Opinion
A151586
01-29-2018
MAGCO DRILLING, INC., Plaintiff and Respondent, v. NATOMA FAMILY HOUSING, L.P. et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco County Super. Ct. No. CGC14540975)
After defendants Natoma Family Housing, L.P. and St. Joseph's Family Associates, L.P. prevailed against plaintiff Magco Drilling, Inc.'s complaint for foreclosure of a mechanic's lien, defendants filed a motion seeking to recover cost-of-proof under Code of Civil Procedure section 2033.420, based on plaintiff's failure to admit certain requests for admission. Defendants appeal from the trial court's denial of their motion, arguing the court erred in concluding they had waived the right to recover such costs. We affirm.
All further statutory references are to the Code of Civil Procedure except as otherwise indicated.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On May 23, 2014, plaintiff recorded a mechanic's lien against defendants' property for money it claimed it was owed in connection with a construction project (Project).
On August 6, 2014, plaintiff filed a complaint for foreclosure of the mechanic's lien against defendants, alleging they had failed to pay $58,894 for work it had done on the Project. To enforce the lien, however, plaintiff was required to have recorded it within 90 days of the Project's completion. (See Civ. Code, § 8412 ["A direct contractor may not enforce a lien unless the contractor records a claim of lien after the contractor completes the direct contract, and before the earlier of the following times: [¶] (a) Ninety days after completion of the work of improvement. [¶] (b) Sixty days after the owner records a notice of completion or cessation."].)
"In order to have a valid mechanic's lien, a claimant must record a claim of lien within a prescribed period of time after completion of the work of improvement or after a notice of completion or notice of cessation has been filed. [Citation.] Once recorded, a claim of mechanic's lien constitutes a direct lien on the improvement and the real property to the extent of the interests of the owner or the person who caused the improvement to be constructed. [Citation.] But the failure of a claimant to timely record a claim of lien precludes the enforcement of a mechanic's lien." (Picerne Construction Corp. v. Castellino Villas (2016) 244 Cal.App.4th 1201, 1209-1210.)
On May 28, 2015, defendants propounded requests for admission that, in part, asked plaintiff to admit (1) the Project's completion date, and (2) it had failed to record its lien within the statutorily required time period.
On July 24, 2015, plaintiff served responses to defendants' requests, stating that after diligent inquiry it lacked sufficient information to either admit or deny the requests.
More than a year later, on October 31, 2016, defendants filed a motion for summary judgment on the ground that plaintiff's mechanic's lien was not timely recorded.
On December 22, 2016, the trial court entered judgment in favor of defendants on the ground asserted, dismissing the complaint with prejudice.
On February 15, 2017, defendants filed a motion for an award of attorney fees pursuant to sections 2033.420 and 2033.5, subdivisions (a)(10)(B) and (c)(5). Defendants alleged that due to plaintiff's failure to admit any knowledge as to the Project's completion date (or to exercise any reasonable diligence to determine that date), they were "forced to obtain irrefutable evidence from relevant witnesses, including third party witnesses, and public documents to prove the date of substantial completion." Defendants claimed they incurred $55,245 in attorney fees in connection with their efforts to prove that plaintiff's lawsuit was without merit because the mechanic's lien had been untimely filed.
On April 20, 2017, the trial court entered its order denying defendants' motion for attorney fees, finding they had waived responses to the requests for admission by having failed to file a motion to compel. This appeal followed.
DISCUSSION
I. Standard of Review
Defendants contend we must review the trial court's decision under the de novo standard of review. They are mistaken.
It is well established that the determination of whether a party is entitled to cost-of-proof sanctions under section 2033.420 is within the sound discretion of the trial court. (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1275-1276 (Laabs); Stull v. Sparrow (2001) 92 Cal.App.4th 860, 864 (Stull) [discussing § 2033, subd. (o), which is the predecessor to section 2033.420]; Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 508 [discussing § 2034, subd. (c), which is the predecessor to § 2033, subd. (o)].) Our review of an order denying a motion for sanctions under section 2033.420 is deferential. (Stull, at p. 864.) The trial court's order is presumed correct. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133; Laabs, at pp. 1271, 1275-1276, fn. 20.) An abuse of discretion will be found only where the party challenging the order shows that the trial court exceeded the bounds of reason. (Stull, at p. 864; Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618, 637, fn. 10 (Wimberly).)
It is true the bounds of reason are defined by the particular law being applied. (City of Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297.) Action that is inconsistent with the applicable principles of law is an abuse of discretion. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326-327 [ruling reviewed for abuse of discretion will not be disturbed " ' "unless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made [citation]" [citation]. . . . "Any valid pertinent reason stated will be sufficient to uphold the order." ' "]; City of Sacramento v. Drew, at pp. 1297-1298.) But where the trial court's determination "falls within the permissible range of options set by the legal criteria," we will uphold the trial court's ruling even if we disagree with it. (Department of Parks & Recreation v. State Personnel Bd. (1991) 233 Cal.App.3d 813, 831; Stull, supra, 92 Cal.App.4th at p. 864.) II. Costs-of-Proof Under Section 2033 .420
A party to a civil action may propound a written request that another party "admit the genuineness of specified documents, or the truth of specified matters of fact, opinion relating to fact, or application of law to fact." (§ 2033.010; see 2 Witkin, Cal. Evidence (5th ed. 2012) Discovery, § 162, p. 1141.) "Requests for admission are not restricted to facts or documents, but apply to conclusions, opinions, and even legal questions. [Citations.] Thus, requests for admission serve to narrow discovery, eliminate undisputed issues, and shift the cost of proving certain matters. As such, the requests for admission mechanism is not a means by which a party obtains additional information, but rather a dispute resolution device that eliminates the time and expense of formal proof at trial." (City of Glendale v. Marcus Cable Associates, LLC (2015) 235 Cal.App.4th 344, 353-354 (Glendale).)
" 'A request for admission [RFA] may relate to a matter that is in controversy between the parties.' [Citation.] Unless the responding party moves promptly for a protective order under section 2033.080, he or she, within 30 days of service of the RFAs [citation], shall respond in writing under oath and separately to each RFA [citation] and 'shall answer the substance of the requested admission, or set forth an objection to the particular request' [citation]. Each response to the RFAs must be 'complete and straightforward.' [Citation.] The responding party shall admit as much of the request that is true, 'either as expressed in the request itself or as reasonably and clearly qualified by the responding party' [citation]; '[d]eny so much of the matter involved in the request as is untrue' [citation]; or '[s]pecify so much of the matter involved in the request as to the truth of which the responding party lacks sufficient information or knowledge.' ' " (St. Mary v. Superior Court (2014) 223 Cal.App.4th 762, 774, italics added (St. Mary).)
Section 2033.420 provides, "(a) If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under [section 2033.010], and if the party requesting the 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 attorney's fees. [¶] (b) The 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 under Section 2033.290. [¶] (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." (Italics added.) III. Motions to Compel Under Section 2033 .290
Defendants contend the trial court erred in applying the exception of section 2033.420, subdivision (b)(1). Again, this is the exception that provides costs-of-proof are not awarded where "[a]n objection to the request was sustained or a response to it was waived under Section 2033 .290." (§ 2033.420, subd. (b)(1), italics added.) Section 2033.290, subdivision (a)(1) provides, in part: "On receipt of a response to requests for admissions, the party requesting admissions may move for an order compelling a further response if that party deems that . . . [¶] . . . [a]n answer to a particular request is evasive or incomplete." (Italics added.) "If the propounding party believes that the responses to RFAs are deficient in some respect or that any objections thereto are not well taken, he or she may make a motion to compel further responses under section 2033 .290. [Citations.] Section 2033.290 provides that such a motion to compel further responses may be made within 45 days of service of the responses [citation] if the propounding party asserts that the particular answer or answers are 'evasive or incomplete' or the objection or objections are 'without merit or too general' " (St. Mary, supra, 223 Cal.App.4th at p. 776, italics added.) The lower court here reasoned that defendants had waived their right to costs-of-proof because they did not bring a motion to compel unequivocal responses to their requests regarding the timeliness of the recording of the mechanic's lien. IV. Application
RFA No. 9 asked plaintiff to "[a]dmit that on November 21, 2013 the PROJECT was certified to be substantially complete by the architect of record for the PROJECT." Without objection, plaintiff responded, "After diligent inquiry, this responding party does not have sufficient information to admit or deny the requested admission." (Italics added.) RFA No. 18 asked plaintiff to "[a]dmit that [its] Notice of Mechanic's Lien was filed more than 90 days after the certification of substantial completion by the architect of record for the PROJECT." Plaintiff set forth three objections to the request, thereafter responding that "after diligent search of its records, it does not have sufficient information to allow it to admit or deny the requested admission." (Italics added.) Plaintiff was allowed by statute to provide a statement of lack of information in response to defendants' requests. (See St. Mary, supra, 223 Cal.App.4th at p. 774; § 2033.220, subds. (b)(3) & (c).)
The parties devote much of their briefing to whether the term "failure to admit" is limited to "unequivocal denials." For purposes of this appeal, we will assume that plaintiff's responses to RFAs No. 9 and No. 18 constituted "failures to admit." This assumption does not alter our conclusion that the trial court did not abuse its discretion in applying the section 2033.240, subdivision (b)(1) exception in ruling on defendants' cost-of-proof motion.
It is settled that an objection to a request for admission followed by a complete denial amounts to an unequivocal denial, and no motion to compel is required to preserve the right to cost-of-proof sanctions. (See American Federation, supra, 126 Cal.App.4th at p. 267.) The response at issue in American Federation, however, is distinguishable from the responses plaintiff provided here. The responding party in that case first posed objections and then stated, "[w]ithout waiving these objections, Local 1902 responds as follows: Deny." (Ibid., italics added.)
In order to avoid having to file a motion to compel as a prerequisite to obtaining costs-of-proof, "[i]t has been said that a denial of all or portion of the request must be unequivocal." (American Federation of State, County & Municipal Employees v. Metropolitan Water Dist. (2005) 126 Cal.App.4th 247, 268 (American Federation), italics added.)
In the present case, plaintiff's responses are more similar to the response that was at issue in Wimberly, a case in which the responding party's objections to a request for admission were followed by a partial denial, and the trial court subsequently denied the opposing party cost-of-proof sanctions. In that products liability action, the plaintiff had filed requests seeking the defendant's admission that (1) the product was defectively manufactured, (2) the defect proximately caused the plaintiff's injuries, and (3) the plaintiff's past and future medical expenses were reasonable and necessary. (Wimberly, supra, 56 Cal.App.4th at p. 635.) Concerning future medical care, the defendant initially unequivocally denied the request for admission (ibid.) and then amended its answer to object to the request as vague and ambiguous but, to the extent it could respond, the defendant denied the care was reasonable and necessary. (Id. at p. 636.) The appellate court held, with respect to the plaintiff's cost-of-proof fees, that he was "not entitled to costs associated with the medical care issue, because he made no motion to compel a further response after [the defendant] objected to the request for admission." (Ibid.)
The defendant stated in its amended response to the need for future medical care: " 'Objection. Defendant cannot respond to this question as phrased. The request is vague and ambiguous as to what is 'claimed' by the plaintiff as well as to the extent of medical care the plaintiff seeks. To the extent defendant can respond, defendant denies that the extent of future medical care, including replacement of prosthetic implants is reasonable and necessary.' " (Wimberly, supra, 56 Cal.App.4th at p. 636.)
Here, the plaintiff's responses to RFAs No. 9 and No. 18 are even less definitive than the ones at issue in Wimberly. Plaintiff did not completely or even partially deny the requested admissions; instead, it asserted it did not have sufficient information to either admit or deny them and left both of them unanswered. As to RFA No. 18, it also inserted objections. Plaintiff's response that it lacked sufficient information to admit or deny defendants' requests amount to "incomplete" responses within the meaning of section 2033.290, subdivision (a)(1), triggering the option of following up with a motion to compel. Instead of proceeding under this statute, defendants waived their right to compel further responses, choosing to conduct their own investigation as to the timeliness of the recording of plaintiff's mechanic's lien.
We disagree with defendants' implication that a motion to compel would have been an idle act, as such a motion can be a vehicle for potentially securing a legally effective admission of a dispositive fact: "[I]f the responding party disobeys an order compelling further responses made under section 2033.290, the court is empowered to 'order that the matters involved in the requests be deemed admitted' and/or impose monetary sanctions." (St. Mary, supra, 223 Cal.App.4th at pp. 776-777, italics added.) Had defendants brought a motion to compel here, such motion could potentially have lessened the attorney fees that were accumulated by defendants' attorneys in conducting detective work to substantiate the defense put forth in their summary judgment motion.
Defendants' own briefing supports the inference that plaintiff was not acting disingenuously at the time it stated that it lacked sufficient information to admit or deny the two requests for admission. Defendants report that because of plaintiff's failure to admit, they "spent additional time during the deposition of [plaintiff] addressing these issues," and "spent time interviewing witnesses, obtaining documents, obtaining declarations, and reviewing public records to irrefutably confirm the applicable dates for use in a motion for summary judgment."
Defendants argue that "[a] party is not required to file a motion to compel if the party received an answer to the entire request." However, the responses they received from plaintiff in this case were clearly "incomplete" in that they were essentially inconclusive. If merely an answer, any answer, is all that is required to trigger liability for costs-of-proof, there would be little or no need for the waiver exception set forth in section 2033.240, subdivision (b)(1). Defendants further assert that there is no basis to treat statements of lack of information differently from outright denials. We are not persuaded, as it appears under defendants' scenario there rarely would be grounds for waiver (and there would always be a right to costs-of-proof) so long as the answering party provided some type of response, no matter how evasive or incomplete. In sum, defendants' arguments would render this exception a virtual nullity.
"Because 'the current language of . . . section 2033.420 is similar to the current language of Federal Rules of Civil Procedure, rule 37(c)(2) (28 U.S.C.)' it is appropriate to ' "look to federal court decisions interpreting the parallel provisions of rule 37(c) . . . ." ' [Citation.] The goal of rule 37(c)(2) (28 U.S.C.), like the federal rules in general, is ' "to secure the just, speedy, and inexpensive determination of every action." ' " (Glendale, supra, 235 Cal.App.4th at p. 353, fn. 6.) Defendants rely heavily on federal law for the proposition that plaintiff's RFA responses amounted to failures to admit, and therefore they were not required to file a motion to compel. While federal law in this area may provide guidance to our courts, it is not binding. In any case, under the federal rules, the propounding party can move to compel further answers to requests for admission where the answering party has neither admitted nor denied due to lack of knowledge after making a reasonable investigation. (See Asea, Inc. v. Southern Pac. Transp. Co. (9th Cir. 1981) 669 F.2d 1242, 1247 [response that does not admit or deny does not comply with rules "if the answering party has not, in fact, made 'reasonable inquiry' or if information 'readily obtainable' is sufficient to enable him to admit or deny the matter."].)
We also disagree that plaintiff's response to RFA No. 9 does not fall within the exception because it was not accompanied by an objection. Section 2033.290, subdivision (a)(1), does not require an objection as a condition for a propounding party to bring a motion to compel a response following an "incomplete" answer.
In sum, we hold the trial court did not abuse its discretion in finding that defendants were not entitled to costs-of-proof based on plaintiff's responses to the two requests for admission. Because plaintiff's responses left important aspects of these two requests for admission unresolved, the lower court reasonably concluded that a motion to compel further responses was necessary. (§ 2033.420, subd. (b)(1) [no entitlement to costs of proof award if "a response to" the request for admission "was waived under Section 2033.290"]; see Wimberly, supra, 56 Cal.App.4th at p. 636.) Under the deferential abuse-of-discretion review, we have no authority to substitute our own decision for that of the trial court. (Walker v. Superior Court (1991) 53 Cal.3d 257, 272.) Our inquiry is limited to determining whether the trial court's decision exceeds the bounds of reason. (Stull, supra, 92 Cal.App.4th at p. 864.) We conclude it does not.
DISPOSITION
The order is affirmed.
/s/_________
Dondero, J. We concur: /s/_________
Margulies, Acting P. J. /s/_________
Banke, J.