Icing on the Cake (From the OCTLA’s The Gavel)
May 19, 2020
This piece was originally published in the OCTLA’s print edition of The Gavel in the Winter 2020 edition (Volume 23, Number 1) as the cover story.
Sounds good, right? Well let’s go get some.
Here’s the scenario: your client is injured in a motor vehicle crash. You attempt to resolve without litigation with the defendant’s insurance carrier but to no avail. The defendant’s insurance carrier is severely undervaluing the claim, so you decide to file your case. Because you have decided to file your case, you have come to terms with the possibility that trial might be in the best interests of your client. As such, it is in your best interests, and more importantly, your client’s best interests to also ready yourself to argue that you are entitled to attorney’s fees and costs necessary to prove any Requests for Admissions that the defendant unreasonably denies. Regardless of whether you pursue trial or arbitration, attorney’s fees and costs associated with proving the unreasonable denial to Requests for Admissions can be recovered in the form of a Costs of Proof motion post-trial or post-arbitration.
Understanding the Triggering Law
Requests for Admissions differ fundamentally from other forms of discovery. Rather than seeking to uncover information, they seek to eliminate the need for proof. Stull v. Sparrow (2001) 92 Cal.App.4th 860.
Code of Civil Procedure section 2033.420 states:
(a) If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves the genuineness of that document or the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney’s fees.
(b) The court shall make this order unless it finds any of the following:
(1) An objection to the request was sustained or a response to it was waived under Section 2033.290.
(2) The admission sought was of no substantial importance.
(3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter.
(4) There was other good reason for the failure to admit.
Note the statute’s usage of the word “shall” when bringing your post-trial or post-arbitration motion. These fees and costs are mandatory unless the opposing party carries the burden of proving one of the excuses delineated above.
The purpose behind allowing a party to recoup attorney’s fees and costs for the unreasonable denial of Requests for Admissions is well-reasoned. Early admissions lead to settlement or dismissal; such result is a positive step in alleviating the heavy caseloads in our courts. Billings v. Edwards (1981) 120 Cal.App.3d 238, 244. Further, an award for costs of proof under Code of Civil Procedure section 2033.420 is not a “discovery sanction” or a “penalty” for engaging in “misuse of the discovery process”…costs of proof in connection with requests for admissions are awarded if the response is established to be incorrect—not for misuses of the discovery process. City of Glendale v. Marcus Cable Assocs. LLC (2015) 235 Cal.App.4th 344, 359.
To recover attorney’s fees and costs, the initial burden is on the moving party to prove the truth of the Request for Admission that defendant denied. “Proof” is the establishment by evidence of a requisite degree of belief concerning a fact in the mind of the trier of fact or the court. Evidence Code section 190. Under that definition, a party who successfully moves for summary judgment proves the facts in issue by submitting papers that “show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Code of Civil Procedure section 437c(c). See Barnett v. Penske Truck Leasing Co., L.P. (2001) 90 Cal.App.4th 494, 497-499. For the purposes of this article, we will focus on proving the defendant unreasonably denied Requests for Admissions after a trial or arbitration.
“Proof” in the context of a trial or arbitration can be demonstrated by citing the special jury verdict whereby the jury answered affirmatively to questions relating to liability and damages for which you are seeking fees and costs or by citing the arbitrator’s award or the statement of decision after a bench trial. A recent appellate decision has made clear that once the moving party has met its initial burden, the burden shifts to the party opposing the motion to prove a justifiable excuse. See Samsky v. State Farm Mutual Automobile Ins. Co., (2019) 37 Cal.App.5th 517, 523-524.
Serving Proper Requests for Admissions
To ensure that you have set yourself up for success, take time to prepare proper Requests for Admissions during the discovery phase of litigation. If everything goes your way and you walk away with a nice verdict, you will be kicking yourself if you did not take time to send clear Requests for Admissions. Simple Requests for Admissions include requesting that defendant admit negligence, admit negligence in part, admit liability, admit liability in part, admit fault, admit fault in part, admit no comparative fault, admit the reasonable and necessary cost of medical expenses as a result of this incident is $_____, admit it is reasonably certain that plaintiff will need future medical care as result of this incident, and admit that the reasonably and necessary costs of future medical care as a result of this incident is $_______. If your case has a particular issue that you believe is straightforward you might consider sending a more tailored Request for Admission. Note, however, that unless you include a question on your verdict form relating to that particular issue the judge will have a difficult time assessing whether you actually proved that issue at trial. Arbitration or bench trials could prove more advantageous in your endeavor to recover fees and cost on particular issues because you will have the benefit of the arbitrator’s award or statement of decision from the judge with their reasoning.
In terms of drafting your Requests for Admissions, you can look to case law whereby prior litigants have propounded Requests for Admissions. The recent opinion Samsky v. State Farm Mutual Automobile Ins. Co., (2019) 37 Cal.App.5th 517 speaks to several Requests for Admissions that the Court found proper. The Samsky case is also interesting from the perspective that attorney’s fee and costs can be recovered in an arbitration forum. One benefit of this is that in an arbitration the arbitrator will usually provide a written ruling that provides the basis for its award. This is not something a litigant would receive from a jury.
This is important because the arbitrator’s written award will usually indicate how he or she ruled on certain particular issues. As noted in the Samsky case, claimant asked respondent to admit several Requests for Admissions relating to specific injuries claimant sustained such as a traumatic brain injury, concussion, and ulnar neuropraxis. Normally, in a jury setting, this type of Request for Admission would be hard to explain to the judge in a post-trial motion that you proved the matter after defendant’s unreasonable denial unless you asked for specific questions on your verdict form for the jury to answer. However, the Samsky case held that even though “The arbitrator did not expressly find appellant suffered a concussion, traumatic brain injury or ulnar neuropraxis… Nevertheless, the arbitrator’s statements and damages award taken as a whole demonstrate the arbitrator impliedly made such a finding.” Id. at 522. As such, if you find yourself in an arbitration, you should make sure you have a long list of admissions and denials from respondent for all the important issues in your case.
Filing Your Motion and Responding to Opposition
Once trial is over, you should be prepared to file and serve your Costs of Proof motion within the 15-day period after Notice of Entry of Judgment. A simple way to remember this is to make sure to file your Costs of Proof motion concurrently with your Memorandum of Costs. After your Costs of Proof motion is filed and served, you can expect the defendant to oppose your motion on the basis that they should be excused from owing any costs due to one of the enumerated exceptions. See Code of Civil Procedure section 2033.420(b). One option to help your chances of having your motion granted is to address defendant’s anticipated arguments in your moving papers to help take out the sting instead of waiting for the Court to hear them first from defendant. Depending on the facts of your case, you can count on the defendant opposing your motion to argue that “The admission sought was of no substantial importance; The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter; or there was other good reason for the failure to admit.” Id.
When addressing defendant’s arguments, whether it be in anticipation in your moving papers or in your Reply papers, be aware of favorable law. For instance, courts have decided that it is not enough for a party denying a Request for Admission to solely “hotly contest” the issue…instead, there must be some reasonable basis for contesting the issue in question before costs can be avoided. Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 511. Courts have held that a party’s reasonable grounds for denial of a Request for Admission must be “more than a hope or roll of the dice.” Grace v. Mansourian (2015) 240 Cal.App.4th 523, 530-532. Further, if a party who denies a Request for Admission lacks personal knowledge but had available sources of information and failed to make a reasonable investigation, the failure will justify a Code of Civil Procedure section 2033.420 award of costs and expenses. Rosales v. Thermex-Thermatron, Inc. (1998) 67 Cal.Appp.4th 187, 198. Proof that the responding party failed to investigate matters it was requested to admit, where the means of obtaining the information at hand supports a finding there was “no good reason” for denying the Request for Admission, supports a Code of Civil Procedure section 2033.420 costs and fees award. Smith v. Circle P Ranch Co., Inc. (1978) 87 Cal.App.3d 267, 275-276.
A tactic that defendant might attempt to argue is that they are “saved” from owing costs because they objected to the Requests for Admissions. Objections, however, are of no matter as long as there is an unequivocal denial. Unequivocal responses such as “admit” or “deny” after objections will support a motion for costs of proof. American Federation of State, County & Municipal Employees v. Metropolitan Water Dist., (2005) 126 Cal.App.4th 247, 269. This law is important when propounding your Requests for Admissions and reviewing defendant’s responses. If the responses contain objections without an unequivocal response, you should move to compel unequivocal responses. You need a clear denial.
In some cases, your Requests for Admissions might be premature, and defendant might respond that they do not have sufficient information at the present time to admit or deny. If this is the case, you should get an agreement from defendant that they will respond later when you serve identical and subsequent Requests for Admission and not object on duplication grounds. If they do not agree, you should move to compel to preserve your right to serve this same discovery again at a later date. If you need to file a motion for this reason be sure to cite Code of Civil Procedure section 2033.420(b)(1) which provides that a response to a Request for Admission is waived unless a motion to compel is timely filed and served. You can inform the court that though you disagree with the defendant’s objections, you attempted to get an agreement to serve the Requests for Admissions again at a later date that would have helped alleviate defendants concerns but to no avail. As such, you are now forced to bring the instant motion to preserve your client’s right to fees and costs at a later date.
A final point here is related to timing. Defendant will likely oppose your motion and argue that their denial was not unreasonable. You will want to argue that defendant knew or should have known of undisputed evidence far in advance of responding to your Requests for Admissions and therefore gambled by denying. To this point, try to propound your Requests for Admissions during a period in litigation when you feel confident that the issue is proven, and defendant is aware of the evidence. Even if the evidence is disputed, you can still argue that denial was unreasonable but to bolster your position you will want to demonstrate that defendant knew or should have known about your favorable evidence before they responded to your Requests for Admissions.
What to Ask for in Your Costs of Proof Motion
Attorney fees and costs associated with proving Requests for Admissions may be recovered from the date of responses through trial. Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724, 736. Only reasonable costs and fees in proving unreasonable denials are recoverable. Code of Civil Procedure section 2033.420(a). Further, only fees and costs after responding party’s failure to admit are awardable. Therefore, fees and costs incurred before a Request for Admission is denied is not awardable. See Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724.
Your Costs of Proof motion can include attorney hours worked on proving issues after defendant’s denials. It can also include costs you incurred to prove defendant’s denials. Examples could be an accident reconstructionist when defendant denies liability, police officer depositions and trial testimony when their purpose was to establish liability that defendant unreasonably denied. Other examples could be calling a medical billing expert to establish medical expenses or an economist to establish lost earnings. You can also include your time preparing experts, preparing your opening/closing, and preparing your witness examination as an example. In terms of accounting for costs related to experts, you will likely already have a simple invoice that your experts provided you with dates and tasks performed on those dates. You can use that information as evidence that you incurred those costs after defendant unreasonably denied your Requests for Admissions.
In terms of attorney’s fees, you will want to have a time sheet. Though a time sheet is not required, I have learned judges appreciate this information and it helps them with their ruling. Now, as plaintiff attorneys, we do not generally keep track of our time. Most of us that will read this work on a contingency basis and do not account for specific minutes spent on specific cases. Case law provides that plaintiffs are entitled to the reasonable value of time spent after Requests for Admissions were unreasonably denied, regardless of whether the attorney fee is based on contingency or hourly. Gonzales v. Personal Storage (1997) 56 Cal.App.4th 464. There is additional case law that holds that detailed time sheets are not required, and the court may award fees based on time estimates for attorneys who do not keep time records. Chavez v. Netflix, Inc. (2008) Cal.App.4th 43, 64. Still, you stand a much better chance of success with a time sheet. You should create a time sheet in any case you believe you might need to seek Costs of Proof. Most word processing programs have a template time sheet or invoice that you can fill out. Keep in mind that the more detail you can put in the time sheet as to what tasks were performed and when those tasks were performed, and which Requests for Admission the time spent was related to, the easier it will be for the court to grant your Costs of Proof motion. It will also add to your credibility that you are not overstating your time.
Losing the Lawsuit but Prevailing on Issues of Substantial Importance
Ok, so now you have gone to trial and you have either persuaded the jury toward a favorable verdict or have unfortunately had a defense verdict rendered upon you. Keep in mind that even if you lose your lawsuit, if the jury found that you proved a Request for Admission that was unreasonably denied, you are still entitled to fees and costs associated with proving that denial. See Smith v. Circle P Ranch Co., Inc. (1978) 87 Cal.App.3d 267. An example of this would be if you prove that defendant was negligent but the defendant proves that your client was 100% comparatively at fault, you would be entitled to seek fees and costs for any Request for Admission that was unreasonably denied relating to the issue of defendant’s negligence. If you have a particularly complex case it might be worth considering adding questions on the verdict form to document your success. See Code of Civil Procedure section 624.
In sum, Requests for Admissions can be a powerful tool to help you recover costs and attorney’s fees regardless if you win or lose your lawsuit. They can be especially powerful in an arbitration setting whereby you will be able to review the arbitrator’s reasoning related to their award. To ensure you get an adequate amount of icing on your cake after trial or arbitration, make sure you spend the time early on to draft proper Requests for Admissions, tracking your time with a time sheet, and diligently ensuring that defendant has provided unequivocal denials regardless of whether they objected or not. With this information you should be in a better position to win your Costs of Proof motion. If anyone would like a copy of recent Costs of Proof Motions, please reach out to us and we would be happy share.