RFAs Shift Fees When You Can't Win

Samsky v. State Farm Mut. Auto. Ins. Co., No. B293885 (D2d8 as modified Jul. 23, 2019)


If a party denies a request for admission but fails to prevail on the issue at trial, the propounding party is entitled to recover costs of proof under Code of Civil Procedure § 2033.420(a) unless an exception in § 2033.420(b) applies. Although the burdens aren’t expressly set out in the statute, the Court of Appeal here decides that the structure of the statute assigns the burden of proof of an exception to the party seeking to avoid fees by justifying its denial.

Here, Plaintiff asked an Insurer to admit, among other things, that a tortfeasor was negligent and a cause of his injuries. Insurer denied. But Plaintiff prevailed on the issue in an arbitration. When Plaintiff sought fees, however, the trial court found that Plaintiff had not shown the lack of a reasonable justification for the denial. That got the burden wrong. Insurer didn’t offer adequate evidence of its own to sustain its burden. That required it to come forward with credible, admissible evidence on which a contrary finding could have been sustained, such that Insurer had a reasonable belief that it would prevail at trial. So no exception was established. Plaintiff should have recovered his fees.

Reversed.

Nothing Retroactive Here

USS Posco Indus. v. Case, No. A140457 (D1d1 Jan. 26, 2016)

Labor Code § 218.5 permits a prevailing party to recover its fees in certain wage cases. While the case was pending, the Legislature amended § 218.5. Prior to the amendment, it was a pure loser-pays statute—the prevailing party, whether plaintiff or defendant, was simply entitled to a fee award. But under the amendment, the defendant can now recover fees only if the court finds the action was brought in bad faith. Citing retroactivity concerns, the trial court applied the old rule and gave defendant its fees. 

But according to the court here, that was error. While there was no evidence that the Legislature intended the amendment to work retroactively, California courts treat cost- and fee-shifting statutes as procedural, not substantive. Procedural changes are essentially prospective—they apply only to procedural events as they occur, even if the facts of the case pre-date the change. Since, as the cases reason, the new rules apply only to litigation events occurring after the change, there are no perceived retroactivity concerns. Thus, the court here should have applied the new version of § 218.5, and in the absence of a bad faith finding, it should not have awarded fees to Defendant.

Reversed.

You Need More than a Hope to Deny an RFA

Grace v. Mansourian, No. G049590 (D4d3 Sept. 15, 2015)

This is a car accident case where defendant allegedly ran a red light. Plaintiff won a jury verdict. He then sought to recover his fees for his costs of proving liability under Code of Civil Procedure § 2033.420, because Defendant had unjustifiably denied an request that he admit the light was red. All the other witnesses said it was red. But Defendant (somewhat shakily) persisted that it was yellow at best. The trial court denied fee shifting, finding that the difference in memory was sufficient to provide a reasonable basis to deny the RFA.

The court of appeal, however, holds that Defendant’s belief wasn’t reasonable given all of the other overwhelming evidence that the light was, in fact, red. The point isn’t whether there was substantial evidence sufficient to beat summary judgment or avoid nonsuit. That was there. But avoiding SJ didn’t make it reasonable to deny the RFA. Reasonableness requires “more than a hope or a roll of the dice.” Under the circumstances, Defendant’s shifty recollection didn’t cut it.

Reversed.