SAN FRANCISCO — The state Supreme Court on Thursday overturned a $676,000 judgment entered as punishment against a civil defendant who was found to have repeatedly resisted court orders and was accused of presenting the plaintiff's lawyer with a box filled with straw and horse manure.
The justices ruled 6 to 1 that, under state law, default judgments issued against defendants as a sanction for deliberate refusal to produce documents before a trial cannot exceed the amount of damages sought by the plaintiff.
Justice Stanley Mosk, writing for the majority, declared:
"No matter how reasonable an assessment of damages may appear in the specific case, we cannot open the door to speculation on this subject without undermining due process--a protection to which every defendant is entitled, even one as obstreperous and as guilty of reprehensible conduct as this defendant."
But the court, acknowledging that its decision was the first of its kind on the issue, gave the plaintiff in the case the opportunity to file a new complaint to seek more money from the defendant than she originally sought.
In dissent, Chief Justice Rose Bird called the defendant's conduct "shocking, inhumane and inexcusable" and said the court was effectively eliminating any remedy for "outrageous abuses" of the legal process.
Under the decision, Bird said, recalcitrant defendants could force plaintiffs to incur the expense of pretrial proceedings and then allow a default judgment to be entered--all without being liable for any more money than they would have been had they not contested the suit at all.
In the case before the court, Eileen Greenup of Torrance brought suit in Los Angeles Superior Court in 1980 against Dale W. Rodman and his firm, Rodman Aviation, alleging fraud and conspiracy in a business transaction and seeking $100,000 in exemplary and punitive damages.
According to the Supreme Court's opinion, Rodman, in pretrial proceedings, repeatedly failed to appear as ordered and once refused to answer questions at a deposition because it was Lincoln's Birthday.
On another occasion, the court said, Rodman, when ordered to appear with records at the office of Greenup's lawyer, allegedly produced "an assortment of papers in a box filled with straw and horse excrement, which he laughingly dumped on the table."
Finally, after Rodman had again failed to appear in court as ordered, the trial judge entered a default judgment against him for violating court orders and found him liable for $676,000 in punitive and compensatory damages. The state Court of Appeal in Los Angeles upheld the judgment, and Rodman took the case to the state Supreme Court.
The justices noted that as a protection to defendants who decline to contest a lawsuit, state law bars default judgments in excess of the amount sought by the plaintiff.
There is nothing in the law to provide an exception when such judgments are entered as a sanction against defendants who have repeatedly disobeyed orders to provide documents and other evidence necessary to try the case, the justices said.
Due process requires that defendants like Rodman receive notice that they may be subject to damages exceeding the amount sought by the plaintiff, the court said.
In this case, the court said, the award of punitive damages must be reduced to $100,000 and the award of compensatory damages to $15,000. But it added that, "in the interest of fairness," Greenup may forgo the reduced award and file another complaint seeking additional damages--and Rodman would be allowed to file a new answer to her suit.
John C. Moore of Manhattan Beach, the attorney for Greenup on appeal, said the court's opinion will be studied and a decision made later on whether the woman will file another complaint.
Rodman, reached by telephone at his company in Torrance, said he is "very pleased" with the decision and vigorously denied that he had presented a box of straw and manure as the plaintiff's counsel alleged in the case.