Second District, Division 1 Finds Award Was No Abuse of Discretion.
In our category "Requests for Admissions," we have discussed numerous cases where substantial fees and costs have been awarded or not awarded when a litigant (usually a defendant) challenged a plaintiff's refusal to admit the truth of certain requests for admissions. Code of Civil Procedure section 2033.420(a) imbues a trial court with discretion to shift costs unless it concludes that the other party had a reasonable ground to believe it would prevail on the matter not admitted (see subdivision (b) caveat). Here is another example of a case of where a substantial RFA cost-shifting award was sustained on appeal.
Housing Authority of the City of Los Angeles v. KPMG LLP, Case No. B207313 (2d Dist., Div. 1 July 20, 2009) involved a situation where plaintiff lost an accounting malpractice case on summary judgment to KPMG based on the bar of applicable statutes of limitations. In addition, the trial court granted KPMG's motion for fees and costs of $165,724.65 because plaintiff denied RFAs of "substantial importance" tending to expose that plaintiff knew or should have known of the claims against the accounting firm more than two years before filing of the complaint.
On appeal, the RFA costs award was affirmed. The record showed that subsequent declaration testimony by one of plaintiff's current higher-ups did confirm that he received and discussed a draft audit report, even though these facts were not admitted previously. Given the import of this draft audit report in the scheme of things, no abuse of discretion was committed in awarding the substantial fees and costs against plaintiff.