Opinion
NOT TO BE PUBLISHED
San Mateo County Super. Ct. No. CIV 451353
Sepulveda, J.
After the settlement of a personal injury action arising from a car accident, an attorney who had represented the plaintiff, and been discharged before the settlement, sued the defendant insured and her insurer. The attorney claimed that defendants induced the termination of his legal services contract with plaintiff by falsely understating the amount of available liability insurance covering the car accident.
The trial court granted summary judgment to defendants insured and insurer upon evidence that defendants did not intentionally engage in conduct designed to disrupt the contract, and that defendants’ failure to disclose the full amount of available insurance did not cause plaintiff to discharge his attorney. (Code Civ. Proc., § 437c.) Subsequently, the trial court denied defendants’ motion for litigation costs incurred in proving facts that the attorney refused to admit during discovery. (Code Civ. Proc., § 2033.420.) Plaintiff attorney appeals the adverse summary judgment, and defendants insured and insurer appeal the denial of their motion for costs. We affirm the judgment and orders denying costs.
I. facts
Defendant Pamela Ross was in a car accident with Scott Parness in July 2002. Ross was insured by defendant Allstate Indemnity Company (Allstate). Parness sued Ross for personal injuries sustained in the accident. In May 2003, Parness first retained attorney David Morgan on an hourly basis to represent him in the underlying litigation. After several months of representation, Parness grew dissatisfied with Morgan. Parness was questioned at his deposition about why he became dissatisfied with Morgan, and Parness testified that he “didn’t feel [Morgan] was the right person to handle the case.” Parness did not identify any particular deficiency on Morgan’s part and said it was “just a personal feeling.” Parness added that he did not feel that Morgan “was specialized enough.” Parness never expressed his feelings of dissatisfaction to Morgan.
Parness contacted plaintiff Law Offices of Bruce E. Krell, Inc. and spoke with Attorney Krell about replacing Attorney Morgan. Parness decided to hire Krell. When asked at his deposition how he decided to hire Krell, Parness replied: “I knew nothing about the field and just from the referral from the insurance agent, and that was about it.” Parness retained Krell in December 2003, under a contingency fee agreement.
The attorney and his law offices are generally referred to interchangeably as Krell. Where relevant, we distinguish Attorney Krell from the Krell Law Offices.
Krell conducted discovery in the underlying litigation. A form interrogatory asked defendant Ross to identify all insurance policies that might provide coverage for her car accident with Parness. Ross responded in February 2004. The only policy identified was an Allstate automobile liability policy for $250,000. At her deposition in the underlying action, Ross said she did not know her policy limits. An attorney in the Krell Law Offices, Russell Robinson, submitted a declaration on the summary judgment motion stating that he and Attorney Krell were informed by Ross, Ross’s attorney (employed by Allstate), and Allstate itself that Ross had only a $250,000 policy limit. In a November 2004 settlement conference statement, Ross’s attorney reported that Parness, represented by Krell, had demanded the $250,000 policy limit in settlement. Ross countered with a $10,000 offer.
In January 2005, Parness discharged Attorney Krell and substituted the Krell Law Offices with the law firm of Cotchett, Pitre, Simon & McCarthy (Cotchett firm). Krell had represented Parness for a little over one year. At his deposition, Parness testified that he became “personally dissatisfied” with the service of the Krell Law Offices in late 2004. Parness said that his dissatisfaction with Krell was “similar” to his dissatisfaction with his first attorney, Morgan. As with the earlier discharge of Attorney Morgan, Parness did not identify any specific events that motivated the second substitution of attorneys.
At his deposition, Parness initially said he was not satisfied with “[t]he communication level” from Krell. When pressed on the matter, Parness said: “I just didn’t feel comfortable. It was a personal thing. . . . It was just a personal touch. You know, you feel comfortable with somebody or you don’t feel comfortable with somebody.” Parness said he “just didn’t feel they were handling it properly.” Parness added that he did not think the case was “going in any correct direction,” and felt that the case was “at a standstill.” Parness decided to telephone the Cotchett law firm because Parness was acquainted with Joseph Cotchett’s son. Parness testified that his decision to hire the Cotchett firm was based solely on his dissatisfaction with the Krell Law Offices. Parness said that Ross’s insurance policy limits had nothing to do with his decision to discharge Krell. Parness added that Allstate did not induce him to fire Krell, and said Allstate had nothing to do with his decision to substitute attorneys.
In response to Allstate’s requests for admission, Parness admitted all of the following facts: “no act or omission by Allstate caused you to fire Krell as your attorneys in the underlying action”; “the amount of Ross’s insurance coverage played no part in your termination of Krell”; “Allstate did not cause you to fire Krell”; “you fired Krell because you were unhappy with their representation of you in the underlying action”; and “no one from Allstate ever urged you to fire Krell.” (Capitalization altered.)
Frank Pitre of the Cotchett firm testified about meeting with Parness to discuss new legal representation. Pitre said that Parness “was deeply troubled” and “very anxious” because he was in a lot of pain and “not comfortable with the lawyers that he had.” Parness described “the level of communication” with Krell and Pitre concluded that Parness “was not getting any response to the status of the case, that [Parness] had been to several hearings where at least in his view nothing had been done.” Parness was reportedly concerned because he had been offered only $10,000 in settlement. Pitre testified that Parness was uncertain about the defendant motorist’s insurance policy. Pitre testified: Parness “said something about 250, but I think the concern was this [defendant] is somebody who lived in Hills borough; they must have assets.”
When Attorney Robinson at the Krell Law Offices transferred the case to the Cotchett firm in January 2005, Robinson stated that Krell had repositioned the personal injury case from “a soft-tissue case” to a “surgery case,” and expected that Allstate would soon make a $250,000 policy limits offer. Robinson had recently discussed settlement with Ross’s attorney and Robinson had repeated earlier demands that Allstate produce the insurance policy declaration page confirming the amount of coverage, and told Allstate that his firm could not advise Parness to accept $250,000 in settlement until the policy declaration page was disclosed.
Several months after the substitution of attorneys, Allstate revealed that its insured, defendant Ross, had a $1 million umbrella liability policy in addition to the previously disclosed $250,000 automobile liability policy. Ross’s attorney said the additional policy was discovered during an Allstate home office review. Ross declared that she was unaware of the umbrella policy when she answered discovery requests from Krell. Ross explained that her husband kept the records in her family, and he died between the time of the car accident and the time when she responded to discovery requests about insurance. In May 2005, Ross and Parness settled the underlying personal injury lawsuit for $432,500, representing the limits of Ross’s $250,000 primary policy and $182,500 from her umbrella policy.
The Krell Law Offices brought this lawsuit for interference with contract against Allstate and Ross. Krell alleged that Allstate and Ross concealed the $1 million umbrella liability policy with the intention, and effect, of disrupting Krell’s legal services contract with Parness who was suing Ross for damages. In June 2006, defendants Allstate and Ross filed separate motions for summary judgment. The trial court granted the motions, finding undisputed evidence that defendants did not intentionally engage in conduct designed to disrupt the contract, and that defendants’ failure to disclose the full amount of available insurance did not cause Parness to discharge Krell.
The Krell Law Offices also sued Parness and the Cotchett firm. Those claims were settled and are not a subject of this appeal.
After defendants obtained summary judgment, they separately moved to recover litigation costs incurred in proving facts that Krell refused to admit during discovery. (Code Civ. Proc., § 2033.420.) The trial court denied the motions upon concluding that Krell had good reason for failing to admit facts stated in defendants’ requests for admission. (Code Civ. Proc., § 2033.420, sub d. (b)(4).) All parties appealed to this court. Krell appealed the adverse summary judgment, and defendants Ross and Allstate separately appealed the orders denying costs. We consolidated the three appeals for decision.
II. discussion
A. Summary Judgment
Summary judgment is granted “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, sub d. (c).) On appeal, we conduct a denovo review of the record to “determine with respect to each cause of action whether the defendant seeking summary judgment has conclusively negated a necessary element of the plaintiff’s case . . . .” (Guz v. Bechtal National Inc. (2000) 24 Cal.4th 317, 334.) “We apply the same procedure used by the trial court: We examine the pleadings to ascertain the elements of the plaintiff’s claim; the moving papers to determine whether the defendant has established facts justifying judgment in its favor; and, if the defendant did meet this burden, plaintiff’s opposition to decide whether he or she has demonstrated the existence of a triable issue of fact.” (San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal. App.4th 1529. 1535.)
The single cause of action at issue here is interference with contract. “The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) The trial court concluded that the evidence negated the third element of acts designed to disrupt the contract, and the fourth element of causation. The court was correct.
On these two elements, defendants presented evidence “that would preclude a reasonable trier of fact from finding that it was more likely than not that the material fact was true.” (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1003.) Ross declared that her failure to disclose all available insurance was inadvertent and that she had “no interest in, wish, desire, or intention of seeing Mr. Krell’s firm dismissed as Mr. Parness’ attorney in the underlying action.” Parness testified at his deposition that he dismissed the Krell Law Offices because he “just didn’t feel they were handling [the personal injury case] properly,” and that he did not dismiss Krell because of Ross’s discovery responses. When Parness was asked “[d]id Ms. Ross’ insurance policy limits have anything to do with your decision to fire the Krell office,” Parness replied “No.” In response to requests for admissions, Parness admitted that he fired Krell solely because he was unhappy with Krell’s representation and that the amount of Ross’s insurance coverage played no part in his discharge of Krell.
Krell conceded, at his deposition, that Parness never expressed displeasure about Ross’s $250,000 policy limit nor threatened to fire him over the policy limits. Krell also conceded that he had no evidence that Ross’s insurance disclosures were intentionally false rather than a “simple mistake,” and did not know why Allstate did not disclose all available insurance. Krell could not state any reason why Allstate would have any feelings of animosity toward him or his firm.
Krell has not shown a triable issue of material fact. There is no evidence that Ross and Allstate understated insurance coverage to disrupt the attorney-client relationship between Krell and Parness, and no evidence that Parness fired Krell because coverage was understated. Attorney Krell’s reliance on his own declaration and that of his colleague, Attorney Robinson, is unavailing. The trial court properly sustained objections to most statements in these declarations on grounds of hearsay, irrelevancy, and lack of foundation. It is pure speculation for Attorney Robinson to declare: “I am informed and believe that if Allstate revealed the $1 million umbrella policy our office would not have been dismissed by Parness.” Such ruminations do not constitute “specific facts” showing a triable issue of material fact sufficient to withstand a summary judgment motion. (Code Civ. Proc., § 437c, sub d. (p)(2).)
Nor is summary judgment defeated by Krell’s argument that Parness’s deposition testimony was not “clear and decisive.” It is true that Parness did not identify a particular event leading to Krell’s discharge nor articulate detailed reasons motivating his decision to dismiss Krell. But Parness’s testimony about discharging Krell was no different from his testimony about other important decisions Parness made, like his retention of Morgan as his first attorney, and the process he used to hire both Krell and the Cotchett firm. Attorneys are often hired and fired for subjective reasons. While Parness’s testimony about why he discharged Krell may not be as “clear and decisive” as Krell would like, the testimony was crystal clear that Parness’s decision to discharge Krell and hire the Cotchett firm was based solely on his dissatisfaction with the Krell Law Offices. Parness plainly said that Ross’s insurance policy limits had nothing to do with his decision to discharge Krell. This evidence justified judgment in defendants’ favor by negating the causation element of the interference with contract cause of action, and Krell failed to respond with admissible evidence showing a triable issue of material fact.
The moving parties also presented evidence additional to Parness’s testimony that negated causation, including Krell’s admission that Parness never expressed displeasure about Ross’s policy limits nor threatened to fire him over the policy limits. Contrary to the claim of Krell’s attorney at oral argument, Parness’s state of mind in deciding to fire Krell was not a material fact that was “sought to be established solely by the individual’s affirmation thereof.” (Code Civ. Proc., § 437c, sub d. (e), italics added.) In any event, a court ruling on a summary judgment motion “retains the discretion to grant the motion even when the moving party relies solely upon a declarant’s statement concerning his or her state of mind.” (Chee v. Amanda Goldt Property Management (2006) 143 Cal. App.4th 1360, 1370, fn. 3.) Summary judgment was properly granted.
B. Costs of Proof
Under civil discovery provisions governing requests for admission, “[i]f a party fails to admit . . . the truth of any matter when requested to do so, . . . and if the party requesting that admission thereafter proves . . . 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 attorney’s fees.” (Code Civ. Proc., § 2033.420.) Moreover, “[t]he court shall make this order unless it finds any of the following: [¶] (1) An objection to the request was sustained or a response to it was waived [by failing to move for an order compelling further response]. [¶] (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. [¶] (4) There was other good reason for the failure to admit.” (Code Civ. Proc., § 2033.420, sub d. (b).)
Following their successful motions for summary judgment, defendants Ross and Allstate moved to recover their costs of proving several facts Krell refused to admit during discovery. The trial court denied the motions. The court determined that Krell had good reason for failing to admit the proffered facts and, in one instance, that Allstate waived a response to the requested admission. (Code Civ. Proc., § 2033.420, sub d. (b)(1) & (4).) A trial court’s ruling on a cost of proof motion may not be reversed on appeal absent a clear abuse of discretion. (Brooks v. American Broadcasting Co. (1986) 179 Cal. App.3d 500, 508.) There was no abuse of discretion here.
Ross propounded the following requests for admission to Krell, which are at issue here: “Ross’ alleged ‘false testimony and concealment’ was not a ‘but for’ cause of Parness dismissing you as his attorney” (Request 2); “[t]here is no causal connection between the alleged ‘false testimony and concealment’ by Ross and your discharge as attorney by Parness” (Request 5); and “[t]he actions of Ross played no part in your termination as Parness’ attorney” (Request 9). (Capitalization altered.) Krell denied the requests and explained the basis for his denials. Krell responded that “Ross did not reveal her $1 million Allstate umbrella insurance policy at her deposition in 2004, nor in her two verified answers to interrogatories, nor in any court mandated settlement conferences . . . . As a result, Krell was dismissed by Parness when neither knew the true Ross Allstate coverage was $1.25 million. If not dismissed Krell would have settled the case within that policy coverage limits and been paid directly.” Krell asserted that “since Scott Parness sought maximum financial damages and recovery, he would not have discharged Krell if prior to Jan[uary] 7, 2005 Parness knew the true insurance coverage for his accident and case against Ross was $1,250,000 instead of only $250,000.”
The trial court found plaintiff Krell’s explanations for his denials to be reasonable. The trial court also found that plaintiff Krell had good reason to deny Allstate’s requests because none of the matters sought to be admitted was “within the personal knowledge of Plaintiff nor reasonably susceptible to his admission or denial.” Also, the court concluded that the requests “were properly denied insofar as an admission would have required Plaintiff to speculate about the intentions or motivations of another party.”
On appeal, Ross argues that Krell was unjustified in denying the requested admissions because Krell’s discovery responses occurred after Parness was deposed, and Parness testified that his decision to substitute attorneys was based solely on his dissatisfaction with the Krell Law Offices, and had nothing to do with Ross’s insurance policy limits. Ross contends that Parness’s deposition ended the controversy over why Parness discharged Krell and compelled Krell to admit the facts as Parness related them. We disagree. The requests did not simply ask Krell to admit that another party made certain statements about his motivations and that Krell had no contrary evidence of that party’s motivations. Instead, the requests effectively asked Krell to admit that another party testified truthfully and fully about that party’s intentions and motivations. Krell reasonably denied requests that required binding admissions about the state of mind of another party. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) ¶ 8:1345, p. 8G-18 [party should not be required to make binding admissions on the basis of hearsay].)
The trial court likewise operated within the bounds of its discretion in denying costs to Allstate. Allstate requested Krell to: “Admit that Allstate is not responsible for Parness’s failure to pay your portion of attorneys’ fees” (Request 5); “[a]dmit that Allstate’s alleged ‘false testimony and concealment’ of Ross’s umbrella policy was not the reason Parness dismissed you as his attorneys” (Request 8); “[a]dmit Parness dismissed you as his attorney solely because he was dissatisfied with your services” (Request 10); “[a]dmit that Allstate did not intend that Parness dismiss you as his attorneys” (Request 11); “[a]dmit that you have suffered no damages as a result of Allstate’s conduct” (Request 14); and “[a]dmit that Allstate’s alleged acts or omissions played no part in Parness’s decision to dismiss you as his attorneys” (Request 15). (Capitalization altered.) Krell objected to request 10, denied all requests, and provided extensive explanations for each of his denials.
As with the denial of Ross’s motion for costs, the trial court found that Krell’s explanations for his denials to Allstate were reasonable; that Krell had good reason to deny Allstate’s requests because none of the matters sought to be admitted was within Krell’s personal knowledge nor reasonably susceptible to admission or denial; and that admissions would have required Krell to speculate about the intentions or motivations of another party.
Allstate argues that it was entitled to ask for admissions outside Krell’s personal knowledge because “[a] party responding to requests for admissions has a duty to make a reasonable investigation to ascertain the facts even though the party has no personal knowledge of the matter . . . .” (Brooks v. American Broadcasting Co., supra, 179 Cal. App.3d at p. 510.) Allstate misunderstands the court’s ruling. It is true that Krell had a duty to investigate the facts, and that investigation may reasonably have included Parness’s deposition testimony in which Parness claimed personal dissatisfaction with Krell as the sole reason for his substitution of attorneys. The point, however, is that Krell did not have personal knowledge of the truth of Parness’s representations and no reasonable investigation could reveal the inner motivations of another party. The requests for admission, as worded, demanded admissions beyond Krell’s ability to admit. The court did not abuse its discretion.
III. disposition
The judgment is affirmed. The orders denying costs of proof are affirmed.
We concur: Ruvolo, P.J., Reardon, J.