United States District Court, E.D. Texas, Marshall Division.

Wayne Withers and wife, Cathy Withers, Plaintiffs,

v.

Schneider National Carriers, Inc., Defendant.

 

Civil Action No. 2:13–cv–00180–JRG

2:13–cv–00180Filed January 22, 2014

 

Mark Lynn Edwards, The Edwards Law Firm, William Cullen McMahon, W. CullenMcMahon PLLC, Dallas, TX, Matthew B. Patterson, Trevor J. Furlong, The Edwards Law Firm, McAlester, OK, for Plaintiffs.

 

James David Stanton, Law Offices of James D. Stanton, Tiffany Rae Serbousek, The Law Offices of James Stanton LP, Dallas, TX, for Defendant.

 

MEMORANDUM AND OPINION

RODNEY GILSTRAP, UNITED STATES DISTRICT JUDGE

*1 Before the Court is Defendant Schneider National Carriers’ (“Defendant”) Motion for Leave to Designate Knife River Corporation as a Responsible Third Party under Texas Civil Practice and Remedies Code Section 33.004(a). (Dkt. No. 53.) Having considered the parties’ written submissions, the Court DENIES the Motion.

 

I. Background

This diversity action arises from a vehicular accident between a motorcycle operated by Plaintiff Wayne Withers and a tractor-trailer owned by Defendant. The accident occurred on October 4, 2011 in a highway construction zone, when the driver of the tractor-trailer allegedly failed to yield the right of way at a stop sign and turned his vehicle directly into the path of Plaintiff’s motorcycle, causing a collision between the two vehicles. Plaintiff Wayne Withers allegedly suffered bodily injury as a result of the collision. Knife River Corporation (“Knife River”) was the construction company working in the construction zone where the accident occurred.

 

Plaintiff filed the instant action against Defendant on February 26, 2013, alleging that Defendant’s negligence in operating the tractor-trailer caused his injury. The Court issued a Docket Control Order on July 10, 2013, giving the parties until December 4, 2013 to conduct relevant discovery. (Dkt. No. 15.) Within the same order the Court set a jury selection date on March 3, 1014. On December 5, 2013, Defendant filed the instant motion, accompanied by an Amended Answer, seeking to designate Knife River as a responsible third party under Texas Civil Practice and Remedies Code Section 33.004(a).

 

II. Applicable Law

Under Texas Civil Remedy and Practice Code 33.004(a), “a defendant may seek to designate a person as a responsible third party by filing a motion for leave to designate … on or before the 60th day before the trial date unless the court finds good cause to allow the motion to be filed at a later date.” A defendant, however, may not designate a person as a responsible third party with respect to a claimant’s cause of action after the expiration of the applicable limitations period with respect to the responsible third party, “if the defendant has failed to comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure.” Tex. Civ. Prac. & Rem.Code § 33.004(d).

 

III. Analysis

It is undisputed that Defendant has filed its motion for leave to designate more than sixty days prior to the March 3, 2014 trial date pursuant to § 33.004(a). It is also undisputed that the applicable statute of limitations has run against Knife River and they are now beyond Plaintiff’s ability to recover against them. Defendant argues that the Court should grant it leave to designate Knife River as a responsible third party, because Knife River’s alleged negligent acts in performing the roadway construction may have caused or contributed to the accident at issue. In response, Plaintiff first argues that third-party practice in this case should be governed by Rule 14 of the Federal Rules of Civil Procedure, not § 33.004 of the Texas Civil Practice and Remedy Code. Plaintiff further contends that Defendant’s disclosure of Knife River as a responsible third party has been untimely. Finally, Plaintiff alleges that there exists no evidence that Knife River is responsible for any part of Plaintiff’s injury. The Court will address each of these arguments in turn.

 

a. Tex. Civ. Prac. & Rem.Code § 33.004 is Applicable in This Case

*2 [1]Plaintiff first disputes the applicability of § 33.004 in this diversity action, arguing broadly that third-party practice in federal courts should instead be governed by Rule 14 of the Federal Rules of Civil Procedure. While there seems to be no precedent on point from the Fifth Circuit, various other district courts within this circuit, however, have concluded that the designation of a responsible third party under § 33.004 does not conflict with Rule 14. See, e.g., Muniz v. Stanley, No. L–06–cv–126, 2007 WL 1100466, at *2 (S.D. Tex. April 11, 2007). While Rule 14 dictates how third-parties may be formally joined and become parties to the suit subject to liability, under § 33.004 responsible third parties are not joined as parties—they are only designated as being responsible without being made parties to the suit. Id.; Werner v. KPMG, 415 F.Supp.2d 688, 692 (S.D.Tex.2006). “Rather than requiring formal joinder, § 33.004 provides a mechanism to designate responsible third parties who then may be apportioned fault.” Muniz, 2007 WL 1100466, at *3. The designation “does not itself impose liability” on the responsible third party, nor can it be used in any other proceeding for purpose of res judicata or collateral estoppel. Tex. Civ. Prac. & Rem.Code § 33.004(i). Thus, § 33.004 exists to allow proper allocation of fault among both the named defendants and those persons designated as responsible third parties, rather than to govern the procedures by which third-parties may be brought into the case as Rule 14 does. Finding no conflict between Rule 14 and § 33.004, the Court is not persuaded that Rule 14 forecloses the applicability of § 33.004 in federal diversity actions and holds accordingly that § 33.004 is substantive law and applies in the instant case.

 

b. Texas Responsible Third Party Statute

Section 33.004 of Texas Civil Practice and Remedies Code, also known as the Texas Responsible Third Party Statute, was amended in 2003 to give defendants the opportunity to introduce evidence regarding a responsible third party’s fault and to have the jury apportion responsibility to the third party even if that person has not been joined as a party to the lawsuit. A defendant may do so by designating a “responsible third party.” A plaintiff can usually respond by joining the responsible third party as an additional defendant. “Under this scenario, all culpable parties were before the court, defending themselves, and accountable to the plaintiff for their percentage of responsibility,” thereby achieving “a carefully constructed scheme balancing the interests of both defendants and claimants.” Justin C. Roberts & Randell C. Roberts, Can Immune Parties Really Be Responsible?: An Analysis of the Current Interpretation of the Texas Responsible Third Party Statute and Its Vulnerability to Constitutional Challenge, 43 St. Mary’s L.J. 559 (2012).

 

However, this statutory scheme risks creating a material imbalance when a defendant is allowed to designate a responsible third party against whom the limitations period of plaintiff’s claim has expired. See, e.g., Molinet v. Kimbrell, 356 S.W.3d 407 (Tex.2011) (the defendant being allowed to designate certain physicians as responsible third parties against whom the plaintiff’s claims were time-barred). Under this circumstance, while the defendant may potentially cut down liability by blaming the third party, the plaintiff is precluded by limitations from seeking recovery on the basis of that third party’s fault. This also creates an unfair burden at trial, as the plaintiff has to attempt to exonerate the judgment-proof third party, in addition to building a case against the defendant.

 

The 2003 amendment to § 33.004 dealt with this issue by providing the plaintiff a reciprocal right to join a time-barred designee in case the defendant designated a time-barred responsible third party. Under § 33.004(e), a plaintiff “may join a responsible third party, even though such joinder would otherwise be barred by limitations,” if the plaintiff seeks to do so within sixty days of the filing of a third party claim. Tex. Civ. Prac. & Rem.Code § 33.004(e) (repealed). Thus, § 33.004(e) sought to restore the statutory balance in cases involving time-barred responsible third parties by ensuring that plaintiff would be able to seek recovery from these otherwise judgment-proof third parties.

 

The debate about the proper application of § 33.004(e), however, sharply divided the highest state court of Texas. In Molinet v. Kimbrell, the plaintiff attempted to join certain responsible third-party physicians pursuant to § 33.004(e), the claims against whom were otherwise time-barred under § 74.251, the Texas health care liability statute. Molinet, 356 S.W.3d 407. The Texas Supreme Court held that the statute of limitations mandated by § 74.251 trumped the plaintiff’s ability to join a time-barred responsible third party under § 33.004(e), based primarily on the “notwithstanding any other law” language in § 74.251. Id. at 413–14. Two justices filed a vigorous dissent, noting that while a defendant has much to gain strategically by designating a responsible third party for purpose of shifting liability, a plaintiff, deprived of the ability to join time-barred non-parties, would be forced to prove the liability of the party defendant as well as to “defend [ ] the empty chair.” Id. at 419 (Lehrmann, J., dissenting). Such a holding, the dissenting justices reasoned, would “disrupt[ ] the balance the Legislature sought to implement in section 33.004(e).” Id. at 420.

 

*3 Presumably troubled by this tension between § 33.004(e) and the limitation requirements mandated under certain other statutes such as § 74.251, the Texas Legislature repealed § 33.004(e) in 2011. Act of May 30, 2011, 82d Leg., R.S., ch. 203, § 5.02, 2011 Tex. Sess. Law Serv. 758, 760 (West). It instead introduced § 33.004(d), providing essentially that for a defendant to designate a time-barred responsible third party, the defendant must “comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure.” Tex. Civ. Prac. & Rem.Code § 33.004(d).

 

The Texas Legislature’s adoption of the new § 33.004(d) is an effort to maintain the same statutory balance with respect to time-barred responsible third parties, albeit in a different fashion. § 33.004(d) now takes away the defendant’s ability to designate a time-barred third party when he has failed to timely disclose such party. Working as a procedural safeguard, the “timely disclosure” requirement seeks to guarantee that the defendant essentially cannot undercut the plaintiff’s case by belatedly pointing its finger at a time-barred responsible third-party against whom the plaintiff has no possibility of recovery.

 

c. Defendant’s Disclosure of Knife River Was Untimely

[2]In this case, Defendant alleges that Knife River Corporation is responsible for Plaintiff’s injury because of its negligent acts in performing the roadway construction on October 4, 2011. It is undisputed that the applicable statute of limitations against Knife River expired on October 4, 2013, and that Defendant only disclosed Knife River as a responsible third party after the expiration of the limitations period, indeed by means of the instant motion filed on December 5, 2013. The issue before the Court is then whether Defendant’s disclosure of Knife River is “timely” under § 33.004(d). The Court finds that it is not.

 

§ 33.004(d) instructs the court to consider “if the defendant has failed to comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure.” This inquiry is complicated in the instant case—a federal diversity action—where discovery is generally governed by the Federal, rather than Texas Rules of Civil Procedure. Under Rule 26(a) of the F.R. Civ. P. 26(a)(1), a party must make initial disclosure of a variety of information including the identities of relevant individuals, “without awaiting a discovery request” from the other side. In contrast, Texas Rules of Civil Procedure 194.2(1) states that a party “may request disclosure” of the identity of a potential responsible third party, and only upon such request the responding party need to serve a written response concerning such. Recognizing the different disclosure obligations imposed by the Federal and Texas Rules of Civil Procedure, one district court has held that a defendant either has no obligation to timely disclose a responsible third party because Texas procedural rules do not apply, or even if Texas procedural rules do apply, a defendant’s obligation remains nonexistent until a plaintiff has explicitly requested the identity of potential responsible third parties. See Webber, LLC v. Symons Corp., No. 4:12–cv–181, 2013 WL 3356291, at *2 (N.D.Tex. July 3, 2013). This Court, however, disagrees.

 

[3]The Texas Supreme Court has not spoken as to what constitutes a “timely” disclosure under § 33.004(d), particularly, whether a disclosure made after the statute of limitations has run can nevertheless be deemed “timely.” In construing the “timely disclosure” requirement of § 33.004(d), however, this Court must presume that the Texas Legislature intended “a just and reasonable result.” See, e.g., City of Dallas v. Abbott, 304 S.W.3d 380, 384 (Tex.2010) (citingTex. Gov’t Code § 311.021(2), (3)). Otherwise, the “timeliness” requirement has no meaning.

 

*4 Here, Defendant has been aware that the accident occurred in Knife River’s construction zone since the day of the accident, i.e., October 4, 2011. The photographs of the accident scene, taken at the time by the responding law enforcement officer, make it clear that Defendant’s driver could not reasonably have been unaware of the construction at this intersection. Yet Defendant only claimed Knife River’s responsibility more than two years later, indeed after the applicable limitations had run on October 4, 2013. If this Court deems such a disclosure “timely” and thereby allows Defendant to designate Knife River as a responsible third party, Plaintiff will be left with no recourse against Knife River while Defendant enjoys the unfair advantage of shifting liability to Knife River, who is now judgment-free. Further, not only is Plaintiff unable to seek recovery based on Knife River’s alleged fault, he would also have to take up the added burden of defending an “empty chair” at trial. See Molinet, 356 S.W.3d at 419. Plaintiff’s burden is further exacerbated in this case given that discovery has closed and trial is set to take place in two months. This Court finds it inconceivable that the Texas Legislature intended such a result being so far-removed from being either just or reasonable. Indeed, having strived to maintain a balanced statutory scheme, first with § 33.004(e) and now with § 33.004(d), the Legislature’s actions reflect a particular vigilance against creating just such a one-sided result. Notwithstanding the different disclosure obligations imposed by the Federal and the Texas Rules of Civil Procedure, a defendant has a duty to disclose the existence of any potential responsible third parties as soon as reasonably possible, so a plaintiff may have an opportunity to join such parties before they are time barred. The obligation on the Defendant to timely discover and disclose any such responsible third parties before the statute of limitations runs is but a fair and reasonable burden when compared to the excessive burden that would otherwise be visited upon the Plaintiff.

 

In this case, Defendant had ample information available since the day of the accident which clearly suggests Knife River’s potential responsibility. A diligent investigation on Defendant’s part would have led to an earlier designation, giving Plaintiff an opportunity to join Knife River before limitations ran. This Court finds no difference in a situation where Defendant’s counsel failed to diligently investigate this accident and only found out about Knife River after October 4, 2013 or whether it knew it and knowingly delayed seeking to designate them as a responsible third party until after October 4, 2013. In either case, such a belated disclosure fails to meet the “timely” requirement of § 33.004(d). To hold otherwise would produce a result neither just nor reasonable and it would make § 33.004(d) essentially meaningless when the underlying case is brought in federal court. Since § 33.004 is substantive law and applicable to litigation in federal court, the procedural differences between state and federal court in who must initiate factual disclosure cannot reasonably be applied in a way that destroys the meaning and effect of § 33.004(d). Therefore, pursuant to § 33.004(d), Defendant having failed to make a timely disclosure of its intent to designate Knife River as a responsible third party, is precluded from making such designation in this case.

 

[4]To be clear, by this holding the Court does not purport to announce a general rule that all disclosures made after the applicable statute of limitations have expired must be deemed untimely for purpose of § 33.004(d). § 33.004(d) must be applied in those circumstances as the facts of each case require. Timeliness is determined in every trial court on a case by case basis.

 

d. Plaintiff’s Other Argument

Plaintiff further argues that Defendant should not be allowed to designate Knife River as a responsible third party because there is no evidence that Knife River is responsible for any portion of Plaintiff’s alleged injury. Tex. Civ. Prac. & Rem. Code § 330.04(l). Having decided that Defendant’s disclosure of Knife River is untimely and that it is precluded from designating Knife River as a responsible third party, the Court need not reach Plaintiff’s argument in this regard.

 

IV. Conclusion

For the reasons stated above, the Court hereby DENIES Defendant Schneider National Carriers, Inc.’s Motion for Leave to Designate Knife River Corporation as a Responsible Third Party (Dkt. No. 53) and STRIKES the relevant portion of Defendant’s Amended Answer (Dkt. No. 52) from the record.

 

So ORDERED and SIGNED.

Court of Appeal,

Fourth District, Division 2, California.

Steve AHN, et al., Plaintiffs and Appellants,

v.

KUMHO TIRE U.S.A., INC., et al., Defendants and Appellants.

 

E054322

Filed January 22, 2014

Certified for Partial Publication.FN*

 

FN* Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of parts IV.B. and IV.C.

 

Appeal from the Superior Court of San Bernardino County. Barry L. Plotkin, Judge. Reversed in part and affirmed in part. (Super.Ct.No. CIVRS1004820)Kim, Shapiro, Park, Lee & Ryu, Paul Park, and Yalan Zheng, Los Angeles, for Plaintiffs and Appellants.

 

Lim, Ruger & Kim, Bruce G. Iwasaki, and Arnold Barba for Defendants and Appellants.

 

OPINION

KING, J

I. INTRODUCTION

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).) FN1

 

FN1. All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

 

In opposing the motion, plaintiff Steven Ahn, the sole owner and principal of plaintiff New Star, 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, 22–23, 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 admissions” of fact.

 

As we explain, this was an overly broad and erroneous application of the D’Amico rule. In light of all the evidence adduced on the motion, a reasonable trier of fact could have credited counsel’s explanation that the discovery responses were a mistake and found the contradictory statements in Ahn’s declaration credible. ( Mason v. Marriage & Family Center (1991) 228 Cal.App.3d 537, 546, 279 Cal.Rptr. 51 ( Mason ).) Thus, plaintiffs’ discovery responses were not “clear and unequivocal admission[s]” of fact which, in light of all the evidence adduced on the motion, could not be credibly contradicted or amended. ( Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, 482, 261 Cal.Rptr. 735, overruled on other grounds in Riverisland Cold Storage, Inc. v. Fresno–Madera Production Credit Assn. (2013) 55 Cal.4th 1169, 1179–1182, 151 Cal.Rptr.3d 93, 291 P.3d 316.)

 

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).)

 

II. STANDARD OF REVIEW

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, 107 Cal.Rptr.2d 841, 24 P.3d 493.) 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, 107 Cal.Rptr.2d 841, 24 P.3d 493.) 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, 107 Cal.Rptr.2d 841, 24 P.3d 493; § 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 evidence to which no objection or an unsound objection was made. ( McCaskey v. California State Automobile Assn. (2010) 189 Cal.App.4th 947, 957, 118 Cal.Rptr.3d 34, citing Reid v. Google, Inc. (2010) 50 Cal.4th 512, 534, 113 Cal.Rptr.3d 327, 235 P.3d 988.)

 

“ ‘[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 ).)

 

III. BACKGROUND

A. The Evidence Adduced on the Motion for Summary Judgment FN2

 

FN2. The facts are based on all of the evidence adduced on the motion for summary judgment, except evidence to which a sound objection was made, but including Ahn’s declaration, which we conclude was erroneously disregarded under the D’Amico rule. (See McCaskey v. California State Automobile Assn., supra, 189 Cal.App.4th at p. 957, 118 Cal.Rptr.3d 34.)

 

Ahn, a former truck driver, 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 three (3) years with a 90–day cancellation option for Kumho Tires or New Star after 1 year,” but the “after 1 year” clause is crossed out and initialed by the signatories.

 

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 company (apparently Korea Express) effective January 1, 2009, and Kumho was giving 30 days’ notice of its intent to terminate the December 2006 agreement. The letter does not mention the 2008 agreement, but according to Nam, he met with Ahn in January 2009 to discuss the termination of “the contract” and Ahn agreed “the contract” would terminate on June 15, 2009. Ahn denies he met with Nam during January 2009 and also denies he agreed the 2008 agreement was or could be terminated before its three-year term expired or on 30 days’ notice.

 

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.FN3 Ahn claims New Star is owed $746,304 for all trucks dedicated to Kumho and Korea Express pursuant to the 2008 agreement based on the $1,196 weekly rate. Of the $746,304 sum, $301,392 is due and unpaid for trucks used by Kumho or Korea Express through September 30, 2009.

 

FN3. In his declaration, Nam averred that S.H. Kim of Korea Express met with Ahn on July 24, 2010 (apparently Nam meant July 24, 2009), and during that meeting Ahn confirmed that “the agreement” between Kumho and New Star could be terminated on 30 days’ notice. Plaintiffs objected to Nam’s statement on hearsay grounds (Evid.Code, § 1200), and the objection was properly sustained. Nam purported to introduce an out-of-court statement by S.H. Kim concerning what Ahn said during the July 24 meeting for the truth of the statement. (Ibid.) We therefore disregard this portion of Nam’s declaration. ( McCaskey v. California State Automobile Assn., supra, 189 Cal.App.4th at p. 957, 118 Cal.Rptr.3d 34.) For his part, S.H. Kim said nothing in his declaration about any July 2009 or July 2010 meeting with Ahn or any agreement by Ahn that the 2008 agreement could be terminated on 30 days’ notice.

 

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.

 

B. The Allegations of the Complaint

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 New Star trailers (third); and (4) against both defendants for common counts and quantum meruit (fourth and fifth).

 

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.

 

C. Plaintiffs’ “Factually Devoid” Discovery Responses

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.

 

[1]Plaintiffs gave similar “we don’t know” and “discovery is continuing” responses to defendants’ other “state all facts” special interrogatories and production requests. In December 2010, plaintiffs supplemented some of their interrogatory responses and agreed to produce some additional invoices and other documents, but they did not change most of their original responses indicating they did not know whether any responsive facts or documents existed. In a December 23, 2010, e-mail to plaintiffs’ counsel, defendants’ counsel summarized the parties’ “meet and confer” or discussion concerning plaintiffs’ original and first amended responses. In the e-mail, defendants’ counsel asserted plaintiffs would “be bound by their original responses,” together with their “admissions” that they did not know whether any responsive facts or documents existed.FN4

 

FN4. Despite the parties’ “meet and confer” discussion and defendants’ apparent belief that plaintiffs’ original and first amended interrogatory responses were incomplete or evasive, defendants did not move for an order compelling further responses to the interrogatories. (§ 2030.300.) Nor did defendants move for an order deeming plaintiffs bound by their original or their first amended interrogatory responses after those responses were amended. (§ 2030.310, subd. (b) [party propounding interrogatory to which an amended answer has been served may move for an order deeming the responding party bound by its initial response].) Thus, defendants’ unilateral assertion that plaintiffs were “bound by” their original and first amended responses was without legal support (§ 2030.310, subds.(b)-(c)), and the second amended responses that plaintiffs submitted along with their opposition to the summary judgment motion were permissible and should have been considered, along with the other evidence adduced on the motion (§ 2030.310, subd. (a) [“Without leave of court, a party may serve an amended answer to any interrogatory that contains information subsequently discovered, inadvertently omitted, or mistakenly stated in the initial interrogatory. At the trial of the action [or any other hearing in the action] the propounding party … may use the initial answer under Section 2030.410, and the responding party may then use the amended answer.”] ).

 

D. Defendants’ Motion for Summary Judgment and Motion for Sanctions

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, 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]; Andrews v. Foster Williams 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 agreement with Ahn or New Star; thus, Ahn was entitled to no relief against either defendant and neither Ahn nor New Star was entitled to any relief against Korea Express.

 

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.

 

E. The Trial Court’s Rulings

At a combined hearing on the motions for summary judgment and sanctions, the court first asked plaintiffs’ counsel why plaintiffs’ initial discovery responses omitted “critical facts.” Counsel explained that a “new attorney” in their offices had prepared the responses “say[ing] that we did not have any evidence, which supported our contentions, which was obviously untrue, because we attached exhibits to our complaint….” The court noted the initial discovery responses “were not the result of a lack of merit in the case necessarily…. because there were more facts contained in the complaint that could have been alleged in response to these discovery [requests].” Rather, in the court’s view the initial responses were “a result of ineptitude and inexcusable neglect” on the part of the attorney who prepared them. The court criticized plaintiffs’ counsel for failing to admit their mistake in their opposition to the motion for summary judgment, for failing to address “the D’Amico issue” in their opposition to the motion for sanctions, and for “blam[ing]” defendants for misreading the initial discovery responses. Still, the court said it did not believe Ahn’s declaration was “contrived” or “untruthful” and “certainly raise[d] triable issues of fact” on plaintiffs’ claims. Plaintiffs’ counsel argued it would be an injustice to plaintiffs to grant defendants’ motion for summary judgment based on the mistake by plaintiffs’ law firm.

 

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.

 

IV. DISCUSSION

A. Ahn’s Declaration Was Erroneously Disregarded Under the D’Amico Rule

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 Co., Inc. (2010) 187 Cal.App.4th 1326, 1335, 115 Cal.Rptr.3d 538), but the California Supreme Court has yet to determine “generally whether a trial court’s rulings on evidentiary objections based on papers alone in summary judgment proceedings are reviewed for abuse of discretion or are reviewed de novo.” ( Reid v. Google, Inc., supra, 50 Cal.4th at p. 535, 113 Cal.Rptr.3d 327, 235 P.3d 988.) Here it makes no difference whether the abuse of discretion or de novo standard of review applies to the trial court’s ruling excluding Ahn’s declaration. As we explain, the trial court misapplied the D’Amico rule and, therefore, necessarily abused its discretion in excluding the declaration.

 

1. The D’Amico Rule Properly Applied

In D’Amico, the California Supreme Court held, “ ‘[w]here … there is a clear and unequivocal admission by the plaintiff, himself, in his deposition’ ” and the plaintiff contradicts that admission in a subsequent declaration, “ ‘we are forced to conclude there is no substantial evidence of the existence of a triable issue of fact.’ ” ( D’Amico, supra, 11 Cal.3d at p. 21, 112 Cal.Rptr. 786, 520 P.2d 10, first italics added, quoting King v. Andersen (1966) 242 Cal.App.2d 606, 610, 51 Cal.Rptr. 561 [assault victim’s affidavit stating unnecessary force was used disregarded in light of her prior deposition testimony that no force was used].) The court explained: “As the law recognizes in other contexts (see Evid.Code, §§ 1220–1230) admissions against interest have a very high credibility value. This is especially true when … the admission is obtained … in the context of an established pretrial procedure whose purpose is to elicit facts.” ( D’Amico, supra, at p. 22, 112 Cal.Rptr. 786, 520 P.2d 10.)

 

In Price v. Wells Fargo Bank, supra, 213 Cal.App.3d at page 482, 261 Cal.Rptr. 735, 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 admissions. (E.g., Scalf, supra, 128 Cal.App.4th at p. 1523, 27 Cal.Rptr.3d 826 [party’s deposition testimony that there were no defects in log cabin kit credibly explained by other evidence showing the defects became apparent only after the kit was inspected]; Niederer v. Ferreira (1987) 189 Cal.App.3d 1485, 1503, 234 Cal.Rptr. 779 [the plaintiff’s deposition testimony that note was never assigned to her credibly explained by the plaintiff’s supplemental declaration stating she did not understand the question asked of her at deposition]; cf. Whitmire v. Ingersoll–Rand Co. (2010) 184 Cal.App.4th 1078, 1087, 109 Cal.Rptr.3d 371 [the plaintiff’s declaration stating he was exposed to asbestos while working at a plant while the defendant was working there was properly disregarded as not credible in view of the plaintiff’s prior interrogatory responses unequivocally indicating that the defendant was working elsewhere at the time].)

 

[2]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, 27 Cal.Rptr.3d 826.)

 

2. Application

[3]The question presented here is whether plaintiffs’ initial and “factually devoid” responses to defendant’s “state all facts” special interrogatories and requests for production—in which plaintiffs stated they did not know whether any facts or documents supported various allegations of their complaint—constituted clear and unequivocal admissions of fact which plaintiffs could not credibly contradict by Ahn’s declaration or the other evidence adduced in opposition to the motion. In light of all of the evidence adduced on the motion, we conclude plaintiffs’ discovery responses fell well short of constituting clear and unequivocal admissions of fact which plaintiffs could not credibly contradict or amend in opposing the motion.

 

[4]To be sure, plaintiffs had a duty to answer the written discovery as completely and straightforwardly as the information available to them permitted ( Scheiding v. Dinwiddie Construction Co. (1999) 69 Cal.App.4th 64, 76, 81 Cal.Rptr.2d 360; §§ 2030.220 [obligations of responding party in answering interrogatories]; 2031.220–2031.240 [compliance with inspection demands] ) and they failed to do so. But evasive answers to written discovery is not a legally sufficient ground for granting a motion for summary judgment, particularly when other evidence adduced on the motion shows there are triable issues of material fact. This is because summary judgment is proper only if all the papers submitted on the motion show there are no genuine issues of material fact requiring a trial. (§ 437c, subd. (c); Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 843, 107 Cal.Rptr.2d 841, 24 P.3d 493.)

 

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, 279 Cal.Rptr. 51; § 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, 279 Cal.Rptr. 51.) 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 defendants commenced. ( Id. at p. 545, 279 Cal.Rptr. 51.) 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, 279 Cal.Rptr. 51.) 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, 279 Cal.Rptr. 51.)

 

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, 27 Cal.Rptr.3d 826.) 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, 279 Cal.Rptr. 51, 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].)

 

As the trial court acknowledged, all of the evidence adduced on the motion showed that, contrary to their initial discovery responses, plaintiffs had credible evidence to support their claims. The parties did not dispute that New Star and Kumho entered into the 2008 agreement; that Kumho reduced the dedicated fleet of trucks from eight to six, then from six to four, during 2008; or that New Star placed “Kumho Tires” advertising on all 40 of its trucks. The parties submitted conflicting evidence concerning whether Ahn or New Star agreed to the 2008 fleet reductions; whether Ahn agreed to the termination of the 2008 agreement by Korea Express in August 2009; whether, in 2007, Kumho orally agreed to pay Ahn or New Star for placing advertising on New Star trucks; and whether Korea Express assumed Kumho’s obligations under the 2008 agreement and the alleged 2007 oral advertising agreement. In light of the entire record, a reasonable trier of fact could have concluded that plaintiffs’ initial discovery responses were, as plaintiffs claimed, a mistake, and the statements in Ahn’s declaration were credible. For this reason, the trial court misapplied the D’Amico rule and abused its discretion in disregarding Ahn’s declaration in ruling on the motion.

 

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. 2, 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, 234 Cal.Rptr. 779, 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 [citations], 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.

 

B.–C.FN**

 

FN** See footnote *, ante.

 

V. DISPOSITION

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).)

 

We concur:

RAMIREZ, P.J.

RICHLI, J.