Penalty Declined – Party Escapes Summary Judgment Despite Evasive Discovery Responses

On February 17, 2016, the Court of Appeal for the Fourth Appellate District in People ex rel. Government Employees Insurance Company (“GEICO”) v. Cruz (Court of Appeal D067061, Superior Court Case 37-2013-00029878), overturned a trial court’s order binding the plaintiff to its non-responsive interrogatory responses which formed the basis of defendant’s successful motion for summary judgment. Because the trial court erred in not allowing the plaintiff to oppose the summary judgment motion using its amended responses, the Court of Appeal also overturned defendant’s summary judgment victory.

In Cruz, GEICO sued Dr. Janice Cruz (“Cruz”) for insurance fraud. GEICO alleged Dr. Cruz submitted sham insurance claims for medical treatment of GEICO policyholders in automobile accidents. In September 2013, Dr. Cruz served GEICO with 99 requests for admissions. She asked GEICO to admit she did not create or submit false claims, billings, or reports on behalf of the claimants. Dr. Cruz also concurrently served form interrogatories requesting GEICO state all facts forming the basis of any denials of the requests for admission. GEICO denied 93 of the requests. In its interrogatory responses, GEICO did not state any facts supporting its denials. Rather, it responded to each by saying: “[d]iscovery is ongoing and Plaintiff reserves the right to supplement this response.” Dr. Cruz subsequently moved to compel further responses.

GEICO opposed the motion, but also served further and more substantive responses to the interrogatories on January 28, 2014 (“January Responses”). The January Responses provided some additional facts but also again stated that GEICO had not completed its discovery and that GEICO reserved the “right to introduce prior to or at the time of trial or otherwise use any additional information it may obtain as a result of [GEICO]’s continuing discovery and investigation . . . .” In February 2014, the trial court granted Cruz’s Motion to Compel finding GEICO’s original “discovery responses . . . insufficient and without merit.” Cruz did not move to compel further responses to the January Responses based on GEICO’s representation that it had “no further information.”

In May 2014, Dr. Cruz moved for summary judgment arguing GEICO’s January Responses failed to provide any evidence to support its causes of action. In June 2014, GEICO served “further supplemental responses to form interrogatories” (“June Responses”) which contained additional facts to support its claims. Dr. Cruz sought to keep out the June Responses by filing a “motion to bind” GEICO to its January Responses pursuant to Code of Civil Procedure § 2030.310(b). Under Section 2030.310(b) a party can bind the other party to an interrogatory response if it establishes: “(1) The initial failure of the responding party to answer the interrogatory correctly has substantially prejudiced the party who propounded the interrogatory; (2) The responding party has failed to show substantial justification for the initial answer to that interrogatory; and (3) The prejudice to the propounding party cannot be cured either by a continuance to permit further discovery or by the use of the initial answer under Section 2030.410.”

The trial court granted Cruz’s Motion and bound GEICO to its January Responses, finding GEICO’s “initial failure . . . to answer the interrogatory correctly has substantially prejudiced” Dr. Cruz. The trial court then granted Dr. Cruz’s summary judgment motion finding that the January Responses did not provide any support for GEICO’s claims.

The primary issue on appeal was whether the trial court improperly bound GEICO to the January Responses and thus improperly granted Dr. Cruz’s summary judgment motion. Here, the Court of Appeal found that Dr. Cruz was not substantially prejudiced by the admissibility of the June Responses, and that any prejudice could have been cured by a continuance or use of the January Responses for impeachment purposes at trial. The Court overturned the trial court’s order binding GEICO to its January Responses, and vacated the trial court’s order granting Dr. Cruz’s motion for summary judgment.

While the Court held Section 2030.310(b) did not bind GEICO to its initial discovery responses, the case serves to remind parties of how important it is to provide full, complete and accurate responses to discovery. Particularly when the discovery involves the basis for claims against an opposing party, counsel should be mindful to provide proper and complete responses to discovery at the outset. It may not be wise to rely on serving further and more substantive responses at a later date. “Hiding the ball” behind a myriad of objections may come back to haunt if the other side can show prejudice from the lack of an initial complete response. The punishment may not simply be monetary sanctions – it could be the far more severe penalty of being stuck with incomplete discovery responses that blunt the party’s ability to fully defend or prosecute its position.

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February 23, 2016