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 (5th 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 Sept. 23, 2009) (unpublished).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.
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