MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 86
JUDICIAL ADMISSIONS, PART II
Mediation Message no. 67 reviewed Dang v. Smith (2010) 190 Cal.App.4th 646 which advised that “statements in a pleading are always admissible against the pleader to prove the matter asserted—as is any other statement by a party.” The recent case of Barsegian v. Kessler & Kessler (April 2013 Court of Appeal, Second Appellate District, Division One) 2013 Cal. App. LEXIS 287, 2013 WL 1680181 reaffirms the concept of judicial admissions in certain situations.
In Barsegian, the plaintiff sued her former attorneys for legal malpractice because of their handling of a real estate transaction and the remaining defendants for breach of lease, fraud, and related claims arising out of her purchase of the same property. The complaint alleged, inter alia, that “each of the defendants was the principal, partner, co-venturer, agent, servant, trustee, or employee of each of the other defendants herein.” The Kessler defendants moved to compel arbitration. The trial court denied the motion on grounds of waiver and the possibility of inconsistent rulings resulting from litigation with the third parties.
On appeal, the Kessler defendants argued that Barsegian’s complaint, which had alleged that all defendants are agents of one another, constituted a binding judicial admission that gave the remaining defendants the right to enforce the arbitration agreement between Barsegian and the Kessler defendants. As a result, the Kessler defendants concluded that the remaining defendants were not “third parties” to that arbitration agreement. The appellate court found that the above pleading was not a judicial admission.
The court gave little weight to Kessler’s argument that the “principal … agent” allegation was a judicial admission. “Complaints in actions against multiple defendants commonly include conclusory allegations that all of the defendants were each other’s agents or employees and were acting within the scope of their agency or employment.” And, even though such conclusory allegations have been criticized as “egregious examples of generic boilerplate, they still may be necessary … at the outset of a lawsuit, before discovery.” Accordingly, “If the Kessler defendants’ argument were sound, then in every multidefendant case in which the complaint contained such boilerplate allegations of mutual agency, as long as one defendant had entered into an arbitration agreement with the plaintiff, every defendant would be able to compel arbitration, regardless of how tenuous or nonexistent the connections among the defendants might actually be.”
Barsegian then observed that “not every factual allegation in a complaint automatically constitutes a judicial admission. Otherwise, a plaintiff would conclusively establish the facts of the case by merely alleging them, and there would never be any disputed facts to be tried.” Instead, the court noted, that “a judicial admission is ordinarily a factual allegation by one party that is admitted by the opposing party. The factual allegation is removed from the issues in the litigation because the parties agree as to its truth. Thus, facts to which adverse parties stipulate are judicially admitted. (Citation.) Similarly, in discovery when a party propounds requests for admission, any facts admitted by the responding party constitute judicial admissions. (Citation.) And when an answer admits certain factual allegations contained in a complaint or cross-complaint, those facts are likewise judicially admitted. (Citation.)”
Barsegian also rejected the judicial admission argument because the defendants wanted to use the mutual agency allegation to obtain arbitration but then intended to contest the truth of that allegation at the eventual proceeding. “That is not how judicial admissions operate. We conclude that the Kessler defendants do not in fact wish to treat the mutual agency allegation as a judicial admission …and we will not treat it as such.”
Barsegian is confused about when a statement is a judicial admission. It holds that a factual allegation in a complaint ordinarily becomes a judicial admission when an opposing party admits to its truth. “Otherwise, a plaintiff would conclusively establish the facts of the case by merely alleging them, and there would never be any disputed facts to be tried.” This rationale misses the point that judicial admissions also occur when language is inconsistent with and not in support of a proponent’s position; like self-serving hearsay, which generally has no exception for its admissibility since it is inherently untruthful, an allegation favorable to the party asserting it is just that – a claim that will have to be proven at a contested hearing. In contrast, an inconsistent statement is admissible hearsay. Dang v. Smith, supra, 190 Cal.App.4th 646 applied that approach when it held that “statements in a pleading are always admissible against the pleader to prove the matter asserted … In other words, a pleaded fact is conclusively deemed true as against the pleader.” (Id. at p. 657; emphasis added.) Thus, the defendant in Dang could use the allegation in the complaint to its benefit, without having to admit or stipulate to it (as Barsegian provides), because the plaintiff had taken a position inconsistent with her claim.
Accordingly, notwithstanding Barsegian’s holding, judicial admissions occur both when a party admits, stipulates to or adopts the truth of an opponent’s statement or when a party’s pleading is inconsistent with its argument, theory, cause of action or defense. Next, Barsegian seems to condone the use of certain “generic boilerplate” language that has become commonplace. Rather than accept such dicta as judicial approval of this type of pleading, attorneys should treat it instead as a cautionary warning that boilerplate allegations have their purpose but, if improperly or too casually used, can still cause problems.
Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010
Copyright Michael D. Marcus, April 2013
Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.