The Merit and Detriment of Contention RFAs

Papas v. Chang, No. A159792 (D1d2 Mar. 3, 2022)

If a party denies a request for admission, but the fact is ultimately proved at trial, the propounding party is generally entitled to an award of attorneys’ fees as cost of proof at trial. Code Civ. Proc. § 2033.420(a). But that is subject to exceptions when the “party failing to make the admission had reasonable ground to believe that that party would prevail on the matter” and when “there was other good reason for the failure to admit.” § 2033.420(b)(3), (4).

Here, a few months into the case Defendant served Plaintiff with a series of RFAs that tracked the key elements of her claims. Plaintiff denied them. When Defendant won, she sought fees under § 2033.420. The trial court denied the motion, finding that based upon the presentation of evidence at the trial Plaintiff had a good faith belief she would prevail at trial. The trial court also found that fees were also inappropriate because the RFAs were served early and went to the ultimate issues in the case such that it would be unfair to award fees. 

The Court of Appeal affirms, finding that it was not an abuse of discretion to deny a fee award based on the trial court’s belief that Plaintiff had a good faith basis for denial. As the judge who denied the motion had preside over the trial, a separate assessment of the evidence on the fee motion was unnecessary.

It further agrees on the second point. Quoting a case from 2020, the Court notes that awarding fees for RFAs that seek admissions that the Plaintiff essentially has no case is “tantamount to a form of strict liability: make a claim; deny an early-served [request for admission] that the claim has no merit; vigorously pursue the claim; lose the claim; and pay. That cannot be the law.” (quoting Universal Home Improvement, Inc. v. Robertson, 51 Cal. App. 5th 116, 130-31 (2020)). The trial court thus did not abuse her discretion when “she refused to condone such tactics.”

Affirmed.

Not sure I’m down with the second point. RFAs are not a discovery device. They are a method to narrow the issues to be proven at trial. It thus makes sense to serve RFAs that track the elements relatively early. Because admissions are conclusive, if fact are admitted obtaining additional evidence is not necessary. § 2033.410(a). This is an especially valuable way, for instance, for a plaintiff to resolve early in the case if the defendant intends to contest every element of a claim. (Since we have general denials in California, answers rarely serve that purpose.) That promotes efficiency. The costs of proof statute is meant to give the answering party an incentive to take issues off the table when it does not intend to contest them.

Moreover, in California, a moving defendant on summary judgment has an affirmative burden to come forward with evidence of the lack of evidence. And a crucial way to satisfy that burden is to serve RFAs that track the factual elements, combined with Form Interrogatory 17.1, which asks for the evidence that sustains the basis for any denial. Get junky responses to the 17.1 and the moving party has met its burden.

Finally, the Discovery Act permits the recipient of RFAs to object. § 2033.210(b). Depending on the case, premature contention RFAs might well be unduly burdensome. If merited, the responding party can object on that ground and either seek a protective order, § 2033.080, or, as is more common, force the propounding party to move to compel to challenge the objection, § 2033.290(a)(2).

I’m not saying that the Court here was wrong in affirming the denial of fees. (And Universal Home Improvement, which reversed an award, seems correct. The discussion quoted by the Court here was in the broader context of a significant review of the evidence presented, as well as a discussion of some less than honorable briefing practices of the moving party.)

But serving element-type RFA relatively early in litigation can have significant value in some cases. So to suggest that they are per se improper, or an unsavory tactic, or never worthy of an award of costs of proof, is too far.

Effects of Debtor’s Corporate Suspension Accrue to Claims Seized by Creditor

Bovet v. Chang, No. D070797 (D1d4 Jun. 7, 2017)

Plaintiff is a judgment creditor to a suspended corporation. In enforcement of judgment proceedings, Plaintiff was assigned certain of debtor’s assets, including certain funds held for potential escheat by the State Controller. Plaintiff filed claims for the property with the Controller, which the Controller denied based on the debtor’s being a suspended corporation. Plaintiff sued, but the court dismissed, on the grounds that the assignee of a suspended corporation can’t enforce that corporation’s rights in court because the corporation has no capacity to sue or defend on its own.

It’s not controversial that a suspended corporation can’t voluntarily assign rights to another, who then can sue to enforce the rights. That make it too easy avoid the consequences of the suspension, which include a disability to prosecute or defend actions in court. Plaintiff, however, claims that it stands in different stead because the assignment here was an involuntary judicial assignment obtained to collect on a debt. 

That has some intuitive sense to it, but the Court of Appeal doesn’t agree, resting on the formalism that the assignee takes subject to whatever defenses the assignor was subject to. According to the court, “It makes no difference if the assignment is voluntary or through a judicial assignment made in the enforcement of judgment process for a corporation refusing to pay a judgment or obligation. The result is the same and should not be permitted.”

Affirmed.