CIV532372 UNIVERSAL HOME, ET AL. VS. KATHERINE ROBERTSON, ET AL.

UNIVERSAL HOME IMPROVEMENT, INC. 1460 O’BRIEN DRIVE ASSOCIATES
ERIC C. KASTNER MARK A. SERLIN

MOTION TO AWARD FEES TENTATIVE RULING:

A party that propounds Requests for Admissions may move for an order requiring the responding party to pay reasonable expenses that were incurred in proving the truth of any matter the responding party failed to admit. (Code of Civ. Proc. Sect. 2033.420, subd. (a).) The Court shall grant the order unless it finds that an objection to the request was sustained, the admission was of no substantial importance, the responding party had reasonable ground to believe that the party would prevail on the matter, or there was a good reason for the failure to admit. (Id. sect. 2033.420, subd. (b).) The moving party is only entitled to the reasonable expenses, including attorneys’ fees “incurred in making the proof, i.e., proving the matters denied by the opposing party.” (Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724, 736–737; Code of Civ. Proc. Sect. 2033.420(a).)

A. The Entity Defendants’ Motion Is Denied.

Each of the three entity Defendants (1460 O’BRIEN DRIVE ASSOCIATES, AIS Partners, and BAY ADVANCED TECHNOLOGIES) propounded the same four RFAs to Plaintiffs: that the defendant made no transfers of property, did not participate in the transfers, did not conspire regarding transfers, and is not liable for any of the claims in the complaint. Plaintiffs denied all requests.

At trial, the Court granted the Entity Defendants’ motion for nonsuit, finding that Plaintiffs “presented no evidence” to support their claims against the Entity Defendants. The Statement of Decision states that Plaintiffs failed to establish “any of the elements of conspiracy” against the Entity Defendants. (Statement of Decision on Nonsuit, January 28, 2019, at 3:9-10.) Thus, the Entity Defendants prevailed at trial not because they “proved the truth” of the four RFAs that Plaintiffs denied, but because Plaintiffs failed to establish a prima facie case against the Entity Defendants.

The Entity Defendants offer no evidence that they “proved the truth of” the four RFAs that Plaintiffs denied, and they have offered no evidence of what costs or fees were incurred to prove only those four matters.

The motion is denied as to the Defendants 1460 O’BRIEN DRIVE ASSOCIATES, AIS Partners, and BAY ADVANCED TECHNOLOGIES.

B. Defendant BENNETT’s Motion for Costs and Fees Is Continued for a Further Showing re Recoverable Attorneys’ Fees and Costs.

1. Plaintiffs Fail to Show that Subdivision (b) of Section 2033.420 Defeats this Motion.

Of the four bases for denying a motion under section 2033.420, Plaintiffs argue only the last two: reasonable ground for believing they would prevail and a good reason existed for failing to admit the request.

a. Plaintiffs first argue that they reasonably believed that the debt ROBERTSON owed to BENNETT was not a liability, since the 4-year statute of limitations to enforce the debt had run. The belief was not reasonable, since it is contrary to case law. (See United States Fidelity & Guaranty Co. v. Postel (1944) 64 Cal.App.2d 567, 572 (Fraudulent Conveyance Act not intended to exclude promise to pay debt barred in part by statute of limitations if there was fair consideration given in good faith by respective parties).)

b. Plaintiffs argue that the value of the transferred partnership interest was contested, and expert witness testimony was required at trial. This argument relates only to RFAs that pertained to the value of the transferred partnership. Only RFA Number 9 meets that description.

c. Plaintiffs’ final argument is that ROBERTSON’s one-sixth partnership interest was worth $166,666, which exceeded the debt she owed BENNETT. The argument is based on BENNETT’s testimony at trial in 2018. Trial testimony in 2018 is not evidence of what Plaintiffs believed when they denied the RFAs in 2015.

At most, Plaintiffs have offered evidence that they had a reasonable ground for denying RFA No. 9 only.

2. Defendant BENNETT Is Entitled to Fees and Costs But Failed to Establish the Amount Directly Attributable to Proving the Requests for Admissions.

Defendant BENNETT propounded eleven Requests for Admissions, all of which were denied. The Statement of Decision contains findings on matters that were the subject of RFAs 2 through 10. The Statement of Decision summarizes the evidence that led to those findings. (See Statement of Decision after Trial, January 28, 2019.) The evidence does not show that BENNETT proved the matters that were in RFAs 1 or 11. Evidence showed that ROBERTSON borrowed $650,000, not “over $700,000,” as stated in RFA 1; the Statement of Decision does not show that the Mariposa Property was foreclosed on, as stated in RFA 11. The Court concludes that Defendant BENNETT proved the truth of RFAs 2 through 10 and incurred attorney’s fees to do so.

Defendant BENNETT has not identified the evidence of what costs or fees were incurred to prove those nine matters. The motion merely concludes that “my clients” incurred $88,584 in “defending the action and proving each part of the facts and issues which UHI and LAVINE failed and refused to admit” to the RFAs. (Declaration of Serlin para. 12.) The Declaration includes 40 pages of billing statements from June 2015 through December 2018, but makes does not identify which billing entries pertain to proving which RFAs. Most of the billing entries do not reveal that they pertained to any of the nine requested matters. Serlin’s declaration provides that the attorneys’ fees and costs were for “successfully defending the action and proving each part of the facts/issues [denied by plaintiff].” (Id.) This almost identical language was the basis for the reversal and remand in Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724, 736 (attorney declaration stated that requested fee amount was for “attorneys fees, costs and other expenses associated with the trial of this case and proving those Requests for Admissions.”) Even a cursory review of Exhibit L to the Serlin Declaration demonstrates that the entries include entries that cannot be related to the prove-up.

Accordingly, the Court continues the hearing of this matter to May 24, 2019 at 9:00 a.m. in Department 4 of this Court. Defendant BENNETT shall file and serve, no later than May 8, 2019, a supplemental brief and supporting declaration demonstrating with specificity and clarity which billing entries relate to which Requests for Admissions.

Plaintiffs may, but are not required to, file and serve a responsive Supplemental Brief no later than May 17, 2019, that addresses only Defendant BENNETT’s Supplemental Brief/Declaration.

The briefs are not to exceed seven double-spaced pages.

LINE: 7 CIV532372 UNIVERSAL HOME, ET AL. VS. KATHERINE ROBERTSON, ET AL.

UNIVERSAL HOME IMPROVEMENT, INC. 1460 O’BRIEN DRIVE ASSOCIATES
ERIC C. KASTNER MARK A. SERLIN

MOTION FOR ORDER TENTATIVE RULING:

Defendants’ motion for costs is DENIED.

An offer to several plaintiffs jointly (with no indication as to allocation) is ineffective for § 998 purposes. It cannot be determined how much each plaintiff would receive and thus whether each plaintiff’s recovery at trial was “more favorable” than the offer. (See Meissner v. Paulson (1989) 212 Cal.App.3d 785, 791.) Defendants’ offer does not identify which Plaintiff to whom it is made. To the extent Defendants intended the offer to be made to Plaintiffs UHI and Lavine jointly, it is ineffective. Either Plaintiff’s or both Plaintiffs’ failure to accept the offer does not support a motion for post-offer costs under Code of Civil Procedure section 998.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Plaintiffs shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.