Tuesday, January 28, 2014

Long Live D'Amico?

Ahn v. Kumho Tire U.S.A., Inc., No. E054322 (D4d2 Jan 22, 2014)

The court of appeal reverses a trial court’s grant of summary judgment in an oral contract case where the plaintiffs’ interrogatory responses were contradicted by a declaration they submitted in opposition to summary judgment. The court ultimately holds that the so-called D’Amico rule—which says a plaintiff cannot avoid summary judgment by contradicting his deposition in a declaration—is inapplicable. In doing so, it sets a new standard regarding the extent of the evidence the non-moving needs to come forward with to establish an explanation for the discrepancy, and thus avoid the rule.

This is an interesting case about the application of the forty-year-old “sham declaration” rule first articulated by the supreme court in D’Amico v. Board of Medical Examiners, 11 Cal. 3d 1 (1974). In their initial response to some early contention interrogatories, plaintiffs said they didn’t know what facts that supported their claims, but that discovery was ongoing. Defendant moved for summary judgment based, in part, on these factually deficient rog responses. Plaintiffs opposed, largely relying upon the lead plaintiff’s declaration, which testified to the facts that formed the basis of the complaint and provided some additional detail. Plaintiffs simultaneously amended their interrogatory responses to include substantive answers. They also submitted a declaration from their attorney, which explained that the original responses were prepared by an inexperienced new associate at his firm and that the initial “I don’t knows” were a mistake. Defendants objected to the lead plaintiff declaration on D’Amico grounds. The trial court stated on the record that it thought the declaration was neither contrived nor untruthful, and that, if credited, it created triable issues of fact. But feeling bound by D’Amico, it nonetheless granted the motion.

The court of appeal reversed. Tracing through some of the post-D’Amico decisions, it explains that, although the rule is sometimes broadly stated as “you can’t avoid summary judgment by submitting a declaration that contradicts your prior discovery responses,” it isn’t really that absolute in application. In particular, the rule does not apply when the opposing party can credibly explain the contradiction.  Because summary judgment should be based on “all of the evidence adduced on the motion,” the D’Amico rule cannot apply if there is evidence in the record from which a trier of fact could conclude that the discrepancy is explainable. Because the attorney’s declaration about his associate’s mistake was sufficient, if believed, to explain the contradiction, the trial court erred in finding that the D’Amico rule applied.


What makes this case interesting is that the rule it applies is novel
—although it does not say so. Prior cases have applied the “credible explanation” exception to D’Amico. Compare Niederer v. Ferreira, 189 Cal. App. 3d 1485, 1503 (1987) (plaintiff did not understand deposition question); Mason v. Marriage & Fam. Ctr., 228 Cal. App. 3d 537, 546 (1991) (plaintiff credibly explained that she got confused about dates) with Leasman v. Beech Aircraft Corp., 48 Cal. App. 3d 376, 383 (1975) (declining to apply exception because the declaration containing the explanation was “irrelevant and evasive”). But no court has previously articulated the nature of the non-moving party’s burden for the exception to apply. The court here, however, clearly sets the standard as: evidence sufficient to support a finding that the initial responses were a mistake. Or said a little differently, evidence sufficent to raise a disputed issue of fact had the credibility of the explanation been an issue of material fact on summary judgment.

To make some sense of this, let’s break down the rule a little.  Stated very generally, as many of the cases do, the D’Amico rule says that a non-moving party can’t
avoid summary judgment by submitting a self-serving declaration that reneges on admissions it made in other discovery. The classic example is where a poorly prepared witness admits something in a deposition that really hurts his case, and then tries to take it back in an attorney-prepared declaration in opposition to summary judgment. Happens all the time.

To get a little more granular, the cases essentially agree on this formulation of the rule (although I have not seen them articulate it this way). A non-moving party's declaration cannot defeat summary judgment if: (1) the non-moving party made a credible under-oath admission of fact in discovery, generally a deposition or an interrogatory response; and (2) the declaration itself clearly contradicts that admission; (3) unless there is a credible explanation for the discrepancy. (1) and (2) are the factual predicate, (3) is an exception.

Thus, there are several ways the rule can be avoided:

First, if the original admission is not in discovery or is tacit, equivocal, or fragmentary, the predicate for the rule in (1) isn’t invoked, because there can’t be any basis for a clear contradiction.  See, e.g., People ex rel. Dept. of Trans. v. Ad Way Signs, Inc., 14 Cal. App. 4th 187, 200 (1993) (original admissions were based on compound and improper questions). Similarly, if the earlier admissions weren’t in sworn discovery, element (1) is not satisfied and the rule doesn’t apply. See, e.g., Minish v. Hanuman Fellowship, 214 Cal. App. 4th 437, 460 (2013) (admissions were not in prior discovery).

Second, if the admission purportedly contradicts with some evidence other than the non-moving party’s self-serving declaration, the rule does not apply. Unless only the new contradictory declaration purports to evidence the disputed facts, (2) isn’t implicated. See Scalf v. D.B. Log Homes, Inc., 128 Cal. App. 4th 1510, 1521–24 (1993); Whitmire v. Ingersoll-Rand Co., 184 Cal. App. 4th 1078, 1090 (2010) (noting that D’Amico rule addressed only the non-consideration of the contradictory declaration, not other evidence). D’Amico does not make party admissions preclusive, like a request for admission would be. It just says they can’t be contradicted by a party declaration without an excuse for the inconsistency. As Scalf explains, “[p]roperly applied, D’Amico is limited to instances where credible admissions are contradicted only by self-serving declarations of a party. In a nutshell, the rule bars a party opposing summary judgment from filing a declaration that purports to impeach his or her own prior sworn testimony.” (quotations, citations, and alterations omitted).  If some other evidence is sufficient to avoid summary judgment—i.e., evidence that, if credited, it gives a sufficient basis for the a trier of fact to find in favor of the non-moving party
D’Amico poses no obstacle to denying the motion, self-serving declaration or not.

Third, the declaration itself can be considered and potentially create a dispute of fact if the non-moving party can come forward with a credible explanation for the inconsistency. See, e.g., Mason, 228 Cal. App. 3d at 546.

On this third type, what’s never been clear, however, is the nature of the non-moving party’s burden. Who does the non-moving party’s explanation have to convince? And how much? The court here answers: as to the court, not very much at all. The party offering the contradictory declaration just needs to come forward with evidence sufficient to provide a basis for a trier of fact to find that the contradiction has been explained. If this is the rule, D’Amico can be avoided by submitting a declaration containing an explanation that the court itself might not believe, provided that as some trier of fact could believe it.

The upshot of the courts analysis is that a non-moving party does not need to convince the court that its explanation is credible in order to defeat the D'Amico rule. Instead, it needs only to come forward with sufficient evidence from which a trier of fact could be convinced. Effectively, the court here is turning the credible explanation into a fact issue to be addressed like any material fact at issue in a summary judgment motion. 
The court purports to draw this rule from Mason. Mason, like this case, is a “type-3” case. The only evidence that potentially created a dispute was the plaintiffs declaration, and the declaration could be considered only if her explanation for the contradiction with her earlier interrogatory response was credible. But the Mason opinion isn’t all that clear. Even on a very close read, it’s hard to tell whether (a) the court finds the plaintiff’s explanation credible under a preponderance (or some other) standard and then holds that since the declaration merits consideration, it created a basis from which a trier of fact could find for the plaintiff on the merits; or (b) the plaintiff’s explanation itself is being subjected to a mere sufficiency of the evidence analysis. The court here reads it as the latter. It bolsters its discussion with reference to a bunch of “type-2” cases like Scalf, which of course deal with the facts sufficient to make a finding burden, because they are asking whether facts other than the self-serving declaration warrant denying summary judgment.
Particularly given the ambiguity of Mason, this case appears to be the first clear articulation of this rule in type-3
credible explanation cases. It is by no means the only rule that could be applied.

What D’Amico is, at its essence, is a summary-judgment-specific rule of evidence* about when a contradictory declaration can be admitted. In particular, when it comes to the “credible explanation” exception, it is a rule of admissibility contingent on proof of a preliminary fact. Syllogistically: Evidence A (the contradictory declaration) is admissible in opposition to a summary judgment motion if and only if it is established that Fact B (the explanation) is true. This issue of admissibility conditioned on fact is addressed in detail in §§ 400–406 of the Evidence Code. Generally, there are two kinds of preliminary fact determinations: those under § 403 and those under § 405.  See People v. Cottone, 57 Cal. 4th 269, 283–85 (2013) (addressing the differences).

For some fact conditions—relevancy, personal knowledge, authenticity—§ 403 requires the proponent to meet only the burden the court applies here. It must come forward only with “evidence sufficient to sustain a finding of a preliminary fact.” If it does so, the ultimate question of whether the preliminary fact has actually been proved goes to the trier of fact. For example, if there is a dispute over the authenticity of a document, the proponent just needs to come forward with prima facie evidence that the document is what it purports to be. If it does, the document is conditionally admitted, and the jury is instructed that it can only consider the document only if it finds by a preponderance of the evidence that the document is, in fact, authentic. Otherwise, the document should be disregarded. See, e.g., Everett v. Everett, 150 Cal. App. 3d 1053, 1072-73 & n.18 (1984). “Under [§ 403] the trial court performs a threshold screening function to shield the jury from evidence that is so factually weak as to undermine its relevance.” Cottone, 54 Cal. 4th at 284. That’s essentially the rule the court applies here.

In contrast, the fact-finding under § 405 is entirely for the trial judge, who makes a finding under the applicable burden of proof
usually a preponderance of the evidenceand either admits or rejects the evidence as required by the finding. When a preliminary fact question is subject to § 405, “the court’s ruling on the question of admissibility is final and not subject to the jury’s redetermination.” Id. Preliminary fact issues committed to § 405 tend to be issues where policy warrants the exclusion of evidence. The trial judge serves as a gatekeeper to protect an objecting party “by ensuring that the trial court reviews the legal basis for admissibility before evidence is submitted to the jury.” Id. Classic § 405 issues include “the mental capacity of a witness to testify, the admissibility of a confession, the qualification of an expert, the existence of an evidentiary privilege, and the admissibility of hearsay evidence under a recognized exception.” Id.

Whether element (3) of the D’Amico test should be a § 403 or a § 405 question is a close call. On one hand, in deciding a summary judgment motion, the trial judge is ideally situated to determine whether an excuse proffered by the proponent of a contradictory declaration is credible or a sham. It worries me that D’Amico could be avoided just by proffering some “dog ate my homework” excuse that, while potentially believable by a lay trier of fact, would drive the average superior court judge to apoplexy. There’s a lot on the line for the non-moving party on summary judgment. And frankly, there’s also precious little risk of negative consequences to any lawyer who puts forth a declaration containing a BS explanation in order to save her client’s case. Perhaps D’Amico is the kind of public policy—a policy against playing fast and loose with the court, and in particular, a policy governing the conduct of attorneys—that warrants a gatekeeping function under § 405.

That said, there’s no jury on a summary judgment motion. Most of the areas subject to § 405 are meant to keep potentially prejudicial stuff that a jury can’t mentally compartmentalize out of their heads until the judge thinks the facts warrant its consideration. And it’s not entirely ridiculous to reason, as the court did here, that it is for the ultimate trier of fact to decide whether the declarant’s explanation is up to snuff or if he is just trying weasel out of his earlier admission. Credibility calls like that have traditionally rested soundly with the trier of fact, and maybe we shouldn’t prematurely kill off cases to prevent them from being made.

I don’t know. What I do know is that the court here potentially came up with a pretty important new rule, and it’s not clear that it was aware it was doing so. It certainly did not consider the § 405 actually-prove-it-to-the-judge alternative. In any event, this rule will affect many cases, ultimately making it all the more difficult to get a summary judgment in California. 


*Some cases have suggested offhand that D’Amico is a form of “pre-trial estoppel.” See Jogani v. Jogani, 141 Cal. App. 4th 158, 177 (2006) (quoting an federal district court case from Ohio on the federal sham-affidavit rule). Were that the case, the courts rule would make sense. There is good authority, for instance, in applying the summary judgment standard to the elements of a assertion of judicial estoppel. See Drain v. Betz Labs., Inc., 69 Cal. App. 4th 950, 595 n.8 (1999). But the resemblance to estoppel is only superficial. Although D'Amico does address an asserted change of position, it requires neither reliance by the court nor the other party (as equitable, judicial or promissory estoppel would). And the type-2 cases like Scalf make clear that the rule does not create any collateral estoppel-like preclusivity. In any event, we don’t need to go about making any more mess of California’s estoppel doctrines than already exits.

No comments:

Post a Comment