The trial court granted summary judgment in favor of defendants Kumho Tire U.S.A., Inc. (Kumho), and Korea Express U.S.A., Inc. (Korea Express), on plaintiffs' unverified complaint for breach of contract and common counts. The motion was based on plaintiffs'"factually devoid" responses to defendants' "state all facts" special interrogatories and requests for production in which plaintiffs generally stated they did not know whether any facts or documents supported various allegations of their complaint. (Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 580-581 [37 Cal.Rptr.2d 653] [motion for summary judgment may be based on discovery responses indicating the plaintiffs have no evidence to support their claims]; Code Civ. Proc., § 437c, subd. (p)(2).)
In opposing the motion, plaintiff Steve Ahn, the sole owner and principal of plaintiff New Star Transport, Inc., adduced a declaration explaining the evidentiary basis of plaintiffs' claims. Plaintiffs also adduced amended responses to their initial discovery responses along with a declaration by plaintiffs' counsel explaining that the initial discovery responses were "a mistake." The trial court granted the motion after disregarding substantially all of the statements of fact in Ahn's declaration on the ground they were inconsistent with plaintiffs' initial discovery responses. The trial court relied on D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-23 [112 Cal.Rptr. 786, 520 P.2d 10] (D'Amico), which held that a party's statements of fact adduced on a motion for summary judgment must be disregarded as insubstantial or incredible to the extent they contradict the party's prior "clear and unequivocal admission[s]" of fact.
In the unpublished portion of this opinion, we explain why all of the papers on the motion show there are triable issues of fact on plaintiffs' claims. We therefore reverse the judgment in favor of defendants. We affirm a postjudgment order denying defendants' motion for sanctions against plaintiffs and their counsel for allegedly filing a complaint without evidentiary support. (§ 128.7, subd. (b)(3).)
Summary judgment is appropriate when all of the papers submitted show there are no triable issues of any material fact and the moving party is entitled to a judgment as a matter of law. (§ 437c, subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 [107 Cal.Rptr.2d 841, 24 P.3d 493].) "`The purpose of a summary judgment proceeding is to permit a party to show that material factual claims arising from the pleadings need not be tried because they are not in dispute.' [Citations.]" (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 168 [92 Cal.Rptr.3d 696]; see § 437c, subd. (a).)
A defendant moving for summary judgment has the burden of showing the plaintiff's causes of action have no merit. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 849-850.) A defendant meets this burden if it makes a prima facie showing that one or more elements of each cause of action cannot be established or is subject to a complete defense. (Id. at p. 849.) If the defendant makes this showing, the burden shifts to the plaintiff to produce evidence demonstrating the existence of a triable issue of material fact. (Id. at pp. 849-850; § 437c, subd. (p)(2).)
We review the entire record de novo, considering "`all the evidence set forth in the moving and opposition papers....'" (Blanco v. Baxter Healthcare Corp. (2008) 158 Cal.App.4th 1039, 1046 [70 Cal.Rptr.3d 566].) We disregard evidence to which a sound objection was made but consider any
"`[W]e strictly construe the moving party's evidence and liberally construe the opposing party's and accept as undisputed only those portions of the moving party's evidence that are uncontradicted.' [Citation.] `... "Any doubts about the propriety of summary judgment ... are generally resolved against granting the motion, because that allows the future development of the case and avoids errors."' [Citation.]" (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519 [27 Cal.Rptr.3d 826] (Scalf).)
Ahn, a former truckdriver, is the sole owner and president of New Star Transport, Inc. (New Star), a trucking services company. Kumho is the American distribution arm of Kumho Tire Company, an international tire manufacturer. Sometime during 2008, Kumho "outsourced" its entire logistics department to Korea Express.
In 2005, Ahn began providing consulting and trucking services to Kumho without a written agreement. In December 2006, New Star and Kumho entered into a written "dedicated fleet trucking services" agreement whereby New Star made available to Kumho a certain number of trucks, trailers, and drivers in exchange for weekly fees. The 2006 agreement had a one-year term with automatic one-year extensions and could be terminated by either party on 30 days' notice.
In March 2008, New Star and Kumho entered into a successor "dedicated fleet operations" agreement requiring New Star to make available "for the exclusive use" of Kumho no fewer than eight trucks, eight drivers, and 16 trailers. Under the 2008 agreement, Kumho agreed to pay New Star "Fixed Charge[s]" of $1,196 per week for each dedicated truck, plus additional charges based on miles driven, fuel, and unloading. New Star agreed to invoice Kumho on a weekly basis for all charges due under the 2008 agreement. The 2008 agreement states its term "will be for a minimum of
According to Ahn, he and Mike Newman, Kumho's transportation manager, discussed the term and termination clause before they signed the 2008 agreement and agreed that terminating the agreement on 90 days' notice after one year or at anytime within the three-year term was inconsistent with the agreement's three-year term. To confirm their understanding that the 2008 agreement could not be terminated until after its three-year term expired, Ahn and Newman initialed and crossed out the "after 1 year" clause. New Star performed its obligations under the 2008 agreement by providing Kumho with the dedicated trucks, trailers, and drivers.
Chong Ha Nam was employed by Kumho from 1985 to 2008. When he left Kumho in 2008, Nam was its senior manager for logistics, responsible for overseeing the distribution and transportation of Kumho tires. Nam negotiated and signed the December 2006 agreement on behalf of Kumho and was in charge of overseeing New Star's performance of the 2008 agreement. According to Nam, sometime during 2008 Kumho "outsource[d] its logistics department" to Korea Express. Nam then stopped working for Kumho and became the branch manager for Korea Express in Rancho Cucamonga. According to Ahn, in January 2009, Kumho's logistics department began using the name Korea Express with "the same group of people working at the same office at [the] same location...."
In April 2008, Kumho notified New Star it was reducing the number of dedicated trucks it would be using from eight to six, and in October 2008, it notified New Star it was further reducing the number of trucks from six to four. According to Nam, New Star "acquiesced" in the reductions because they were "necessitated by the level of business," and Ahn did not object to Nam concerning the fleet reductions. Ahn claims neither he nor New Star ever agreed to the fleet reductions.
New Star invoiced Kumho for all trucks dedicated to Kumho pursuant to the 2008 agreement, including the unused trucks. Kumho refused to pay the invoices for the unused trucks; required Ahn to submit separate invoices for the used and unused trucks; and paid only the invoices for the trucks it used. Ahn claims he asked Nam about the unpaid invoices "on numerous occasions" and Nam told him Kumho would pay the invoices for the unused trucks "when the business got better."
In a December 29, 2008, letter to Ahn at New Star, Nam advised that Kumho was outsourcing its warehouse and logistics operations to another
New Star continued to provide trucks to Korea Express during 2009. Finally, on August 28, 2009, Korea Express terminated the 2008 agreement on 30 days' notice effective September 30, 2009, approximately 78 weeks before its three-year term expired.
In his declaration, Ahn claims Kumho approached him during 2007 about placing "Kumho Tires" advertising signs on all trailers operated by New Star, including trailers not dedicated to or used by Kumho. Around July 2007, Mr. Chu Hwan Kim of Kumho and Ahn orally agreed that Kumho would pay New Star $1,000 per month per trailer for the advertising, and Kumho had "Kumho Tires" placed on all 40 of New Star's trailers. According to Ahn, $1 million is due for the Kumho Tires advertising placed on New Star trucks from July 2007 to August 2009.
In May 2010, Ahn and New Star filed an unverified complaint against Kumho and Korea Express alleging five causes of action: (1) against both defendants for breach of the 2008 agreement (first); (2) against Korea Express for breach of an oral agreement to assume the 2008 written agreement (second); (3) against both defendants for breach of a 2007 oral agreement to pay New Star $1,000 per month to place "Kumho Tires" advertising on 40
As indicated, the allegations of the complaint are fairly detailed and are entirely consistent with Ahn's declaration. The complaint explains the origins of the 2006 and 2008 agreements, their terms and termination clauses; alleges Kumho reduced the dedicated fleet from eight trucks to six in April 2008 and from six trucks to four in November 2008; alleges on information and belief that sometime after the 2008 agreement was signed Korea Express assumed all of Kumho's business operations, including its obligations under the 2008 agreement; and alleged Korea Express unilaterally terminated the 2008 agreement on 30 days' notice in August 2009, before its three-year term expired. The complaint further alleges that in 2007 Kumho approached plaintiffs about placing advertising signs on plaintiffs' trailers and agreed to pay plaintiffs $1,000 per month per trailer, due to the increased risk of theft resulting from the placement of the advertising signs.
The complaint seeks $765,440 in damages from both defendants for their alleged breach of the 2008 agreement (first cause of action); the same amount in damages from Korea Express for its breach of an alleged oral agreement to assume Kumho's obligations under the 2008 agreement (second cause of action); and an additional $1 million from both defendants for their breach of the alleged 2007 oral agreement to pay New Star $1,000 per month per trailer for placing advertising on all New Star trucks (third cause of action). Plaintiffs seek both amounts, or $1,765,440, from defendants in their fourth and fifth causes of action for common counts and quantum meruit. Attached as exhibits to the complaint are copies of the 2006 and 2008 agreements and photographs showing "Kumho Tires" advertising on New Star trucks.
Defendants answered the May 2010 complaint in July 2010. In October 2010, plaintiffs responded to defendants' "state all facts" special interrogatories and requests for production. Most of the discovery was directed to the allegations of the complaint. For example, one interrogatory asked Ahn and New Star to state all facts supporting their allegation that "there is now owing and due from defendants the sum of at least $1,765,440.00 ...." Each plaintiff responded: "At this time, responsive party does not know whether any facts responsive to this request exist. Discovery is continuing." Yet the complaint itself explained that plaintiffs were seeking $765,440 for trucks dedicated to defendants pursuant to the 2008 agreement but not paid for, and $1 million for Kumho's breach of the alleged 2007 oral advertising agreement.
In March 2011, defendants moved for summary judgment without deposing Ahn, even though the complaint indicated he had personal knowledge of the factual bases of plaintiffs' claims as alleged in the complaint. Based on plaintiffs'"factually devoid" responses to defendants'"state all facts" special interrogatories and requests for production, defendants argued plaintiffs admitted their causes of action "lacked any factual basis." (See Union Bank v. Superior Court, supra, 31 Cal.App.4th at p. 593 [motion for summary judgment may be based on discovery responses indicating the plaintiffs have no evidence to support their claims]; Andrews v. Foster Wheeler LLC (2006) 138 Cal.App.4th 96, 106-107 [41 Cal.Rptr.3d 229] [the plaintiffs' nonresponsive answers to comprehensive special interrogatories in effect admitted the plaintiffs had no further information].) The motion also claimed Ahn had no contractual relationship with either defendant, and Korea Express had no
In support of the motion, defendants adduced the declarations of Nam and other employees of Kumho and Korea Express averring to the facts described above, including that (1) New Star never objected to Kumho's April and October 2008 fleet reductions; (2) Kumho paid New Star in full for all trucks used and other services rendered pursuant to the 2008 agreement; (3) New Star never told Kumho it had not been paid in full for its services; (4) Kumho had no oral or written agreement with Ahn, only a written agreement with New Star; (5) Korea Express had no oral or written agreement with New Star or Ahn; (6) neither Kumho nor Korea Express agreed to pay for any advertising on New Star trucks; and (7) on behalf of New Star, Ahn agreed to Kumho's termination of the 2008 agreement effective September 30, 2009. In a further declaration, defendants' counsel authenticated defendants' discovery responses and other documents.
In opposition to the motion, plaintiffs submitted the declaration of Ahn explaining the factual bases of plaintiffs' claims consistent with the allegations of the complaint. Plaintiffs also served amended responses to defendants' "state all facts" special interrogatories and requests for production, essentially repeating the allegations of the complaint and the additional detail in Ahn's declaration. In a further declaration, plaintiffs' counsel explained the amended discovery responses: "Plaintiffs' initial discovery responses contain certain responses that were inadvertently omitted and mistakenly stated. As [a] result, plaintiffs have served and submitted ... amended responses."
In reply, defendants objected to nearly every statement in Ahn's declaration on the ground it violated the D'Amico rule because it was contrary to plaintiffs' initial discovery responses and no explanation for the discrepancies had been given. Defendants also adduced excerpts of Ahn's deposition which defendants took shortly after plaintiffs filed their opposition, and argued, based on Ahn's deposition testimony, that plaintiffs' claims still lacked evidentiary support. With their reply, defendants filed a motion for sanctions against plaintiffs and their counsel on the ground the allegations of the complaint were, "by plaintiffs' own admission, completely lacking in factual support," and by signing the complaint plaintiffs' counsel falsely certified that the allegations had evidentiary support. (§ 128.7, subd. (b)(3).) Plaintiffs and their counsel opposed the sanctions motion.
At a combined hearing on the motions for summary judgment and sanctions, the court first asked plaintiffs' counsel why plaintiffs' initial discovery
The court nonetheless granted the motion for summary judgment, reasoning it was required to disregard Ahn's declaration based on contradictions between it and plaintiffs' initial and factually devoid discovery responses. The court denied defendants' motion for sanctions against plaintiffs and their counsel, noting plaintiffs' claims had evidentiary support and the court was therefore "unable to [find]" plaintiffs' counsel violated the certification requirement. (§ 128.7, subd. (b)(3).) Plaintiffs appeal from the judgment in favor of defendants, and defendants appeal from the postjudgment order denying their motion for sanctions.
Plaintiffs claim the trial court misapplied the D'Amico rule in disregarding Ahn's declaration in ruling on the motion for summary judgment. For their part, defendants argue the trial court acted within its discretion in disregarding the declaration because it was inconsistent with plaintiffs' initial and "factually devoid" discovery responses, in which plaintiffs stated they did not know whether any facts or documents existed to support various allegations of their complaint.
As defendants point out, the weight of California appellate court authority holds that a trial court's evidentiary rulings in summary judgment proceedings are reviewed for an abuse of discretion (Miranda v. Bomel Construction
In Price v. Wells Fargo Bank, supra, 213 Cal.App.3d at page 482, the court warned that, "an uncritical application of the D'Amico decision can lead to anomalous results, inconsistent with the general principles of summary judgment law." The Price court cautioned that D'Amico should not be interpreted "as saying that admissions should be shielded from careful examination in light of the entire record." (Ibid., italics added.) This is because the record may contain evidence that credibly contradicts or explains what might appear to be clear and unequivocal admissions, if the admissions are viewed in isolation and without reference to the other evidence. (See ibid. ["summary judgment should not be based on tacit admissions or fragmentary and equivocal concessions, which are contradicted by other credible evidence" (italics added)].) In the case before it, the Price court concluded the trial court properly relied on the plaintiffs' admissions "only" because nothing in the record was "materially" inconsistent with them. (Ibid.)
Courts have consistently refused to apply the D'Amico rule to exclude evidence in opposition to a summary judgment motion when the evidence in the record on the motion credibly explains or contradicts a party's earlier
The Scalf court aptly summarized the proper application of the D'Amico rule: "While the D'Amico rule permits a trial court to disregard declarations by a party which contradict his or her own discovery responses (absent a reasonable explanation for the discrepancy), it does not countenance ignoring other credible evidence that contradicts or explains that party's answers or otherwise demonstrates there are genuine issues of factual dispute." (Scalf, supra, 128 Cal.App.4th at pp. 1524-1525.)
Mason is analogous and instructive. The defendants, a clinical psychologist and a marriage, family, and child counselor, moved for summary judgment on the ground the plaintiff's professional negligence claims against them were barred by the applicable three-year limitations period. (Mason, supra, 228 Cal.App.3d at pp. 540-541; § 340.5.) In a previous interrogatory response, the plaintiff stated her injuries began occurring in September 1977, more than three years before she filed her complaint. (Mason, supra, at pp. 540-541.) Then, in a declaration in opposition to the motion, the plaintiff explained that her previous response "was a mistake," and that September 1977 was actually the time her therapy with the defendants commenced. (Id. at p. 545.) The plaintiff further explained that one of the defendants initiated a sexual relationship with her in 1983, and as a result she began suffering mental and emotional distress symptoms in 1986 and 1987, within the limitations period. (Ibid.)
The Mason court found the plaintiff's explanation credible and reversed summary judgment in favor of the defendants. (Mason, supra, 228 Cal.App.3d at p. 546.) The court reasoned that if a trier of fact believed the sexual relationship began in 1983, as the plaintiff claimed in her declaration, the trier of fact could also reasonably conclude that the plaintiff's initial interrogatory response that her injuries began occurring in September 1977 was "a simple mistake." (Ibid.) The Mason court accordingly refused to disregard the plaintiff's declaration explaining her prior interrogatory response under the D'Amico rule, reasoning it was not "free" to disregard the explanation because a trier of fact could find it credible. (Mason, supra, at p. 545.)
Similarly here, plaintiffs' counsel explained in an opposing declaration, and again at the hearing on defendants' motion, that plaintiffs' initial discovery responses were a "mistake" made by a "new" and apparently unsupervised attorney employed by her law firm. In determining whether to disregard Ahn's declaration under D'Amico, the question for the trial court was not whether the statements in the declaration were inconsistent with plaintiffs' initial discovery responses. (See Scalf, supra, 128 Cal.App.4th at p. 1525.) Rather, the question was whether, in light of all the evidence adduced on the motion, a reasonable trier of fact could conclude that plaintiffs' initial discovery responses were a mistake and that the contradictory statements in Ahn's declaration were credible. (Mason, supra, 228 Cal.App.3d at pp. 545-546; accord, Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 473-474 [110 Cal.Rptr.2d 627] [assessing discovery responses in light of entire record].)
At times, courts have stated the D'Amico rule in broad, summary terms which may be misconstrued as suggesting that prior discovery responses or purported admissions may be assessed in isolation and not in light of other evidence that credibly contradicts or explains them. (See, e.g., Shin v. Ahn (2007) 42 Cal.4th 482, 500, fn. 12 [64 Cal.Rptr.3d 803, 165 P.3d 581] [flatly stating, "a party cannot create an issue of fact by a declaration which contradicts his prior discovery responses"]; Benavidez v. San Jose Police Dept. (1999) 71 Cal.App.4th 853, 860 [84 Cal.Rptr.2d 157], quoting Preach v. Monter Rainbow (1993) 12 Cal.App.4th 1441, 1451 [16 Cal.Rptr.2d 320] ["[W]e are constrained by the well settled rule that `[a] party cannot create an issue of fact by a declaration which contradicts his prior [discovery responses]....'"]; Niederer v. Ferreira, supra, 189 Cal.App.3d at p. 1503, quoting Leasman v. Beech Aircraft Corp. (1975) 48 Cal.App.3d 376, 382 [121 Cal.Rptr. 768] ["`[W]hen a defendant can establish his defense with the plaintiff's admissions sufficient to pass the strict construction test imposed on the moving party ..., the credibility of the admissions are valued so highly that the controverting affidavits may be disregarded as irrelevant, inadmissible or evasive.'"].) Such summary statements of the D'Amico rule must not be misconstrued as allowing summary judgment to be granted based on what may appear, in isolation, to be clear and unequivocal admissions, when the purported admissions are credibly contradicted or explained by other credible evidence in the record, and all the evidence in the record shows there are triable issues of material fact.
The judgment is reversed and the postjudgment order denying defendants' motion for sanctions (§ 128.7) is affirmed. The matter is remanded to the trial court with directions to set aside its order granting defendants' motion for summary judgment and to enter a new order denying that motion. Plaintiffs are awarded their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)
Ramirez, P. J., and Richli, J., concurred.
