Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment and an order of the Superior Court of Los Angeles County No. BC 351136, Yvette M. Palazuelos, Judge.
Turner, Aubert & Friedman, Steven A. Morris and Jonathan M. Deer for Plaintiff, Cross-Defendant and Appellant.
Schlichter & Shonack, Kurt A. Schlichter and Steven C. Shonack for Defendants, Cross-Complainants and Respondents.
WOODS, Acting P. J.
Plaintiff Carol Ann Fiore, the trustee of the Allan A. Adrian Living Trust (Trust), appeals from the judgment entered in favor of Yoram Kahana and Margarey Ann Kahana following the court’s granting summary judgment in favor of the Kahanas. Adrian had entered into a contract (Contract) to sell his residence (the Property) to the Kahanas. Subsequently, Adrian and the Kahanas entered into a settlement agreement (Agreement) giving the Kahanas an option to purchase the Property under certain conditions. The court found the Agreement was enforceable. Fiore contends there are disputed facts as to whether the Agreement was just and reasonable, whether the Agreement was supported by any consideration and whether the presence of a caretaker on the Property triggered the Kahanas’ right to purchase the Property. Fiore further contends the court erred in granting costs of proof sanctions against her. We affirm the judgment and reverse the sanctions order.
FACTUAL AND PROCEDURAL SYNOPSIS
I. Background
In 1973, Adrian and Fiore met and fell in love. Fiore moved into Adrian’s residence on the Property, and they lived a simple life in the style of the Southwestern Indians. The house had no stove and inadequate heating. Adrian was a screenwriter and antique book dealer. In the late 1970’s, Fiore moved a few blocks away, but the couple always continued a close personal relationship.
II. The Agreement
On March 30, 1988, Adrian entered into the Contract with the Kahanas to sell them the Property for $300,000 (though the parties dispute the effective date of the Contract). The Contract required the Kahanas to pay $60,000 cash and obtain a loan for the balance of $240,000 within 30 days. Paragraph 1H of the Contract allowed Adrian to cancel if the Kahanas did not obtain loan approval within 30 days. Paragraph 14 of the Contract gave the Kahanas five days after notice by Adrian to cure any default.
By letter dated May 5, Adrian cancelled the Contract per paragraph 1H because although the Kahanas’ bank had approved the loan, it wanted to temporarily hold back $60,000 until some needed repairs were completed. The Kahanas declared they were ready, willing and able to immediately provide the held back $60,000 if necessary.
The Kahanas demanded Adrian perform. The parties negotiated and agreed to move forward to complete the sale.
The Kahanas received a letter dated May 20 from Adrian’s attorney Kenneth Gottlieb regarding a personal injury by Adrian allegedly stemming from maintenance work being done by the Kahanas. It was becoming clear Adrian did not want to complete the sale.
The Kahanas and Adrian met at a restaurant for dinner to discuss the situation. Adrian said he did not want to perform on the Contract and even offered the Property free in his will if he did not have to immediately perform. Adrian and the Kahanas negotiated and agreed upon the terms that were incorporated into the Agreement, including the $250,000 sale price.
The parties met again and signed the Agreement before a notary on June 2, 1988. No one intimidated or threatened Adrian. Attorney Gottlieb was present before and during the signing meeting, and he acknowledged in writing that he had reviewed the Agreement.
Adrian was competent to enter into the Agreement. Adrian was lucid, coherent, not under the influence of medication or under a doctor’s care and was fully aware of his actions and their significance. Adrian appeared grateful for the opportunity to avoid immediately having to sell his home.
The Agreement was modified for Adrian’s benefit. The Agreement allowed Adrian to remain on the Property until one of several specified conditions, or triggers, occurred, at which time the Kahanas could purchase the Property from Adrian for $250,000, avoiding the six percent broker commission and the $3,000 termite credit.
Paragraph 9(B) allows the Kahanas to purchase the Property if a person other than Adrian occupied the Property, either as tenant or invitee, for more than 30 days in a year. A concurrent modification entitled “Supplement to Settlement Agreement” specified that paragraph 9(B) did not apply to a spouse or girlfriend.
The Agreement recited that the Kahanas “did all things necessary to complete the escrow and consummate the purchase, including, by way of example, obtaining financing.” Paragraph 21 released Adrian from all potential claims by the Kahanas and allowed Adrian to keep the benefit of the work already performed on the Property by the Kahanas.
The Agreement acknowledged “that the property will increase in value over time (subject to deterioration and wear and tear).” Adrian waived “any claim for any increase in such value [] and grant[ed] to Kahana the benefit of any such increases over the time or life of this settlement agreement.” Adrian executed and the Kahanas recorded the required “Notice of Irrevocable Right/Option to Purchase Real Property.”
The Agreement expressly acknowledged the Kahanas’ remedy for a breach was specific performance, and it was expressly binding upon Adrian’s successors in interest.
At the time of the Agreement, the Kahanas claim they had, and believed they had, a potential claim regarding the Contract. Yoram declared: “At the time of the Settlement Agreement, I believed that I had a potential legal claim for damages and/or specific performance against [Adrian] if [Adrian] had failed to fulfill the terms of the March 30, 1988 contract.” The Kahanas state that in reliance on the Agreement, they did not file a lawsuit to enforce the Contract.
The statute of limitations has now expired on any lawsuit to enforce the Contract. Records of the Contract transaction that support the Kahanas’ version of the events are unavailable because the escrow company and bank are now out of business and because the Kahanas themselves no longer have all the relevant documents. Adrian is currently mentally incompetent to give testimony.
The Kahanas left Adrian to himself, as intended, for nearly two decades while they waited for the option to trigger. The Kahanas never believed the Agreement had become ineffective, and Yoram often drove by the Property and observed it. The Kahanas never waived, expressly or impliedly, their rights under the Agreement.
Fiore did not tell the Kahanas of the Property’s transfer to the Trust; they found out about it when served with Fiore’s complaint. Under the Agreement, the transfer was not a triggering event. Fiore concedes that as trustee, she took title with constructive notice of the Agreement, but states she did not know about it before March 2006.
There is nothing in the record showing Adrian ever regretted or disclaimed the Agreement to anyone; Adrian never filed a lawsuit challenging the Agreement.
III. Related Events
Adrian owned the Property from the 1970’s until transferring it to the Trust on August 19, 2005.
Adrian signed a holographic will in 1990 leaving the Property to Fiore.
In 2003, Fiore began taking food and other essentials to Adrian once or twice a week. In 2004, Adrian began spending evenings with Fiore because his home was too cold for an aging man, and Fiore began taking Adrian to his doctor’s appointments as his car had fallen into disrepair. In 2005, Adrian informed Fiore that he wanted her to be the beneficiary of his estate, and he took her to his attorney who drew up the Trust and made her the beneficiary and trustee of the Trust. Fiore is the sole beneficiary of the Trust, and upon Adrian’s death, she receives the Property and his whole estate.
Adrian is now incompetent. Fiore first noticed Adrian’s mental decline in March 2006. Fiore was appointed Adrian’s conservator on October 13, 2006.
On March 6 or 7, 2006, Yoram noticed what he thought was a real estate open house at the Property. The visitors were social workers who had been contacted by a concerned citizen, not Fiore who lived just blocks away and stated she visited frequently, regarding Adrian’s living conditions.
After that incident, Fiore noticed a decline in Adrian’s ability to function, learned he had dementia, and felt he should not be left alone. Fiore hired a series of caretakers, each of whom Adrian rejected. Finally, Fiore hired Bill Gooding, whom Adrain allowed to care for him and who also maintained the Property, which had fallen into disrepair. When Adrian became too difficult for Gooding to hand alone, Fiore hired two nurses to come in alternating eight hour shifts seven days a week to help care for Adrian.
Fiore filed this lawsuit on April 20, 2006, to set aside the Agreement claiming the recorded notice of the Agreement acted as a cloud on the title to the Property which prevented her from encumbering the Property with a reverse mortgage to help take care of Adrian’s living and medical expenses. Fiore made no attempt to allow Adrian to remain on the Property.
Fiore claims Adrian has living and medical expenses of about $12,200 per month. The Trust has investments of $1.5 million. Adrian could live up to ten more years.
Fiore suggests the investments have substantially declined since she appealed.
Fiore’s amended complaints expressly alleged the Agreement was triggered because a full-time caretaker began living with Adrian around May 2006. Fiore hired the caretaker and placed him with Adrian with full knowledge of the Agreement and after she hired a lawyer.
The Kahanas never received the notice of the trigger required by the Agreement. The Kahanas state they are ready, willing and able to perform the Agreement.
Adrian remains living on the Property. Fiore claims the value of the Property is $950,000, though the court sustained objections to the evidence supporting that claim.
IV. Procedural History
After a series of demurrers and motions to strike, Fiore filed the operative complaint, the unverified second amended complaint (SAC) for quiet title, cancellation, rescission, and trespass. The Kahanas answered and cross-complained against Fiore and Adrian for breach of contract, specific performance, constructive trust and declaratory relief. The court overruled the demurrer of Fiore and Adrian, who never answered the cross-complaint.
In January 2008, Fiore dismissed her cause of action for trespass.
The Kahanas filed motions for summary judgment on the SAC and on their cross-complaint. Fiore filed a motion for summary adjudication of her quiet title and cancellation causes of actions and all of the Kahanas’ claims.
At the first hearing, the court requested further briefing and evidence, and the parties filed supplemental papers and evidence. Fiore filed a verification of the SAC. After the second hearing, the court found the Agreement “absolutely fair and reasonable,” denied Fiore’s motion, granted the Kahanas’ motions, and ordered specific performance. The court ruled on written objections. The court subsequently entered judgment in favor of the Kahanas.
The court granted sanctions to the Kahanas pursuant to their motion under Code of Civil Procedure section 2033.420.
All statutory references are to the Code of Civil Procedure.
Fiore filed a timely notice of appeal from the judgment and the sanctions order.
DISCUSSION
I. Summary Judgment
The instant case involved three summary judgment/summary adjudication motions. However, as noted by the trial court, all the motions presented one issue -- whether the Agreement was enforceable.
Appellant contends the court erred in granting summary judgment in favor of respondents as there were triable issues of material fact as to whether the Agreement was just and reasonable, whether the Agreement was supported by adequate consideration, and whether the parties intended the presence of a caretaker be a trigger for respondents’ right to exercise their purchase option.
A. Standard of Review
“In determining the propriety of a summary judgment, the reviewing court is limited to facts shown by the evidentiary materials submitted, as well as those admitted and uncontested in the pleadings. The trial court must consider all evidence set forth in the parties’ papers, and summary judgment is to be granted if all the papers submitted show there is no triable issue of material fact in the action, thereby entitling the moving party to judgment as a matter of law. On appeal, this court exercises its independent judgment in determining whether there are no triable issues of material fact and the moving party thus is entitled to judgment as a matter of law.” (Citations & italics omitted.) (Sanchez v. Swinerton & Walberg Co. (1996) 47 Cal.App.4th 1461, 1466.)
Citing Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1135, respondents suggest the correct standard of review is abuse of discretion because the case involves equitable claims. The Prata exception does not apply as the court was determining if there were triable issues of fact not exercising its discretion.
B. Consideration
The trial court found that respondents’ forbearance in suing on the Contract, was adequate consideration for the Agreement. “[I]t is a fundamental principle of contract law that forbearance from exercising a legal right constitutes legal consideration.” (Armstrong World Industries, Inc. v. Superior Court (1989) 215 Cal.App.3d 951, 957; see also Goldstone-Tobias Agency, Inc. v. Barbroo Enterprises Producutions, Inc. (1965) 237 Cal.App.2d 720, 722 [“It is settled that unless a claim is advanced in bad faith, or is without foundation, the actual validity of the claim is immaterial in determining whether forbearance from proceeding thereon is sufficient consideration. [¶]... the compromise of a doubtful claim asserted and maintained in good faith constitutes a sufficient consideration for a new promise, even though it may ultimately be found that the claimant could not have prevailed.” (Internal quotation marks omitted.)].)
Appellant argues the court used the wrong standard because for forbearance to be adequate consideration there has to be a good faith belief in a genuine dispute. (Baker v. Philbin (1950) 97 Cal.App.2d 393, 397.) Appellant claims the merits of the underlying claim are relevant as there was no valid basis for a dispute regarding the Contract and notes the court did not and could not make a finding of good faith because the facts were in dispute, i.e., respondents’ declarations regarding their belief were conclusory and not factual, there were no facts demonstrating good faith in the separate statements of fact, and there were contrary facts showing respondents knew they did not have a claim on the Contract.
Appellant complains the court refused to go behind the Agreement and determine whether respondents entered the Agreement in good faith. The court was correct in not doing so. “A settlement contract also has the attributes of a judgment in that it is decisive of the rights of the parties and serves to bar reopening of the issues settled. Absent a fundamental defect in the agreement itself the terms are binding on the parties.” (Gorman v. Holte (1985) 164 Cal.App.3d 984, 988; see also Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 677 [“‘[A] valid compromise agreement has many attributes of a judgment, and in the absence of a showing of fraud or undue influence is decisive of the rights of the parties thereto and operates as a bar to the reopening of the original controversy.’”].) There was no showing of fraud or undue influence. By its terms, the Agreement acknowledged respondents had a claim (they agreed not to sue on the Contract) against appellant, who presumably would not have entered it otherwise.
Appellant also argues the court had to consider whether the money to be paid on exercising the option was sufficient consideration for the actual purchase. “The fairness or adequacy of the consideration cannot be judged or estimated in relation to events which transpired subsequent to the time of the conveyance; if the consideration was adequate at the time, it is immaterial that subsequent events such as a change in the property value make it inadequate later.” (Lundgren v. Lundgren (1966) 245 Cal.App.2d 582, 589; see also Berkeley Lawn Bowling Club v. City of Berkeley (1974) 42 Cal.App.3d 280, 290 [the adequacy of consideration and if a contract is just and reasonable “must be determined as of the time the contract was made”]; accord Hastings v. Matlock (1985) 171 Cal.App.3d 826, 839.)
Appellant opines that because the sales price in the Contract was $300,000 and the sales price in the Agreement was $250,000 that establishes the consideration was inadequate. Once again, appellant forgets the agreement at issue was a settlement agreement, not a sales contract. Adrian negotiated the terms of the Agreement and agreed to the price.
The court correctly found forbearance was adequate consideration for the Agreement.
C. Just and Reasonable
Appellant suggests there are disputed issues as to whether specific performance was just and reasonable because the effect of specific performance will be devasting on Adrian, the facts regarding whether the consideration was sufficient at the time parties entered into the Agreement are disputed, and the court failed to address whether the Agreement was just and reasonable even though she had raised the issue. Appellant also claims there are disputed facts regarding whether the price to be paid for the house was sufficient consideration.
In Jacklich v. Baer (1943) 57 Cal.App.2d 684, 693, the court reasoned, “Equity will not lend its aid to enforce contracts which upon their face are so manifestly harsh and oppressive as to shock the conscience; it must be affirmatively shown that such contracts are fair and just.” In Jacklich, the defendant boxer had a contract with plaintiffs to pay them 15 percent of the net proceeds from boxing contests in which he engaged for a five year period until his indebtedness was paid and then 10 percent until the expiration of the contract. The court found there was substantial evidence the plaintiffs had been paid in full the amounts due to them. (Id., at pp. 689-692.) The court refused to act as a court of equity and enforce specific performance of a further provision in the contract extending the plaintiffs’ right to receive 10 percent for an additional five years as harsh, oppressive and unjust because the plaintiffs had been paid in full and received some $20,000 in addition without performing services of any kind. (Id., at pp. 693-694.)
In its written ruling, the court found the Agreement was not unconscionable. The court reasoned the Agreement was not procedurally unconscionable (i.e., overly harsh or one-sided) because: “The terms were negotiated at arms length between two parties that had previously negotiated a transfer of real property. Adrian had his attorney review the settlement agreement before he signed it. Finally, the settlement agreement is written in plain English and easy to understand so [it] cannot be described as surprising.” When appellant raised the issue of whether the Agreement was just and reasonable at the hearing, the court stated the Agreement was “absolutely fair and reasonable.” Thus, the court did address the issue.
Moreover, although appellant raised objections to the proposed judgment, she did not object on the basis there was no ruling on the issue of whether the Agreement was just and reasonable.
“The fairness of a bargain is to be viewed in the light of the circumstances as they existed at the time the bargain was struck and not at the time the parties seek to enforce the rights based upon their earlier contract.” (County of Los Angeles v. Law Bldg. Corp. (1967) 254 Cal.App.2d 848, 856.)
The Agreement was not harsh and oppressive on its face; rather appellant asserts it is not just and reasonable because it is shocking Adrian can be thrown out of the house because he requires a full-time caretaker and there was evidence such a thing was not contemplated by the parties, meaning there was a question of fact if Adrian made a mistake in entering the Agreement.
“‘Generally, the rules relating to the scope of appellate review apply to appellate review of summary judgments. An argument or theory will... not be considered if it is raised for the first time on appeal. Specifically, in reviewing a summary judgment, the appellate court must consider only those facts before the trial court, disregarding any new allegations on appeal. Thus, possible theories that were not fully developed or factually presented to the trial court cannot create a “triable issue” on appeal.’ ‘A party is not permitted to change his position and adopt a new and different theory on appeal. To permit him to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant.’” (Citations & italics omitted.) (Expansion Pointe Properties Limited Partnership v. Procopio, Cory, Hargreaves & Savitch, LLP (2007) 152 Cal.App.4th 42, 54-55.)
Appellant did not raise the issue of whether the Agreement was invalid due to mistake below. In addition, rescinding a settlement agreement requires a mutual mistake. (Larsen v. Johannes (1970) 7 Cal.App.3d 491, 503.)
As discussed above, at the time the Agreement was entered, there was adequate consideration, and, as reflected in the court’s discussion on why the Agreement was not procedurally unconscionable, it was just and reasonable.
D. Trigger
Appellant contends the court did not properly ascertain the intent of the parties with respect to whether the option to purchase was triggered by the presence of a caretaker. Appellant posits that outcome was never intended by anyone and it is inconceivable that respondents would have insisted upon a caretaker’s presence being a trigger or that Adrian would have agreed to a such an option being triggered if he were to become incapacitated. The court did not make a finding as to whether the presence of a caretaker was intended to be a trigger to respondents’ right to exercise their purchase option.
As noted by the court, the language of the option is plain. The parties impliedly recognized that fact when they modified that option so that the trigger for an additional party living on the Property for more than 30 days in one year did not apply to a spouse or girlfriend. In a deposition, respondents’ attorney stated he had not thought about a caretaker being a tenant. That trigger refers to the additional party “either as tenant or invitee.” Most likely the eventuality of the need for a caretaker was not foreseen at the time the Agreement was made. The Agreement is not unjust because of a result not anticipated by the parties; as noted by the court, Adrian had the benefit of the bargain for 20 years of remaining in the house.
“A party’s subjective intent cannot be used to create an ambiguity or a material factual issue. ‘[E]vidence of the undisclosed subjective intent of the parties is irrelevant to determining the meaning of contractual language.’” (Havstad v. Fidelity National Title Ins. Co. (1997) 58 Cal.App.4th 654, 661.)
In addition, in the SAC, appellant alleged, “Due to his deteriorating health, Adrian requires a full-time caretaker who resides at the Property, which event is a triggering cause for exercise of the Option (Settlement Agreement, ¶9(B)).” In her opposing fact statements to respondents’ motions, appellant stated the fact that according to the pleadings, because a full-time caretaker lived with Adrian, paragraph 9(B) had been triggered was undisputed.
Appellant proffers that her pleadings are mistaken legal conclusions, not admissions. In Bahan v. Kurland (1979) 98 Cal.App.3d 808, 812, the case cited by appellant, the court concluded: “When the underlying facts pleaded and averred in declarations in opposition to a motion for summary judgment belie the pleaded conclusion, and indicate the existence of an important fact question, the mistaken conclusion on the part of a pleader should not preclude a trial of the issue on its merits.” In 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1211, the court noted that allegations a party was acting within the scope and course of his employment were best characterized as “mixed legal-factual conclusions” and would not bind the plaintiff on summary judgment if her proferred countervailing evidence in opposition to the summary judgment motion.
In the various motions, the crux of appellant’s argument was that Agreement was not enforceable for lack of consideration and because it was unjust and unfair or unconscionable. The court indicated in its tentative ruling that there was a triable issue whether a full-time caretaker triggered the option, and appellant’s counsel made some reference to that ruling during the final argument. However, we were unable to find, and appellant cites to, no argument providing legal authority nor any fact in a separate statement that the purchase option in paragraph 9(B) had not been triggered. (See San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 315; Waisbren v. Peppercorn Productions, Inc. (1995) 41 Cal.App.4th 246, 263.) Thus, we need not address this issue further.
At the hearing after the supplemental briefing, the court specifically stated it was reversing itself on its earlier ruling.
In her opposing facts, appellant admitted it was undisputed that the Agreement allowed respondents to purchase the Property if a person other than Adrian occupied the Property for more than 30 days in a year.
Accordingly, the summary judgment in favor of respondents was proper.
II. Sanctions
The court imposed costs of proof sanctions of $78,043 against appellant pursuant to section 2033.420 for denying certain requests for admission (RFAs). Pursuant to subdivision (b)(3) of section 2033.420, the court shall order such sanctions unless “[t]he party failing to make the admission had reasonable ground to believe that that party would prevail on the matter.” The court found appellant’s denial was without a reasonable basis.
The four requests at issue are: “Admit the Settlement Agreement is enforceable”; “Admit the Settlement Agreement is not void”; “Admit Allan A. Adrian received consideration in return for his agreement to the Settlement Agreement with the Kananas”; and “Admit the Settlement Agreement between Allan A. Adrian and the Kahanas was not unconscionable.” (Emphasis deleted.)
“The determination of whether ‘there were no good reasons for the denial,’ whether the requested admission was ‘of substantial importance,’ and the amount of expenses to be awarded, if any, are all within the sound discretion of the trial court.” (Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 508.) Appellant’s only contention is that she had a reasonable basis to deny the RFAs.
Awarding costs of proof is improper if the party who denied the request for admission, “held a reasonably entertained good faith belief [it] would prevail on the issue at trial.” (Brooks v. American Broadcasting Co., supra, 179 Cal.App.3d at p. 511.) However, it is not enough to “‘hotly contest’ the issue... there must be some reasonable basis for contesting the issue in question before sanctions can be avoided.” (Ibid.)
RFAs are “‘calculated to compel admissions as to all things that cannot reasonably be controverted.’” (Italics deleted.) (Hazeltine v. Hazeltine (1962) 203 Cal.App.2d 48, 61.) “The fact that matters denied were subsequently proved by uncontroverted evidence, if true, does not make the denial unreasonable per se, in retrospect.” (Ibid.) “[A] serious and real contest as to the subject matter of a requested admission constituted ‘good cause’ within the meaning of the statute.” (Chodos v. Superior Court (1963) 215 Cal.App.2d 318, 324.)
In her opposition to the motion, appellant argued that there was inadequate consideration to support the formation of the Agreement, inadequate consideration to support specific performance and the Agreement was unconscionable. In her declaration, appellant stated that she had an honest belief the Agreement was not enforceable or void and not supported by consideration based upon the underlying facts -- the only facts referenced was the cancelling of the Contract by Adrian and the “fact” no legitimate suit could be filed. Appellant also stated she believed the Agreement was unconscionable because of the current value of the Property and the trigger points.
On appeal, appellant notes the reasonable basis for denying the RFAs is reflected in her appellate briefs, i.e., the “facts” showing the Agreement was not enforceable because the “agreement” (presumably appellant means the Contract) had been cancelled and the parties were seeking new terms; the “contract” (presumably appellant means the Agreement) was not supported by sufficient consideration for specific performance because the purchase price was substantially less than the value of the home at the time of the Agreement; and she had a reasonable basis to assert unconscionability as Adrian did not understand he was giving up the right to the house, the option was for an indefinite period of time and limited Adrian’s use of the Property, the Agreement required Adrian to sell his home if he needed a caretaker to live with him, and the Agreement included a provision allowing respondents to use a portion of the Property before executing the option.
Respondents assert that in order to avoid sanctions, appellant had to have a reasonable belief she would be able to provide sufficient admissible evidence to prevail on the issues raised by the RFAs. (Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618, 635-638.) However, the RFAs were served early in the proceedings; the original complaint was filed on April 20, 2006, and the subject RFAs were served on July 11, 2006, and answered on August 16, 2006. We conclude that given the timing of the RFAs and their sweeping nature, basically asking appellant to admit she had no case, she had enough facts at that time to support her legal arguments that the Agreement was not supported by adequate consideration and that specific performance would be unjust and unreasonable. Although the arguments were ultimately determined not to be persuasive, they were not without merit or so unreasonable as to justify the severe monetary sanctions awarded. Thus, we reverse the sanctions order.
DISPOSITION
The judgment is affirmed. The sanctions order is reversed. Each side to bear its own costs on appeal.
We concur: ZELON, J. JACKSON, J.