Dean Ventura vs R&R Motorworks
Case No: 16CV05772
Hearing Date: Wed Jun 05, 2019 9:30

Nature of Proceedings: Attorney Fees

TENTATIVE RULING:

For the reasons set forth herein, the court continues the hearing on this motion to July 3, 2019, at 9:30 a.m. Plaintiff shall file and serve supplemental papers as discussed herein on or before June 19, 2019. Defendants shall file and serve any response on or before June 25, 2019. Plaintiff shall file and serve any reply (not to include any new evidence) on or before June 28, 2019.

Background:

On December 21, 2016, plaintiff Dean Ventura filed his complaint in this action asserting four causes of action against defendants R&R Motorworks (R&R), Ralph Gold and Nancy Gold: (1) breach of contract; (2) fraud; (3) negligence; and, (4) violation of consumer protection statute.

On January 31, 2017, defendants filed their answer to the complaint, generally denying the allegations thereof and asserting six affirmative defenses.

A bench trial was held in this action between March 6, 2018, and April 6, 2018, consisting of 12 days of trial. Following trial, the parties submitted their closing arguments in written submissions.

On August 22, 2018, the court filed its tentative statement of decision. After objections of the parties were considered by the court, the court filed its final statement of decision (SD) on September 25, 2018.

On April 29, 2019, the court entered judgment in favor of Ventura and against defendants in the amount of $21,837.15.

On May 10, 2019, Ventura filed this motion for an award of attorney fees and costs pursuant to Code of Civil Procedure section 2033.420 based upon defendants R&R and Ralph Gold’s failure to admit facts proven at trial. The motion is opposed by defendants. The parties’ arguments are discussed below.

The court notes that the opposition was filed and served one day late. This tardiness presumably was caused by counsel’s failure to account for the intervening Memorial Day holiday. A reply was filed based upon this opposition and the court does not find that the untimely filing resulted in any prejudice. The court will consider the reply but reminds counsel of the necessity to file and serve documents timely. The court also notes that the reply does not contain footers complying with Rules of Court, rule 2.110(b). In addition, both parties have failed to provide electronic bookmarks required by Rules of Court, rule 3.1110(f)(4).

Analysis:

“If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under this chapter, 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 attorney’s fees.” (Code Civ. Proc., § 2033.420, subd. (a).)

“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.” (Code Civ. Proc., § 2033.420, subd. (b).)

Ventura seeks fees pursuant to section 2033.420 based upon the responses of R&R and Ralph Gold (Gold) to five requests for admissions (RFA’s). To address the attorney fees and cost issue raised by this motion, the court examines each of these requests individually.

RFA No. 2 is: “Admit that YOU did not provide Plaintiff with any written estimate(s) before YOU performed any work on Plaintiffs Corvette.” (Kaestner decl., exhibit A.) The response is an unqualified “Deny.” (Kaestner decl., exhibit B.)

Defendants argue that this fact was not proven at trial. The court made express findings that there were verbal estimates and text messages regarding costs, implying the absence of written estimates prior to work. (SD, pp. 2, 3.) The court concluded that, having voluntarily paid all but the final payment, Ventura had waived the statutory requirement of written estimates as to all but the final payment. (SD, pp. 3, 5.) Waiver is only an issue if there is an absence of written estimates. For purposes of section 2033.420, Ventura proved the truth of matter requested to be admitted.

Under section 2033.420, subdivision (b), an award is mandatory unless the court finds that one of the four exceptions applies. The first exception (objection sustained or response waived) does not apply because of the unqualified denial. In opposition, defendants argue that, although the existence of estimates is on its face important to the matters in this case, the existence of estimates was not of substantial importance in resolving the ultimate question of whether Ventura was entitled to a refund.

“ ‘An issue is of “substantial importance” if it has “at least some direct relationship to one of the central issues in the case, i.e., an issue which, if not proven, would have altered the results in the case.” [Citation.]’ [Citation.]” (Bloxham v. Saldinger (2014) 228 Cal.App.4th 729, 752, fn. 20.)

The existence of written estimates was a central issue to Ventura’s claim of violation of Business and Professions Code section 9884.9 and the absence of an estimate was the basis for the court’s award relating to the last payment made under protest. The court does not find that the admission sought was of no substantial importance.

Defendants argue that Gold denied that he did not provide any written estimates before work was performed because (1) at that time, Gold believed, based on what he learned from the Bureau of Automotive Repair representative, that he was not required to provide documented estimates since the work was not repairs, and (2) because Gold reasonably believed that text messages and emails between him and Ventura were estimates provided to Ventura. (Opposition, pp. 6-7; Unander decl., ¶ 4 & exhibit B [responses re facts supporting denials].)

In order to find that sanctions are not to be awarded based on the third exception, the court must find that “[t]he party failing to make the admission had reasonable ground to believe that that party would prevail on the matter.” (Code Civ. Proc., § 2033.420, subd. (b)(3).) Gold’s argument that he believed that estimates were not needed does not respond to the request to admit not providing estimates. The request does not ask Gold to admit whether estimates were necessary, only whether estimates were provided. This argument does not demonstrate a reasonable ground for denial. With respect to text messages and emails, the issue is not whether Gold reasonably believed that the text messages and emails constituted written estimates, but whether Gold reasonably believed he would prevail at trial on the issue of providing written estimates. (See Grace v. Mansourian (2015) 240 Cal.App.4th 523, 530.) In this action, the existence of written estimates is a substantial issue as it relates to the requirements of Business and Professions Code section 9884.9. (See Bennett v. Hayes (1975) 53 Cal.App.3d 700, 704 [violation of Bus. & Prof. Code, § 9884.9 renders repair contract unenforceable by repair dealer].) The court finds that defendants had no reasonable belief that defendants would prevail at trial on the issue that R&R/ Gold provided written estimates.

Factors to be considered to determine whether there are “other good reasons for the failure to admit,” apart from the second and third exceptions, include whether, at the time of the denial, defendant reasonably viewed the subject matter of the requested admission as not involving an issue of substantial importance, whether defendants had available sources of information and failed to make a reasonable investigation to ascertain the facts, the degree to which defendants attempted in good faith to reach a reasonable resolution of the matters involved, and whether information later was discovered that called for admission of the matter and the party thereafter advised the party propounding the request that the denial was in error or should be modified. (Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509-511.) There is no persuasive evidence to show a good reason for Gold’s failure to admit this fact based upon these factors. The issue from the beginning was one of substantial importance and all of the necessary information was always available to defendants.

Defendants present evidence of their efforts to settle the entirety of the case. The factor of the attempt “in good faith to reach a reasonable resolution of the matters involved” relates to resolution of the factual issue under consideration—such as by proffering stipulations—not resolution of the case as a whole. (Brooks v. American Broadcasting Co., supra, 179 Cal.App.3d at p. 510.) Consequently, the evidence of settlement of the entirety of the case does not provide any persuasive evidence relating to the factual issue in the request.

The court concludes that defendants have not shown an exception to awarding attorney fees and costs for failure to admit RFA No. 2.

RFA No. 5 is: “Admit that YOU charged Plaintiff for work on his Corvette which was not performed.”

RFA No. 6 is: “Admit that YOU charged Plaintiff for parts which were not installed into his Corvette.”

The responses to RFA Nos. 5 and 6 are both unqualified denials.

Defendants argue that this fact was proven at deposition on May 30, 2017, rather than at trial. (Unander decl., ¶ 2 & exhibit A.) Defendants note that Gold testified at his deposition that he admitted that there were charges for work not performed and parts not provided. (Ibid.)

“ ‘ “Proof” is the establishment by evidence of a requisite degree of belief concerning a fact in the mind of the trier of fact or the court.’ [Citation.] Given this definition, preparation for trial or arbitration is not the equivalent of proving the truth of a matter so as to authorize an award of attorney fees under [current section 2033.420].” (Wagy v. Brown (1994) 24 Cal.App.4th 1, 6.) The fact that Gold admitted facts in deposition that should have been admitted in RFA Nos. 5 and 6 does not show that Ventura “proved” the fact in deposition rather than at trial. No fact is “proved” until it is adjudicated by the court. These facts were found by the court. (SD, p. 3.)

Defendants argue that these facts were not of substantial importance because the overcharges amounted to less than $1,000 in damages. The amount of $1,000 in damages is a matter of substantial importance, as defined above, insofar as it directly relates to amount of damages claimed by Ventura.

Defendants argue that Gold reasonably believed that this request could be denied because Gold did not have an opportunity to audit the final invoice. (Unander decl., ¶ 4 & exhibit B.) RFA Nos. 5 and 6 relate to the objective fact of charging for service or parts not provided, not whether such charges constituted a good faith mistake in invoicing.

“Each answer in a response to requests for admission shall be as complete and straightforward as the information reasonably available to the responding party permits.” (Code Civ. Proc., § 2033.220, subd. (a).) “Each answer shall:

“(1) Admit so much of the matter involved in the request as is true, either as expressed in the request itself or as reasonably and clearly qualified by the responding party.

“(2) Deny so much of the matter involved in the request as is untrue.

“(3) Specify so much of the matter involved in the request as to the truth of which the responding party lacks sufficient information or knowledge.” (Code Civ. Proc., § 2033.220, subd. (b).)

The response of an unqualified denial failed to respond based upon facts Gold actually knew, or could have determined by reasonable investigation, at the time of his response. The fact that he admitted the overcharges in deposition demonstrates the ease by which Gold should have admitted those overcharges in response to the RFA. The court does not find that Gold/ R&R had a reasonable ground to believe that that defendants would prevail on the matter at trial or that there was other good reason for the failure to admit.

The court concludes that defendants have not shown an exception to awarding attorney fees and costs for failure to admit RFA Nos. 5 and 6.

RFA No. 14 is “Admit that Plaintiff towed his Corvette from YOUR shop because the vehicle could not be driven, at the time Plaintiff retrieved the vehicle.”

RFA No. 22 is “Admit that Plaintiff paid YOU for an engine rebuild and electronic fuel injection system which YOU were never able to make operable.”

Again, the response of Gold and R&R were unqualified denials.

Defendants argue that these facts were not proven at trial. The court expressly found: “With respect to the fuel lines, the Court understood that the improper fuel line installation was the reason the car would not start when Ventura came to retrieve it.” (SD, p. 5.) The court also stated that “Upon being presented with a Cashier’s Check for the amount demanded, Gold returned a car to Ventura that Ventura testified would not run and needed to be towed out of the shop. Gold testified, however, that Ventura insisted on towing the car before he could wrap up the repairs.” (SD, p. 2.) The court has found true the facts set forth in RFA No. 14 and 22.

Defendants argue that these facts are not of substantial importance because at the time the vehicle was removed from defendants’ possession, Gold had not finished working on vehicle, and because the fact that the fuel injection system was not at the time working does not imply that Gold’s work was bad or incompetent. (Opposition, p. 6.) These two underlying facts are of substantial importance, as defined above, because the fact that the vehicle was not operable and the reason for the inoperability was an improper fuel line are both directly related to Ventura’s claim that Ventura had paid for service that was not adequately performed. These RFA’s do not ask why the facts are true, which from Gold’s perspective could have been a qualification to the response. (See Code Civ. Proc., § 2033.220, subd. (b)(1).)

Defendants also argue that Gold reasonably believed that he could deny these requests. With respect to RFA No. 14, Gold bases his belief on his statement that he had no knowledge of the vehicle’s roadworthiness. (Unander decl., exhibit B.) Lack of knowledge is different from an unqualified denial. (See Code Civ. Proc., § 2033.220, subd. (b)(3).) Moreover, there is no evidence that Gold could not have, by reasonable investigation, obtained sufficient information to admit some or all of these requests. With respect to RFA No. 22, Gold provides information that he was troubleshooting the fuel injection system at the time the vehicle was removed. (Unander decl., exhibit B.) In both cases, the court finds that Gold could not reasonably believe that he could prevail on the factual issues at trial. The court also finds that there are no other good reasons for the failure to admit these requests.

The court concludes that defendants have not shown an exception to awarding attorney fees and costs for failure to admit RFA Nos. 14 and 22.

Having concluded that attorney fees are mandated by section 2033.420 for the failure to admit these requests, Ventura must show the amount of attorney fees awardable under the statute. In support of the attorney fee request, Ventura provides the declaration of his counsel, attorney Jan Eric Kaestner, as to the total amount of attorney and paralegal time spent on this entire action from the time of the denials of these RFA’s through trial as 176.8 hours, of which Kaestner opines that more than 20 percent of that time was spent dedicated to the proof of the facts denied. (Kaestner decl., ¶¶ 10-19.) Ventura thus asserts that the lodestar amount of attorney time is equal to 20 percent of the value of that total attorney time, or $10,716.00. (Kaestner decl., ¶¶ 20-21.) To that amount, Ventura seeks a multiplier enhancement and also an award of costs, including expert costs. (Kaestner decl., ¶¶ 22-25.) Ventura also seeks $3,665.15 in attorney fees and costs for the making of this motion. (Kaestner decl., ¶ 26.)

While the court agrees that reasonable attorney fees and costs are appropriately awarded to Ventura, the court does not agree that the method of calculation presented by Ventura is sufficient. “[T]he statute authorizes only those expenses ‘incurred in making that proof,’ i.e., proving the matters denied by the opposing party.” (Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724, 736-737.) Expenses of trial preparation and proof of other matters are not recoverable. A general estimate as a fraction of the entire post-denial litigation is a poor substitute for a particularized accounting. As one treatise recommends: “PRACTICE POINTER: Carefully track your time and costs associated with proving matters on an issue-by-issue (RFA-by-RFA) basis to facilitate granting of your motion for compensation.” (Edmon & Karnow, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2018) ¶ 8:1413.1b, bolding omitted.) Notwithstanding counsel’s opinion that the amount of attorney time dedicated to the proof of the RFA facts denied exceeded 20 percent of the total time, the court requires a more particularized time analysis correlating attorney activity and time spent with proof of each specific RFA fact for which attorney fees are requested under section 2033.420. The court recognizes that, as a contingency matter, contemporaneous time records may not exist. However, the court needs an RFA-by-RFA identification of activity and estimated time and not merely a conclusory statement based upon total time in order to assure that the award relates only to matters for which there is statutory authorization.

The court will therefore continue this matter to permit the filing of further declaration(s) and other supporting papers responding to the court’s request.