Cummings Medical Corp. v. Occupational Medical Corp.

In this action plaintiffs (collectively referred to as Cummings) filed a complaint against defendants (collectively referred to as OMCOA). OMCOA filed a cross-complaint against Cummings. Cummings then filed a cross-complaint against OMCOA. As a sanction for discovery abuse, the trial court struck Cummings’ complaint and cross-complaint and the answer to OMCOA’s cross-complaint. The court entered a default judgment in favor of OMCOA on its cross-complaint. Cummings filed a timely appeal contending the trial court abused its discretion in terminating the actions in favor of OMCOA as a discovery sanction against Cummings and in awarding punitive damages to OMCOA in the absence of notice to Cummings of the amount claimed and in the absence of evidence of Cummings’ net worth. We affirm the judgment but modify the award of punitive damages.

Facts and Proceedings

This action stems from OMCOA’s purchase of the Valley Medical Industrial Center (Valley Medical) from Cummings in July 1985. Under the terms of the agreement OMCOA executed a $700,000 promissory note in favor of Cummings to be paid off in three installments of $233,333.33, on January 1, 1986, January 1, 1987, and…