Agreed. IANAL and I don't know anything about CA small claims court or what grounds the appeal was on, but I would have asked the judge to not allow that evidence. Usually you can't present evidence on appeal that you could have presented in the original case. If they refused to provide that evidence in the original case, you could argue they waived their right to present it in the future.

It defeats the whole purpose of small claims court if large corporations can just ignore the original case and lose and then appeal and bring in lawyers to put on their real case in front of the appeals court.