Judge Lynne M. Hobbs, Case Number: 21STCV41864, Date: 2023-12-05 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 21STCV41864, Date: 2023-12-05 Tentative Ruling

Case Number: 21STCV41864 Hearing Date: April 2, 2024 Dept: 30

JOSE RAMIREZ, AN INDIVIDUAL vs PHILLIPS 66 CORPORATION,A DELAWARE CORPORATION

TENTATIVE

Defendant’s Motion for Relief from Deemed Admissions and from Stipulation Re Liability is GRANTED. However, the motion for relief from deemed admissions is granted on the condition that Defendant pay Plaintiff’s counsel attorney fees in the amount of $7,650. Moving party to give notice.

Evidentiary Objections

Defendant’s Objections to Plaintiff’s Evidence

· The following objections are OVERRULED: 2,

· The following objections are SUSTAINED: 1, 3, 4, 5, 6, 7

Legal Standard

Code of Civil Procedure section 2033.300 states that:

(b) A party may withdraw or amend an admission made in response to a request for admission only on leave of court granted after notice to all parties.

(b) The court may permit withdrawal or amendment of an admission only if it determines that the admission was the result of mistake, inadvertence, or excusable neglect, and that the party who obtained the admission will not be substantially prejudiced in maintaining that party's action or defense on the merits.

(c) The court may impose conditions on the granting of the motion that are just, including, but not limited to, the following:

(1) An order that the party who obtained the admission be permitted to pursue additional discovery related to the matter involved in the withdrawn or amended admission.

(2) An order that the costs of any additional discovery be borne in whole or in part by the party withdrawing or amending the admission.

Section 2033.300 applies to all admissions, and thus permits withdrawal not only of admissions contained in an actual response, but also admissions deemed admitted based on failure to respond. (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973.) The requirements for relief under Code of Civil Procedure section 2033.300 are similar to those governing relief from default under section 473(b). (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403.)

“Section 2033.300 eliminates undeserved windfalls obtained through requests for admission and furthers the policy favoring the resolution of lawsuits on the merits.” (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1418.)

Discussion

Defendant brings this motion seeking relief from Requests for Admission, Set One being deemed admitted and to obtain relief from stipulating to liability and to waive the defense of comparative negligence. Defendant seeks relief from what Defendant argues were unauthorized actions of its attorney Joseph Gordon which resulted in Gordon being reported to the State Bar of California pursuant to Rule 8.3 of the Rules of Professional Conduct. Defendant contends that Gordon's misconduct included fabricating Verifications, stipulating to liability without Defendant's consent, and allowing Requests for Admissions to be deemed admitted by failing to inform Defendant about the requests or about the motion to deem them admitted.

III. Relief from Deemed Admissions

Defendant argues that Gordon's actions were contrary to Defendant's interests and amounted to "positive misconduct" toward Defendant, who is free from negligence and should be entitled to the relief requested as Gordon's actions should not be imputed to Defendant. (See Daley v. County of Butte (1964) 227 Cal.App.2d 380, 391.)

An attorney's inexcusable neglect is imputed to his client. (Elston v. City of Turlock (1985) 38 C.3d 227, 236.) A party is only excused from the errors of his attorney where counsel has completely abandoned his client and thereby eviscerated the attorney-client relationship. (Carroll v. Abbott Laboratories, Inc. (1982) 32 C.3d 892, 898-900.) A party may be entitled to discretionary relief where it appears its counsel has abandoned the representation. (Daley v. Butte County (1964) 227 Cal.App.2d 380, 391 (“Despite the general rule which imputes the attorney's neglect to the client, there are exceptional cases in which the client, relatively free from personal neglect, will be relieved of a default or dismissal attributable to the inaction or procrastination of his counsel.”); Carroll v. Abbott Laboratories, Inc. (1982) 32 Cal.3d 892, 898–899 (“The issue, therefore, becomes whether counsel's conduct amounted to ‘positive misconduct’ by which [the client] was effectually and unknowingly deprived of representation.”); Buckert v. Briggs (1971) 15 Cal.App.3d 296, 301 (“The exception is premised upon the concept the attorney's conduct, in effect, obliterates the existence of the attorney-client relationship and for this reason his negligence should not be imputed to the client.”).)

However, Gordon’s multiple filings and appearances on behalf of Defendant falls short of having “had de facto substituted himself out of the case.” (Carroll v. Abbott Lab'ys, Inc. (1982) 32 Cal. 3d 892, 900.) It is undisputed that Gordon mishandled defending this matter and failed to perform mandatory duties to his client by keeping Defendant informed of significant developments. However, the Court is unable to find Gordon’s misconduct amounted to the type of abandonment contemplated by case law. The aforementioned conduct cuts against a finding that Gordon had effectively "obliterat[ed] the existence of the attorney-client relationship” such that Welch’s negligence should not be imputed to Defendant. (Buckert v. Briggs (1971) 15 Cal. App. 3d 296, 301.) As provided by the California Supreme Court, “the Daley exception should be narrowly applied, lest negligent attorneys find that the simplest way to gain the twin goals of rescuing clients from defaults and themselves from malpractice liability, is to rise to ever greater heights of incompetence and professional irresponsibility while, nonetheless, maintaining a beatific attorney-client relationship.” (Carroll, supra, 32 Cal. 3d at 900.)

Even if abandonment was shown, the courts also consider equitable factors in deciding whether the dismissal of an action should be set aside. These factors include the client's own conduct in pursuing and following up the case (Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 739), and whether the defendant would be prejudiced by allowing the case to proceed (Fleming v. Gallegos (1994) 23 Cal.App.4th 68, 74–75), among other things not relevant here. As Plaintiff notes, Phillips 66 is a publicly traded (PSX [NYSE]) multinational energy company with market cap of $63.89 billion with annual revenues over $150 billion. Given its stature, it has scores of in-house counsel including Senior Counsel Dawn Staggs. Ms. Staggs, as in-house counsel “supervises outside counsel in representing Defendant in litigation.” (Staggs Decl., ¶ 2.) However, there is no evidence showing that Defendant followed up with the case.

In reply, Defendant argues that Egan's declaration should be deemed an attorney affidavit of fault. In light of the policy favoring the resolution of lawsuits on the merits, the Court agrees. The preference for trial and disposition on the merits requires that any doubts be resolved in favor of Defendants. (New Albertsons, supra, 168 Cal.App.4th at pp. 1420-1421.)

Joseph A. Gordon was the attorney handling the day-to-day activities of the case from the beginning of representation of Defendant until Gordon left the firm on January 12, 2024. (Egan Decl., ¶ 2.) As the handler of the case, Gordon was expected to manage communications with opposing counsel, handle all pretrial issues, including discovery and potential settlement negotiations, and keep Defendant informed of all developments in the case. (Id., ¶ 3.) While handling this matter, Gordon met periodically with Egan and purported to update him about the status of the case. Unfortunately his updates were untruthful. (Id., ¶ 4.) During these meetings, Gordon reported that he had provided verified responses to discovery and that Plaintiff's Motions to Compel Responses were no longer necessary and that they had been "squared away," that the client was informed of all issues in the case, and that the parties were close to settle this matter without the need for trial. None of these representations were true. (Id., ¶ 5.)

After Gordon's departure from the firm, another attorney was assigned to handle the day-to-day activities of the case. (Id., ¶ 6.) Within a few days, it was learned that Gordon's reports were untrue, and did not match the contents of the file and that the file was missing numerous documents when compared with the electronic docket. (Id., ¶ 7.) Despite his representations, Gordon had failed to provide verified discovery responses before the hearing on the Motions to Compel Responses and the Motion to Deem Requests for Admissions Admitted, and that the Motions were granted on December 5, 2023. (Id., ¶ 8.)

As part of the case file investigation upon Gordon's departure, Egan also found that on December 21, 2023, Gordon had served Verifications purportedly signed electronically by Defendant's in-house counsel, Dawn L. Staggs, for the unverified responses Gordon had served in response to Plaintiff's Motions. (Id., ¶ 9.)

As part of the investigation, Egan also found that on September 20, 2023, Gordon entered into a Stipulation to Continue Trial with Plaintiff that also included language accepting liability and waiving comparative negligence as an affirmative defense as follows:

"Defendant Phillips 66 Corporation is liable for the injuries sustained by Jose Ramirez on March 21, 2021. Accordingly, plaintiff will not introduce evidence on liability and defendant will not introduce evidence of comparative fault of the plaintiff at trial."

(Id., ¶ 11.)

Prior to entering into this Stipulation, Gordon never discussed it with me or with Defendant, nor did he inform me or Defendant, that he had then agreed to this language in a Stipulation to Continue Trial. This purported Stipulation was made by Gordon entirely without Defendant's and/or my knowledge or approval. (Id., ¶ 12.)

The Court finds that Defendant’s counsel has shown that the deemed admissions were the result mistake, inadvertence or excusable neglect. Egan did not supervise Gordon and was unaware of Gordon’s failure to comply with Defendant’s discovery obligations. The failure to respond to the RFAs was not the fault of Defendant, who was unaware and was told the discovery issues had been “squared away.” Additionally, Plaintiff has not shown substantial prejudice from granting this motion. Plaintiff argues that trial was continued multiple times and that he will need to restart discovery. However, the requests for admissions were deemed admitted in December of 2023. As such, there has only been a delay of four months. Plaintiff had plenty of time to conduct discovery prior to December of 2023. Further, trial is not for another few months, and the parties may swiftly move discovery along prior to trial.

Attorney Fees

Plaintiff seeks $7,650 in attorney fees for 6.4 hours researching this matter, 7 hours preparing his declaration and the exhibits attached, and 1 hour to attend the hearing, at $525 per hour.

In reply, Defendant argues that Plaintiff claims he is entitled to monetary sanctions against Defendant and their counsel under Code of Civil Procedure 2033.300 for filing the present motion. However, Defendant argues, this section does not allow for monetary sanctions. At best this section allows the Court to impose some conditions in the relief granted conditionally, which may include payment for the costs of conducting additional discovery.

The Court disagrees with Defendant. A court may order a moving party to pay just attorney’s fees in granting a motion under California Code of Civil Procedure section 2033.300. (Rhule v. WaveFront Technology, Inc. (2017) 8 Cal.App.5th 1223, 1228 [analyzing Code Civ. Proc., § 2033.300, subd. (c)].)

The Court thus conditions the granting of the motion for relief from deemed admissions on Defendant paying Plaintiff attorney fees in the amount of $7,650.

IV. Relief from Stipulation Re Liability

Defendant also to be relieved from the Stipulation re Liability and Comparative Negligence entered into by Gordon without Defendant's knowledge and consent, as such stipulation is extremely prejudicial and contrary to Defendant's position throughout this litigation.

“Stipulations are conclusive as to all matters properly contained in them. [Citations] Ordinarily, a party will not be permitted to contradict a stipulation, even though it may be opposed to otherwise provable fact, and even though the stipulation affects the statutory and constitutional rights of the parties. [Citation]” (Harris v. Spinali Auto Sales, Inc. (1966) 240 Cal.App.2d 447, 453.)

“The rights growing out of a stipulation are similar to those arising from a contract, and the word ‘contract’ is often employed loosely to denominate the rights created by a stipulation. However, when a stipulation is accepted by the court…, there is an additional party or element involved, namely, the court. And it becomes necessary, if contrary evidence is to be admitted or considered, for the trial judge to give permission, upon proper request, to a setting aside of the stipulation. Such action on the part of the trial court should normally be preceded by a motion to set aside the stipulation and a statement of the grounds supporting such an order; a court should not set aside a stipulation regularly made except after a clear showing of error or unfairness. [Citation]” (Id.)

“In a proper case, a trial court has the power to set aside a stipulation and to permit other evidence on the issues which were dealt with in it.” (Id. at 454-454.)

C.C.P. §473(b) provides, in pertinent part, as follows:

The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken…Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney’s affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties. However, this section shall not lengthen the time within which an action shall be brought to trial pursuant to Section 583.310.

As noted above, the Court has found that Defendant’s counsel has shown that Gordon’s unauthorized actions were the result mistake, inadvertence or excusable neglect. Based on the foregoing, the request to set aside the stipulation is also granted.

In opposition, Plaintiff concedes that section 473(b) can be used to set aside the stipulation, but argues that judicial estoppel should bar setting aside the stipulation.

“Judicial estoppel prevents a party from asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding.” (State Water Resources Control Bd. Cases (2006) 136 Cal.App.5th 674, 826-827 [quotation and citation omitted].) “The doctrine applies []when: (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (Ibid. [quotation and citation omitted].)

Here, on September 12, 2023, after the close of discovery, when Mr. Gordon contacted Plaintiff’s counsel seeking an addition trial continuance leading up to the October 11, 2023, trial date, Defendant had not served any written discovery, taken any depositions including that of the Plaintiff, demanded an independent medical examination, or served a single subpoena. (See Grismer Decl., ¶ 13). Defendant was at a tactical disadvantage at this juncture. Also, despite a seven month meet and confer and numerous extensions regarding Defendant’s overdue discovery responses, Defendant had failed to serve any responses. (Grismer Decl., ¶ 24-31). As a result, Plaintiff argues he would have sought, and likely been successful in a motion in limine to exclude any evidence not disclosed in discovery.

Plaintiff argues that given the severe disadvantage, Defendant stipulated to liability for the bargained for exchange of a stipulation to continue trial and reopened discovery to tactically retain the ability to dispute the nature and extent of Plaintiff’s injuries (Defendant’s first position). (See Grismer Decl., ¶ 10-23).

Plaintiff relied on the promises made and Defendant received their consideration for this agreement, the trial was continued, and discovery was reopened giving the Defendant the ability to litigate this matter (Defendant was successful in asserting the first position, which was taken in a Judicial Proceeding).

Defendants now seek to repudiate its stipulation to liability, repossessing its consideration to Plaintiff. (Defendant’s second and totally inconsistent position).

Defendant argues not that stipulation was the result of mistake, inadvertence, surprise or excusable neglect, but that it was an associate attorney’s inexcusable negligence or "positive misconduct" that the stipulation was entered into upon relying on Daley (first position was not taken as a result of ignorance, fraud, or mistake).

Moreover, as discussed above, the stipulation is the result of excusable neglect. Further, evidence is presented that Defendant was ignorant of Gordon’s first position to enter into a stipulation admitting liability. Plaintiff argues that Gordon’s representations to Plaintiff’s counsel are that he did contact an agent of Phillips 66 Corporation to enter the stipulation. He informed Plaintiff that he was later informed by MERKT that the person he spoke to did not have authority to enter the stipulation. (Grismer Decl., ¶ 46-51). However, these statements are inadmissible hearsay, and Defendant’s objections to these statements have been sustained by this Court.

Therefore, the fifth element has not been met. As a result, judicial estoppel does not apply.

Lastly, Plaintiff’s argument that he was at a tactical advantage when Gordon agreed to stipulate to liability because Defendant had not conducted any discovery is without merit. First, no evidence is presented that Gordon entered into this stipulation because he had conducted no evidence. Further, Defendant could have simply moved to continue trial and reopen discovery. Thus, Plaintiff has not shown prejudice.

Based on the foregoing, Defendant’s Motion for Relief from Deemed Admissions and from Stipulation Re Liability is GRANTED. However, the motion for relief from deemed admissions is granted on the condition that Defendant pay Plaintiff’s counsel attorney fees in the amount of $7,650.