Pacific Building Development v. Kensington-Fair Oaks Assocs. Joint Venture CA6 ( 2014 )


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  • Filed 11/20/14 Pacific Building Development v. Kensington-Fair Oaks Assocs. Joint Venture CA6
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    SIXTH APPELLATE DISTRICT
    PACIFIC BUILDING DEVELOPMENT                                         H038685
    INC.,                                                               (Santa Clara County
    Super. Ct. No. CV 056857)
    Plaintiff, Cross-defendant and
    Appellant,
    v.
    KENSINGTON-FAIR OAKS
    ASSOCIATES JOINT VENTURE,
    Defendant, Cross-complainant and
    Appellant;
    TOPA INSURANCE COMPANY,
    Intervener and Appellant.
    Topa Insurance Company (Topa) appeals from an order denying its post-trial
    1
    motion for costs of proof under Code of Civil Procedure section 2033.420, arising from
    the litigation involving respondent Kensington-Fair Oaks Associates Joint Venture
    (Kensington) and Lincoln General Insurance Company (Lincoln), the primary liability
    insurer of construction work on Kensington’s apartment complex. In a companion appeal
    2
    (H038482) we uphold the court’s judgment allocating a settlement between Lincoln and
    1
    All further statutory references are to the Code of Civil Procedure.
    2
    This court ordered these two appeals to be considered together for oral argument and
    disposition.
    Kensington to both of Lincoln’s primary policies issued to the insured contractor,
    Pacific Building Development Inc. (Pacific). In this appeal Topa contends that the
    court’s denial of Topa’s motion for costs of proof constituted an abuse of discretion. We
    agree with Topa that in the circumstances presented, it was entitled to those costs.
    Accordingly, we must reverse the order and remand for the court to determine the amount
    of expenses Topa reasonably incurred to prove the fact Kensington had unjustifiably
    denied.
    Background
    The facts underlying this post-trial dispute are summarized in H038482 and need
    not be repeated in detail. In brief, Kensington and Pacific were engaged in litigation
    arising from the work performed by Pacific on Kensington’s apartment complex. Both
    Pacific and one of its subcontractors, Rojas Construction and its principal, Rudy Rojas
    (collectively, Rojas), were insured by Lincoln. Lincoln covered Pacific in two successive
    primary policies, covering the period between June 11, 2004 and June 11, 2005 (the
    04-05 policy) and the period between June 11, 2005 and June 11, 2006 (the 05-06
    policy). The policies issued to Rojas were effective from January 22, 2005 to January 22,
    2006, and from January 22, 2006 to January 22, 2007, each policy covering liability for
    property damage up to $500,000 for any one occurrence.
    After Pacific’s corporate status was suspended, Kensington and Lincoln settled the
    dispute, which included Pacific’s suit against Kensington for unpaid amounts,
    Kensington’s suit against Pacific for defective work, Pacific’s cross-claims against
    various subcontractors (including Rojas), and Lincoln’s complaint in intervention.
    Topa’s remaining complaint in intervention was decided by court trial.
    In the Kensington-Lincoln settlement the parties agreed that Lincoln would
    pay $1 million, to be allocated entirely to the 05-06 policy. Lincoln represented that
    this amount exhausted the 05-06 policy. Lincoln also represented (inaccurately, as the
    court later found) that it had denied coverage for its earlier policy, the 04-05 policy.
    2
    Lincoln agreed to assign to Kensington all of its rights asserted against Pacific’s
    subcontractors, including Rojas. Kensington agreed to release Lincoln entirely, and to
    release Pacific “to the extent of the [settlement amount],” from all claims connected with
    the action or Lincoln’s obligations under the agreement. Kensington, however, was “not
    releasing [Pacific] for any recovery in excess of the [settlement amount] and is not
    releasing any other insurer from obligations that are in excess or in addition to the one
    million dollars that exhausts the [Lincoln] insurance policy as recited herein.”
    Kensington also expressly acknowledged the risk that there might be unanticipated
    claims connected with the litigation, and it waived any rights it had “in such unsuspected
    claims.” Kensington further acknowledged its awareness of the Topa excess policy, and
    Lincoln expressed its understanding that Kensington would continue the litigation against
    Pacific to the extent that the Topa policy was available.
    By excepting “any other insurer” from the scope of the release, the settling parties
    exposed the excess policy Pacific had with Topa. Before Kensington and Lincoln signed
    the agreement, Topa learned of the prospective settlement and intervened in the action to
    protect its interests. In an amended complaint it added a claim for declaratory relief
    against Kensington. Topa also brought an action directly against Lincoln, which was
    later consolidated with the Pacific-Kensington litigation. Shortly thereafter, Rojas
    3
    successfully moved for an order determining its good faith settlement with Kensington.
    Topa eventually secured a default judgment against Lincoln, in which the court
    declared that the 04-05 policy applied to Kensington’s claims against Pacific and that
    neither of the primary policies had been “properly exhausted.” The Topa excess policy
    therefore had not been triggered.
    3
    In that settlement Kensington agreed to dismiss its cross-complaint against Rojas “and
    the rights it was assigned by Lincoln General Insurance Company with prejudice in
    exchange for a waiver of costs.”
    3
    A court trial took place on the consolidated action between January 4 and
    January 24, 2012. In a comprehensive statement of decision the court found the
    following: (1) The prior default judgment established that the Topa excess policy had not
    been triggered because the Lincoln policies had not been exhausted, and Kensington
    could not relitigate that point under the doctrine of collateral estoppel; (2) the 05-06
    policy had not been exhausted because $350,000 of the $1 million settlement payment to
    Kensington must be allocated to the Lincoln policies issued to Rojas; (3) the 05-06 policy
    had not been exhausted because the payment to Kensington “was not made to satisfy a
    final judgment against Pacific, nor did it result in a final, actual settlement with Pacific”;
    (4) after the $1 million payment to Kensington is reduced by the $350,000 allocation to
    Rojas, the remaining amount must be allocated pro rata between the 04-05 and 05-06
    4
    primary policies, thereby exhausting neither. Judgment was entered May 4, 2012.
    Topa moved for “cost of proof” sanctions on May 23, 2012, citing
    section 2033.420. The trial court denied the motion one month later, together with its
    denial of Kensington’s motion for new trial. On August 16, 2012, Topa filed a timely
    notice of appeal.
    Discussion
    At issue in this appeal is the trial court’s application of section 2033.420, which
    allows a party to move for sanctions if the opposing party fails to admit, upon a request
    5
    for admissions, the truth of any matter and that matter is later proved true. The statute
    4
    On August 24, 2012, the court entered an amended judgment awarding Topa costs of
    $47,241.09.
    5
    This statute 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 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. [¶] (b) The court
    4
    requires the court to order sanctions unless one of the exceptions listed in subdivision (b)
    applies. Subdivision (b)(2), for example, permits denial of the motion if “[t]he admission
    sought was of no substantial importance”; and the exception in subdivision (b)(3) applies
    when “[t]he party failing to make the admission had reasonable ground to believe that
    that party would prevail on the matter.”
    “Requests for admissions differ fundamentally from other forms of discovery.
    Rather than seeking to uncover information, they seek to eliminate the need for proof.”
    (Stull v. Sparrow (2001) 
    92 Cal.App.4th 860
    , 864.) “The primary purpose of requests for
    admissions is to set at rest triable issues so that they will not have to be tried; they are
    aimed at expediting trial.” (Brooks v. American Broadcasting Co. (1986) 
    179 Cal.App.3d 500
    , 509 (Brooks); Cembrook v. Superior Court (1961) 
    56 Cal.2d 423
    , 429.)
    An award of sanctions under section 2033.420, like its predecessor statutes, “is not a
    penalty. Instead, it is designed to reimburse reasonable expenses incurred by a party in
    proving the truth of a requested admission where the admission sought was “ ‘of
    substantial importance’ [citation] such that trial would have been expedited or shortened
    if the request had been admitted.” (Brooks, supra, at p. 509.)
    Topa’s motion for costs under section 2033.420 was directed at the costs of
    litigating one fact that Kensington had denied upon Topa’s request for admissions (RFA).
    RFA No. 6 asked Kensington to admit “that [your] settlement with Lincoln General
    Insurance Company in the instant action included resolution of [your] claims against
    ROJAS.” Kensington responded: “Objection: The requests [sic] for admission do [sic]
    not comport to [sic] C.C.P. § 2033.060. Without waiving objections: [¶] Denied.”
    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.”
    5
    At trial, Topa presented evidence that in settling its claims against Pacific,
    Kensington agreed that it would be resolving the claims against Rojas as well. In August
    2009, before its suspension, Pacific had demanded $540,359 from Rojas. In March 2010,
    Rojas had offered to pay $350,000 and dismiss its own claim against Pacific “in
    exchange for a dismissal of the cross-complaint by [Pacific].” Sherry Kretzer, the
    Lincoln representative who had handled the claim involving Pacific, testified that she had
    recommended that Lincoln accept the offer. That payment did not transpire, however.
    Kretzer was later told that the settlement between Kensington and Lincoln involved “a
    release of Rojas for payment of no money.” Roderick Standard, a senior vice president at
    the property management company used by Kensington, testified that he was involved in
    the mediation between Lincoln and Kensington, and there was no discussion about Rojas.
    Dean Mabie, assistant general counsel for the general partner of the Kensington
    partnership, also stated that Edward Ruberry (coverage counsel representing Lincoln at
    the mediation) had not included Rojas in the settlement offer he made during the
    mediation session.
    However, Daniel Smith, attorney for Lincoln in its representation of the suspended
    Pacific, testified that part of the settlement involved Rojas, which would pay nothing to
    Kensington and give up its own cross-claim against Pacific, subject to an order of
    good-faith settlement. Smith was not involved in this aspect of the settlement, which had
    been reached during mediation, and he acknowledged that the agreement to dismiss Rojas
    was not expressed in the resulting written document. However, he was shown a letter he
    had written in April 2010 to Kretzer and Lincoln’s counsel, in which Smith had explained
    the settlement terms arrived at during the mediation. Among those terms was the
    following: “Lincoln General would assign whatever rights it has as Intervenor against
    the subcontractors to Kensington. Once given the assignment, Kensington agrees to
    dismiss Rojas Construction in exchange for Rojas dismissing with prejudice its
    affirmative claim against [Pacific].” Smith added that the “understanding between
    6
    Kensington and Lincoln General regarding Rojas will not be contained in the agreement
    between Kensington and [Pacific]. The agreement will only state that [Pacific] is
    assigning its rights against Rojas to Kensington.”
    Smith noted in the letter that Topa was unhappy with this settlement and was
    expected to challenge it on the ground that the agreement to dismiss Rojas for no money
    was part of the settlement. Lincoln had not exhausted its policy because Rojas owed its
    policy limits on the case “and paid nothing as a conspiracy to artificially exhaust the
    [Pacific] policy.” Smith also advised the recipients of the letter that Rojas’s motion for
    good-faith settlement would not be easy to win, because it was paying nothing in a case
    with a large liability exposure. Smith suggested that “[t]he best argument will be that
    Rojas has given up their [sic] affirmative claims against [Pacific] in exchange of [sic] the
    dismissal and therefore the settlement is in good faith.”
    At trial the court admitted the letter from Smith and an April 13, 2010 entry on
    Lincoln’s “Claims Task Management System,” which stated, “Just spoke with Ed
    Ruberry—case settled for $1M with no payments on Rojas and no payment for atty fees.
    Excellent job by Ed at the mediation.” James Butler, a former Vice President of Claims
    for Lincoln, testified by deposition that he wrote the note after Ruberry called him to say
    that “the case [had] settled for a million dollars on Pacific Builders, that there would be
    no payments on Rojas and no payments for attorney fees.” Butler had already extended
    authority to settle the claims against Rojas for up to $350,000.
    The court also admitted the deposition of Barbara Nock, who had signed the
    settlement agreement on behalf of Lincoln. She testified that dismissal of Rojas for no
    payment was a condition of the Kensington-Lincoln settlement.
    In its statement of decision the trial court explained its finding that $350,000 of the
    Lincoln-Kensington settlement had to be allocated to resolution of the Rojas claims. The
    court referred to Butler’s claim note as an indication that Kensington “complied with its
    agreement with Lincoln General to release Rojas for no additional funds beyond the
    7
    $1 Million payment by Lincoln General.” After applying collateral estoppel to Topa’s
    prior default judgment against Lincoln, the court stated, “The Court finds that Lincoln
    General paid $1 Million to resolve Kensington’s claims against both Pacific and Rojas.”
    That finding meant that only $650,000 was attributable to the primary policies issued to
    Lincoln, which therefore were not exhausted.
    The court found its refusal to allocate the settlement proceeds in accordance with
    the agreement to be supported by both the facts and equity. It specifically found that
    allocating the $1 million payment exclusively to the 05-06 policy, “rather than allocating
    a portion of that payment to the Rojas policies, was a strategic decision to exhaust its one
    policy, terminate its defense obligations, trigger Topa’s excess policy and prevent future
    claims against the 2005/2006 policy.” The court further observed, “Lincoln General
    understood that Rojas had liability and damage exposure in the Kensington lawsuit. . .
    Prior to the April 2010 mediation that resulted in the Settlement Agreement, Lincoln
    General had an interest in settling the case on behalf of both of its insureds, Pacific and
    Rojas . . . Lincoln General therefore authorized a settlement on behalf of Rojas for
    $350,000.” Lincoln’s offer alone was, in the trial court’s view, a sufficient basis for
    equitably reallocating $350,000 from the $1 million settlement payment to the policies
    held by Rojas.
    6
    Notwithstanding Kensington’s assertion to the contrary, Topa unquestionably
    proved the truth of the fact it had asked Kensington to admit, that Kensington’s
    settlement with Lincoln included resolution of Kensington’s claims against Rojas. The
    central point of the parties’ dispute is whether Kensington “had reasonable ground to
    believe that [it] would prevail” on the issue. (§ 2033.420, subd. (b)(3).) The trial court
    found that it did, because (1) the settlement did not expressly resolve claims against
    6
    Kensington’s arguments include an oblique challenge to the trial court’s factual
    findings and evidentiary rulings, which are not properly before us. This is Topa’s appeal.
    8
    Rojas, and Kensington had not brought any direct claims against Rojas; (2) Roderick
    Standard had signed the verification of RFA No. 6 and testified that the settlement did not
    include Rojas; (3) the issue “hinged on” the admissibility of mediation-related documents
    and the court’s equitable act of reallocation. Thus, Kensington, the court concluded, “had
    a reasonable ground to believe it could prevail.”
    The determination of whether expenses are justified under section 2033.420 is a
    discretionary one for the trial court and will not be overturned absent abuse of that
    discretion. By contrast, if the trial court exercises its discretion and determines that the
    requirements of the statute exist, reasonable expenses must be awarded.” (Brooks, supra,
    179 Cal.App.3d at p. 508.) “ ‘The abuse of discretion standard . . . measures whether,
    given the established evidence, the act of the lower tribunal falls within the permissible
    range of options set by the legal criteria.’ [Citation.] A logical concomitant of our review
    is that there must be sufficient evidence for us to conclude that the action of the trial court
    was within the permissible range of options set by the legal criteria; here, that no
    miscarriage of justice has occurred.” (Dorman v. DWLC Corp. (1995) 
    35 Cal.App.4th 1808
    , 1815.) “ ‘ “[O]ne of the essential attributes of abuse of discretion is that it must
    clearly appear to effect injustice.” ’ ” (Ibid., quoting Denham v. Superior Court (1970)
    
    2 Cal.3d 557
    , 566; accord, Wimberly v. Derby Cycle Corp. (1997) 
    56 Cal.App.4th 618
    ,
    637, fn. 10 (Wimberly).)
    In the circumstances presented here, we believe that the denial of expenses
    did effect injustice by exceeding “the permissible range of options set by the legal
    criteria”—in this case, those criteria set forth in subdivisions (b)(1) through (b)(4) of
    section 2033.420. This is not a case in which the requested party denies liability,
    7
    negligence, or a fact not within its personal knowledge. Any of these situations might
    7
    Even without personal knowledge of the fact at issue, if the requested party
    nonetheless “had available sources of information and failed to make a reasonable
    9
    give a litigant the reasonable belief that the proof at trial will vindicate its denial of the
    requested fact. In Laabs v. City of Victorville (2008) 
    163 Cal.App.4th 1242
     (Laabs), for
    example, legal causation was at issue; the plaintiff was asked to admit that her injuries
    were not caused by the condition of the public property on which the automobile accident
    occurred, and that the intersection was not dangerous if used with due care. Those were
    issues on which she could have reasonably and in good faith believed she would prevail.
    In Wimberly, supra, 
    56 Cal.App.4th 618
    , the defendant producer and distributor of a
    bicycle fork assembly was asked to admit that the product was defective and that the
    defect had caused the plaintiff’s bicycle accident and resulting injuries. It denied the
    request but failed to produce any evidence on the soundness of the product or on lack of
    causation; had it done so, it might have escaped liability for the expenses plaintiff then
    incurred in proving that the fork assembly was defective and that the defect was the legal
    cause of his injuries. In Miller v. American Greetings Corp. (2008) 
    161 Cal.App.4th 1055
    , the plaintiffs were requested to admit that the defendant’s employee was not acting
    within the scope of his employment when his truck struck Holly Miller, an issue that was
    “not so cut and dried” as the trial court had suggested when it improperly imposed costs
    of proof on the plaintiffs. (Id. at p. 1066; see also Denver D. Darling, Inc. v. Controlled
    Environments Const., Inc. (2001) 
    89 Cal.App.4th 1221
    , 1239 [denial of cost-of-proof
    sanction within court’s discretion where ambiguity in contract led each party reasonably
    to believe the contract meant something different].) In Brooks, on the other hand, the
    plaintiff had “no good reason” to deny the straightforward fact that his truck was “as little
    as a fraction of an inch” over the center line of the road when it was struck by an
    oncoming bus. (Brooks, supra, 179 Cal.App.3d at p. 511.)
    investigation to ascertain the facts, such failure will justify an award of expenses under
    section [2033.420].” (Brooks, supra, 179 Cal.App.3d at p. 510; accord, Rosales v.
    Thermex-Thermatron, Inc. (1998) 
    67 Cal.App.4th 187
    , 198; Wimberly, supra, 56
    Cal.App.4th at p. 635.)
    10
    Neither Brooks nor Wimberly, the two cases cited by the trial court in its decision,
    provides a test that is strictly responsive to the current issue, whether Kensington had
    reasonable grounds to believe that it would prevail on RFA No. 6. The provision
    applicable here is subdivision (b)(3) of section 2033.420, which exempts a party from
    sanctions if, at the time of the denial, he or she had a “reasonable ground to believe that
    that party would prevail on the matter.” Brooks applied a more general standard
    reflective of the statute operative at that time, former section 2034, subdivision (c). That
    provision required the imposition of the sanction if “there were no good reasons for the
    denial and that the admissions sought were of substantial importance.” (Stats. 1982,
    ch. 138, § 1.) The Brooks court provided guidelines for determining whether there were
    “good reasons” for the denial of the requested fact: The requested party may have
    reasonably viewed the subject matter as “relatively trivial”; the party may have lacked
    personal knowledge of the matter but “had available sources of information and failed to
    make a reasonable investigation to ascertain the facts; and whether the party has
    attempted in good faith to reach a reasonable resolution of the matters involved. (Brooks,
    supra, 179 Cal.App.3d at pp. 510-511.) In short, under the former statute, as applied in
    Brooks, “there must be some reasonable basis for contesting the issue in question before
    sanctions can be avoided.” (Id. at p. 511.)
    The Brooks court stated that in determining whether there were “no good reasons
    for the denial” under former section 2034, subdivision (c), 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.”
    (Brooks, supra, 179 Cal.App.3d at p. 507 & fn. 4; id. at p. 511.)
    The court in Wimberly, supra, applied former section 2033, subdivision (o), which
    was substantively identical to the current provision, section 2033.420. In reversing the
    order denying sanctions, the appellate court emphasized that the defendant, after denying
    the defect in the bicycle fork assembly, had not produced any evidence at trial to rebut
    11
    the evidence of either the defect or causation. The defendant therefore had “no
    reasonable belief [that] it could prevail on the causation and defect issues.” (Wimberly,
    supra, 56 Cal.App.4th at p. 638.) Notably, the court did not use the term “good faith” in
    determining whether the defendant had a reasonable basis for denying the existence of
    the defect.
    Subsequently, however, the court in Miller, supra, applied the “good faith”
    language in the Brooks discussion of former section 2034, subdivision (c), to the current
    version of the sanctions statute, section 2033.420, in determining that the plaintiffs
    “could have reasonably entertained a good faith (albeit ultimately mistaken) belief that
    they could prevail . . . under respondeat superior.” (Miller v. American Greetings Corp.,
    supra, 161 Cal.App.4th at p. 1066.) Similarly, the court in Laabs, supra, held that the
    trial judge “could have easily concluded” that the plaintiff, in refusing to admit the lack
    of dangerousness of the intersection, “reasonably held a good faith belief that she would
    prevail at trial on these issues.” (Laabs, supra, 163 Cal.App.4th at p. 1277.) But in both
    Miller and Laabs it appears that the issue under consideration was the fourth exception,
    that “[t]here was other good reason for the failure to admit” (§ 2033.420, subd. (b)(4),
    former § 2033, subd. (o)), not section 2033.420, subdivision (b)(3).
    Subdivision (b)(3) of section 2033.420 does not use language suggesting “good
    faith” of the denying party as a consideration in determining whether to award sanctions
    against that party. It appears to require only the party’s objectively reasonable belief that
    he or she will prevail on the issue. But even if the “good faith” factor is tenable in the
    determination of the subdivision (b)(3), the trial court did not make any finding that
    Kensington’s denial was made with good faith. Instead, its ruling directly reflected the
    language of subdivision (b)(3), by stating that Kensington “had reasonable grounds to
    believe that . . . it would prevail on the matter.”
    To uphold this ruling, however, would effect a manifest injustice in the
    circumstances before us. Kensington’s belief that it would prevail was based on its
    12
    confidence that it could conceal its side agreement with Lincoln by relying on the written
    integrated settlement agreement, Roderick Standard’s and Dean Mabie’s testimony, and
    Kensington’s objections to the admission of mediation documents. Topa was not
    requesting admission of a party’s opinion, a legal conclusion, or an application of law to
    fact. (See Garcia v. Hyster Co. (1994) 
    28 Cal.App.4th 724
    , 735.) In such requests it may
    be more likely that the requested party reasonably believed that he or she would prevail
    on that issue. Here, by contrast, Kensington was asked to admit a simple fact within its
    personal knowledge or, at the very least, easily confirmed by minimal investigation: that
    its settlement with Lincoln included Kensington’s dismissal of Rojas from its lawsuit.
    Even without considering whether Kensington denied RFA No. 6 in “good faith,” we
    cannot see how the grounds for Kensington’s belief that it would prevail on this factual
    issue could have been reasonable. Topa therefore should not have been forced to expend
    considerable sums at trial to prove that the settlement included dismissal of Rojas.
    Kensington suggests an alternative ground for upholding the denial of sanctions:
    citing the exception provided in subdivision (b)(2) of section 2033.420, it contends that
    RFA No. 6 was of “no substantial importance.” The trial court, however, properly found
    against Kensington on this question. It noted the Wimberly court’s explanation of
    “substantial importance”: “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.’ ” (Wimberly, supra, 56 Cal.App.4th
    at pp. 634-635, quoting Brooks, supra, 179 Cal.App.3d at p. 509.) Here, the trial court
    reasoned that “the issue of whether the $1 million Lincoln General settlement payment
    included resolution of the Rojas claims is of substantial importance because the inclusion
    of the Rojas claim meant that a substantial portion of the $1 million payment would be
    allocated towards that claim, leaving the primary policy short of exhaustion. The issue of
    whether the primary policy was exhausted (so as to trigger Topa’s excess policy) was a
    central issue in Topa’s action against Kensington.” The trial court’s exercise of
    13
    discretion on this point is amply supported by the facts on which it based its conclusion.
    Unquestionably subdivision (b)(2) is inapplicable here.
    Kensington does not suggest any “other good reason for the failure to admit”
    RFA No. 6, under the catch-all exception to sanctions in section 2033.420,
    subdivision (b)(4). We therefore must remand this matter to enable the trial court to
    ascertain the amount of reasonable expenses Topa incurred in proving the matter
    specified in RFA No. 6.
    Disposition
    The order denying Topa’s motion is reversed. Upon remand, the trial court shall
    have the opportunity to determine the amount of reasonable expenses to which Topa is
    entitled to recover pursuant to Code of Civil Procedure section 2033.420.
    14
    _______________________________
    ELIA, J.
    WE CONCUR:
    _____________________________
    PREMO, Acting P. J.
    _____________________________
    MÁRQUEZ, J.
    

Document Info

Docket Number: H038685

Filed Date: 11/21/2014

Precedential Status: Non-Precedential

Modified Date: 4/18/2021