Request for Admissions: $239,170.86 Costs Of Proof Sanctions Order Affirmed On Appeal

Appellate Court Rejects Per Se Rule That Denials of Summary Judgment Motion Or Directed Verdict Presents Imposition Of These Type Of Sanctions.

            Hi, everyone.  We are back from the Thanksgiving break and hope you are all well.  The fee decisions were very sparse from mid-November to now, but they are ramping back up as we close in on the December Holidays.

            Code of Civil Procedure section 2033.420 allows a lower court to award “costs-of-proof” sanctions, typically attorney’s fees, unless it falls within one of these exceptions:  (1) an objection was sustained to the request or a response was waived; (2) the admission sought was of no substantial importance; (3) there was reasonable ground to believe the party refusing to admit the matter would prevail on the matter; or (4) there was other good reason for the failure to admit.” (Doe v. L.A. County Dept. of Children and Family Services, 37 Cal.App.5^th 675, 690 (2019).)  Usually, (2) or (3) are involved in most cases we have posted on since early May 2008.  However, the reasonable belief exception, as colorfully described in one case, involves showing more than a “hope or roll of the dice.”  (Doe, 37 Cal.App.5^th at 690.)

            Plaintiff learned that all too well, after being hit with a costs-of-proof sanctions order of $239,170.86 after an unsuccessful bench trial in Spahn v. Richards, Case No. A159495 (1^st Dist., Div. 3 Nov. 30, 2021) (published).

            The problem was that Plaintiff had no trial proof that defendant contractor had orally agreed to build a home at a specified fix price.  Based on the abuse of discretion review standard, the lower court did not err in awarding the “sanctions.”  Plaintiff tried to avoid that by advocating a per se rule that the previous denials of a summary judgment motion and a directed verdict motion at trial conclusively established a good faith belief that plaintiff would prevail at trial.  Given that summary judgment and directed verdict motions do not involve weighing of evidence, the appellate court refused to adopt the per se approach suggested by plaintiff given that the evidence presented at trial drives the section 2033.420 analysis.