Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-00921/USCOURTS-casd-3_06-cv-00921-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

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06cv0921

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

OMNI HOME FINANCING, INC., et

al.,

Plaintiffs,

v.

HARTFORD LIFE AND ANNUITY

INSURANCE COMPANY, et al.,

Defendants. 

 

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Case No. 06-CV-0921-IEG (JMA)

ORDER DENYING PLAINTIFFS’

MOTION TO AMEND OR WITHDRAW

ADMISSIONS

[Doc. No. 97]

Plaintiffs Omni Home Financing, Inc. (“Omni”), Omni Home

Financing, Inc. 412(i) Defined Benefit Plan (“Plan”), Keith

Murphy (“Murphy”), Anthony A. Gaglione (“Gaglione”) and David A.

Bancroft (“Bancroft”) (hereinafter collectively “Plaintiffs”)

have filed a Motion to Amend or Withdraw Admissions. Defendants

Hartford Life and Annuity Insurance Company (“Hartford”) and Paul

Bannock (“Bannock”) (hereinafter collectively “Defendants”)

oppose. For the reasons set forth below, the Court DENIES

Plaintiffs’ motion.

// 

//

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Although Defendants’ counsel states that she served Requests for

Admission on behalf of Hartford and Bannock (see Taylor Decl. in Opp’n

[Doc. No. 107], ¶ 3), the copies of the Requests which have been

provided to the Court indicate that the Requests for Admission were

propounded by Hartford only, not Bannock. Notice of Lodgment in Supp.

of Mot. [Doc. No. 97-4], Ex. B at 1, 12-13, 42-43, 65-66. 

2 06cv0921

I. BACKGROUND

On or about May 29, 2007, Defendant Hartford served Requests

for Production, Interrogatories and Requests for Admissions upon

Plaintiffs Omni, Murphy, Gaglione and Bancroft.1

 Pls.’ Mem. in

Supp. of Mot. [Doc. No. 97-2] (“Pl.’s Mem.”) at 2; Defs.’ Resp.

to Mot. [Doc. No. 106] at 3; Notice of Lodgment in Supp. of Mot.

[Doc. No. 97-4] (“Notice of Lodgment”), Ex. B at 5, 17, 47, 70. 

Plaintiffs’ responses to the discovery were due on July 2, 2007. 

Pls.’ Mem. at 2; Taylor Decl. in Opp’n [Doc. No. 107] (“Taylor

Decl.”), ¶ 3. On July 23, 2007, Defendants’ counsel, Jessica

Spangler Taylor, Esq., notified Plaintiffs’ counsel, Susan Meter,

Esq., of the overdue responses by telephone. Pls.’ Mem. at 2;

Taylor Decl., ¶ 4. Ms. Taylor also advised Ms. Meter of

Hartford’s position that Plaintiffs had waived all of their

objections to the discovery requests and that the requests for

admission had been deemed admitted. Taylor Decl., ¶ 5. 

Plaintiffs state that “as a result of extending discovery

deadlines in pursuit of settlement of the case, [they]

inadvertently overlooked the deadline” for responding to the

written discovery propounded by Hartford and/or Bannock. Pls.’

Mem. at 2. 

After July 23, 2007, Plaintiffs’ counsel asked Defendants’

counsel whether Hartford was interested in pursuing settlement

before Plaintiffs provided the overdue discovery responses. 

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Jones Decl. in Opp’n [Doc. No. 106-4] (“Jones Decl.”), ¶ 5. 

Hartford agreed to hold its discovery demands in abeyance for a

brief period of time, but made clear that “its position was in no

way a waiver of Hartford’s position that Omni waived all

objections to Hartford’s discovery.” Id. Plaintiffs forwarded a

settlement demand to Defendants’ counsel on August 10, 2007. 

Id., ¶ 6; Meter Decl. in Supp. of Mot [Doc. No. 97-3] (“Meter

Decl.”), ¶ 3. Hartford rejected the settlement offer on August

13, 2007. Jones Decl., ¶ 7; Meter Decl., ¶ 3. Plaintiffs

responded to all of the outstanding written discovery requests,

including the requests for admission, on August 20, 2007. Meter

Decl., ¶ 6; Notice of Lodgment, Ex. C. After counsel met and

conferred regarding the discovery responses, Plaintiffs served

amended responses to some of the requests for admission on or

about September 20, 2007. Meter Decl., ¶ 7; Notice of Lodgment,

Ex. D. Nothing in the record demonstrates that Hartford,

throughout this chain of events, ever abandoned its position that

the requests for admission had been deemed admitted. 

Plaintiffs’ counsel, Ms. Meter, first notified the Court of

her clients’ desire to file the instant motion on October 10,

2007. Plaintiffs filed their motion on October 12, 2007, after

participating in a conference call with the undersigned’s

chambers as required by the Court.

II. LEGAL STANDARDS

Rule 36 of the Federal Rules of Civil Procedure, applicable

to requests for admission, states that a matter is deemed

admitted “unless, within 30 days after service of the request . .

. the party to whom the request is directed serves upon the party

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The language of Rule 36 was amended effective December 1, 2007

as part of the “general restyling of the Civil Rules to make them more

easily understood and to make style and terminology consistent

throughout the rules.” Fed. R. Civ. P. 36 Advisory Committee Notes,

2007 Amendment. The changes were intended to be stylistic only. Id.

For purposes of this motion, the Court utilizes the previous version

of the Rule as the motion was fully briefed before December 1, 2007. 

Moreover, because the changes are stylistic only, the Court’s ruling

would not be any different even if the Court analyzed this matter

under the amended version of the Rule. 

4 06cv0921

requesting the admission a written answer or objection addressed

to the matter, signed by the party or by the party’s attorney.” 

Fed. R. Civ. P. 36(a). Any matter admitted under Rule 36 is

“conclusively established unless the court on motion permits

withdrawal or amendment of the admission.” Fed. R. Civ. P.

36(b). “[T]he court may permit withdrawal or amendment when the

presentation of the merits of the action will be subserved

thereby and the party who obtained the admission fails to satisfy

the court that withdrawal or amendment will prejudice that party

in maintaining the action or defense on the merits.” Id.

(emphases added).2 

“The first half of the test in Rule 36(b) is satisfied when

upholding the admissions would practically eliminate any

presentation of the merits of the case.” Hadley v. United

States, 45 F.3d 1345, 1348 (9th Cir. 1995). The second half of

the test, the prejudice component, requires “not simply that the

party who obtained the admission will now have to convince the

factfinder of its truth. Rather, it relates to the difficulty a

party may face in proving its case, e.g., caused by the

unavailability of key witnesses, because of the sudden need to

obtain evidence with respect to the questions previously deemed

admitted.” Id. (citation and quotations omitted). The party

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relying on the deemed admission has the burden of establishing

that withdrawal or amendment of the admission would prejudice the

party’s case. Id. 

Rule 36(b) is permissive, not mandatory, with respect to the

withdrawal or amendment of admissions. Conlon v. United States,

474 F.3d 616, 621, 624-25 (9th Cir. 2007). Therefore, even if

the moving party can satisfy the two-pronged test, the court is

not required to grant relief. Id. at 624. In deciding a motion

to withdraw or amend admissions, the court may also consider

other factors, including whether the moving party can demonstrate

good cause for the delay and whether the moving party appears to

have a strong case on the merits. Id. at 625. 

III. DISCUSSION

A. Scheduling Order

As a preliminary matter, the Court considers whether

Plaintiffs’ motion is timely. The Court’s Scheduling Order,

issued on February 6, 2007, states in pertinent part:

All disputes concerning discovery shall be

brought to the attention of Magistrate Judge

Adler no later than thirty (30) days

following the date upon which the event

giving rise to the dispute occurred. For

oral discovery, the event giving rise to the

discovery dispute is the completion of the

transcript of the affected portion of the

deposition. For written discovery, the event

giving rise to the discovery dispute is the

service of the response.

Feb. 6, 2007 Order [Doc. No. 66], ¶ 5 (emphasis in original). 

Here, although Plaintiffs were aware that a dispute

concerning discovery existed as of July 23, 2007, they did not

notify the Court of the dispute until October 10, 2007, over

eleven weeks later. Any reasonable lawyer in Plaintiffs’

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counsels’ position would have realized that a discovery dispute

existed as of July 23, 2007, when Ms. Taylor brought to Ms.

Meter’s attention the fact that Plaintiffs had missed the July 2,

2007 deadline to respond to Defendants’ written discovery and

that the requests for admission had been deemed admitted. 

Although the language of the Scheduling Order does not

specifically address the situation at hand, i.e., the failure to

serve timely responses to written discovery, Plaintiffs’ counsel

clearly should have recognized as of July 23, 2007 that a motion

under Rule 36 would be necessary to withdraw or amend the

admissions, and should have proceeded at that time with the steps

necessary to file the motion. 

The Court completely disagrees with Plaintiffs’ statement

that they filed their motion “on the earliest date possible.”

Pls.’ Mem. in Reply [Doc. No. 109] at 1-2. There is no

justification for waiting eleven weeks before bringing this

matter to the Court’s attention. None of the excuses proffered

by Plaintiffs for not bringing a timely motion -- including

broaching settlement with Defendants, being “bombarded” with

discovery (a claim which appears to be grossly exaggerated), and

prioritizing the preparation of amended discovery responses over

the filing of this motion -- are relevant considerations, nor do

any of them provide an adequate reason for not contacting the

Court about this dispute until October 10. 

The Court accordingly finds that Plaintiffs’ motion is

untimely under the Court’s Scheduling Order, and DENIES the

motion on that basis. Notwithstanding that finding, the Court

now independently analyzes the merits of the motion, i.e.,

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whether Plaintiffs have met the two-prong test set forth in Rule

36(b).

B. Presentation of the Merits

Again, the first prong of the test set forth in Rule 36(b)

is satisfied when upholding the admissions would “practically

eliminate any presentation of the merits of the case.” Hadley,

45 F.3d at 1348 (emphasis added). In Hadley v. United States,

the case centered on whether Hadley was properly assessed a tax

penalty by the federal government as a person responsible under

26 U.S.C. § 6672 for willful failure to pay taxes. Two requests

for admission propounded upon Hadley concerned the two “ultimate

issues” in the case, namely, whether Hadley was a “responsible

person” and whether the failure to pay over the taxes was

“willful” under § 6672. Hadley, 45 F.3d at 1347. These matters

were deemed admitted when Hadley failed to timely respond to the

requests. Id. The court found that the first prong of the Rule

36(b) test was satisfied as the deemed admissions amounted to a

complete admission of liability for willful failure to pay taxes

under 26 U.S.C. § 6672 and effectively disposed of the issues in

the action as the admissions permitted full recovery by the

Government on its counterclaim against Hadley. Id. at 1346. 

Similarly, in Conlon v. United States, deemed admissions by

Conlon resulted in a complete admission of no liability on the

part of the defendant. In that case, Conlon alleged that the

United States Parole Commission improperly issued a warrant for

his arrest, and that he had been negligently arrested and

imprisoned. Three requests for admission propounded upon Conlon

by the Government asked Conlon to admit that the issuance of the

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The requests for admission served upon Murphy and Bancroft are

virtually identical.

8 06cv0921

arrest warrant, his arrest, and his imprisonment had not been

caused “by any negligent or wrongful act or omission of any

employee of the United States.” Conlon, 474 F.3d at 619-20. 

These matters were deemed admitted when Conlon failed to respond

to the requests within 30 days as required by Rule 36(a). Id. at

620. The Ninth Circuit found that under such circumstances,

Conlon had satisfied the first prong of the test in Rule 36(b)

because “upholding the deemed admissions eliminated any need for

a presentation on the merits.” Id. at 622. In essence, Conlon

had admitted away his case.

Thus, the first prong of the Rule 36(b) test was satisfied

in both Hadley and Conlon because the admissions in those cases

conclusively resolved the issue of liability. Such is not the

case here. Although Plaintiffs argue that upholding the deemed

admissions would eliminate the need for any presentation of this

case on the merits, Plaintiffs are overstating the effect of the

admissions. Plaintiffs point to the following requests for

admission in their motion: Nos. 1-6 to Murphy and Bancroft,3

Nos. 1-12 and 17-20 to Gaglione and Nos. 9-10 to Omni. As will

be seen in the discussion below, the admissions as to the matters

set forth in these requests do not conclusively resolve this case

against Plaintiffs. 

a. Requests to Murphy

Plaintiffs primarily base their argument on three requests

served upon Murphy -- Nos. 3, 5 and 6. Request No. 3 to Murphy

states as follows:

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4

Exhibit A, attached to the requests for admissions served upon

Murphy and Bancroft, consists of “A Life Insurance Policy Illustration

Using Stag Whole Life” prepared for each of these individual

plaintiffs.

9 06cv0921

Request No. 3: Admit that by signing Exhibit A,4

Anthony Gaglione, as Trustee for the Omni Plan,

acknowledged at HL00083 that “neither Hartford Life and

Annuity Insurance Company nor its employees, its

agents, or its representative[s] provide tax or legal

advice, including, but not limited to, any advice

relative to the fair market value of the policy for

income, gift or estate tax valuation purposes.”

Notice of Lodgment, Ex. B at 71. Plaintiffs contend that if they

are not able to withdraw the deemed admission to this request,

they will not be able to argue one of their primary contentions -

- that Defendants did provide tax and legal advice which was

“fraudulent and misleading.” Pls.’ Mem. at 7. This admission,

however, does not preclude Plaintiffs from arguing that

Defendants actually provided fraudulent and misleading tax and

legal advice, notwithstanding the disclaimer in Exhibit A. The

request, after all, does not ask Murphy to admit that Defendants

did not provide tax or legal advice; rather, it simply asks

Murphy to admit that Gaglione, by signing Exhibit A, made an

acknowledgment of what the document states, i.e., that Defendants

do not provide tax or legal advice. Thus, the request asks for

nothing more than what the document itself establishes -- that

Gaglione made the acknowledgment. One way or another, with or

without the above admission, Plaintiffs will have to explain the

acknowledgment and counter any effects it may have on their case. 

For these reasons, it cannot be said that this admission results

in the practical elimination of any presentation of the merits of

the case. Hadley, 45 F.3d at 1348. 

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Similarly, the admissions to Request Nos. 1, 2 and 4 to

Murphy establish nothing more than what the document (Exhibit A)

itself does. That is, the requests simply seek to confirm

information pertaining to Exhibit A that is also evident from the

document itself. Moreover, none of these admissions -- that

Exhibit A is a fair and accurate copy, that Gaglione signed

Exhibit A, and that Exhibit A contains certain cited text --

preclude Plaintiffs from presenting the merits of their case. 

See Notice of Lodgment, Ex. B at 71-72. 

Plaintiffs also rely heavily upon Request Nos. 5 and 6 to

Murphy. These requests are as follows:

Request No. 5: Admit that, prior to communicating with

Hartford or Bannock, You had already decided to create

a 412(i) Plan to minimize Omni’s tax liability.

Request No. 6: Admit that, prior to communicating with

Hartford or Bannock, You had already communicated with

other persons or entities regarding the creation of a

412(i) Plan to minimize Omni’s tax liability.

Notice of Lodgment, Ex. B at 72. Upholding these admissions

would not practically eliminate any presentation of the merits of

the case. While it is true that Plaintiffs would not be able to

establish that Defendants’ advice caused Plaintiffs to create a

412(i) Plan, in that Plaintiffs will be deemed to have admitted

that they had already communicated with others about creating a

plan and had decided to implement such a plan, these admissions

will not preclude Plaintiffs from arguing that Defendants’ advice

caused Plaintiffs to enter into a 412(i) Plan with Hartford, or

that Defendants in fact provided false or misleading tax and

legal advice in connection therewith. Therefore, an admission

that Plaintiffs had already decided to create a 412(i) Plan prior

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to communicating with Hartford or Bannock would not effectively

end the litigation, and thus does not rise to the level necessary

for the Court to permit withdrawal or amendment of the

admissions. See, e.g., Perez v. Miami-Dade County, 297 F.3d

1255, 1266 (11th Cir. 2002) (granting motion to withdraw

admissions when the deemed admission “took the wind out of the

defendants’ sails and effectively ended the litigation”); Hadley,

45 F.3d at 1348; Conlon, 474 F.3d at 622.

b. Requests to Bancroft

Because the requests for admission served upon Bancroft are

virtually identical to those served upon Murphy, the analysis

applied above is also applicable to the deemed admissions by

Bancroft.

c. Requests to Gaglione 

Plaintiffs do not contend that Request Nos. 1 and 2 to

Gaglione (which seek admissions that Exhibit A, a document

attached to the requests, is a fair and accurate copy and that

Gaglione signed a “Disclosure and Acknowledgment Statement”

attached to Exhibit A) concern core elements of the case, and do

not argue that the admissions to the matters set forth in those

requests are untrue. Request Nos. 3 through 8 simply quote text

from Exhibit A and essentially ask Gaglione to confirm that the

text is contained within Exhibit A, and thus ask for nothing more

than what the document itself establishes. Furthermore, as

discussed above, admitting that Exhibit A contains various

acknowledgments and disclosures is not the same as admitting the

truth of those acknowledgments and disclosures. 

Request No. 9 asks Gaglione to admit that he listed Richard

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Goldberg, C.P.A. as Omni’s tax advisor in connection with the

Omni Plan. The effect of this admission is that Plaintiffs

cannot further their contention that someone else filled in Mr.

Goldberg’s name on the form. See, e.g., Pls.’ Mem. at 4. 

However, the admission does not establish that Mr. Goldberg gave

tax advice or preclude Plaintiffs from proving that Defendants

did so. And, while Request No. 10 asks Gaglione to admit that

Mr. Goldberg provided Omni with tax advice in connection with the

Omni Plan, an admission here does not conclusively establish that

Mr. Goldberg gave pre-Plan tax advice to Plaintiffs. Therefore,

if Mr. Goldberg did not give pre-Plan tax advice to Plaintiffs,

as Plaintiffs appear to argue, a deemed admission of Request No.

10 does not preclude them from establishing that fact. 

Request Nos. 11 and 12 are substantially similar to Request

Nos. 5 and 6 to Murphy, and the same analysis applies. 

Similarly, Request Nos. 17, 18, 19 and 20 are the same as Request

Nos. 1, 2, 3 and 4 to Murphy.

d. Requests to Omni

Request Nos. 9 and 10 to Omni are substantially similar to

Request Nos. 9 and 10 to Gaglione, and the same analysis applies.

In conclusion, because upholding the deemed admissions by

all four of the Plaintiffs discussed above would still permit

Plaintiffs to put on a case at trial, i.e., it would not

eliminate any need for a presentation on the merits, Plaintiffs

have not satisfied the first prong of the test in Rule 36(b). 

C. Prejudice to Defendants

When considering whether the prejudice prong of Rule 36(b)

has been met, “courts should focus on the prejudice that the

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nonmoving party would suffer at trial.” Conlon, 474 F.3d at 623. 

Reliance on a deemed admission in a summary judgment motion does

not constitute prejudice, nor does reliance on a deemed admission

in choosing not to engage in further discovery. Id. at 624. 

Here, Defendants have made no argument that they would be

prejudiced by a withdrawal or amendment of Plaintiffs’ deemed

admissions. It is their burden to establish such prejudice. Id.

Therefore, the second prong of Rule 36(b) is satisfied.

Although the second factor of Rule 36(b) has been met, both

prongs of the two-pronged test of Rule 36(b) must be met in order

for the Court to grant relief. See Fed. R. Civ. P. 36(b). 

Accordingly, the Court also DENIES the motion as the test in Rule

36(b) has not been satisfied. 

IV. CONCLUSION

For the reasons set forth above, the Court hereby DENIES

Plaintiffs’ motion to amend or withdraw admissions. Plaintiffs’

late responses to Defendant Hartford’s requests for admissions

are stricken and the matters therein are deemed admitted.

IT IS SO ORDERED.

DATED: December 27, 2007

Jan M. Adler

U.S. Magistrate Judge

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