Opinion
C040201.
10-29-2003
KATZ COMMUNICATIONS, INC., Plaintiff, Cross-Defendant and Respondent, v. JOSEPH GAMBLE STATIONS, INC., Defendant, Cross-Complainant and Appellant.
Following a court trial, the judge awarded $20,721 in earned commissions to plaintiff Katz Communications, Inc. (plaintiff or Katz) for advertising that was sold to run on two Stockton radio stations owned by defendant Joseph Gamble Stations, Inc. (defendant).[] The court also awarded plaintiff prejudgment interest on the award (Civ. Code, § 3287, subd. (a)) and permitted plaintiff to recover expenses (including attorney fees) incurred in proving facts that were denied by defendant in pretrial requests for admissions (Code Civ. Proc., § 2033, subd. (o)). On the other hand, the court awarded defendant nothing on its cross-complaint against plaintiff for breach of contract.
We shall refer to Joseph Gamble Stations, Inc. as defendant (rather than Gamble) to distinguish it from Joel Gamble, defendants vice president and general manager.
On appeal, defendant challenges (1) the trial courts finding that an account stated existed between the parties; (2) its award to plaintiff of prejudgment interest; (3) its award to plaintiff of its expenses incurred in proving the denied requests for admissions; and (4) its rejection of defendants cross-complaint on the ground that the trial court should have held plaintiff liable for the actions of its subsidiary, Christal Radio Sales, Inc.
Because none of defendants assignments of error have merit, we shall affirm the judgment.[]
Defendants opening brief on appeal fails to follow the standard format suggested by California Rules of Court, rule 14(a)(1)(B), in that it does not state each point under a separate heading and incorporates argument under virtually every heading, including the "Statement of the Case" and the "Evidence at Trial." This makes the brief difficult to follow. We address herein only those arguments properly presented; all other arguments are disregarded. (E.g., People v. Turner (1994) 8 Cal.4th 137, 214, fn. 19 ["To the extent defendant perfunctorily asserts other claims, without development and, indeed, without a clear indication that they are intended to be discrete contentions, they are not properly made, and are rejected on that basis"]; Live Oak Publishing Co. v. Cohagan (1991) 234 Cal.App.3d 1277, 1291 [Arguments not denoted by separate headings as required by the California Rules of Court may be disregarded].)
FACTUAL AND PROCEDURAL BACKGROUND
"`This court must view the evidence in a light most favorable to respondent and presume in support of the judgment the existence of every fact the trier could reasonably deduce from the evidence. [Citation.]" (In re Ryan N. (2001) 92 Cal.App.4th 1359, 1372.)[]
Plaintiff asks us to take judicial notice of the register of actions, which lists the various pleadings, orders, and actions taken by the trial court in this case and presents them in chronological order. This document is not pertinent to our analysis. We therefore deny the request. (Evid. Code, §§ 459, subds. (a), (b), and 454, subd. (a)(1).)
I. Written Representation Agreements Between Defendant and Christal
As relevant here, defendant operated two radio stations in Stockton, KJAX-AM and KJOY-FM.
In 1987, defendant entered into two written Representation Agreements with Christal Radio Sales, Inc. (Christal), a subsidiary of plaintiff Katz.[] The Representation Agreements are identical — one for each of defendants two radio stations. Both provide that in exchange for Christals agreement to act as the stations "exclusive representative and sales agent" for the sale of national broadcast advertising, and its agreement not to sell advertising on behalf of local competing radio stations, Christal would receive a 15 percent commission based on the net advertising billings.[]
The parties briefs refer to only one agreement, but defendants second amended cross-complaint alleges two agreements and attaches a full copy of one and the face sheet of the other.
At trial, the parties described the commission calculation as 15 percent of "whatever [defendant] collected" from advertisers or the "net collected amounts." The distinction between "net billing" (as defined in the agreements) and "net collected amounts" (as described in the testimony of both parties) has not been raised by either party in this appeal.
The agreements contemplated that defendant would run the ads sold by Christal, bill the advertisers, collect the revenue, and remit to Christal its 15 percent commission. To facilitate the calculation of earned commissions, Christal agreed to provide defendant with periodic statements showing invoices for the advertising that it had contracted to sell on defendants behalf. For its part, defendant agreed to provide Christal with monthly statements showing the amounts billed to advertisers, the commission due Christal, and the cash collections received by defendant upon the commissionable accounts. Defendant also agreed to thereafter remit (on a monthly basis) Christals commissions based on the net billings.
Finally, the Representation Agreements provided that they could be terminated by either party upon one years advance written notice.
A second method of generating advertising revenue also became available to defendant by virtue of its relationship with Christal. A division of plaintiff Katz, called Katz Radio Group Network (KRGN), occasionally sold national network advertising to run on defendants stations. However, KRGN collected the fees directly from the advertisers, subtracted a 15 percent commission, and paid the balance to defendant.
II. Correspondence Regarding Defendants Failure to Pay Earned Commissions When Due
Unfortunately, defendants performance under the Representation Agreements began to deteriorate shortly after its relationship with Christal commenced.
In October 1990, plaintiff sent a letter to Joel Gamble, defendants vice president and general manager, stating in relevant part as follows: " . . . the withholding of our commission payments, which has been a continuing problem, has not abated. Our agreement calls for payment of our commissions, as collected, 5 days after the month of collection. Since we began representation in October of 1987[,] we have received only 4 payments covering our commissions collected from October 1987 through September of 1988. We have received no payment since May 5, 1989. While payment plans were discussed, none was ever implemented."
The letter also stated that $5,134 in network advertising sales due to defendant from KRGN had been applied to reduce plaintiffs outstanding balance to $11,587: "After application of the KRGN checks, we still have a balance dating back to April of this year and all commissions for the months of May through August, that, of course, is on a billing basis whereas our agreement calls for payment on collection; but our attempts to achieve that payment have been fruitless. [¶] May we hear from you?"
The situation did not improve.
On March 1, 1991, Christal wrote to Gamble that defendants stations were "past due in commission payments to Christal Radio in the amount of $25,088 covering the months of April 1990 — January 1991." The letter also notified Gamble that a new corporate policy required it to suspend sales on behalf of stations that were more than three months in arrears on commission payments.
The following April 18, Gamble responded by letter to Christal, "confirm[ing] that we have sent a check (#4239) . . . in the amount of $5,066.00. Additionally, as we spoke yesterday, it is our goal to retire the remaining outstanding balance by paying $ 2,000.00 a month in addition to new balances as they become due. This should bring us completely current within six to seven months. I appreciate your cooperation and assistance in this matter. Please let me know if this is acceptable and we can commence payments beginning in May."
More than a year later, however, in November 1992, Christal again wrote to Gamble: "We are in a very serious situation as far as our commissions due Christal Radio from KJAX/KJOY. Joel, in March of 1991 we notified you that your stations owed Christal $25,088 covering the months of April 1990 — January 1991. [¶] We discussed a payment plan that you and I agreed on and was confirmed in your letter to me of April 18, 1991. [¶] In the letter you stated that the schedule ` . . . should bring us completely current within six to seven months . . . . [¶] It is now 18 months later and we are actually worse off than we were on April 18, 1991! [¶] Joel, immediately we must work out a payment plan that will bring us current. [¶] If this situation is not addressed immediately, we will be forced to take serious action that will have a negative effect on KJAX/KJOY. It is something that I do not want to do. [¶] This must be top priority[,] Joel."
Five months later, in April 1993, Christal wrote to Gamble: "Despite repeated demands for prompt payment of your past due commission obligations, KJAX/KJOY remain indebted to us for a total of $27,021, representing commissions which are past due. [¶] If all past due accounts are not paid in full by April 15th, we will stop selling KJAX/KJOY until all past due amounts are paid in full. [¶] This notice to you does not constitute a termination of the station representation agreements between us nor is it an election of remedies or a waiver of any other legal or equitable rights we may have against you, including the right to bring suit, without any further notice or demand."
Defendant did not pay the overdue commissions by April 15, and on that date, a notice went out to all Christal sales personnel from Christals president (with a copy to defendant) stating:
"Effective immediately Christal Radio has suspended sales for KJAX/KJOY, Stockton, CA, due to non-payment of commissions. [¶] When these stations get current, we will alert all offices."
The following June 29th, Gamble wrote to a representative of Christal, proposing various methods of "resolv[ing] this matter amicably." Gamble stated that "aside from verifying the accuracy of the amount claimed, which I have yet to do," the "only thing in question . . . is the speed with which this balance can be eradicated." Acknowledging that paying Christal "approximately $ 1,300 a month . . . would take 24 months to liquidate the outstanding balance[,]" Gamble proposed instead to either retain a different company to represent defendant, which "would allow us to pay off the balance more quickly," or if Christal would resume selling ads for defendant, defendant would agree to "bill all Christal accounts to a lockbox [system that] Christal could control."
The record contains no written response by Christal to these proposals, but its written statement of account as of August 3, 1993 sent to (and received by) defendant shows unpaid commissions for advertising sold on defendants behalf in the amount of $ 32,830.
On August 24, 1993, Gamble wrote to Christals president that "our companies have been deadlocked for several months now in attempting to resolve a problem that is causing us both losses of revenues. This seems counter-productive from a purely business standpoint . . . . I would like to discuss this with you personally in hopes that we could arrive at something satisfactory to both parties to break this stalemate and allow us to resume a positive, mutually beneficial relationship."
On September 15, 1993, Gamble wrote again to Christal, stating that he enclosed "a check for $1,000 as the first installment of our payments to eliminate the outstanding balance due Christal Radio. It is my understanding that in negotiating this payment that Christal has agreed to the payment terms outlined in my last letter and that this is a satisfactory arrangement as long as regular payments are maintained. [¶] . . . I would still prefer an agreement whereby Christal resumes representing our stations or makes arrangements so that someone else may do so, in order to retire this amount in considerably less time. I will go along with this agreement, however, if this is what Christal is committed to."
The written statement of account sent by Christal to defendant dated September 30, 1993, reflects the $1,000 payment described in Gambles September 15 letter.
III. The Pleadings
Plaintiff Katz initiated this action in March 1994 by filing a form complaint, alleging common counts for open book account and services rendered. The complaint did not mention Christal. Instead, the complaint alleged only defendants indebtedness to plaintiff Katz.
Defendant answered and cross-complained against Katz for breach of contract. The cross-complaint neither named Christal as a cross-defendant nor specifically referred to the written Representation Agreements between Christal and defendant, but alleged that "Christal is a corporation . . . authorized to do business in the State of California," that "Katz and its subsidiary, Christal[,] are in the business of procuring on behalf of local radio stations national advertising accounts," that defendant and "Katz/Christal had an ongoing arrangement wherein Christal/Katz would be its exclusive agent," that Christal/Katz has refused to continue to do business with defendant, and that "[i]n refusing to continue to provide nation-wide [sic] advertising business to [defendant], Christal/Katz breached the agreement between [defendant] and Christal/Katz."
Following an unsuccessful motion for summary judgment, plaintiff Katz moved successfully in 1999 for permission to amend its complaint to add allegations that Christal assigned Gambles debt to plaintiff for collection, and that an account stated existed between Christal and defendant. This first amended complaint also corrected the alleged outstanding balance owing from defendant to reflect credits applied to defendants account after the action was commenced, thereby reducing the unpaid commissions debt to $20,721.[] Defendant responded with a general denial.
The December 1996 statement of account had shown a $20,721 balance owing on unpaid commissions.
Around the same time, defendant obtained permission to file a second amended cross-complaint, which repeated the allegation that "Katz and its subsidiary, Christal[,] are in the business of procuring on behalf of local radio stations national advertising accounts," but added in particular the following allegation: "Christal/Katz dealt with Gamble as an integrated entity and joint enterprise. By reason of such dealings and by reason of its [sic] conduct which continued through April 1999[,] Katz is estopped from denying such unity of interest and joint enterprise. . . ." The second amended cross-complaint also incorporated by reference the Representation Agreements and alleged that "Christal/Katz" breached those agreements (and their implied covenant of good faith and fair dealing) by suspending sales for defendant at the urging of a competing radio station. Plaintiff filed a general denial to the second amended cross-complaint.
IV. Trial Testimony
Plaintiffs chief witness was Diane Marchetti, plaintiffs collection manager, who handled accounts receivable billing for Christal and plaintiffs other subsidiaries. Marchetti was responsible at all relevant times for maintaining the books and records of plaintiff Katz and Christal.
Marchetti testified that when Christal sold advertising on behalf of the stations that it represented, it logged the sales contracts into its computer. Under the Representation Agreements and similar contracts, clients (such as defendant) were required to report to Christal what monies were actually collected on the advertising sold by Christal. Marchettis department then routinely matched these client reports to Christals records of advertising sold to determine what commissions were due Christal, and generated monthly account statements of the commissions due Christal. Because Christal earned no commission on sums not collected from advertisers, clients generally reviewed the account statements that they received from Christal "line by line," and reported any erroneous items, such as ads that were sold but not broadcast, or fees that were not collected from advertisers. Plaintiffs collection departments computer program permitted department personnel to make notes — on a line-by-line basis — of any item disputed by a client. Thus, if a client contacted Christal by telephone to dispute a particular commission charge, a note on that item would be made in Christals computer records and an adjustment to the disputed item would likely follow. Only items unpaid from month to month remained on the statement; paid or adjusted items were deleted.
Marchetti also testified that Gamble never advised her that there was any "uncertainty in his mind as to what the accurate balance was that was owing," and that nothing in Christals records, including its computer system, reflected that defendant or its representatives ever objected to any of the statements issued by Christal that showed the commissions owing.
Because defendants commission payments to Christal were overdue, monies that would otherwise have been paid to defendant by KRGN for network advertising were offset against defendants outstanding commission debt. According to Marchetti, her records reflected no objection by Gamble to this practice.
Marchetti also introduced, without objection, two charts prepared for trial, which showed the amounts owing. The first, entitled "Gamble Account Balance Summary," showed the fluctuating sum in overdue commissions owed by defendant to Christal over time, as reflected in the parties contemporaneous correspondence and statements of account: on March 1, 1991 ($25,088); April 18, 1991 ($20,022); April 8, 1993 ($27,021); August 3, 1993 ($32,830); September 30, 1993 ($31,470); December 31, 1993 ($27,218); and December 9, 1996 ($20,721).
The second chart, entitled "Interest Calculation (10%)" (and referred to during trial as plaintiffs exhibit 17), showed the amount of interest accrued daily on each Gamble Account Balance Summary entry.
But some of the trial testimony of defendants vice president and general manager, Gamble, directly contradicted Marchettis recollection of whether defendant had objected to statements of account that it had received from Christal. Gamble testified that several times each year between 1991 and 1993, he advised Marchetti, personnel under her supervision, or others at Christal "that I didnt believe that the statement was correct. That we didnt owe that amount of money. And that I was desirous of getting it resolved as to how much money was in fact owing so that the obligation could be taken care of." Gamble did not, however, put these concerns in writing and did not articulate what sum he did believe was owed. Thus, when he received letters and statements from Christal indicating that defendant was delinquent in its commission payments to defendant, Gamble agreed that defendant was overdue in its commission payments to Christal, but believed that it was less than the amount stated.
Indeed, Gamble admitted elsewhere that he "didnt dispute their figures." He testified that he had resolved not to "quibble with their number(s)" because he wanted Christal to sell national advertising for defendant (or after Christal had suspended sales, to allow defendant to seek representation elsewhere). For example, with respect to Christals March 1, 1991 assertion that defendants stations owed $25,088 in overdue commissions, Gamble testified that "we were accepting their figure at that time." Similarly, by offering in June 1993 to pay $1,300 each month for 24 months "to liquidate the outstanding balance," Gamble testified that he effectively "accepted" that defendant owed Christal close to $31,000, the sum of the proposed payments, even if he privately disagreed: "[W]hen I said I accepted their number, I dont mean I agreed with their number, but I accepted to base payments on their number to give them every incentive, or no reason not to continue selling for us . . . ."
Gamble also testified that he was aware of Christals practice of applying KRGN monies due defendant for purposes of reducing defendants outstanding debt to Christal, and told someone at Christal that he objected to it, but he could not recall when he had complained about the practice and failed to do so in writing. And he claimed that defendant was never properly credited for network advertising sold by KRGN and run by defendant in 1992.
With respect to its cross-complaint, defendants theory at trial was that it — not Katz — was entitled to recover damages for breach of the Representation Agreements. Gamble testified that (1) Christals cessation of sales on defendants behalf in 1993 was improper, because it never gave the written termination notice that the agreements required, and because the agreements did not allow Christal to unilaterally suspend performance in retaliation for defendants nonpayment; (2) Christal began representing a competitor in 1993 in violation of the agreements; (3) Katz or Christal breached an agreement in the fall of 1993 to represent plaintiff under a lockbox arrangement; and (4) the continued refusals of "Katz or Christal" to release defendant from its obligations under the agreements, thereby preventing it from retaining another entity to sell national advertising, financially crippled defendants stations.
With respect to the question of whether Katz could be held responsible for Christals breach of the Representation Agreements, Gamble testified that he knew at the time of their execution that Christal was a subsidiary of plaintiff Katz and that Christal was a corporation that was maintained separately from plaintiffs other subsidiaries, so that each could compete and yet avoid conflicts of interest.
However, in support of his belief that Katz and Christal were "one in the same," Gamble pointed to the fact that Katz "was the parent company [of] Christal Radio." And Gamble testified that his belief that Katz and Christal comprised "a unified business organization" was reinforced when he received three letters about his contracts with Christal on Katz stationery. Two were sent in December 1987: The first stated, "We are delighted that Christal Radio represents your fine station," and enclosed "a letter outlining our procedures for the exchange of monthly billing information"; the second described those procedures and stated, "Im pleased to welcome you and your station as a client of Christal Radio. . . ." The third was the October 1990 letter, stating that KRGN checks had been applied to reduce defendants outstanding balance. In addition, correspondence from Christal was copied to Marchetti and another Katz employee.
Marchetti, Katzs collection manager, confirmed that Christal is one of Katzs several subsidiaries and is a company "separate" from plaintiff. She also explained that although Katz and Christal share the same address, they do not share the same telephone numbers and do not share employees, except that Katz provides accounting and collection services to all of its subsidiaries, with different collections employees for each of plaintiffs subsidiaries.[]
Cathleen Walsh, vice president of plaintiffs client accounting practice, testified that plaintiff charges its subsidiaries, including Christal, the expenses associated with client accounting practices performed by plaintiff.
V. Statement of Decision
The trial court found in favor of Katz on its complaint, ruling that it could recover on the common count theory of account stated, and awarded damages in the principal sum of $20,721.00 — the outstanding balance reflected on defendants December 1996 statements of account — plus prejudgment interest in the amount of $24,219.96 pursuant to Civil Code section 3287, subdivision (a). The court also found in favor of Katz on defendants cross-complaint.
The court explained its reasoning (in part) as follows: "The evidence at trial, including admissions by [defendant], proved that [defendant] owed certain commissions to Christal. Under New York law, one or more accounts stated were established by the statements and correspondence sent by Christal to [defendant] and retained by [defendant] without objection. Christal assigned the debt to Katz. [Defendant]s cross-complaint for breach of contract against Katz is without merit because Katz is not a party to the Representation Agreement and cannot be held responsible for Christals alleged breach. [Defendant] failed to establish that Katz was the alter ego of Christal. More importantly, [defendant]s breach of contract cross-complaint would fail as a matter of law even if it were brought against Christal. Christal had the right to suspend performance without one years notice based on [defendant]s prior material breach of the Representation Agreement."
In finding the existence of an account stated in favor of Katz, the court expressly found that despite "extensive communication between the parties and account statements," such as that dated September 30, 1993, defendant "made no objection as to the amounts reflected in the statements at that time," and indeed, that defendant "did not present any credible evidence to support its contention that it objected to the amounts owing or any item contained in the account statements within a reasonable time after the statements and correspondence were received."[]
The seven-page Statement of Decision adequately explains the legal and factual basis of the trial courts decision as to each of the principal controverted issues at trial. (Code Civ. Proc., § 632.) As we point out elsewhere in the Discussion, post, defendants contention that "the trial court erred in refusing to rule on critical issues before it," requiring reversal, is therefore meritless. (See Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1125-1126 [The trial court need only "set out the ultimate facts supporting that determination, and the legal basis for its decision"; it need not "address how it resolved intermediate evidentiary conflicts, or respond point by point to the various issues posed in appellants request for a statement of decision"].)
VI. Plaintiffs Motion for Sanctions
By posttrial motion, plaintiff Katz sought to recover sanctions pursuant to Code of Civil Procedure section 2033, subdivision (o).
In 1999, plaintiff served defendant with a detailed set of 62 requests seeking defendants admissions (1) that correspondence and account statements reflecting commissions due to Christal were genuine (each of which were subsequently admitted into evidence at trial); (2) that defendant received those account statements and correspondence and yet failed to dispute that it owed the specified amounts within 30 days of receipt; (3) that an account stated existed by virtue of defendants receipt of those documents and its failure to dispute them; (4) that defendant had been notified in March 1991 that it was in breach of the parties agreement; and (5) that Christals further performance under the Representation Agreement was excused by defendants breach. Defendant denied those requests.
Plaintiff sought expenses of $71,691.18 incurred in "defending the action through trial on these issues" following defendants denial, including the expense of trial preparation and of deposing Gamble on three different occasions. To support the motion, plaintiff submitted 100 pages of attorney fee bills and expense statements.
Opposing the motion, defendant argued that its denials of the requests for admission were in good faith, because "[t]here were ongoing discussions" about the commissions and because defendant had agreed that it owed "some money" to Christal, but not the amounts claimed.
Defendant did not challenge, however, particular fees or expenses sought as sanctions, observing that "[i]t would be extremely time consuming to go through the attorney fee address [sic] from Katz[,] and counsel believes that it would serve no useful purpose as Katz is not entitled to any money whatsoever for sanctions. If, however, the court disagrees with counsel then it is respectfully requested that there be a long cause hearing to go over the precise attorney fee figure."
At the hearing on plaintiffs request for sanctions, defendant argued that the motion improperly sought reimbursement of attorney fees incurred by plaintiff in connection with an unsuccessful summary judgment motion, and again urged the court (should it decide to award any fees) to schedule "another hearing to decide which fees are attribut[able]" to the denials of plaintiffs requests for admission.
Thereafter, and without further hearing, the trial court issued its decision awarding plaintiff its travel expenses related to trial, most of the costs sought, and 75 percent of the attorney fees claimed by plaintiff — a sum deemed by the court "reasonable in light of the circumstances."
DISCUSSION
I. Challenges Related to Plaintiffs Complaint
Defendant raises various challenges to the trial courts finding in favor of Katz on its complaint. We consider them seriatim.
A. Substantial Evidence Supports the Trial Courts Ruling That Gamble Was Indebted to Katz Pursuant to an Account Stated
Defendant makes several arguments concerning the sufficiency of evidence supporting the trial courts ruling that Katz could recover on an account stated claim: Defendant insists that "[t]here was no account stated because there was an ongoing dispute as to what money was owed" and "[n]o evidence was presented at trial that in fact there ever was a writing wherein [defendant] agreed to the amount being claimed."
"An account stated is an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due [citations]. The agreement may be express or . . . implied from the retention of an account rendered for an unreasonable period of time without objection and from the surrounding circumstances [citations]." (Jim-Mar Corp. v. Aquatic Constr. (1993) 195 A.D.2d 868, 869-870 [600 N.Y.S.2d 790, 791-792], and cases cited therein; Citibank (S.D.) N.A. v. Jones (2000) 272 A.D.2d 815, 815-816 [708 N.Y.S.2d 517, 518-519].)[]
The Representation Agreements between Christal and defendant provide that they shall be "construed, governed and enforced by and in accordance with the laws of the State of New York." The parties appear to concur that New York law governs matters of substantive law concerning the contract, while California law should be applied to procedural issues.
A defendant may be deemed to have "impliedly agreed to pay the amount due as reflected in plaintiffs invoice when defendant received and retained it without rejecting it or objecting to it within a reasonable period of time." (Jim-Mar Corp. v. Aquatic Constr., supra, 195 A.D.2d at p. 870 .)
Indeed, in such circumstances, the defendant is obliged "to examine the invoice and raise any objections, and its `[s]ilence is deemed acquiescence and warrants enforcement of the implied agreement to pay [citation]." (Jim-Mar Corp. v. Aquatic Constr., supra, 195 A.D.2d at p. 870 [Defendants agreement to statement is implied from its five-month delay in voicing any objection to its accuracy]; see also Citibank (S.D.) N.A. v. Jones, supra, 272 A.D.2d at p. 816 [Defendant is deemed to have impliedly agreed to pay the amount indicated on her credit card statements after "she received and retained the monthly statements without objection within a reasonable period"].)
In this case, substantial evidence supports the trial courts finding that despite "extensive communication between the parties and account statements," such as that dated September 30, 1993, defendant "made no objection as to the amounts reflected in the statements at that time." Marchetti testified that Christals records contained no evidence that defendant ever contested Christals earned commission calculations, and in none of his letters did Gamble dispute them. Gamble himself testified that whatever his private reservations about the accuracy of Christals statements, he outwardly "accepted" Christals calculations of the commissions due and made no effort to "quibble" about them. The trial court could properly find, as it did, that defendant "did not present any credible evidence to support its contention that it objected to the amounts owing or any item contained in the account statements within a reasonable time after the statements and correspondence were received by [defendant]."[]
Defendants continued insistence on appeal that the court "ignored the continuing nature of the disagreement between Gamble and Katz relative to the amount due" misconstrues the Statement of Decision. The court did not ignore such evidence; it affirmatively rejected defendants evidence on this point as incredible. On appeal, we must defer to the trial courts resolution of any conflicting evidence. (People v. Barnes (1986) 42 Cal.3d 284, 306 ["`Conflicts and even testimony which is subject to justifiable suspicion do not justify the reversal of a judgment, for it is the exclusive province of the trial judge or jury to determine the credibility of a witness and the truth or falsity of the facts upon which a determination depends"].)
Defendants silence in the face of Christals multiple statements of account and correspondence on the overdue commissions created an account stated under New York law. (See Jim-Mar Corp. v. Aquatic Constr., supra, 195 A.D.2d at p. 870 ; Citibank (S.D.) N.A. v. Jones, supra, 272 A.D.2d at p. 816 .) Gambles private, unexpressed reservations do not undermine an implied agreement based on his outwardly expressed acquiescence that defendant owed the amounts stated. (See Padovano v. Vivian (1995) 217 A.D.2d 868, 869 [629 N.Y.S.2d 844, 846] [Interpreting agreements, the parties objective intent controls; their "uncommunicated subjective intent is irrelevant"].)
Further, substantial evidence supports the inference that the amounts claimed by Christal were the actual amounts owed. Defendant was in the best position to know (1) what national advertising had actually been broadcast by its stations, and what revenues had actually been collected from advertisers, upon which basis commissions were due Christal, and (2) what network advertising sold by KRGN had actually been broadcast, entitling defendant to payment or a credit. That defendant used neither source of information to challenge the balances stated by Christal compels the conclusion that it had no factual basis for doing so.
Although defendant argues that "there was an ongoing dispute as to what money was owed," there was no evidence of such an "ongoing dispute." Defendant responded to Christals demands by addressing only how it would pay, not how much it would pay. For example, although Gambles June 1993 letter states that he had not yet attempted to "verify[] the accuracy of the amount claimed," his willingness to pay approximately $1,300 per month for 24 months "to liquidate the outstanding balance" acknowledged a debt of close to $31,000 — almost exactly the balance claimed by Christal in August 1993.
There was no error in the trial courts finding of an account stated.
B. The Courts Award of Prejudgment Interest Was Proper
Civil Code section 3287 provides for the recovery of prejudgment interest on damages recoverable when the amount due is capable of ascertainment. Subdivision (a) provides in pertinent part: "Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day . . . ." (Civ. Code, § 3287, subd. (a).)
"If damages are `certain, interest must be awarded as a matter of right. [Citations.] Moreover, `[damages] are deemed certain or capable of being made certain within the provisions of subdivision (a) of section 3287 where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage. [Citations.]" (National Farm Workers Service Center, Inc. v. M. Caratan, Inc. (1983) 146 Cal.App.3d 796, 809; North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.)
Defendant contends that the trial court "failed to make findings supporting [the] interest award."
We disagree. The court expressly found that defendant had failed to object to the amounts claimed by Christal in its statements of account or correspondence between 1991 and 1993, thereby "establish[ing] an account stated between Christal and Gamble at several times. The amount due fluctuated due to payments and network commissions applied by Katz to the [defendants] account. [Defendant] did not object to the application of network commissions to the account or introduce any evidence that any amount was incorrectly applied. Each account stated vested in Christal the entitlement to recover from [defendant] the agreed amount of the account stated . . . . Having established that the amounts reflected in periodic statements to Gamble are enforceable, Katz [is] also entitled to prejudgment interest as a matter of law, and the court accepts plaintiffs calculation (Plaintiffs Exhibit #17) of prejudgment interest . . . ."
Defendant made no objection to the introduction of plaintiffs exhibit 17. That exhibit calculated prejudgment interest on the "fluctuating" balance by separately assessing interest on each periodic statement for the period that the balance accurately stated the amount of the debt. Thus, by explaining that the commission amounts owing were made certain and by accepting plaintiffs calculation of prejudgment interest in plaintiffs exhibit 17, the trial court did make findings supporting the interest award.
Defendant also argues that "the record does not support the conclusion that interest should be awarded on dates prior to the filing of the complaint."
We disagree. The trial courts findings show that it awarded prejudgment interest based on the fluctuating balance due from defendant as a result of its finding that defendant did not object to the balances. Specifically, the trial court effectively concluded that beginning on March 1, 1991, there was "essentially no dispute between the parties concerning the basis of computation" (see National Farm Workers Service Center, Inc. v. M. Caratan, Inc., supra, 146 Cal.App.3d at p. 809) because defendant failed to contest Christals commission computations, thereby justifying the assessment of interest after that date. Whether "[defendant] was uncertain as to what . . . amount was owed" (as defendant argues) is immaterial, because the court found that defendant failed to articulate that uncertainty by challenging the amounts claimed by Christal in the statements of account or correspondence. That the trial court credited plaintiffs evidence that defendant acquiesced in Christals commission calculations — including its offsets for amounts otherwise due to defendant from KRGN — and rejected as incredible defendants evidence to the contrary, compels us to do the same. (See People v. Barnes, supra, 42 Cal.3d at p. 306.)[]
Defendant suggests that "Katz itself was uncertain" about the amounts owing because its summary judgment motion sought a different balance than sought in the initial complaint. The short answer is that the trial courts finding that the amounts were undisputed was based on the evidence, not the original complaint.
Finally, defendant argues that an award of prejudgment interest is improper because "the data from which [defendant] could make those calculations [of amounts owed] was in the sole possession of Katz."
But that argument is contrary to the evidence. Christal could recover commissions for advertising sales only if defendants stations actually broadcast the ads and billed (or received revenues from) the advertisers; defendant, not Christal, had first-hand knowledge of what ads had broadcast and what fees had been collected. Similarly, defendant knew when it was owed money by KRGN for network advertising, because network advertising ran infrequently and defendant tracked when the advertising broadcast. Thus, the means to verify whether Christals calculations were proper were at all times available to defendant. The court was entitled to infer from these facts that defendant was in a position to dispute Christals calculations but failed to do so because they were correct.
C. Plaintiffs Claim for an Account Stated Is Not Barred by the Statute of Limitations
At various points in its opening brief on appeal, defendant asserts that "the first amended complaint by Katz was barred as a matter of law by the statute of limitations."
However, we are entitled to disregard this contention, because it does not appear as a separate contention. (Live Oak Publishing Co. v. Cohagan, supra, 234 Cal.App.3d at p. 1291.) Only in the reply brief does defendant present under a separate heading its claim that plaintiffs cause of action for account stated is barred by the statute of limitations because it fails to "relate back" to plaintiffs timely claim for an "open book account" raised in the original complaint. This belated assignment of error, made only in the reply brief, fails to properly preserve the issue for consideration on appeal. (Neighbours v. Buzz Oates Enterprises (1990) 217 Cal.App.3d 325, 335, fn. 8.)
Nonetheless, we consider defendants claim that plaintiffs first amended complaint is barred by the statute of limitations, and we find it is meritless.
"[A]n amended complaint relates back to the filing of the original complaint and thus avoids the bar of the statute of limitations, so long as recovery is sought in both pleadings on the same general set of facts." (Idding v. North Bay Construction Co. (1995) 39 Cal.App.4th 1111, 1113; Austin v. Massachusetts Bonding & Ins. Co. (1961) 56 Cal.2d 596.)
It follows that "[a]n amended complaint `relates back to the original complaint when it is based on the same general set of facts as the original complaint, seeks relief for the same injuries, and refers to the same incident." (Carrier Corp. v. Detrex Corp. (1992) 4 Cal.App.4th 1522, 1530; see also Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 408-409.) "The same general set of facts includes the same operative facts; a change in legal theory is permissible." (Honig v. Financial Corp. of America (1992) 6 Cal.App.4th 960, 966.)
And an amendment will relate back even where it alleges a new theory of liability and even where additional facts are stated to support that theory. (Altman v. Morris Plan Co. (1976) 58 Cal.App.3d 951, 963.)
Here, the trial court correctly found that plaintiffs claim in its first amended complaint for account stated related back to the filing of its original complaint. The original complaint sought to hold defendant responsible for the commissions owed as a result of Christals sale of advertising under the common count of open book account; the first amended complaint sought to hold defendant responsible for the commissions owed as a result of Christals sale of advertising under the common count of an account stated, which obligation had been assigned to plaintiff.
Because the two successive common counts were based on the same general facts and the same circumstances, and sought the same relief — albeit based on a different legal theory — defendant was not misled as to the basic nature of plaintiffs claim by the substitution of one count for the other. In such circumstances, the amendment was not vulnerable to a statute of limitations defense. (See Ben-Hur Mfg. Co. v. Empire Factors (1960) 181 Cal.App.2d 123, 130-132 [Original complaint pleaded common count for money had and received; amendment during trial alleging different common count — goods sold and delivered — was permissible because the amendment sought redress for a wrong which arose from the same general state of facts].)
Defendants suggestions that the law is to the contrary — that is, its insistence that "[defendant] had a right to rely on the [original] pleadings of Katz" and that "[n]o reason was ever given for the non-assertion [in the original complaint] of this legal theory [(account stated)]" — are bereft of citation to authority and are meritless.
II. Contentions Related to Defendants Cross-Complaint
We also reject defendants challenges to the trial courts finding that defendants cross-complaint lacked merit.
A. Substantial Evidence Supports the Trial Courts Finding That Defendants Failure to Sue Christal Was Fatal
Defendant had a contractual relationship with Christal, not plaintiff Katz.
The trial court concluded that having failed to name Christal as a cross-defendant, defendant could not recover against Katz for damages that the defendant alleged were caused by Christals breach of contract: "[Defendants] cross-complaint for breach of contract against Katz is without merit because Katz is not a party to the Representation Agreement and cannot be held responsible for Christals alleged breach. [Defendant] failed to establish that Katz was the alter ego of Christal."[]
Even had defendant named Christal as a cross-defendant, the trial court found that its claim for breach of contract would have failed on the merits as matter of law: "The Representation Agreement required [defendant] to pay commissions to Christal based on monthly collections for broadcast advertising. At trial, [defendant] admitted that it failed to pay broadcast advertising commissions of at least $10,000 to Christal. The failure to pay commissions when due constitutes a material breach of the Representation Agreement. This is a recurring breach that occurred each month that Gamble failed to pay Christal its earned commissions." The trial court concluded: "Christal had the right to suspend performance without one years notice based on Gambles prior material breach of the Representation Agreement." The courts analysis is well supported under New York law. (See Hinman v. Hinman (1933) 146 Misc. 786, 789 [263 N.Y.S. 800, 804] [The failure to honor a promise to pay contained in a written contract presents "a clear case of breach of contract" under New York law]; Standard Factors Corp. v. Kreisler (1945) 53 N.Y.S.2d 871, 874-875 [The breach by one party of a written contract in circumstances such as this excuses further performance by the other]; Charlop v. Alt (1920) 182 N.Y.S. 630, 632 and cases cited therein [same].)
Moreover, with respect to defendants claim that Katz was the alter ego of Christal, the trial court opined that defendants position that "there was a unity of interest and existence between Christal and Katz . . . [w]as not supported by the testimony and was flatly rebutted by the responses of [defendant] to request[s] for admissions in which it did not deny that Katz and Christal were two separate entities. There was also a shortfall in the evidence to establish that Katz and Christal were operated as a single entity. Instead, the evidence painted a picture of two closely related but separately operated interlocking corporations, each doing a part of the overall tasks involved with the sale of national advertising. There were some minor indicia of singularity[,] such as references to letters in which Gamble was `welcomed to the Katz family of stations[,] but taken in their totality, failed to allow the piercing of the corporate veil." The court added that although "Katz handled some of the accounting functions for Christal and applied certain network commissions to reduce the balance of the [defendants] account, this does not provide any basis for a finding that Katz and Christal were one and the same."
Defendant insists that the court should have found plaintiff breached the Representation Agreements, that plaintiff waived defendants nonperformance by "agreeing to the lockbox arrangement in the fall of 1993," and that plaintiff breached the covenant of good faith and fair dealing by suspending its sales of advertising for defendant, dealing with a local competitor, and failing to release defendant from the agreements between Christal and defendant.
But before plaintiff can be held responsible for breaches of defendants contracts with Christal, defendant must sustain its burden of pleading and proving that plaintiff can properly be held responsible for the acts of its subsidiary, Christal, alleged in defendants cross-complaint.
"`The alter ego doctrine arises when a plaintiff comes into court claiming that an opposing party is using the corporate form unjustly and in derogation of the plaintiffs interests. [Citation.] The elements of the doctrine are at least easily stated. `There is no litmus test to determine when the corporate veil will be pierced; rather[,] the result will depend on the circumstances of each particular case. [Citation.] There are, nevertheless, two general requirements: "(1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow." [Citation.]" (Mid-Century Ins. Co. v. Gardner (1992) 9 Cal.App.4th 1205, 1212.)
The trial court found that defendant failed to sustain that burden. Its conclusion is supported by substantial evidence, chiefly derived from Marchettis testimony. Moreover, defendant assigns no claim of error to the trial courts reasoning that there was an insufficient showing of a unity of interest so as to warrant holding Katz liable for the purported breaches of the Representation Agreements, to which it was not a party.
B. The Trial Court Did Not Abuse Its Discretion in Holding That Plaintiff Was Not Judicially Estopped from Distinguishing Itself from Its Subsidiary, Christal
Defendant makes a single argument on appeal to justify holding plaintiff liable for Christals alleged breaches of the Representation Agreements: that Katz should have been "judicially estopped" from disputing that Christal and Katz were a single entity by virtue of the original verified complaints allegation that Katz was entitled to recover the unpaid commissions, without alleging an assignment from Christal to Katz. Defendant concludes that "the court and any reasonable person would be [led] to believe, based upon the verified complaint and the absence of any assignment allegation that Katz and Christal were the same company."
The trial court rejected this argument, reasoning as follows: "The doctrine of `judicial estoppel is not recognized and therefore does not apply to the circumstances presented in this case. Katzs first amended complaint properly alleged the assignment of Christals claim to Katz. Katz sued on the account stated between Christal and [defendant]. Katz did not allege that it was the same entity as Christal. Moreover, there was no showing of reasonable reliance by [defendant]."[]
Inexplicably, defendant asserts that "[t]he trial court did not rule at all on the doctrine of judicial estoppel" and argues that this "failure to rule on a material issue" warrants reversal. Defendants assertion that the trial court failed to rule on the doctrine of judicial estoppel is belied by the trial courts decision, quoted above, and even by defendants own argument elsewhere that the trial courts ruling on judicial estoppel was "wrong."
On appeal, defendant argues that the trial court erred in failing to apply the doctrine of judicial estoppel in this case because "[defendant] relied upon the representations made in the [original] verified complaint by Katz." We disagree.
"Judicial estoppel precludes a party from gaining an advantage by taking one position, and then seeking a second advantage by taking an incompatible position. [Citations.] The doctrines dual goals are to maintain the integrity of the judicial system and to protect parties from opponents unfair strategies. [Citation.] Application of the doctrine is discretionary. [Citation.]" (People ex rel. Sneddon v. Torch Energy Services, Inc. (2002) 102 Cal.App.4th 181, 189; Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 181.)
However, judicial estoppel only applies where: "(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake." (Jackson v. County of Los Angeles, supra, 60 Cal.App.4th at p. 183.)
The trial court did not err in declining to apply the doctrine of judicial estoppel for several reasons.
First, the two positions purportedly taken by Katz were not totally inconsistent. Specifically, Katzs assertion in its first amended complaint and at trial of a corporate identity separate from Christal was not "totally inconsistent" with its original complaint, which did not allege a unity of interest with Christal. (See Jackson v. County of Los Angeles, supra, 60 Cal.App.4th at p. 183.) Although Katzs original complaint sought damages against defendant for an open book account and services rendered, the fact that Katz could cure any defect in its claim by adding an allegation that it had been assigned Christals claim demonstrated that its original position was not "totally inconsistent," only incomplete.
Second, we are aware of no case applying the doctrine of judicial estoppel to prevent a party from asserting a position arguably inconsistent with a prior pleading filed in the same case. Defendant cites us to none. (See Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1019 ["Cases concerning judicial estoppel have generally been decided after a fact-finding or evidence-reviewing proceeding of some sort"].) And any such application would necessarily fail to satisfy another requirement of the doctrine: that the party must have been successful in asserting the first position, that is, the tribunal must have adopted the position or accepted it as true. (Jackson v. County of Los Angeles, supra, 60 Cal.App.4th at 183.) That was not the case here.[]
We are aware that some California courts have not limited the doctrine of judicial estoppel to those situations where the litigant was successful in asserting a contradictory position. (Thomas v. Gordon (2000) 85 Cal.App.4th 113, 118-119.) But this is not the majority view (ibid.), and this limitation has only been disregarded where the litigant is playing fast and loose with the court (id. at p. 119). There was no such finding here.
Third, the policy underlying the doctrine of judicial estoppel does not justify its application here. The primary purpose of the doctrine is not to protect the litigants, but to protect the integrity of the courts. (Thomas v. Gordon, supra, 85 Cal.App.4th at p. 118.) "Judicial estoppel may be applied in the trial courts discretion. [Citation.] It is intended to protect the integrity of the judicial process by preventing litigants from playing `fast and loose with the courts [citation] and, as such, it should be invoked only in egregious cases. [Citations]. For these reasons, judicial estoppel is usually limited to cases where a party misrepresents or conceals material facts. [Citation.]" (California Amplifier, Inc. v. RLI Ins. Co. (2002) 94 Cal.App.4th 102, 118 [That appellants made inconsistent legal arguments in two different lawsuits is a reasonable litigation tactic and does not undermine the integrity of the judicial process].) Here, Katz neither misrepresented that Christal had no separate existence nor concealed the assignment; it merely omitted reference to the assignment, which omission was cured during the proceeding.
Fourth, "`the doctrine of judicial estoppel does not apply "when the prior position was taken because of a good faith mistake rather than as part of a scheme to mislead the court." [Citation.] An inconsistent argument sufficient to invoke judicial estoppel must be attributable to intentional wrongdoing. [Citations.]" (Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 509-510.) Defendant fails to point to substantial evidence to support such a finding.
Hence, the trial court did not abuse its discretion in declining to find that Katz was judicially estopped from distinguishing itself from Christal. "Judicial estoppel should be applied with caution. [Citation.] `[J]udicial estoppel is an "extraordinary remed[y] to be invoked when a partys inconsistent behavior will otherwise result in a miscarriage of justice." [Citation.] [Citation.]" (Haley v. Dow Lewis Motors, Inc., supra, 72 Cal.App.4th at p. 511.)
This is not such a case. True, the original complaint contained neither a description of the relationship between plaintiff Katz and Christal nor an allegation that Christal had assigned defendants debt to plaintiff for collection. But (as the trial court correctly observed) defendant did not "rely" on any such representation: Defendant knew that Christal was a corporation separate from Katz before the Representation Agreements were signed, and the agreements state that Christal alone shall be defendants "exclusive" representative. Indeed, defendants original cross-complaint alleged that Christal was a separate corporation and a subsidiary of Katz.[]
For the same reasons, the trial court found no basis for holding plaintiff equitably estopped from denying an identity separate from Christal.
Accordingly, the trial court did not err in rejecting defendants argument in favor of judicial estoppel.
III. Plaintiffs Motion to Recover Sanctions
Defendant also attacks the attorney fees and costs awarded to plaintiff under Code of Civil Procedure section 2033. Subdivision (o) of that section states that if a party responding to requests for admissions denies a fact subsequently proven at trial, the trial court shall permit the party requesting the admissions to recover the reasonable expenses incurred in making that proof, including reasonable attorney fees, unless (among other things) "there was . . . good reason for the failure to admit."[]
Subdivision (o) of Code of Civil Procedure section 2033 states: "If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under this section, 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 attorneys fees. The court shall make this order unless it finds that (1) an objection to the request was sustained or a response to it was waived under subdivision (l), (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, or (4) there was other good reason for the failure to admit.
Defendant contends that the trial court erred in awarding plaintiff its expenses incurred in proving the facts denied in the requests for admissions, because its "denials were in good faith," in that it had "a good faith basis for believing" that the amount owed to Christal by defendant "was an ongoing disputed issue."
Ultimately, however, "[t]he determination of whether `there were no good reasons for the denial, . . . 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; see also Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618, 637, fn. 10.) An abuse of discretion occurs only where it is shown that the trial court exceeded the bounds of reason. (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 972.) It is a deferential standard of review that requires us to uphold the trial courts determination, even if we disagree with it, so long as it is reasonable. (Avant! Corp. v. Superior Court (2000) 79 Cal.App.4th 876, 882.)
In this case, substantial evidence supports the trial courts implicit determination that there were no good reasons for defendants denials of the requests for admissions propounded by plaintiff. All of the documents, whose genuineness or receipt were denied by defendant, were admitted into evidence without objection by defendant, or with only token objection. Nor did defendant establish that it ever disputed the specific amount of the overdue commissions specified in Christals statements of account and correspondence. To the contrary, defendant at all times accepted and acquiesced in Christals claims.
Once the trial court determined that Code of Civil Procedure section 2033, subdivision (o) applied, the imposition of sanctions was mandatory unless one of the good-cause exceptions applied. (Brooks v. American Broadcasting Co., supra, 179 Cal.App.3d at p. 508.) And the burden was on the defendant to establish that there was a good reason for its refusals to admit.
The trial court did not abuse its discretion in deciding that defendant had failed to sustain that burden. In addition to its refusal to admit the genuineness of Christals various demands for overdue commissions, and its failure to dispute them, defendant also refused to admit "that [its] material breach of the Representation Agreement in or about March 1991 excused Christal from further performance under the agreement." Thus, the court did not abuse its discretion in permitting plaintiff to recover the expenses associated with proving its claim and with proving that it had no liability under the cross-complaint since all of the claimed breaches of contract occurred in 1993 — years after the court held Christals continued performance under the agreements was excused. Had defendant admitted that Christals performance was excused after 1991, there would have been no triable issues remaining on the cross-complaint.
And the fact that plaintiffs request for admission that Christals performance was excused after 1991 demands the admission of an "ultimate fact" does not preclude an award of costs of proof. Code of Civil Procedure section 2033, subdivision (a), authorizes the admission of the application of law to fact and "expressly authorizes a request for admission `embracing a matter that is clearly in controversy between the litigants." (2 Witkin, Cal. Evidence (4th ed. 2000) Discovery, § 157, p. 991; see Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724, 735 [Awarding sanctions, the court noted that requests for admissions "may . . . require an application of law to fact"].)
Finally, defendant argues that "the vast majority of the attorney time that was being spent for Katz had nothing to do with establishing the amounts of the money owing" and that the "75% figure [of] the amount of attorney[] fees" awarded by the court was "arbitrar[y]." But plaintiff supported the fees incurred by declarations from its attorneys, and defendant offered no real challenge to that evidence in the trial court. Moreover, the court was able to observe from the trial proceedings what was required to prove the facts that defendant refused to admit, reviewed the attorney declarations, and made the award "in light of the circumstances." On appeal, we defer to the courts factual findings. (See Shamblin v. Brattain (1988) 44 Cal.3d 474, 479.)[]
Defendant argues that the trial court "refused to have a hearing, even though requested by [defendant] to determine if any of the fees were linked to the refusal to admit." This contention lacks merit. There was a hearing on plaintiffs motion for sanctions. Defendant had every opportunity to challenge the fees sought by plaintiff at that hearing, which fees were described in 100 pages of detail in plaintiffs moving papers. But defendant chose to forego the opportunity because, it opined, "it would serve no useful purpose as Katz is not entitled to any money whatsoever for sanctions." Defendant cannot now complain that it had no chance to oppose plaintiffs motion.
DISPOSITION
The judgment is affirmed. Plaintiff is awarded its costs on appeal. (Rule 27(a), Cal. Rules of Court.)
We concur: NICHOLSON, Acting P.J. and ROBIE, J.