Failure To Allocate Fatal On The CDAFA Claim, But Lack Of Any Evidence During A Jury Trial Meant Some Costs-of-Proof Sanctions Were in Order on Remand.
In Yeng Midas Touch, Inc. v. Phanichkul, Case No. D080981 (4th Dist., Div. 1 Nov. 29, 2023) (unpublished), plaintiff lost various tort and a claim under the Computer Data Access and Fraud Act, CDAFA (the latter having a prevailing party statutory provision), after plaintiff basically denied or objected to 68 RFAs, many of which involved specifying computer/internet accounts for which no evidence was introduced during a jury trial. After plaintiff’s loss, the lower court denied the defense motions for attorney’s fees under the CDAFA and costs-of-proof sanctions for denial of the RFAs. Plaintiff appealed, losing on the CDAFA issue but obtaining a remand on the RFA issue.
CDAFA Fee Denial. Although the appellate court did not affirm on this ground, the lower court denied fees on the grounds that prevailing defendants are not entitled to fees under Penal Code section 502(e)(2), citing Physician’s Surrogacy, Inc. v. German, 311 F. Supp.3d 1190, 1195 (S.D. Cal. 2018), so everyone keep this case in mind. However, the fee denial was affirmed because defendant failed to allocate fees between CDAFA work and non-CDAFA work.
Costs-of-Proof Sanctions Issue. This issue resulted in a reversal and remand. Many of the RFAs sought admissions relating to specified accounts which plaintiff could not prove at trial. The appellate court did not believe the defense had a reasonable basis to deny the RFAs given they failed to produce any evidence at trial to back up the denials, with the RFAS having substantial importance in the case. So, a remand was warranted for purposes of awarding some sanctions to plaintiff.
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