SHEPARD MORGAN v. LEE DANIEL INC

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Court of Appeal, Second District, Division 4, California.

SHEPARD & MORGAN, Cross-Complainant and Appellant, v. LEE & DANIEL, INC., Cross-Defendant and Respondent.

Civ. 59022.

Decided: August 05, 1981

Murchison & Cumming, John A. McCaskey, Horvitz & Greines, Ellis J. Horvitz, Frederic D. Cohen and Michelle Van Cleave, Los Angeles, for cross-complainant and appellant. Waters, McCluskey & Corcoran, Laurence R. Corcoran, and Scott L. Thomas, Los Angeles, for cross-defendant and respondent.

Plaintiff, a construction carpenter, brought an action against defendant Shepard & Morgan, a general contractor, for negligence and breach of warranty, and against Simpson Company, a manufacturer, for negligence, breach of warranty and products liability. Defendant, Shepard & Morgan, cross-complained for indemnity against Simpson Company, R. M. Stowell, plaintiff's employer, and Lee & Daniels Corp., a subcontractor and supplier of joists.

This appeal was taken from a verdict on liability directed against defendant Shepard & Morgan, and a nonsuit entered against this defendant on its cross-complaint against cross-defendant Lee & Daniels Corp. Pursuant to settlement Cole v. Shepard & Morgan was dismissed during the pendency of this appeal. We therefore proceed to address only those issues presented in the cross-complaint of Shepard & Morgan v. Lee & Daniels, Inc.

Plaintiff Terry Cole, a journeyman carpenter, was employed by R. M. Stowell, a framing subcontractor. Plaintiff was securing wooden ceiling joists when he fell 20 feet to the concrete floor below. Each joist was fitted into a strap-like hanger which had been welded to the I-beams at two-foot intervals. The plaintiff was bent over, standing with each foot on a two-by-twelve joist, nailing a spreader block in between the joists to secure them, when he fell.

On August 23, 1978, plaintiff served a set of 27 requests for admissions on appellant. Appellant responded on August 30, 1978. Twenty-five of the requests were denied, but numbers 14 and 21 were admitted. The requests were signed by defense attorney John A. McCaskey and verified as corrected by Mr. Brinker, a partner of appellant company.

Admission number 14 read as follows: “That the defendant, Shepard & Morgan, contends that the subject joist and joist hanger did not constitute a hazard for plaintiff, Terry Cole, who was performing his duties on November 2, 1973, at the jobs site in question.” In response defendant answered, “Admit.”

Thereafter, on October 11, 1978, plaintiff settled its lawsuit with Simpson Company, the manufacturer of the joists, for $5,000.

On June 21, 1979, the first day of trial, the court granted plaintiff's motion in limine to prohibit the introduction of all evidence relating to the hazardous nature of the joists or joist hanger. The effect of the order was to exclude any evidence that would in any way create an inference that there was a defect or dangerous condition about the joists or joist hangers.

The attorney for Shepard & Morgan moved to be relieved of the admission on equitable principles, contending that it was unjust to his client to preclude this evidence. The court denied the motion as untimely.

The court then ruled that defendant's admission to plaintiff was binding in the action on the cross-complaint, and granted a nonsuit in favor of cross-defendant Lee & Daniels Corp. It was this cross-defendant who had supplied the I-beams and joists and was responsible for the welding of the hanger to the I-beams.

After the presentation of the testimony of Mr. Regynsky, the defendant's foreman, as to the lack of safety devices, the plaintiff moved for a directed verdict on liability. Defendant made an offer of proof that it was the custom and practice in the construction industry at the time of this accident to perform its job in the manner in which it was being performed by the plaintiff. The court concluded that custom and usage was not a defense to liability in a peculiar risk situation and therefore defendant's offer of proof was insufficient and directed a verdict on liability against defendant.

The jury returned a verdict against defendant as directed for $494,412 and found no negligence attributable to the plaintiff.

The issues presented are:

1. Whether the trial court abused its discretion in refusing to grant defendant relief from its admission.

2. Whether the admission is equally binding in the action on the cross-complaint.

I

Appellant contends that the trial court abused its discretion in refusing to grant it relief from its inadvertent admission. Appellant cites and relies on Milton v. Montgomery Ward & Co., Inc. (1973) 33 Cal.App.3d 133, 108 Cal.Rptr. 726, and Zorro Inv. Co. v. Great Pacific Securities Corp. (1977) 69 Cal.App.3d 907, 138 Cal.Rptr. 410, for the proposition that the trial court has discretion to grant relief “from admissions.” Those cases, however, and all other relevant cases which our research has discovered, concern problems not presented here. Each involves a party's dilemma resulting from a failure to answer or defective denial of requested admissions. Under Code of Civil Procedure section 2033, subdivision (a), if a party on whom requests for admissions have been served fails to deny the requested admissions within the time specified, or fails to tender such denial under oath, the facts stated in the request shall be deemed admitted. Under such circumstances, the court has jurisdiction to relieve a party from his late or otherwise inadvertent admission. (See, e. g., Kaiser Steel Corp. v. Westinghouse Elec. Corp. (1976) 55 Cal.App.3d 737, 743-745, 127 Cal.Rptr. 838; Cohen v. Superior Court (1976) 63 Cal.App.3d 184, 185-187, 133 Cal.Rptr. 575.)

As previously noted, we know of no instance in California where a party has been relieved from his express admission of a fact. We are disinclined to grant the relief sought here. “Requests for admissions are primarily aimed at setting at rest a triable issue so that it will not have to be tried. Thus, such requests, in a most definite manner, are aimed at expediting the trial.” (Cembrook v. Superior Court (1961) 56 Cal.2d 423, 429, 15 Cal.Rptr. 127, 364 P.2d 303.) Once a proposition has been expressly admitted, the party who sought the admission should in fairness be entitled to rely on the fact that he is not required to prepare to prove that matter at trial. A trial judge has discretion, under Code of Civil Procedure section 473, to grant relief in the furtherance of justice from the effect of a mistake. We do not believe that there has been an abuse of that discretion in this case.

In exercising its discretion, the court is justified in distinguishing between a matter deemed admitted by technical default and one expressly admitted. Certainly, the party securing the deemed admission could be said to be less reasonable in relying on its binding effect.

As explained in Finman, The Request for Admissions in Federal Civil Procedure (1962) 71 Yale L.J. 371, 421: “Admissions are not the result of inadvertence or inattention to procedural niceties but of a litigant's deliberate, conscious choice. As for ‘substantial justice,’ the interests of both litigants the one who obtained and relied upon an admission as well as the one who made the admission must be considered. If Rule 36 (Fed. Rules of Civ. Proc.) is to operate effectively, we must accept the fact that on occasion, in order to protect a party who has relied on an admission, the admitting party must be held to an erroneous admission. To bind a party in this manner is not new and has never been considered a denial of ‘substantial justice.’ ” (Fn. omitted.)

In the instant case, it appears that plaintiff's reliance on the admission extends beyond lack of preparation for trial on particular issues. The answers to requests for admission were served on September 5, 1978. On October 11, 1978, plaintiff entered into a “Cost of Defense” settlement with defendant Simpson Company, the alleged manufacturer of the joists, for the sum of $5,000. Although no such express assertion appears in the record, it may well be that the dismissal of Simpson Company was made in reliance on appellant's assertion that Simpson Company was not negligent. Also of great importance here is the fact that relief from the admission was not requested until the day of trial.

We hold that the trial judge did not err in denying appellant's motion to be relieved from the binding effect of its express admission.

II

The remaining question in the case before us is whether the binding effect of this admission extends to the cross-complaint.

Appellant relies on subdivision (d) of Code of Civil Procedure section 2033 which provides: “Any admission made by a party pursuant to such request is for the purpose of the pending action only and neither constitutes an admission by him for any other purpose nor may it be used against him in any other action.”

Appellant bases its contention that the court erred on the proposition that a cross-complaint is an “other action” for purposes of this section. We disagree.

A cross-complaint is a separate and independent action for most purposes. In 1933, our Supreme Court explained that while one of the objects of the reformed or code procedure is to simplify the pleadings and conduct of actions, and to permit the settlement of all matters of controversy between the parties in one action, so far as may be practicable, and defendants are permitted to set up new matters or cross-claims, which must otherwise have been tried in separate actions, these cross-actions are still distinct and separate causes of action so, that when properly interposed, the defendant becomes, in respect to the matters pleaded by him, the actor, and there are two simultaneous actions pending between the same parties wherein each is at the same time both a plaintiff and a defendant. (Pacific Finance Corp. v. Superior Court (1933) 219 Cal. 179, 182, 25 P.2d 983.)

The court has continued to reject the concept of treating a cross-pleading as an integral part of the cause of action initiated by the complaint. For example, dismissal of a complaint does not affect the independent existence of a cross-complaint or counterclaim. (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 51, 118 Cal.Rptr. 184, 529 P.2d 608.) Likewise, a general appearance in the cross-complaint was held not to constitute a general appearance in the main action. (Botsford v. Pascoe (1979) 94 Cal.App.3d 62, 67, 156 Cal.Rptr. 177; Glenwood Homeowners Assn. v. Prosher Development Ltd. (1980) 111 Cal.App.3d 1002, 169 Cal.Rptr. 48.) However, we do not believe that the Legislature intended, in enacting subdivision (d) of section 2033 to restrict the effect of an admission so that it could not be used in a related cross-action.

This appears to be a question of first impression in California, and our research has not disclosed any federal cases on point, although the federal statute contains a similar provision. However, the cases discussing this provision in other contexts shed light on its purpose. For example, in Woods v. Robb (5th Cir. 1948) 171 F.2d 539, the court discussed whether a party was privileged to refuse to admit or deny certain facts on the grounds that the answers might tend to incriminate him in any subsequent criminal prosecution. Other cases discussing this provision (all federal) have focused on whether the provisions can operate to protect an answering party against the institution of subsequent civil or criminal actions against him.

In 4A Moore's Federal Practice, chapter 36 at page 36-80, the author explains: “The purpose of the provision (the other action or proceeding limitation) is to encourage admissions.” Such a purpose would be served by prohibiting the use of the admission in any other independent action which might be brought against the admitting party. However, that purpose would not be furthered in the case before us by prohibiting the use of the admission in this cross-action. It is not reasonable to assume that the answering party anticipated such a restriction in this case; his admissions were served on all parties to the action, including cross-defendants, who had been parties to this action for four years.

Nor does fairness compel a different result. The admission related to the common issue of causation. Normally both actions would have been tried together. Appellant admitted that the product supplied by cross-defendant did not constitute a hazard to plaintiff. To hold that admission binding only in the principal action would result in the following anomaly: defendant, who admitted that cross-defendant was not liable, could then pursue and possibly recover from that cross-defendant on the basis of the very liability it had previously denied.

We are convinced that the Legislature did not intend to produce such a result in enacting the limitation on use in other actions found in Code of Civil Procedure section 2033.

Here, the court ascertained that these admissions had been timely served on the respondent/cross-defendant, who joined in the motion in limine to preclude appellant from presenting any evidence that the joists or joist hangers were in any way defective or created a dangerous condition. Since this admission foreclosed the establishment of any negligence on the part of the respondent, the motion for nonsuit was properly granted. (Elder v. Pacific Tel. & Tel. Co. (1977) 66 Cal.App.3d 650, 136 Cal.Rptr. 203.)

The judgment is affirmed.

WOODS, Associate Justice.

FILES, P. J., and KINGSLEY, J., concur.