Judge: Deirdre Hill, Case: YC072653, Date: 2022-10-12 Tentative Ruling

Case Number: YC072653    Hearing Date: October 12, 2022    Dept: M

Hearing Date:                          October 12, 2022

Moving Parties:                      Plaintiffs Kenneth L. Creal and Kenneth L. Creal, an Accountancy Corp.

Responding Party:                  Defendant Amitiss Nasiri

Motion for Attorneys’ Fees Pursuant to CCP §2033.420 to Prove Denied Request for Admissions

            The court considered the moving, opposition, and reply papers.  The court also considered the supplemental declarations.

RULING

            The motion is GRANTED.  The court awards $358,365 in attorney’s fees in favor of plaintiffs and against defendant.

BACKGROUND

On February 1, 2018, plaintiffs Kenneth L. Creal and Kenneth L. Creal, an accountancy

corporation filed a complaint against Amitiss Nasiri for libel based on a negative Yelp review.

On March 2, 2018, Nasiri (self-represented) filed a cross-complaint for IIED, invasion of

privacy, intentional breach of fiduciary duty, negligence per se, and injunctive relief.

On June 10, 2019, plaintiffs filed a First Amended Complaint for (1) defamation per se, (2)

defamation per quod, (3) trade libel, and (4) intentional infliction with prospective economic

advantage.

On August 30, 2019, the court denied defendant Nasiri’s special motion to strike.

On July 29, 2020, defendant Nasiri dismissed the cross-complaint

Trial was conducted over several weeks from August to December 2021, concluding on December 17, 2021.  The court found in favor of plaintiffs and against defendant and awarded $1,318,000 in special damages, $250,000 in general damages, and $30,000 in punitive damages.  The court also ordered that plaintiffs are entitled to attorneys’ fees in accordance with CCP 2033.420 in an amount to be determined upon a motion for attorneys’ fees.

            On March 30, 2022, judgment was entered.

LEGAL AUTHORITY

CCP §2033.010 states: “Any party may obtain discovery . . . by a written request that any other party to the action admit the genuineness of specified documents, or the truth of specified matters of fact, opinion relating to fact, or application of law to fact. A request for admission may relate to a matter that is in controversy between the parties.”

CCP §2033.420 states: “(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 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.”

“When a party denies an RFA, ‘[t]he question is not whether a reasonable litigant would have denied the RFAs. Nor is the question simply whether the litigant had some minimum quantum of evidence to support its denial (i.e., ‘probable cause’). The relevant question is whether the litigant had a reasonable, good faith belief he or she would prevail on the issue at trial.’ ‘Consideration of this question requires not only an assessment of the substantiality of the evidence for and against the issue known or available to the party, but also the credibility of that evidence, the likelihood that it would be admissible at trial and persuasive to the trier of fact, the relationship of the issue to other issues anticipated to be part of trial (including the issue's importance), the party's efforts to investigate the issue and obtain further evidence, and the overall state of discovery at the time of the denials and thereafter.’” Samsky v. State Farm Mutual Automobile Ins. Co. (2019) 37 Cal. App. 5th 517, 526.

“’Unlike other discovery sanctions, an award of expenses . . . is not a penalty. Instead, it is designed to reimburse reasonable expenses incurred by a party in proving the truth of a requested admission . . . such that trial would have been expedited or shortened if the request had been admitted.’” American Federation of State, County and Municipal Employees v. Metropolitan Water Dist. of Southern California (2005) 126 Cal. App. 4th 247, 267.

“If a party who denies a request for admission lacks personal knowledge but had available sources of information and failed to make a reasonable investigation, the failure will justify an award of sanctions. In order to be of substantial importance, a request for admission should have some direct relationship to an issue which, if not proven, would have altered the results of the case. There is no requirement, however, that the fact in question is one that would have altered the determination of the ultimate issue.”  Rosales v. Thermex-Thermatron, Inc. (1988) 67 Cal. App. 4th 187, 198 (citation omitted). “Litigation is supposed to be a search for truth.”  Id.

DISCUSSION

            Plaintiffs request $455,719 in attorneys’ fees against defendant Amitiss Nasiri pursuant to CCP 2033.420 on the grounds that defendant failed to admit the truth of multiple matters in response to plaintiffs’ Request for Admissions and plaintiffs incurred expenses and attorneys’ fees in proving those matters.  Specifically, plaintiffs seek fees relating to defendant’s denial of plaintiff Creal’s requests for admission nos. 1-8 and 11-25 and plaintiff Creal Corp.’s requests for admission nos. 1-4 and 7-28.

            Plaintiff Creal’s RFAs at issue are:

            Nos. 1, 2:  Admit [defendant] made a false statement . . . .

            Nos. 3, 4, 5, 6:  Admit [plaintiff(s)] never represented [defendant] as an accountant, never performed work on [defendant’s] behalf, only performed accounting services for [defendant’s former husband]

            Nos. 7, 8:  Admit that “My tax return was Manipulated” is a false statement . . .

            Nos. 11, 12, 13, 14:  Admit that [plaintiffs] never manipulated any tax return . . . .

            Nos. 15, 16, 17, 18:  Admit that [plaintiffs] never took a 20% fee . . . .

            Nos. 19, 20:  Admit that [defendant] has no basis to accuse plaintiffs “of committing fraud like YOU stated on Yelp.”

            No. 21:  Admit that “He has been helping in creating unreported income for the two business[es]” is a false statement that [defendant] made on Yelp.

            No. 22:  Admit that “This man followed me today to my attorneys’ office” is a false statement that [defendant] made on Yelp.

            No. 23:  Admit that [defendant] falsely accused plaintiff of covering cameras to hurt defendant.

            Nos. 24, 25:  Admit that plaintiff did not touch or damage [defendant’s] car at any time.

            Plaintiff Creal Corps’s RFAs at issue are:

            Nos. 1-4:  Admit that plaintiff did not harass, stalk, or threaten [defendant] or cover up [defendant’s] surveillance cameras.

            Nos. 7-12:  Admit that plaintiffs did not have a fiduciary duty to [defendant]; defendant never hired plaintiff to do any accounting work for defendant or defendant’s business.

            Nos. 13-20:  Admit that plaintiffs never concealed or diverted profits from [various businesses].

            Nos. 21-28:  Admit that plaintiffs never fabricated or manipulated accounting records [from various businesses].

            On June 13, 2018, plaintiff Creal served defendant with 28 requests for admission and plaintiff Creal Corp. served defendant with 35 requests for admission.  Defendant served amended responses to plaintiff Creal’s requests on August 1, 2018 and responses to plaintiff Creal Corp.’s requests on August 30, 2018.  Plaintiffs contend that defendant “denied nearly every one of these requests” or gave equivocal responses.  Plaintiffs assert that they were required to conduct further discovery, investigation, and motion work to prove the truth of the matters at trial.  Plaintiffs contend that they successfully proved the truth of the matters at trial.  The court determined that each of the defamatory statements defendant made about plaintiffs on Yelp and RipOff Report were false.

            Plaintiffs argue that the requests were of substantial importance to the case.  Moreover, plaintiffs argue, defendant had no reasonable ground to believe that she would prevail on the matter.

            Plaintiffs provide evidence that plaintiffs’ counsel spent 1279 hours at $350/hr. and an additional six hours in conjunction with the motion.  Plaintiffs argue that all fees should be awarded because the fees are intertwined with the full prosecution of the case.

            Plaintiffs argue that the requests were of substantial importance to the case.  Moreover, plaintiffs argue, defendant had no reasonable ground to believe that she would prevail on the matter.

            In opposition, defendant argues that the RFAs were sent out early in the litigation and that defendant had a good faith expectation to prevail at the time the denials were made based on the facts available to her.  She argues that she had a good faith belief in her own credibility and “properly relied on tax documents, information from her divorce proceedings, her accountant, and her divorce attorney.”  Defendant further contends that many of the requests were not of “substantial importance.”

            In reply, plaintiffs argue that “bad faith” is not an element; rather, the test is whether defendant had a “reasonable ground to believe that the party would prevail on the matter.”  Further, it is defendant’s burden to prove an exception to CCP §2033.420, and she has not met it.  As to defendant’s contention that plaintiffs failed to serve “supplemental requests for admission,” there is no statute that provides for such.  Plaintiffs also argue that defendant had “plenty of information to admit the RFAs at the time they were served” as plaintiffs served “simple, undisputable RFAs.”  Plaintiffs further reiterate that all RFAs were related to issues of substantial importance.  Plaintiffs also argue that apportionment of the bills is not needed because the entire case was a defamation case.

            The court has already determined that plaintiffs are entitled to attorneys’ fees under CCP §2033.420.

At the hearing on the motion on June 7, 2022, the court continued the hearing and made the following order for additional briefing:

The court found that the information contained in the RFAs was uniquely within the knowledge of defendant to admit or deny without the need of discovery or testimony from another party.

The court preliminarily found that it will allow RFA attorney fees related to:

1. Trial testimony and related discovery.

2. Plaintiff and defendant's depositions and related discovery.

3. Pre-trial discovery related to the RFAs in questions.

The court found that it will not allow attorney fees for:

1. Expert discovery.

2. Trial testimony of any witness related to expert testimony or testimony of the plaintiff's daughter.

3. Pleadings or other costs associated with the Anti-SLAPP motion.

Plaintiff was to file a supplemental brief addressing the following issues:

1. Itemize more clearly the breakdown in attorney fees claimed.

2. Show a nexus between the cost claimed and an RFA(s) at issue.

            On July 15, 2022, plaintiffs’ counsel filed a supplemental declaration.  Plaintiff’s counsel states that he further reviewed the invoices and further reduced the hours by 268 hrs. for a total claimed of 1,119 hrs. (x $350/hr.) for a total amount of $391,650.

            At the hearing on August 11, 2022, the court found that the number of hours for trial testimony and related discovery was not itemized with a clearer itemized breakdown of the attorney’s fees claimed.  Plaintiffs’ counsel’s declaration highlighted the series of reductions from their original motion for attorney’s fees but there was not a clear table accounting for the billable hours requested corresponding to the 1,119 hours alleged to cover trial testimony and related discovery, plaintiff and defendant’s depositions and related discovery, and pretrial discovery related to the RFAs in questions.  The court continued the hearing to allow plaintiffs’ counsel to submit a more clear, itemized list of its attorney’s fees in compliance with the June 7, 2022 order.

            On September 20, 2022, plaintiffs’ counsel filed a second supplemental declaration.  According to counsel’s declaration, plaintiffs further reduced the hours to 970.9 [64.1 hrs. for pre-trial discovery related to the RFAs; 70.5 hrs. for plaintiffs and defendant’s depositions and related discovery; 836.3 hrs. for trial testimony and related discovery], including removing fees related to causation and damages.  At an hourly rate of $350, plaintiffs request $339,815 plus an additional $18,550 in preparing the motion.

            In opposition, defendant argues that the second supplemental declaration is insufficient because the tasks are correlated to “all RFAs” and that the issues are “completely intertwined with causation and damages.”  Defendant points out that some of plaintiffs’ counsel’s explanations are vague.

            The court finds that the second supplemental declaration and table is sufficient.

            The motion is GRANTED.

            The court finds that the amount requested is reasonable.  The court thus awards $358,365 in attorney’s fees in favor of plaintiffs and against defendant.

            Plaintiffs are ordered to give notice of ruling.