CALIFORNIA ATTORNEY'S FEES

Requests For Admissions: Fee Request Denied To Plaintiff Defensed In Sidewalk Dangerous Condition Suit

 

RFA Denials Were Made In Good Faith and Other Denied RFAs Were Not Of Substantial Importance.

     In our category, “Requests for Admissions,” we have posted on several cases discussing Code of Civil Procedure section 2033.420, which does allow the trial court to award attorney’s fees and costs to a litigant who proves material matters denied in bad faith which are the subject of request for admissions denials by the opposing side.

     Tagliaferri v. City of Los Angeles, Case No. B223302 (2d Dist., Div. 3 Nov. 30, 2011) (unpublished), where failure to grant a fee request for RFA denials was affirmed on appeal, reminds us that two of the necessary conditions were missing for a fee award--the RFAs denials were made in good faith (rather than done so in bad faith) and the two denied RFAs did not have substantial importance in the overall case. These circumstances demonstrated the lower court did not abuse its discretion in denying the fee request by plaintiff. (Laabs v. City of Victorville, 163 Cal.App.4th 1242, 1275-1276 (2008).)

Requests For Admissions: $4,860.51 Costs Of Proof Sanction Affirmed On Appeal

RFAs Were Of Central Importance and Denials Were Not Reasonable in Nature.

     The Cadle Company II, Inc. v. Bell, Case No. A128685 (1st Dist., Div. 4 Aug. 11, 2011) (unpublished) was an appeal of a $4,860.51 costs-of-proof sanction under Code of Civil Procedure section 2033.20, which authorizes the lower court to award fees against a litigant that unreasonably denies a germane request for admission.

     Cadle was unsuccessful in its appeal of the costs-of-proof ruling.

     The appellate court focused on the two main elements of section 2033.20--were the RFAs of central importance in the case and were the plaintiff’s denials unreasonable in nature? It found the lower court correctly said “yes” to both prongs given that the RFAs on fraudulent transfer were key in the case and that plaintiff had failed to produce facts in earlier litigation and during discovery in this case to support its theory of the case (and accompanying denial of the RFAs).

Request For Admission: First District, Division 3 Sides With Manuel Decision

 

RFA Cost-of-Proof Sanctions Cannot Be Assessed Against Litigant’s Attorney.

     In our August 11, 2010 post, we explored Estate of Manuel, 187 Cal.App.4th 400, 404-405 (2010), where the Second District, Division 3 concluded that RFA cost-of-proof sanctions can only be assessed against a party rather than the party’s attorney.

     Now, in an unpublished decision, the First District, Division 3 expressly agrees with the Second District’s conclusion on this issue. That concurrence occurred in McManus v. Security Public Storage--Vallejo, Case No. A127457 (1st Dist., Div. 3 June 24, 2011) (unpublished), where a $4,095 cost-of-proof sanction against plaintiff’s attorney was reversed on appeal.

REQUESTS FOR ADMISSIONS: $216,000 RFA Sanctions Reversed On Appeal

Specify, Specify ... Otherwise, Lose the Fee Award!

     We do have a category entitled “Requests for Admissions.” Read it. There are lessons to be learned. One of them is to make sure that the RFA denials relate to something tangible--causation, or however else you want to parse it, but make the denials relate to certain issues that were unreasonably denied. Do not just claim all your fees (or a big part) and expect the appellate court to rubberstamp the lower court--we can tell you that this does not happen as often as you might think. Read our category on this issue, but now to the case at hand to reinforce what we have blogged on in the past.

     Coming from the Fifth District is Rego Dairy v. Golden State Feeds, LLC, Case Nos. F058548/F058766 (5th Dist. Apr. 21, 2011) (unpublished) to illustrate lessons from our prior posts.

     There, plaintiff won on the merits but also was awarded over $216,000 in attorney’s fees based on defendants’ failure to admit under Code of Civil Procedure section 2033.430. However, this award had to be justified on appeal, something that did not happen.

     Reason for reversal? No laziness intended, but plaintiff could not establish that all fees incurred in proving causation and damages (which apparently was behind the award) could be allocated to the specific RFA denials, some of which were also done in good faith so that the allocation was further complicated. The burden of proof was on plaintiff to prove causation, not the defense, such that this important principle required reversal of the RFA fee award on appeal.

Requests For Admissions: $341,295 Costs Of Proof Award Goes POOF!

Reasons: Issue Was Not Of Substantial Importance And Form Interrogatory Responses Effectively Explained Denial.

     In Wilson v. Lightner, Case No. D055083 (4th Dist., Div. 1 Jan. 31, 2011) (not for publication), parties in a bitter easement dispute reached a denouement when the trial court awarded successful defendants a postjudgment award of $341,295 as costs incurred in proving matters not admitted in responses to 12 requests for admissions under Code of Civil Procedure section 2033.420. Plaintiffs understandably appealed.

     They did get a reversal on this issue.

     The reasons? Twofold in nature, explained below.

     First, the issue involved in the RFAs in question--whether the easement was appurtenant (archane, but definitely involved in cases of these sorts)--was not of substantial importance. Not only was little time devoted to this issue, but the real issue was easement overburdening, implicated not at all in the germane RFAs.

     Second, the actual RFA denials were effectively negated by responses to the form interrogatory relating to RFA denials in which plaintiffs admitted the easement was appurtenant to the five parcels referenced in the grant deeds (albeit denied that it served seven parcels). The denial on the seven parcels was made in good faith, as the form rog response showed good faith on behalf of plaintiffs in the overall sense of things.

     Big reversal in favor of plaintiffs on this costs of proof issue.

Requests For Admissions: Deny The Obvious And Face Monetary Sanctions

Failure to Admit Four Specific RFAs Propounded By Defense Justified $7,741.48 in Attorney’s Fees Under CCP § 2033.420.

     In our category “Requests for Admissions,” we have explored the requirements of Code of Civil Procedure section 2033.420 which, in a nutshell, authorizes imposition of fees and costs for denying a request for admission unless there was good cause. Even then, the award is limited to costs-of-proof expenses rather than burdening the losing party with all the fees and costs of a case (unless there is some other fee-shifting clause or statute allowing recoupment by a prevailing party).

     The next case demonstrates that a litigant should not deny an admission request dealing with a core issue within the litigant’s knowledge. If this happens and costs-of-proof expenses are allowed, it will be hard to obtain reversal of any adverse award.

     In Moore v. California Surety Investigations, Case No. D055253 (4th Dist., Div. 1 Jan. 7, 2011) (unpublished), employee filed a disability discrimination and failure to engage in interactive process claims against employer, which asked him to admit that he could no longer physically apprehend bail fugitives without compromising the health/safety of himself or other investigators as a result of a back injury. He denied four specific RFAs on these circumstances, arguing that “physically apprehend” meant only peaceful apprehension so that denial was proper. The trial court disagreed, awarding employer costs-of-proof attorney’s fees of $7,741.48 under section 2033.420.

     The appellate court affirmed the costs-of-proof award. The lower court could reasonably find that the term “physically apprehend” was not ambiguous and aimed at obtaining employee’s admission that he could not physically apprehend bail fugitives rather than handle a peaceful surrender by a fugitive. Employee’s reliance on Miller v. American Greetings Corp., 161 Cal.App.4th 1055, 1066 (2008) was found misplaced, because the admissions requested occurred in the context of an unsettled area of the law--hardly the situation at play in Moore. No abuse of discretion attended the lower court’s award.

The Fugitive - Final Episode Epilogue

           To hear the “Dog the Bounty Hunter” theme, click here.

Year End Wrap-Up: Mike & Marc’s Top 20 Attorney’s Decision Fees Decisions--Part 2 of 2.

     Here is the second installment of our top 20 decisions.

     10. Jankey v. Lee, 181 Cal.App.4th 1173 (1st Dist., Div. 4 2010), review granted, No. S180890 (May 12, 2010) -- authored by Presiding Justice Ruvolo; discussed in our Feb. 6, 2010 post.

     Attorney’s fees are awardable to a prevailing defendant under Civil Code § 55 without the necessity of showing a plaintiff’s action was “frivolous, unreasonable, or groundless,” disagreeing with Ninth Circuit’s Hubbard decision. This has been accepted for review by the California Supreme Court and is not published anymore, but available for reading in the California Reporter or research databases.

     9. Plummer v. Day/Eisenberg, LLP, 184 Cal.App.4th 38 (4th Dist., Div. 3 2010) -- authored by Justice Ikola; discussed in our Apr. 30, 2010 post.

     Contingency fee agreement-driven case with an attorney charging lien is not subject to the disclosure/consent requirements of Fletcher v. Davis, 33 Cal.4th 61, 71-72 (2004).

     8. Conservatorship of Whitley, 50 Cal.4th 1206 (Cal. Sup. Cto. 2010) -- authored by Justice Moreno; discussed in our Dec. 22, 2010 post on Pappas v. Farr (2d Dist., Div. 6 2010) (unpublished).

     Litigant’s personal pecuniary interests may not be used to disqualify the litigant from obtaining fees under California’s private attorney general statute (CCP § 1021.5); rather, the deciding court must focus on the financial burdens and incentives involved in bringing the lawsuit.

     7. PNEC Corp. v. Meyer, 190 Cal.App.4th 66 (4th Dist., Div. 3 2010) -- authored by Justice Ikola; discussed in our Nov. 18, 2010 post.

     Defendant successfully obtaining dismissal of action based on forum non conveniens is a prevailing party under Civil Code section 1717, extending the reasoning from Profits Concepts Mgt., Inc. v. Griffith, 162 Cal.App.4th 950 (2008) (an earlier case determining that a defendant successfully moving to quash service for lack of personal jurisdiction is a prevailing party, authored by Justice Fybel of the 4th Dist., Div. 3).

     6. Lockton v. O’Rourke, 184 Cal.App.4th 1051 (2d Dist., Div. 4 2010) -- authored by Presiding Justice Epstein; discussed in our Apr. 24, 2010 post.

     Contractual clause in retainer agreement allows attorney parties to recover for their efforts in collecting fees against clients, avoiding application of the Trope bar.

     5. In re Mercury Interactive Corp., 618 F.3d 988 (9th Cir. 2010) -- authored by Circuit Judge Tashima (with a dissent by Circuit Judge Bybee); discussed in our Aug. 18, 2010 post.

     Although refusing to articulate a bright-line rule, F.R.Civ. P. 23(h) does not contemplate that class members’ objections to class counsel fee requests have to be filed before the fee motion itself is filed, which denies the class the full and fair opportunity to examine and oppose the motion.

     4. Estate of Manuel, 187 Cal.App.4th 400 (2d Dist., Div. 3 2010) -- authored by Acting Presiding Justice Croskey; discussed in our Aug. 11, 2010 post.

     Costs of proof sanctions for failure to admit requests for admissions under Code of Civil Procedure § 2033.420(a) can only be assessed against a party, not the party’s counsel.

     3. Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC, 185 Cal.App.4th 1050 (4th Dist., Div. 3 2010) -- authored by Justice Moore; discussed in our June 23, 2010 post.

     Expert witness fees awardable under contract clause can be recovered under routine costs memorandum approach, disagreeing with Carwash’s approach that the fees must be pled and proven at trial.

     2. Donahue v. Donahue, 182 Cal.App.4th 259 (4th Dist., Div. 3 2010) -- authored by Justice Aronson; discussed in our Feb. 27, 2010 post.

     Extensive discussion of factors that are probative in gauging the reasonableness of fees requested in probate trust litigation involving multiple attorneys, billings with duplicative entries, litigation inefficiencies, and block billing time entries.

     1. Chavez v. City of Los Angeles, 47 Cal.4th 970 (Cal. Sup. Ct. 2010) -- authored by Justice Kennard; discussed in our Jan. 14, 2010 post.

     Trial courts have discretion to deny or reduce fee requests to winning plaintiffs in FEHA cases where a plaintiff’s success is minimal or there is a grossly inflated fee request.

Requests For Admissions: No Costs Of Proof Sanctions Awarded Where Personal Injury Plaintiffs Had Basis For Denial At Discovery Stage

Fourth District, Division 2 Affirms Trial Court’s Denial of RFA Costs of Proof Request.

     In Chiang v. J.B. Hunt Transport, Inc., Case Nos. E047560 et al. (4th Dist., Div. 2 Nov. 3, 2010) (unpublished), a trial court rejected a defense request for an award of $60,493 in costs of proof sanctions against personal injury plaintiffs denying requests for admissions on the cause of an accident despite the fact the defense later won a summary judgment on the issue. Defendants appealed the RFA costs of proof denial.

     They were not successful.

     The appellate court was unsure if a summary judgment ruling could be equated to a finding of fact for purposes of the costs of proof statute. However, even assuming it was, plaintiffs had a reasonable basis to deny the RFAs at the discovery stage--one of the classic costs of proof sanctions exceptions justifying the lower court’s denial of any sanctions. Because plaintiffs could have rationally believed they would procure future sufficient evidence to prove their theory of the case, the trial court’s denial was no abuse of discretion.

Request For Admissions: $106,121.32 Costs Of Proof Award Affirmed

Daughter Had No Objective Basis To Deny RFAs.

     Under our category “Requests for Admissions,” we have explored many, many cases on “costs of proof” sanctions under Code of Civil Procedure section 2033.420, allowing a sanctions of fees and costs for proving at trial a denial of RFAs unless certain exceptions are met. Daughter/appellant in a testamentary capacity case did deny certain RFAs, resulting in a costs of proof award in the hefty amount of $106,121.32 when the estate successfully contested her claims.

     She appealed in Estate of Chuang, Case No. A126945 (1st Dist., Div. 5 Oct. 28, 2010) (unpublished). Was she successful?

     She was not.

     We understand daughter was not happy. Her father had only left her with $1 and left the remainder of his estate to a Buddhist organization. Although contesting that father was of unsound mind, daughter really had no objective proof or medical evidence other than her subjective beliefs that he was incompetent in a testamentary capacity sense. Subjective beliefs alone in these type of cases will not support RFA denials, so that the costs of proof award was sustained on appeal. (Brooks v. American Broadcasting Co., 179 Cal.App.3d 500, 511-512 (1986).)

Requests For Admissions: $177,030.76 Cost of Proof Sanctions Goes POOF! When Court Of Appeal Finds That Only One Out Of 7 RFAs Was Material

Matter Remanded To Decide Sanctions for One Germane RFA.

     Appellate courts do scrutinize costs of proof sanctions under Code of Civil Procedure section 2033.420 carefully, as the next case demonstrates.

     The trial court in Windward Capital Management Co. v. Christenson, Case No. B210898 (2d Dist., Div. 2 Oct. 13, 2010) (unpublished) imposed costs of proof sanctions under section 2033.420 against defendants for denying seven RFAs. The sanctions award amounted to $177,030.76, prettty heavy hitting when one considers that the total damages awarded only came to about $113,000. The Court of Appeal reversed, finding that the denial of only one RFA was material so that the sanctions had to be recalculated for this single transgression. The other six RFAs were found not to be that important.

     Also, a punitive damages award was reversed because alleged false promises made in connection with settlement negotiations were protected by the Civil Code section 47 privilege. That meant that another $37,500 damages component went POOF! too.

Requests For Admissions And Routine Costs: Denial Of RFA Expenses And Partial Denial Of Routine Costs Is Affirmed On Appeal

Sixth District Gives a Primer on RFA Expenses and Routine Costs Awards.

     Berkman v. City of Morgan Hill, Case No. H032205 (6^th Dist. Sept. 28, 2010) (unpublished) is a virtual primer on the standards to be met to recover fees/expenses under the request for admission sanctions statute codified at Code of Civil Procedure section 2033.420 and the routine costs statute under Code of Civil Procedure section 1032. Here are the points to take away:

        · Section 2033.420 orders on RFA sanctions can be affirmed based on implied findings, with there being no requirement that findings be expressly stated on the record (containing a spirited debate on the majority and dissenting opinions in Laabs v. City of Victorville, 163 Cal.App.4^th 1242 (2008));

        · A litigant desiring 2033.420 expenses must conquer several exceptions before gaining an expense award, such as whether the denied RFAs were central to the dispute, whether the denying litigant had a reasonable belief that it would prevail in the case, and whether the denying litigant had other good cause for making the denials;

        · A winning cross-defendant's costs-sharing agreement with other litigants did not necessarily mean that a costs allocation was required with respect to a costs award, even if cross-defendant did not incur the fees based on the sharing agreement (Ceranski v. Muensch, 60 Cal.App.2d 751, 754 (1943); Skistimas v. Old World Owners Assn., 127 Cal.App.4^th 948, 952 (2005); Jones v. Dumrichob, 63 Cal.App.4^th 1258, 1265 (1998)); and

        · A trial court's allocation of costs is reviewed for an abuse of discretion (Slavin v. Fink, 25 Cal.App.4^th 722, 725 (1994).)

     Below:  Hiram Morgan Hill, after whom the City of Morgan Hill is named.

Requests For Admissions: Corporate General Counsel Defendant and Corporate Defendant Hammered With $123,455 In RFA “Costs Of Proof” Sanctions In Personal Injury Case

Second District, Division 2 Affirms And Awards $5,000 For a Frivolous Appeal.

     In our category “Requests for Admissions,” we have discussed numerous cases examining the “costs of proof” sanctions under Code of Civil Procedure section 2033.420 for litigants that unreasonably deny RFAs for matters later proven true at trial. (The most potent sanction is that attorney’s fees are within the ambit of what can be recovered.) In the next case, we report on one that really stung two defendants, with the appellate court reminding us that the status of the primary litigant—in this case, an individual defendant who was assistant general counsel for Toyota Motor Sales USA, Inc.—does carry weight in the ultimate result reached by the court.

     Grant v. Toyota Motor Sales USA, Inc., Case No. B220766 (2d Dist., Div. 2 Sept. 20, 2010) (unpublished) involved a pedestrian who was hit by an assistant general counsel of Toyota, who denied fault-based RFAs even after he (the defendant driver) admitted during his deposition that he struck defendant in a crosswalk and failed to yield to the pedestrian. Yikes! The matter proceeded to trial, with the jury awarding plaintiff $623,990 for medical expenses, economic losses, and pain/suffering.

     That was hardly the conclusion of the litigation. Plaintiff then moved for $139,610 in attorney’s fees, expert witness fees and other expenses under the RFA “costs of proof” provision. The trial court granted her sanctions of $123,455 ($84,875 of which constituted of attorney’s fees).

     Defendants, driver and Toyota (with the company owning the vehicle driven by assistant general counsel), appealed.

Requests for Admissions: Court Of Appeal Reverses $55,420 Costs-of-Proof Award Against Legal Malpractice Plaintiff

 

Second District, Division 3 Remands For Costs-of-Proof Award Recalculation.

     Under our sidebar category “Requests for Admissions,” we have looked at many decisions examining the costs-of-proof statute set forth in Code of Civil Procedure section 2033.420(a), which allows the court to order a party improperly denying a request for admission to reimburse another party for reasonable expenses (including attorney’s fees) incurred in proving the denied fact. Section 2033.420 is equally available to a party prevailing on summary judgment. (Barnett v. Penske Truck Leasing Co., 90 Cal.App.4^th 494, 495, 499 (2001).) However, we have found that appellate courts do give scrutiny to determining if the denying litigant had a reasonable basis to deny the requested fact, sometimes resulting in a reversal of a costs-of-proof award. That happened in the next case we look at.

     Plaintiff in Simon v. Coleman, Case Nos. B215813/B218219 (2d Dist., Div. 3 Aug. 31, 2010) (unpublished) suffered a summary judgment defeat in a legal malpractice action brought against defendant former attorney. Plaintiff was also hit with a $55,420 costs-of-proof award as well as $3,690 for defendant’s efforts in pursuing the costs-of-proof motion. Although not contesting the last component, plaintiff did appeal the $55,420 award.

     Plaintiff gained a reversal and remand, but it will only mean that some of the costs will need to be excluded. The appellate court, although indicating the review standard is abuse of discretion, found that plaintiff did have reasonable basis to deny some requested facts, so that section 2033.420’s legal requirements for assessments of costs were not met. The appellate panel remanded for recalculation of a proper costs-of-fee award, although it did delineate which denied RFAs would allow for a costs assessment on remand.

Requests for Admission: Only Party, Not Party’s Attorney, Can Be Exposed To Costs Of Proof Fee Order

Also, Second District, Division 3 Decides Fee Award Not Tethered to Actual Costs of Proof of Denied Admissions.

     Here is a “biggie” under our category “Requests for Admissions,” a just published Second District, Division 3 decision—Estate of Manuel, Case Nos. B210701/B215380 (2d Dist., Div. 3) (Aug. 10, 2010) (certified for partial publication)—authored by Acting Presiding Justice Croskey on behalf of a 3-0 panel. There, parties and their attorneys, on an allocated basis, were held liable for all of the attorney’s fees of an opponent incurred after the date of the denial of certain RFAs, aggregating a fee award of $52,779.50. Costs of proof award reversed for two reasons.

     The first part of the decision holds that costs of proof fees under Code of Civil Procedure section 2033.420(a), which allows an award of attorney’s fees for failure to admit the truth of a request for admission (subject to certain exceptions), can only be imposed against parties, not their attorneys. This result was dictated by the unambiguous language of section 2033.420(a), as well as federal cases that had reached the same result under Federal Rules of Civil Procedure, rule 37(c) (the federal civil rule analog provision).

     The second part of Estate of Manuel, though unpublished, found that the trial court overdid it with respect to the award of fees. After all, there was reasonable basis for the litigant to deny requests on the testamentary capacity issue, and fees devoted to mediation efforts had no nexus to disputed facts at issue in the RFAs. A remand was appropriate, directed to limit the costs of proof award to the actual costs of proof.

Requests for Admissions: Court of Appeal Reverses Fee Award Because Responses To Requests For Admissions Were Not Unequivocal Denials

Second District, Division 4, Explains You Better Move to Compel if You Want to Preserve the Right to Fees Under CCP 2033.420.

     The underlying facts of the next case were dramatic.  A fight broke out at the Rits Cafe culminating in the shooting death of one person and the wounding of another.  Lawsuits followed that included causes of action for negligence, negligent hiring-supervision, assault and battery, wrongful death, and a survival action for negligence.  Defendants move for summary judgment and won, based on the lack of a duty to those who were injured.  Previous altercations at the Rits Cafe did not rise to such a level as to create a duty in the owners of the Rits Cafe.   The shooter had come from Russian Nights, another establishment, and the owner successfully argued he had no liability because the shooting did not occur on the premises.  In all respects the judgment was affirmed – except as to an attorney’s fees issue.  Tadevosyan v. Shakarian, B213649 (2nd Dist., Div. 4 July 20, 2010 (unpublished).  Hence, this post.

     The trial court awarded fees of $36,861 to two defendants for expenses incurred to prove matters denied by appellants in response to the requests for admission.  Unfortunately for respondents, the denials were not unequivocal, but included objections, partial admissions, and partial denials.  Respondents were required to move to compel further responses to preserve the right to fees under CCP 2033.420.  Hence, the Court of Appeal reversed the fee award. 

     The practical lesson is that, when responding to requests for admissions, weasel words resulting in an equivocal denial may avoid an award of attorney’s fees – and that the party getting the evasive responses will have to incur the additional expense of moving to compel to be able to take advantage of CCP 2033.420. 

RFA Admission Fee Shifting: Doesn’t Work, Unless You Allocate!

Second District, Division 8 So Rules.

     KL Trading Co. v. Dahan, Case No. B215182 (2d Dist., Div. 8 July 14, 2010) (unpublished) is a very pragmatic decision in the RFA fee shifting area. The problem is that plaintiff requested $ 56,956.25 in fees for proving certain RFAs not admitted in responses, despite any specific delineation of time for proving the facts denied in the RFAs. The trial court denied fees, and the appellate court affirmed the determination. The reason? You need to allocate—billing entries claimed for RFAs, such as “full day in trial” did not specifically relate the trial time to the RFA denial. No abuse here.

FEHA/RFA Fee Shifting: Trial Court Did Not Abuse Discretion In Denying Defense Fee Request Of $204,723

Standard of Review Was Determinative in This One.

     When statutes give trial court discretionary calls on fee requests, appellate courts review such calls under a very deferential standard of review. This deferential standard—abuse of discretion--was determinative in the next case we review.

     In Ross v. Frank, Case No. B211125 (2d Dist., Div. 1 May 4, 2010) (unpublished), four non-employer defendants prevailed in a FEHA case but were denied their request for an award of attorney’s fees in the total sum of $204,723. Defendants had sought fees under two bases: (1) Government Code section 12965(b) [in FEHA cases, “the court, in its discretion, may award to the prevailing party reasonable attorney’s fees and costs ….”]; and (2) Code of Civil Procedure section 2033.420(a) [failure to admit a proper request for admission gives rise to fees unless the court determines an objection to the request was sustained, a response was waived, the admission was inconsequential, the denying party had a reasonable basis to believe that party would prevail on the matter, or there was other good reason for the denial].

     Defendants appealed.

Requests For Admissions: Sizable Sanctions Reversed Where Denying Party Had Reasonable Basis For Responses When RFAs Served Early In Proceedings

Second District, Division 7 Reverses $78,043 Costs of Proof Award.

     In Fiore v. Kahana, Case No. B209133 (2d Dist., Div. 7 Dec. 17, 2009) (unpublished), the trial court granted a $78,043 costs of proof sanctions for a party’s denial of requests for admissions pursuant to Code of Civil Procedure section 2033.420(b)(3). [See our category “Requests for Admissions” to explore the statutory basis and standards for such an award.] Result on appeal? Reversed. Reason: Denying party had a reasonable ground to believe she would prevail in the matter, a conclusion bolstered by the fact the requests for admissions were served early in the proceedings and it would be unfair to ask the party to admit she had “no case” at an early juncture of the case.

Requests for Admissions

Letter from a Reader

Dear Marc and Mike,

One of our lawyers recently turned me on to your blog on California attorneys’ fees, and I have found it extremely helpful and informative.  This is a fantastic resource.  With that in mind, I wanted to let you know about an attorneys’ fee award received in a case that Moses Lebovits and I tried together in September before Hon. Dudley Gray in Dept. M in Redondo Beach.

The case involved an automobile vs. pedestrian accident at the intersection of 2nd street and Meadows Avenue in Manhattan Beach on November 7, 2006.  Moses and I represented the plaintiff, a former partner at Howery, who was returning home from walking her children to school that morning.  She was in the center of the street, crossing corner to corner in an unmarked crosswalk when the defendant, assistant general counsel for Toyota Motor Sales USA, Inc., ran over her causing a vestibular head injury with residual vertigo, a 6mm herniated disc at L4-5 and a torn labrum in her right hip.  Three eyewitnesses all confirmed that the defendant struck the plaintiff in the center of the road in the area where a marked crosswalk would have been.  The investigating police officer concluded that the defendant caused the entire accident by striking a pedestrian in an unmarked crosswalk in violation of California Vehicle Code section 21950(a).  During discovery, our office served well tailored requests for admissions on the issues of liability and causation which were denied by the defense.  This was clearly a case which should have been tried solely on the issue of the plaintiff’s damages; yet, the defense forced a trial on all issues – contesting liability to the bitter end without one shred of evidence to support their position. On September 17, 2009, the jury returned a unanimous verdict in favor of the plaintiff and awarded her damages of just under $624,000, which is the largest plaintiff’s verdict ever obtained in Redondo Beach.

Subsequently, our firm filed a motion to recover costs and fees, including the cost of a biomechanics expert and an accident reconstruction expert, utilized in proving the facts on which request for admissions were sought prior to trial.  The motion was heard on October 26, 2009.  Judge Gray took the motion under submission and issued the attached order awarding an additional $123,445.15 including $84,875 in attorneys’ fees.  I am also attaching a copy of our motion.  Defense counsel has indicated that his client intends to pay the underlying judgment and appeal the award of fees and costs.  In light of recent cases posted on your website, I thought you might find our case of particular interest for your readers.  If either of you  have any questions or need additional information, please do not hesitate to give Moses or me a call.  Keep up the good work.

Jason Tortorici

Daniels, Fine, Israel, Schonbuch & Lebovits

Requests For Admissions: Court Of Appeal Reverses Denial Of RFA Sanctions Where Trial Court Found No Reasonable Basis for Denials But Found No Additional Work Expended

Fifth District Reversed, Finding Mandatory Sanction Was In Order.

     O.K., readers, go to our category “Requests for Admission” for a primer on when fees can be awarded for sanctions when a party fails to admit the truth of RFAs. (Code Civ. Proc., sec. 2033.420(a)-(b).) Now, we have a reversal of a trial court ruling in not allowing RFA sanctions on punitive damage issues in a lawsuit.

     The case arises from Fifth District Court of Appeal and is Hodge v. Guarantee Real Estate, Case No. F056064/F056101 (5^th Dist. Sept. 23, 2009) (unpublished).

     In a purchaser-broker dispute, brokers served RFAs requesting an admission that they did not engage in conduct constituting malice, oppression or fraud for purposes of the punitive damage claims. Plaintiffs denied these RFAs, and brokers were granted a nonsuit during trial that the punitive damage claims were improper. Brokers then moved to recover RFA sanctions, but the trial court denied in unusual fashion. Although finding that the RFA denials were not supported by a reasonable good-faith basis that plaintiffs would prevail on the punitive damage issue, the RFA sanctions were denied because the lower court could not conclude that these denials caused any additional work in the overall defense of the action.

     Brokers appealed, and won—they got a shot to show their time for the RFA denials and obtain an award of sanctions (likely, with a fair amount being attorney’s fees, our forte!).

     The Court of Appeal seemed to be swayed by the reasoning of the trial court itself in oral proceedings. If there was no good faith basis for punitive damages, why weren’t at least some fees allowed? The appellate court had no good answer, and did not regard the facts as classifying this an exceptional case where fees should be denied altogether. So, on remand, plaintiffs can apportion fees and demonstrate what should be awarded as an appropriate RFA sanction.

Consumer Statutes And Requests For Admissions: Court Of Appeal Denies Unfair Competition Defendants' Request For Fees Under Section 17200 Or Under RFA Sanctions Statute

No Basis For Fees Based On Defensed Claims; No Abuse of Discretion in Denying RFA Sanctions.

      In Chichi v. Ennen, Case No. D053410 (4^th Dist., Div. 1 Sept. 18, 2009) (unpublished), plaintiffs brought a class action under California's unfair competition statute based on violations of several other California statutes. After plaintiffs rested their case-in-chief at a bench trial, the trial court decertified the class and granted an oral motion for judgment against plaintiffs.

     Defendants then moved to recover attorney's fees based on two grounds: (1) a contractual attorney's fees clause in the contract involved in the overall tapestry of the UCL claim; and (2) the RFA statute that allows a party to recoup fees for proving the truth of certain requests that were denied by plaintiffs.

     Defendants did not succeed on appeal.

     As to the first ground, the Court of Appeal found no basis to award fees to defendants under the UCL. "The unfair competition law does not provide for attorney fees. Although a prevailing plaintiff on an unfair competition claim may seek attorney fees as a private attorney general under Code of Civil Procedure section 1021.5, a prevailing party has no such right." (Slip Opn., at p. 4, citing Walker v. Countrywide Home Loans, Inc., 98 Cal.App.4^th 1158, 1179-1180 (2002).)

     Defendants then tried to argue there was a contractual basis for fee recovery under Civil Code section 1717. Wrong again, said the appellate panel. The UCL claim did not allege any contract was breached and did not seek enforcement of the contract; so, only a UCL claim was involved that conferred no basis for a fee award.

     Defendants then defaulted to Code of Civil Procedure section 2033.420(b), which allows a court to award fees as a cost of proof for failing to admit an RFA under specified circumstances. (See our category "Requests for Admissions" to explore this statute more fully.) The problem with this argument is that any challenge to a lower court ruling is reviewed under a deferential abuse of discretion standard. (Laabs v. City of Victorville, 163 Cal.App.4^th 1242, 1275-1276 (2008).) In this instance, nothing in the record indicated that the plaintiffs lacked a reasonable basis for contesting the matters referred to in the RFA. Given this determination, the refusal to award fees was sustained on appeal.

Requests for Admissions: Court Of Appeal Reverses $17,500 Fee Award Granted Against Plaintiff Suffering Nonsuit In Premises Liability/Negligence Lawsuit Against HOA

 

First District, Division 1 Finds HOA Never Had To Prove The Truth Of Matter Initially Denied But Then Admitted During Subsequent Pretrial Deposition.

     In our category "Requests for Admissions," we have explored several decisions granting or denying attorney's fees and costs requests under Code of Civil Procedure section 2033.420. That statutory provision provides that a party denying a request for admission may be ordered to pay the costs and fees incurred by the requesting party in proving that matter unless there are certain specified mitigating factors at play. The next case involved the reversal of a $17,500 fee award against a nonsuited plaintiff in a premises liability/negligence lawsuit against a homeowners association based on plaintiff denying one request for admission.

     Bachelor v. Blackhawk Homeowners' Assn., Case No. A121222 (1^st Dist., Div. 1 Aug. 26, 2009) (unpublished), in reversing the fee award against losing plaintiff, found that the one germane request for admission—whether a hillside had been sprayed with weed killer prior to a December 2002 storm—had been denied initially but had been admitted in a deposition taken 10 days after service of the RFA denial. Even more critical, the weed killer fact was admitted in losing plaintiff's case in chief during trial (before the nonsuit was granted). This meant that HOA never had to prove the denied fact given that a nonsuit was granted and nothing demonstrated the deposition testimony was ever introduced at trial. Because no proof was ever introduced by HOA on the denied RFA, there was no basis for the fee award.

RFA Cost-Shifting: Court Of Appeal Affirms $165,724.65 Award For Plaintiff's Failure To Admit The Truth of RFAs Of Substantial Importance In Accounting Malpractice Case

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.

Requests For Admissions: Segregate Time And Apportion To RFA Denials … Or Bear The Consequences—No Fee Recovery

Fourth District, Division 1 Denies Fees Based on Lack of Apportionment.

     Here is a case with a pragmatic reminder for all litigators feeling they have a shot at recovering attorney’s fees under Code of Civil Procedure section 2033.420, the Discovery Act provision allowing a requesting party to recover attorney’s fees incurred in proving the truth of a matter denied by a responding party answering requests for admissions. The lesson is to heed the advice of the Rutter Group treatise writers in this area: segregate your time and expenses in order to prove the particular matters in dispute and your trial preparation time to recoup fees on those matters. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) para. 8:1415, p. 8G-41.)

     Failure to follow this practical advice cost defendant a chance for recoupment of substantial attorney’s fees after plaintiff lost her case through summary adjudication and a nonsuit. One defendant sought to recover $184,200 in attorney’s fees for plaintiff’s denial of certain RFAs. The trial court denied the request, finding defendant sought to recover for all work in the case rather than just time spent in proving the truth of the denied matters. The lower court concluded in part: “This motion is problematic because it is presented on an ‘all or nothing’ basis. The fees expended are not broken down as to the proof required for each asserted request for admission. Essentially, defendant argue[s] that the entire trial would have been unnecessary if plaintiffs would have responded to the requests for admissions in good faith. The sanction set forth in section 2033.420 was not intended to apply to an entire trial such that it acts as a pseudo sanction for malicious prosecution.”

     This determination was affirmed by the Fourth District, Division 1 in Kim v. Lee, Case No. D053890 (4^th Dist., Div. 1 July 13, 2009) (unpublished). Not only did plaintiff have reasonable grounds to believe they would prevail and thus had basis to deny some of the RFAs, the appellate court quoted the Rutter Group “segregation” advice and found that the failure to apportion time was fatal to the “all or nothing” request. “ . . . in light of the lack of specificity in [defendant’s] motion for attorney fees, the trial court had no way of determining which fees were recoverable and which were not recoverable Therefore, the trial court did not abuse its discretion in denying Lee’s motion in full.” (Slip Opn., pp. 15-16.)

Requests For Admission: Denial Of Seven Key Admissions Justified $32,400 Attorney’s Fees Award

Fourth District, Division 2 Affirms Fee Award, Even Though $182,469.75 In Fees Were Requested.

     Under our category “Requests for Admissions,” we have surveyed cases where courts have granted or refused substantial attorney’s fees award to litigants claiming that they had to prove facts that were unreasonably denied with respect to pretrial discovery requests for admission. Here is a decision where the party seeking RFA sanctions requested $182,469.75 in fees and was awarded only $32,400 in fees, with the latter decision affirmed on appeal.

     In Kelly v. LaMunyon, Case No. E044897 (4^th Dist., Div. 2 Apr. 23, 2009) (unpublished), plaintiffs, the purported buyers, and defendants, the purported sellers, engaged in protracted, bitter litigation over whether a residential purchase transaction had occurred. The facts were somewhat goofy, but clearly husband on the defendants’ side had never signed a purchase agreement and claimed he knew of no conduct that indicated that he had consented to the sale—after all, the money that was paid was by plaintiffs seeking to enforce a sale was rental for the use of the property by mother of one of the plaintiffs. Also, plaintiff never listed the property as an asset in a chapter 7 bankruptcy petition. (By the way, all of this involved litigation over a City of Canyon Lake condominium unit with a $135,000 purchase price.) Defendants eventually won and sought attorney’s fees for plaintiffs’ denial of RFAs about whether they had entered into an enforceable sales contract with plaintiffs. Defendants asked for $182,469.75 in fees for having to prove facts denied in the RFAs. The trial court only awarded $32,400 in fees against plaintiffs, and neither side challenged the amount of fees awarded by the lower court. Plaintiffs, though, did contest the correctness of the decision to award fees in the first place.

Requests For Admissions: Court Of Appeal Reverses Denial Of Fees And Remands For New Determination

 

Fourth District, Division 1 Determines Denial of RFA Fees Was Abuse of Discretion and Needed Another Look.

     In our category “Requests for Admissions,” we have surveyed past decisions which have considered Code of Civil Procedure section 2033.420, which authorizes a trial court to award attorney’s fees and costs to litigants having to incur expenses to prove the truth of denied requests for admissions at a subsequent trial. In the next case, an appellate court actually reversed a denial of fees and remanded for further proceedings to determine if fees were justified in the RFA context.

RFA Cost of Proof Fee Awards: A Two-Fer … Appellate Courts Do Not Allow Them In Two Recent Cases

Second District, Division 6 Reverses Substantial Award, While Second District, Division 5 Affirms Failure to Award RFA Fee Recovery.

     In our category “Cases: Discovery,” we have explored prior cases, some of which have granted substantial attorney’s fees award to litigants convincing lower courts that an opponent unreasonably denied discovery requests for admission of substantial importance. (Code Civ. Proc., sec. 2033.420(a); Brooks v. ABC, 179 Cal.App.3d 500, 508 (1986); Miller v. American Greetings Corp., 161 Cal.App.4^th 1055, 1066 (2008).) In the next two cases, appellate courts refused to grant RFA cost of proof fees, reversing a result in one and affirming a denial in the other.

Nonvictorious Qui Tam Plaintiff Is Not Assessed With Requests For Admission Sanctions Or Attorney's Fees For Bringing A Frivolous Action

Second District So Rules Even Though Plaintiff Lost at the Demurrer Stage.

            In State of California ex rel. Dockstader v. Amoroso Construction Co., Inc., Case No. B197343 (2d Dist., Div. 5 Aug. 26, 2008) (unpublished), a qui tam plaintiff lost a demurrer against some private defendants for reimbursement of costs relating to new school construction.  Plaintiff denied certain requests for admissions during the course of litigation.  One of the defendants requested fees under two theories:  (1) for recovery of expenses to prove matters after the RFAs were denied; and (2) plaintiff proceeded with a clearly frivolous claim, triggering fee recovery under Government Code section 12652(g)(9).  The trial court denied the fee requests under both theories.  Aggrieved defendant appealed and did not prevail.

            Both fee denials were judged under the deferential abuse of discretion standard of review.  See, e.g., Wimberly v. Derby Cycle Corp., 56 Cal.App.4^th 618, 637 n. 10 (1997) [RFAs]; Bartling v. Glendale Adventist Medical Center, 184 Cal.App.3d 97, 103 (1986) [Government Code section 12652(g)(9)].

            With respect to the RFA denial issue, there was no error in denying fees to defendant.  The key fact is that a demurrer was granted such that no proof was involved or no policy to award costs when a litigant denies RFAs in an attempt to make a trial more expensive.  The appellate panel articulated it this way:  "It is clear from the plain language of the statute that in order to be awarded attorney fees under Code of Civil Procedure section 2033.420, the party who propounded the request for admission must 'prove the truth' of the matter at issue before being entitled to recover expenses.  [Appellant/defendant] did not prove the truth of any matter.  Instead, [appellant] demurred, and the trial court agreed, that the complaint failed to allege a cause of action.  No proof was required, and the trial court correctly determined that [appellant] was not entitled to recover attorney fees under the discovery provision."  (Slip Opn., at p. 26.)  BLOG OBSERVATION—For similar or diverse rulings on RFA denial issues, see our "Cases:  Requests for Admission" Category.  (Expenses were awarded in the cases we reviewed only after the matter proceeded to trial, which bolsters the result reached in Dockstader.)

            Government Code section 12652(g)(9) was not a good hook for fee recovery.  It provides that a court may award reasonable attorney's fees and expenses to a defendant in a qui tam action "if the defendant prevails in the action and the court finds that the claim was clearly frivolous, clearly vexatious, or brought solely for purposes of harassment."  Given the importance of the allegations in the complaint, plaintiff's inability to allege specific facts did not render the complaint "clearly frivolous." The lower court's denial on this basis was justified. 

LOSING PLAINTIFF IN DANGEROUS PUBLIC PROPERTY CASE DOES NOT SUFFER ADVERSE AWARD OF FEES UNDER THE REQUEST FOR ADMISSION “COST OF PROOF” SCHEME OR CODE OF CIVIL PROCEDURE SECTION 1038

Fourth District, Division Two Splits Sharply On Fee Award Denial By

Lower Court

.

            Mr. Leviant, of The Complex Litigator, has done a very insightful synopsis of Laabs v. City of Victorville, Case No. E040778 (4^th Dist., Div. 2 June 12, 2008) (certified for publication) on the subject of when “cost of proof” sanctions can be awarded against a litigant denying requests for admissions (RFAs) improperly.  We agree with his observations and also post our “spin” on this 2-1 decision because it also deals with a denial of fees under Code of Civil Procedure section 1038.  Unlike our previous posts in which substantial fees were awarded under the RFA scheme, this case involved a denial of fees and highlights conflicting views among the appellate panel about the particularity with which the trial judge needs to articulate his/her reasons for fee denial.

            Plaintiff minor suffered injuries in an automobile crash, suing San Bernardino County and the City of Victorville for creating a dangerous public property condition.  Summary judgment was granted in favor of the City, a determination affirmed on appeal. However, the trial judge subsequently denied City its defense costs and fees under either Code of Civil Procedure section 2033.420 (the RFA “cost of proof” sanction) or Code of Civil Procedure section 1038(a) (a provision allowing fee recovery to a governmental entity showing a plaintiff brought a Tort Claim Act proceeding without  a good faith belief in the action’s justifiability and without objectively reasonable cause).  City appealed.  The Fourth District, Division Two affirmed in a 2-1 decision with divergent opinions (Authoring Justice King and Justice Miller in the majority, and Acting Presiding Justice Hollenhorst in a dissent on the fees issues).

            On the RFA issue, the majority found that the denial was reviewed under the abuse of discretion standard, a point the dissent did not contest.  (Slip Opn., pp. 49 [majority], p. 24 [dissent].)  The majority found that the RFA denials were on unimportant matters or were made because plaintiff believe she had a good reason to deny, hinged on the implied determinations that certain denials were not central to the case and that other denials were made because there was a belief that plaintiff would prevail at trial.  In contrast, the dissent argued that review was impossible because the trial judge stated no express findings on the issue so as to preclude meaningful review.  This does set up an interesting appellate review issue for further consideration--whether explicit or implied findings are required for scrutiny of RFA “cost of proof” issues.  Stay tuned on this first issue.

            That brings us to the section 1038(a) issue.  The majority determined that it was not necessary for the trial judge to make the equivalent of an explicit “statement of decision” that the elements of the statute were met.  (Slip Opn., at p. 44.)  Rather, the majority found that “implied findings” sufficed.  Using this standard, the majority found that an objective attorney could reasonably have thought plaintiff’s claim was tenable.

Not at all, said dissenting Justice Hollenhorst.  He noted that the “reasonable cause” prong of section 1038 is reviewed de novo and the “good faith” prong is reviewed for the presence of substantial evidence.  (Slip Opn., pp. 15-16, dissenting opn.).  The dissent believed that the trial court was required to make a mandatory statement of decision on both prongs of the section 1038 fee-shifting test.  (Slip Opn., pp. 16-23, dissenting opn.).  Because no explicit findings were made by the trial court, the dissent would have reversed and remanded with directions to issue the equivalent of a “statement of decision.”  Stay tuned on this second issue.

            We agree with Mr. Leviant that this decision is an interesting counterpoint to other decisions awarding substantial RFA “cost of proof” sanctions.  Laabs seems to queue up whether a statement of decision needs to be made, with particularity, in order to sustain fee decisions (grants or denials) under the RFA fee-shifting statute or section 1038.  Given that no statement of decisions are usually required in other important contexts (e.g., normal preliminary injunctions), it will be interesting to see which side—the majority or dissent in Laabs—is vindicated in this interesting debate. 

ATTORNEYS DEFENSING LEGAL MALPRACTICE CLAIM AT SUMMARY JUDGMENT STAGE AWARDED $80,962 IN “COST OF PROOF” FEES INCURRED IN PROVING FACTS IMPROPERLY DENIED IN THE REQUESTS FOR ADMISSION PROCESS

Second District Corrects Clerical Error and Affirms Substantial “Cost of Proof” Award Against Losing Attorney Malpractice Plaintiff.

            In our June 6, 2008 post, we reviewed the fee-shifting provision of Code of Civil Procedure section 2033.430(a).  Briefly summarizing, that provision allows a trial court to award “costs of proof,” including reasonable attorney’s fees, to a party that proves facts that should have been admitted through the requests for admission (RFA) discovery process.  This case is the second illustration of how practitioners need to be very careful in responding to requests for admission or else expose their clients to substantial “cost of proof” awards. West Side Health Care Dist. v. Hooper, Lundy & Bookman, Case No. B190562 (2d Dist., Div. 4 June 11, 2008) (unpublished), involved a plaintiff suing its Former Attorneys for transactional legal malpractice.  The trial judge granted summary judgment based on the statute of limitations contained in Code of Civil Procedure section 340.6 and on lack of causation, rulings which were affirmed on appeal.

            Winning Former Attorneys also moved for an award of $122,626.42 in attorney’s fees and costs (mainly fees) under the RFA fee-shifting statute, plus $3,240 of costs in bringing the fee motion.  At the fee motion hearing, the trial judge was concerned that Former Attorneys had not apportioned out fees so that they correlated to the work spent in proving the denied RFAs, a concern acknowledged by Former Attorneys as having some validity.  The trial judge continued the hearing for supplemental papers on this issue.  Former Attorneys did supplement with a declaration by which the fee request was reduced to $81,530, plus $3,240 incurred in the initial fee motion, plus $2,940 incurred in preparing the supplemental declaration, for a grand total of $87,710.  After eliminating five items totaling $3,808, the court “reduced” the award to $118,818.42 in fees and costs, after refusing to award the $2,940 in work for the supplemental declaration.  (Wait, you say, something does not add up—you are right, so hang on.)

            On appeal, the Second District panel (3-0, with Presiding Justice Epstein as author) affirmed but modified the award down based on an obvious arithmetic error. The Court of Appeal found that there was no abuse in awarding expenses for proving the truth of facts that showed a lack of causation on the legal malpractice claim.  It did, however, correct the mathematical error, finding that the trial judge erroneously took the $3,808 off of the initial fee request of $118,818.42 rather than the concededly reduced request of $81,530.  When the proper arithmetic was done and the fees for the initial motion were also added in, the appellate court—under its inherent authority—modified the award to $80,962, still a hefty “cost of proof” award to be faced by the losing malpractice plaintiff.