Opinion
NOT TO BE PUBLISHED
San Mateo County Super. Ct. No. CIV 477881
RIVERA, J.
I. INTRODUCTION
This appeal arises out of the third unsuccessful attempt by The Cadle Company II, Inc. (Cadle) to recover on a defaulted bank loan entered against Balew’s Fine Jewelers, Inc. (Balew’s), a defunct, family-run jewelry business. Cadle has filed five separate appeals, challenging the judgments entered in favor of the defendants and the orders awarding defendants cost of proof fees. In the instant appeal, Cadle appeals from the postjudgment order awarding cost of proof fees to Marilyn Bell (Marilyn) pursuant to Code of Civil Procedure section 2033.420, following Cadle’s unreasonable denial of the requests for admissions propounded during discovery. We affirm.
The underlying litigation involves Marilyn Bell, and her two sons, Phillip Bell (Phillip) and Harold Bell (Harold). We shall refer to the defendants by their first names to avoid confusion. (See In re Marriage of Witherspoon (2007) 155 Cal.App.4th 963, 967, fn. 2 [“We refer to the parties by their first names for clarity and ease of reference, and intend no disrespect.”].)
All further undesignated statutory references are to the Code of Civil Procedure.
II. BACKGROUND
This action arises from a defaulted bank loan. In April 2005, Cadle sued Balew’s and Marilyn (The Cadle Company II, Inc. v. Balew’s Fine Jewelers, Inc., et al. (Super. Ct. Santa Clara County, 2005, No. 105CV040095) [Balew’s I]), alleging breach of contract and breach of written guaranty of the loan. After dismissing that action on the eve of trial, Cadle filed an identical action against Balew’s and Marilyn in November 2006, which also named Phillip as a defendant (The Cadle Company II, Inc. v. Balew’s Fine Jewelers, Inc., et al. (Super. Ct. Santa Clara County, 2006, No. 106CV073476) [Balew’s II]). Just after the case was ordered to trial, Cadle dismissed its claims against Marilyn and Phillip. Thereafter, Cadle obtained a default judgment against Balew’s.
Cadle filed the first amended complaint in the instant action in April 2009, naming Balew’s, Marilyn, Phillip, and Harold as defendants (The Cadle Company II, Inc. v. Balew’s Fine Jewelers, Inc., et al. (Super. Ct. San Mateo County, 2009, No. CV 477881) [Balew’s III]). The complaint alleged, among other things, that the individual defendants, while acting as officers and directors of the corporation, improperly dissipated Balew’s assets for personal purposes at the expense of Balew’s creditors.
During discovery, Marilyn submitted requests that Cadle admit that Marilyn did not receive any fraudulent transfers; that she did not possess any property belonging to Balew’s; and that Cadle was not in possession of any documents indicating that Marilyn received fraudulent transfers from Balew’s. Cadle denied the requests for admissions. Cadle also refused to respond to Marilyn’s special interrogatory requesting identification of each purported fraudulent transfer from Balew’s to Marilyn. Furthermore, when asked to identify all the facts supporting its claim that Marilyn received any such fraudulent transfers, Cadle merely responded that Marilyn had received “[a] large dollar amount of checks while [Balew’s] was being improperly liquidated.”
Marilyn moved for summary adjudication on the grounds that, among other things, Cadle’s discovery responses were devoid of any facts to support Cadle’s claims. In response, Cadle continued to advocate its denials, but failed to produce any supporting evidence, and in fact failed to deny or otherwise respond to the majority of Marilyn’s separate statement of undisputed facts. Cadle attempted to create a triable issue of fact by asserting that Marilyn was simply given the sums of money as a continuation of her deceased husband’s salary and not for any work that Marilyn had performed. In support of this contention, Cadle referenced a portion of Phillip’s deposition testimony, in which he stated that “after [his father] passed away, [Marilyn] assumed his salary.” Deposition testimony from Phillip, however, revealed that Marilyn’s draws were compensation for the work she performed at Balew’s, five days a week, every week. Phillip unequivocally testified that Marilyn received a regular salary between 2001 and 2004.
The trial court granted summary adjudication in favor of Marilyn. In so ruling, the court stated: “No reasonable person could interpret the cited deposition testimony as supporting the proposition that ‘these sums were not employee payments for work performed’ especially given the testimony on [p]age 45 of the same deposition in which Phillip [] testifies that Marilyn [] worked five days a week, every week, and received compensation based on her contribution, and given that five of the checks attached as [e]xhibits... are expressly denoted as ‘salary.’ ” In support of this finding, the trial court also relied on Phillip’s testimony in a prior deposition, the transcripts of which were included in Marilyn’s moving papers, in which Phillip unequivocally testified that between 2001 and 2004, he and Marilyn received “ ‘regular salaries’ ” as “ ‘compensation’ ” from Balew’s.
Marilyn moved to recover costs of proof for Cadle’s failure to admit the truth of the requests for admissions pursuant to section 2033.420. At the hearing on the motion, plaintiff’s counsel advised the trial court that Cadle would be seeking an appeal, which prompted the trial court to opine: “The fact that you are even considering appealing this decision shows to me that but for the fact that vexatious litigant is a legal term of art, The Cadle Company is a vexatious litigant in pursuing this litigation... I seriously hope the Court of Appeal in reviewing this realizes this entire appeal, including the appeal of the grant of summary judgment in favor of Marilyn [], is absolutely, completely specious and without any legal merit. That’s my opinion.”
The trial court awarded Marilyn $4,860.51as reasonable costs of proof. This appeal followed.
In a supporting declaration, Marilyn’s counsel averred that Marilyn “is an elderly woman of very modest means who lives in a trailer park, and as such cannot afford to pay substantial attorney fees.” Accordingly, counsel and his firm had not billed Marilyn “for more than 50% of the time incurred in presenting her defense.”
III. DISCUSSION
A. Standard of Review
On appeal, we review the court’s ruling under section 2033.420 for an abuse of discretion. (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1275-1276 (Laabs); Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 508 (Brooks); Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618, 636-637; Barnett v. Penske Truck Leasing Co. (2001) 90 Cal.App.4th 494, 497.) Abuse of discretion occurs “only where it is shown that the trial court exceeded the bounds of reason. [Citation.] It is a deferential standard of review that requires us to uphold the trial court’s determination, even if we disagree with it, so long as it is reasonable.” (Stull v. Sparrow (2001) 92 Cal.App.4th 860, 864.) As we shall discuss, there was no abuse of discretion here.
B. No Abuse of Discretion
The trial court awarded attorney fees and costs to Marilyn pursuant to section 2033.420. “Under... section 2033.420, a party that denies a request for admission may be ordered to pay the costs and fees incurred by the requesting party in proving that matter. The court ‘shall’ order the payment of such fees and costs unless it finds: (1) that an objection to the request was sustained or a response to the request was waived; (2) the admission sought was of no substantial importance; (3) the party failing to make the admission had reasonable ground to believe that the party would prevail on the matter; or (4) there was other good reason for the failure to admit the request.” (Laabs, supra, 163 Cal.App.4th at p. 1276.)
Section 2033.420 provides, in pertinent part:“(a) If a party fails to admit... the truth of any matter when requested to do so under this chapter, 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. [¶] (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.... [¶] (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.”
In this case, there was no objection to the requests for admission, nor was a response waived. The requests for admission had substantial importance. Marilyn asked Cadle to admit that Marilyn did not receive any fraudulent transfers; that she did not possess any property belonging to Balew’s; and that Cadle was not in possession of any documents indicating that Marilyn received fraudulent transfers from Balew’s. These matters are “ ‘central to disposition of the case.’ ” (Laabs, supra, 163 Cal.App.4th at p. 1276; Brooks, supra, 179 Cal.App.3d at p. 509.)
The only remaining question in the analysis is the reasonableness of Cadle’s denials. “In evaluating whether a ‘good reason’ exists for denying a request to admit, ‘a court may properly consider whether at the time the denial was made the party making the denial held a reasonably entertained good faith belief that the party would prevail on the issue at trial.’ ” (Laabs, supra, 163 Cal.App.4th at p. 1276; Brooks, supra, 179 Cal.App.3d at p. 511.) “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 when the party has available sources of information as to the matters involved in such requests for admissions. [Citations.] Thus, if a party denies a request for admission (of substantial importance) in circumstances where the party lacked personal knowledge but had available sources of information and failed to make a reasonable investigation to ascertain the facts, such failure will justify an award of expenses under [current section 2033.420].” (Brooks, supra, 179 Cal.App.3d at p. 510.)
At the time the requests for admissions were denied, the instant case had been pending for nine months. Moreover, this case is the third lawsuit filed by Cadle within a five-year period in which it seeks to recover on the defaulted bank loan. In the prior cases, Cadle deposed Marilyn, Phillip, and a corporate accountant, as well as propounded extensive written discovery, all of which pertained to Balew’s inventory, banking records, and other financial matters. None of this discovery garnered any factual support for the prior cases and the cases were dismissed.
In the instant case, Cadle conducted discovery that also confirmed that Marilyn had not participated in any fraudulent conveyances. Indeed, discovery revealed that the so-called illegal transfers were salary draws to compensate Marilyn for her services. Cadle, nevertheless, purported to rely on Phillip’s deposition testimony as a basis for its denials, asserting that Phillip admitted that the sums paid to Marilyn were not for work performed. That deposition testimony, however, supports no such inference. Indeed, Phillip testified that: “My dad was taking out a draw of somewhere around $5,500 or $6,000 for both of them while he was alive. And basically, then she assumed—after he passed away, she assumed his salary.” Cadle could not reasonably rely on the cited deposition testimony as a basis for denying the requests for admissions, especially given Phillip’s testimony from the same deposition in which he stated that Marilyn worked at Balew’s every week, and received compensation based on her contribution. Accordingly, the trial court did not abuse its discretion in finding that Cadle had no plausible basis for its denials.
Cadle also complains that Marilyn failed to connect the request responses to any services rendered that justified an award of costs. In particular, Cadle faults the declaration of Marilyn’s counsel for failing to disclose any work that “resulted in the uncovering of any proof whatsoever of any reason why, when [Cadle] made its denials, it should have ‘known better’ and admitted.” This argument is disingenuous.
First, section 2033.420, subdivision (a) provides, in pertinent part: “(a) If a party fails to admit... the truth of any matter when requested to do so under this chapter, 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.” (Italics added.)
Contrary to Cadle’s suggestion, nothing in subdivision (a) of section 2033.420 requires a party seeking cost of proof sanctions to establish that his or her opponent should have “ ‘known better’ and admitted []” the requests for admissions. Rather, the plain language of the statute provides for reimbursement of the costs associated with proving the matter at issue, i.e., Marilyn had not received any fraudulent conveyances.
Second, Marilyn’s counsel provided a detailed declaration outlining the procedural history of the instant case, which necessitated the filing of the motion for summary adjudication and subsequent motion for costs of proof. Counsel also submitted timesheets, describing the tasks performed, time spent and hourly rates. The award was well within the trial court’s discretion.
IV. DISPOSITION
The postjudgment order awarding cost of proof fees to Marilyn is affirmed. Marilyn is entitled to recover her costs on appeal.
We concur: RUVOLO, P.J. REARDON, J.