Key Points

  • A party responding to a compound request for admission must admit the portions that are true under Code of Civil Procedure section 2033.220, subdivision (b)(1); a blanket denial exposes the party to cost-of-proof fees under section 2033.420 once any part is proved at trial.
  • The sustained-objection exception in section 2033.420, subdivision (b)(1), did not apply because Hagestad objected but then unequivocally denied the request, and no objection was ever sustained.
  • Hagestad lacked reasonable grounds to deny that a contract existed because e-mails and an approved seven-day menu showed sufficiently definite terms, and price could be objectively determined.
  • A party moving for cost-of-proof fees must segregate the fees incurred proving the specific denied issues; the trial court did not abuse its discretion in awarding $1,950 of $81,875 requested.
  • The trial court properly struck $25,741.20 in court reporter costs because the Hanna Group did not show the transcripts were court-ordered or otherwise authorized by law, and Hagestad made no concession limiting the reduction.

A California appeals court ruled Thursday that a party who flatly denies a multipart request for admission, the written discovery device that asks an opponent to concede a fact before trial, can be ordered to pay the cost of proving whichever part of the request turns out to be true.

The unanimous published decision by the Fourth Appellate District, Division Three, arose from a dispute over a catering bill for the Masters golf tournament. Justice Moore wrote for the panel, joined by Presiding Justice Motoike and Justice Gooding. The court affirmed orders that gave the restaurant company that sued only $1,950 of the $81,875 in fees it sought.

The case concerns cost-of-proof fees, which Code of Civil Procedure section 2033.420 lets a party recover when an opponent fails to admit a matter the party later proves. The panel said it published the case "to remind litigants of their duties in responding to requests for admission" and "to encourage precision when moving for cost-of-proof fees." "A moving party must identify the fees it incurred proving the specific issues that the responding party denied," Moore wrote. "It cannot outsource this duty to the court."

According to the opinion, John S. Hagestad and his wife dined at Hanna Carroll Restaurant Group LLC's Orange County restaurant in March 2022, then asked its chief operating officer, Dave Hanna, to feed family and friends at the Masters in Augusta, Georgia, where their son would compete. They approved a seven-day menu, but the parties never signed a written contract or discussed price.

The company served breakfast, dinner and a full bar for five days, averaging 25 guests per meal. The Hagestads texted afterward: "The staff, the food, everything was perfect." The opinion's next sentence reads: "Then the bill came."

Hagestad disputed the $74,960 invoice, which included a $5,000 discount. Dave Hanna rescinded the discount and added $5,000 for "the time, burden, and delay in seeking payment," bringing the total to $84,960. Hagestad did not pay, and the company sued him for breach of contract.

In discovery, the company asked Hagestad to admit "that YOU contracted with Plaintiff for food and catering services for the entire seven days" of the April 2022 tournament. He objected that the request was vague, ambiguous and compound, then answered: "Deny." At trial, which focused mainly on the value of the services, the jury found for the company and awarded it $60,391.

Orange County Superior Court Judge Nick A. Dourbetas found the request proved true but awarded only $1,950 in fees because the company had "failed to identify the specific costs and/or fees incurred in proving the truth of [the request] at trial." The judge also struck $25,741.20 the company claimed in court reporter costs.

On appeal, Hagestad argued that the request bundled five facts, including that all of his representatives were parties to the deal and that it covered every meal for seven days, and that the company never proved them all. The panel agreed "that the request was unfocused," noting the jury never decided how many days or meals the contract covered.

But a response must "[a]dmit so much of the matter involved in the request as is true," the court held, quoting section 2033.220. Hagestad "could have admitted that he alone contracted with the Hanna Group to provide some food and services during the Masters and then denied the facts he disputed," Moore wrote. "He did not. He denied the entire request." The company therefore had to prove at trial that a contract existed, and it was entitled to the fees for that proof.

The panel rejected Hagestad's reliance on the statute's exceptions. No objection had been sustained, and his outright denial left "no aspect of [the request] unresolved and nothing to be addressed by the trial court in a motion to compel further responses," the court wrote, quoting an earlier appellate decision. A footnote said he could have met and conferred or "stood on his objections rather than provide an unequivocal denial."

Nor was the denial reasonable, the court held. E-mails and the approved menu showed terms "sufficiently definite to create an enforceable contract," and the missing price did not matter because "a contract need not specify price if it can be objectively determined," the panel wrote, quoting a 1955 decision.

The company fared no better on its own appeal. It argued that the trial court never explained what work was compensable to justify "a 97 percent cut." The panel said segregating fees was the company's burden, and it had instead sought every fee incurred from the denial through trial. "It was not the trial court's initial duty to comb through these invoices and identify the recoverable fees for the Hanna Group," Moore wrote.

The trial court could have denied the motion outright, the panel said, and $1,950 was not unreasonable given the trial court's view that contract formation was "a necessary but minor issue in this case." The panel also rejected Hagestad's argument that the failure to segregate fees required denying the motion.

On court reporter costs, the panel noted that section 1033.5 excludes "[t]ranscripts of court proceedings not ordered by the court" unless recovery is authorized by law. The company argued that Hagestad had conceded only $2,931 should be cut, but the court found no concession: he sought that reduction "at a minimum" while asking to strike the full $25,741.20.

Lawyers for Hanna Carroll Restaurant Group included Michael W. Caspino of Price Caspino. Lawyers for Hagestad included Brian R. Bauer of Scheppach Bauer.

The appeals court affirmed both orders, leaving the $1,950 award in place and the court reporter costs stricken. The panel ordered each side to bear its own costs on appeal. The case is Hanna Carroll Restaurant Group LLC v. Hagestad, No. G065313.