-filed action (see note 3, ante ) was initiated, was in effect being penalized for the previous discovery violations of the other defendants in the other actions. However disturbing (cf. Sabado v. Moraga (1987) 189 Cal.App.3d 1, 10–11, 234 Cal.Rptr. 249), the essence of this claim is that the termination sanction ordered by the referee lacks adequate evidentiary support. Even if true, the absence of such support is not a jurisdictional defect. (See 2 Witkin, op. cit. supra, Jurisdiction, §§ 221 [p. 610], 226 [pp. 617–618].)
A more serious challenge is defendants' claim that the referee sanctioned them “because of their alleged failure to provide discovery from non-party witnesses who were not controlled by them.” This claim is directed to representations made by defendants' counsel that he would provide or persuade certain witness to be deposed and to produce documents sought by plaintiffs. As evidenced by his language in various of his orders, the referee treated this representation as some sort of binding promise, the purported violation of which was cited as one of the grounds on which the termination sanctions were imposed.
Defendants' objection may qualify as a jurisdictional defect. (See Lund v. Superior Court (1964) 61 Cal.2d 698, 710–711, 714–715, 39 Cal.Rptr. 891, 394 P.2d 707; see also Volkswagen of America, Inc. v. Superior Court (1971) 18 Cal.App.3d 477, 479–480, 96 Cal.Rptr. 205.) Alternatively, it may be treated as simply a failure of the evidentiary justification for one of grounds recited by the referee as warranting the defaults. (See note 13, post.) The precise nature of the label attached is not of significant consequence because the ultimate result is the same. The relevant provisions of the referee's orders, Nos. 11 and 14, make it clear that the nonparties' conduct was only one of the bases for the defaults. It is equally clear that most of the desired discovery was eventually made. Our careful review of the entire record and the referee's orders leaves us with almost no doubt that, had the referee taken no account of this issue, the defaults would still have been ordered.13 That vestigial doubt is not of sufficient strength to support a reasonable probability that a different and more favorable result would have been reached in its absence. (Cal. Const., art. VI, § 13; § 475; People v. Watson (1956) 46 Cal.2d 818, 836, 299 P.2d 243.)
Our dispositions of these appeals are as follows:
(1) In A031902, the judgment in Action No. 802792 is modified by striking “$3,609,514.58 in compensatory damages” in paragraph “3” and inserting in lieu thereof “$485,780.95 in compensatory damages.” As so modified, the judgment is affirmed. The purported appeals from all other “orders and rulings” are dismissed. The parties shall bear their respective costs.
(2) In A031905, the judgment in Action No. 804082 is modified by striking the punitive damage awards in paragraph “3.” As so modified, the judgment awarding “compensatory damages in the sum of $4,007,586.77” is affirmed. The purported appeals from all other “orders and rulings” are dismissed. The parties shall bear their respective costs.
(3) In A031906, the judgment in Action No. 816561 is modified by striking “$4,007,586.77 in compensatory damages” in paragraph “4” and inserting in lieu thereof “$520,412.53 in compensatory damages.” As so modified, the judgment is affirmed, with the exception of the punitive damage awards in paragraph “5,” which are reversed. The purported appeals from all other “orders and rulings” are dismissed. The parties shall bear their respective costs.
1. Statutory references are to the Code of Civil Procedure.
2. In general, the parties designated in the numerous pleadings are a collection of interrelated foreign and domestic corporations—the majority of which employ a bewildering array of numbingly similar names—and certain affiliated individuals. In the interests of simplicity and clarity, and because there will seldom be any need for delineating their separate identities, we shall refer to the parties grouped around the Four Embarcadero Venture Center as “plaintiffs” and to those associated with the Mr. Greenjeans Galleria Corporation as “defendants.”
3. One of the four actions, for unlawful detainer, figures in the discussion concerning the referee's actions, but it is not at issue on this appeal. That action ended with a default judgment ordered by the referee prior to his disposition of the three actions which resulted in the separate judgments that are the subject of these appeals.As pertinent to the appeals, the reference originally included Action Nos. 802792 and 804082; it was later extended to the subsequently-filed Action No. 816561 pursuant to a stipulation by the parties.
4. As relevant here, the appointment order read in pertinent part:“This is the most recent of a long series of discovery motions and other requests for intervention by this Court in the pretrial proceedings in these cases. At the urging of this Court, the parties have considered and agreed to the appointment of a referee pursuant to Section 638 ․ for the purposes identified herein.“․“2. Pursuant to ․ Section 638, this Court hereby appoints Leonard [sic ] Weiss, Esq. as referee for the following purposes:“a. To hear any and all discovery matters and disputes that may in the course of these proceedings be raised by any parties hereto, and to make final and binding decisions with the same force and effect as orders of this Court on all said matters and disputes;“b. To hear and decide any and all other issues that the parties may by agreement at any time present to said referee.“3. The referee appointed hereby shall determine in his sole discretion any and all procedures to be followed by the parties and may hear matters by telephone and without presentation of papers by the parties.”
5. In his “Order No. 4” the referee (1) vacated the judgment and quashed a writ of possession which had issued; (2) “[a]lternatively, ․ recommend [ed]” that the court do likewise; and (3) took the position that the “imposition of sanctions” was “within his authority under the Court's July 22, 1983 Order.”The court began its statements at the hearing with the observation that “it seems to me that it might not be a bad idea for me to enter an order confirming the order of Mr. Weiss vacating the judgment which he had previously directed be entered.” Counsel for plaintiffs stated that “The first question the Court has to decide is: What is the extent of Mr. Weiss' authority? Was he appointed under [section] 638, as the order says, and was he appointed to make final and binding decisions, as the order says?” The court responded with “Catch–22” logic: “I tend to think that Mr. Weiss was, as the order which I signed recites, appointed pursuant to [section] 638, ․ [¶] ․ I confess I am not positive whether he had authority to enter that judgment or not. I am not sure whether appointment under [section] 638 confers that authority or not. It seems to me there is at least a strong question about that, and it is possible that that may have been beyond the authority that he had. But in any event, it seems to me that if he had the authority to enter judgment, he certainly had the authority to vacate it. And if he didn't have authority to enter it, then it is not entered in the first place; and either way, it should be clear as we sit here right now, there is no longer a judgment in effect.”Plaintiffs' counsel pressed on, reminding the court that if the appointment was based upon section 638, subdivision 1, “you don't have jurisdiction [to vacate the judgment], he [the referee] does” but that if the appointment was pursuant to subdivision 2, “you clearly do [have jurisdiction to vacate].” The court replied: “[A]s between subdivisions 1 and 2 of [section] 638, I think the truth of the matter is that those two alternatives, neither of them fully or accurately describe[s] what it is that we are doing. I suppose as between the two of them, we are probably under the second. [¶] Certainly nobody thought that Mr. Weiss was actually going to go ahead and try the merits of the case. ․ [H]e was going to resolve ․ all questions with regard to discovery, ․ [¶] Now, whether that encompasses entry of judgment at this point is an academic question, because he has purported to set aside the judgment that he entered. Had he not done so, there would have been a difficult question. And in all honesty ․ I do not know what the answer to it would have been. It would have been a difficult question whether he had authority to enter that judgment.”Plaintiffs' counsel insisted that “it is not an academic question, because if he is making recommendations, then you must act on the recommendations.” The court disagreed: “He is certainly not making recommendations with respect to all the matters that we have been explicitly talking about․ For example, he has imposed monetary sanctions and he has ordered certain people to appear for their depositions at certain times. He has the authority to do that, and his order is the final order; and by the terms of the agreement, the agreed order that I signed, his decision is final.” After plaintiffs' counsel inquired “Does the power to make final and binding decisions on all discovery issues mean that he has the power to [exercise all powers pursuant to section] 2034, or does it mean he only has certain powers under [section] 2034,” the court stated: “I will state for the record that—I suppose my thinking is, in terms of future situations, I would think that Mr. Weiss has been delegated under the agreed order that I signed the authority to make final determinations with respect to all issues relating to discovery which the Court could make, and that specifically includes the authority to grant whatever sanctions may be authorized under [section] 2034, or any other section of the Code of Civil Procedure.”The court's final comments only underscored the confusion. Defendants' counsel advised that “it would be useful if Your Honor were to enter an order that goes both ways on the subject, that states that if it were found that Mr. Weiss lacked that power, you are confirming his actions as recommendations.” The court stated: “[C]ertainly if it were determined that if Mr. Weiss did not have authority to set aside a judgment which he had entered, it would have been my intention to do so․ Had there been no such delegation, as I believe has occurred, ․ [¶] ․ I mean, if Mr. Weiss couldn't set that judgment aside ․ then I would have done it based upon his recommendations to that effect. If that is what it would have amounted to. But I think he does have the authority.” “I have denied the motion as moot. It is moot because Mr. Weiss has set aside the order that was in question and which was the subject of the motion [to the referee] for reconsideration. Along the way, I have told you what my thinking is․ [¶] ․ I think I have made clear that I believe that he has the authority to grant orders under the discovery sections, and specifically including [section] 2034 to the same extent as the Court could do. Now, that does not mean in his office he can sign a document and call it Judgment and it becomes a judgment. It still has to go through and be dealt with by the Court in the normal manner.”
6. This is the amount of compensatory damages specified in two of the judgments; the third recites that defendants are awarded compensatory damages of $3,609,514.58. The punitive damage awards are in only two of the judgments. Each of the three judgments recites that “[t]o prevent a double recovery, attorneys' fees and expenses” awarded “pursuant to this judgment will not be recoverable to the extent” that such fees “are recovered and collected under the [other] judgments․” There are no comparable provisions respecting the damage awards, although the trial court did state for the record that “any ․ judgments given here in these ․ actions, there is no intention to [sic: of] double recovery being obtained in any of them.” Plaintiffs apparently desired separate judgments to facilitate enforcement against certain Canadian corporations named as defendants.
7. Each of the notices recites that the appeal is “from the Judgment ․ and all orders and rulings entered by the trial court in this case,” “including those entered by Referee Weiss.” We have previously had occasion to criticize such indiscriminate shotgun designations in notices of appeal on the grounds that they “encompass[ ] a myriad of rulings and decisions, almost all of which are not appealable” and which are not actually contested, with the consequence that the purported appeals therefrom must be dismissed. (See Johnson v. Tago, Inc. (1986) 188 Cal.App.3d 507, 512, 233 Cal.Rptr. 503, fn. 2.) Our review is accordingly confined to the judgments, and the appeals from all other “orders and rulings” will be dismissed.
8. Section 639 provides: “When the parties do not consent, the court may, upon the application of any party, or of its own motion, direct a reference in the following cases: [¶] (a) When the trial of an issue of fact requires the examination of a long account on either side; in which case the referees may be directed to hear and decide the whole issue, or report upon any specific question of fact involved therein. [¶] (b) When the taking of an account is necessary for the information of the court before judgment, or for carrying a judgment or order into effect. [¶] (c) When a question of fact, other than upon the pleadings, arises upon motion or otherwise, in any stage of the action. [¶] (d) When it is necessary for the information of the court in a special proceeding. [¶] (e) When the court in any pending action determines in its discretion that it is necessary for the court to appoint a referee to hear and determine any and all discovery motions and disputes relevant to discovery in the action and to report findings and make a recommendation thereon.”
9. It was in an apparent response to Bird that the Legislature amended section 639 by adding subdivision (e), quoted in note 8, ante. (Stats.1981, ch. 299, § 1, pp. 1429–1430.)
10. Despite the enormity of the record filed, we were able to verify this fact only after taking judicial notice of the trial court's docket and its minutes for the proceedings conducted on July 18, 20, and 22, 1983.
11. A point emphasized by the court at the time it signed the order of appointment: “[I]t is clear under subparagraph 2(a), Mr. Weiss will have the authority to grant and impose sanctions for violations of his own orders, and that should be clear.”
12. After discussing the situation with counsel by telephone, Mr. Weiss sent them a letter reading in part:“During those telephone conversations I advised each of you that my firm presently does some legal work for Prudential Insurance Company, one of the owners of the Embarcadero Center complex and a party to [these] proceedings. I also advised that the undersigned and my predecessor firm participated in representation of Embarcadero Center in connection with certain unrelated litigation several years ago. Finally, my firm is a tenant of the Embarcadero Center and is involved in active negotiations with the Embarcadero Center for new or additional space.“I further advised each of you that in my estimation none of the foregoing would in any way affect my ability to be impartial in connection with [these] proceedings. It is my understanding that each of you and your respective clients understand and agree with the foregoing.”Immediately before signing the order of appointment, the court confirmed the lack of objection to Mr. Weiss serving as the referee:“THE COURT: ․ [¶] As I understand, he [Mr. Weiss] has discussed with you some questions he had about the possible conflicts, and everybody is satisfied that there is no problem and happy to have him designated as the master?“MR. KNOX [counsel for defendants]: True.“MR. GOWDY [counsel for plaintiffs]: That is correct.”
13. Order No. 11 which is 25 pages in length, directed entry of defaults by reason of defendants' (1) failure to obey a prior order requiring their certification of compliance with document requests (2) failure to produce documents requested in a timely fashion (3) failure to produce all documents requested, and (4) obstructive behavior at depositions. (An additional category of defendants' conduct was cited by the referee but expressly excluded as a basis for the order.)Order No. 14, which is 30 pages in length, directed entry of default for these reasons: (1) “Failure to Provide Appropriate Certificates of Compliance” (2) “Failure to Provide Information Required” (3) “Failure to Produce Documents” (4) “Failure to Produce Witnesses for Depositions” and (5) “Failure to Produce Documents in a Timely Manner.”The orders are punctuated with blistering comments against defendants. These are a representative sampling: “calculated lack of good faith in complying with the Court's and Referee's prior orders to produce documents properly requested,” “purposefully inadequate efforts ․ to make full document discovery as ordered [which] were part of a continuing pattern,” “intentional and continuing plan to conceal information and documents,” “willful, conscious and deliberate plan to obstruct the processes of the Court and Referee,” “deliberate litigation strategy to thwart legitimate discovery,” “determination to produce only those documents they unilaterally decide to produce and then only after they have been caught withholding documents,” “bad faith manipulation of these proceedings,” “persistent willingness to engage in games of brinksmanship in the hope of further limiting and hindering discovery,” “egregious pattern of discovery violations and ․ abusive and fraudulent discovery conduct.”After noting that “an entire array of lesser sanctions has been previously imposed” against defendants, the referee concluded that defaults were the only appropriate sanction to redress conduct which had “incurably prejudiced” plaintiffs by “irreparably depriv[ing them] of the opportunity to prepare for the trial of these actions.” Our review of the 15,000 page record leaves us convinced beyond any possible doubt that the referee ordered the defaults only after the outermost limits of tolerance had been surpassed.
FOOTNOTE. See footnote * ante.
POCHÉ, Associate Justice.
ANDERSON, P.J., and CHANNELL, J., concur.