31 Cal. App. 5th 96
Cal. Ct. App. 5th2018Background
- Orange County Water District sued multiple former site operators, including The Arnold Engineering Co., to recover costs for groundwater remediation of VOC contamination (PCE, TCE, 1,1,1‑TCA, 1,4‑dioxane).
- Arnold admitted using 1,1,1‑TCA; evidence and witness testimony variably supported or contradicted use of PCE and TCE; groundwater testing included grab samples from adjacent properties but no monitoring well data at the Arnold site.
- The District's expert (Dr. Waddell) opined Arnold used/released several VOCs and that contamination contributed to groundwater impacts; Arnold’s expert (Rohrer) disputed many of Waddell’s conclusions and criticized reliance on grab samples.
- After trial the court entered judgment for defendants (including Arnold) and concluded the District had not proven Arnold caused groundwater contamination; the court discredited Waddell in several respects.
- Arnold moved postjudgment for costs of proof under CCP § 2033.420 based on the District’s denials of RFAs; the trial court awarded partial attorney fees (~$313,000) and full expert fees (~$300,000), finding the District lacked reasonable grounds to deny most RFAs.
- On appeal the Court of Appeal reversed in part: it held the trial court abused its discretion as to many RFAs (PCE, TCE, 1,1,1‑TCA and related VOC RFAs) because the District had reasonable grounds to believe it would prevail based on percipient testimony, testing, and qualified expert opinion; the court affirmed costs awards only for limited 1,4‑dioxane RFAs and remanded to recompute costs accordingly.
Issues
| Issue | Plaintiff's Argument (District) | Defendant's Argument (Arnold) | Held |
|---|---|---|---|
| Whether District had "reasonable ground" to deny RFAs (so as to avoid costs under §2033.420) | District: relied on percipient witness testimony, soil/groundwater test results, and Waddell's expert opinions — enough to reasonably believe it would prevail on PCE, TCE, 1,1,1‑TCA, and related VOC issues | Arnold: District lacked substantial evidence; Waddell was unreliable and waited to advance certain opinions; denials were unjustified | Court: Abuse of discretion to award costs for RFAs re PCE (release), TCE (release & groundwater), 1,1,1‑TCA (release & groundwater), and general VOC RFAs — District had reasonable grounds to deny those RFAs; affirmed award only for limited 1,4‑dioxane RFAs where evidence was insufficient |
| Whether expert invoices submitted to support expert fee award were adequately substantiated | District: Arnold submitted expert invoices as proof of expert costs incurred to prove RFAs | Arnold: invoices lacked RFA-specific ties; District argued invoices were hearsay/inadequate | Court: Trial court erred in part by awarding full expert fees without distinguishing recoverable vs nonrecoverable work; remand required to re‑calculate costs consistent with opinion |
| Proper standard of appellate review for §2033.420 reasonable‑ground determination | District: urged de novo review (analogizing to probable‑cause/probable cause legal review) | Arnold: standard is abuse of discretion given trial court’s superior position to weigh evidence and credibility | Held: Abuse of discretion is the correct standard; appellate court reviews whether trial court's decision fell within permissible options, but applied that standard to reverse where record showed reasonable grounds existed |
| Whether reliance on expert opinion alone can justify denying RFAs | District: expert opinion is sufficient if credible, qualified, and grounded in evidence | Arnold: trial court found expert opinion unreliable or contradicted by other evidence | Held: Expert opinion can provide reasonable grounds to deny RFAs; reliance is unreasonable only where the expert is plainly unqualified, opinion inadmissible, or fatally undermined by known facts — here Waddell’s opinions were not fatally undermined for PCE, TCE, 1,1,1‑TCA issues |
Key Cases Cited
- City of Glendale v. Marcus Cable Associates, LLC, 235 Cal. App. 4th 344 (2015) (scope and purpose of requests for admission; §2033.420 framework)
- Grace v. Mansourian, 240 Cal. App. 4th 523 (2015) (reasonable‑ground standard for denying RFAs; party must have a good‑faith belief grounded in evidence)
- Laabs v. City of Victorville, 163 Cal. App. 4th 1242 (2008) (discussion of "reasonable basis" and trial court discretion on discovery matters)
- Wimberly v. Derby Cycle Corp., 56 Cal. App. 4th 618 (1997) (expert disclosure/admissibility issues can render reliance unreasonable and mandate costs of proof)
- Marchand v. Mercy Medical Ctr., 22 F.3d 933 (9th Cir. 1994) (federal precedent: expert reliance unreasonable where opinion is fatally undermined by party admissions)
- Brooks v. American Broadcasting Co., 179 Cal. App. 3d 500 (1986) (historical treatment of "good reason" to deny RFAs and cost‑shifting purpose)
- Alcoa Global Fasteners, Inc. v. Orange County Water Dist., 12 Cal. App. 5th 252 (2017) (companion opinion addressing merits of the underlying judgment against which the costs motion was brought)