Watch what you plead: The effects of judicial and evidentiary admissions

What you say can and will be used against you in a court of law

2014 January

What you say can and will be used against you in a court of law. This Miranda warning, which is so familiar in criminal cases, applies equally to civil litigators who may be “stuck” with judicial admissions as a result of what is pled in a complaint or evidentiary admissions made in earlier complaints.

Careless language in a complaint can be the difference between getting to trial and losing on the merits at the time that a summary-judgment motion is brought by your adversary.  Defense attorneys are keen on identifying factual assertions as judicial admissions, and using those judicial admissions as proof of undisputed facts, which cannot, if truly judicial admissions, be rebutted.  To avoid an adverse ruling, or facts that you are ultimately “stuck” with, a litigator must carefully plan and thoroughly investigate all of the facts and issues when preparing the initial complaint.

The factual allegations in the complaint must be accurate and consistent with the client’s anticipated testimony, and supportive of the legal theory which is to be advocated.

What is a judicial admission?

What is a judicial admission and what is the impact of a judicial admission made in a pleading?  The well-recognized concept of judicial admissions was raised in Dang v. Smith (2010) 190 Cal.App.4th 646.  In Dang, the court held 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 court categorized these statements as “‘a conclusive concession of the truth of [that] matter,’ thereby ‘removing it from the issues.’” In other words, a judicial admission is an admission incorporated in a pleading that is conclusive in that proceeding on the party who makes it.

A judicial admission is a party’s unequivocal concession of the truth of a matter, which effectively removes the fact as an issue from the litigation.  (Gelfo v. Lockheed Martin Corp. (2006) 140 Cal.App.4th 34, 48.) Judicial admissions are most commonly found in allegations set forth in pleadings, such as a plaintiff’s complaint. (Cytodyn, Inc. v. Amerimmune Pharmaceuticals, Inc. (2008) 160 Cal.App.4th 288.) Facts established by pleadings as judicial admissions are conclusive and may not be contradicted. As one court has put it, “a pleader cannot blow hot and cold as to the facts positively stated.” (Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746.) However, allegations are judicial admissions only in the case in which made, if at all.

Not every assertion in a complaint is a judicial admission

The court in Barsegian v. Kessler & Kessler (2013) 215 Cal.App.4th 446, 452, emphasized an important limit on the characterization of allegations in pleadings and elsewhere as judicial admissions. The Court noted that a judicial admission is ordinarily a factual allegation by one party that is admitted by the opposing party. Judicial admissions include: factual stipulations; answers to requests for admission; an answer that admits the allegations in a complaint or cross-complaint.  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 as a result of an arbitration clause in the retainer agreement. 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 allegation 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 “principal … agent” allegation was not a judicial admission because:

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 multi-defendant 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.

(Id. at 451.)

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.” (Id. at 452.)  Instead, the court noted, that “a judicial admission is ordinarily a factual allegation by one party that is admitted by the opposing party.” (Ibid.)

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.” (Id. at p. 453.)

Dang v. Smith, 190 Cal.App.4th 646, foreshadowed the legal rationale of Barsegian. In Dang, a legal-malpractice case, the plaintiff, in her complaint alleged that her attorney failed to record a lien. The plaintiff then sought to assert, in opposition to summary judgment, that the malpractice was actually the failure to perfect the lien, which although recorded had been discharged by the debtor’s death due to a failure to perfect. The defendant sought to use the judicial-admission doctrine to prevent plaintiff from changing her theory i.e., failure to record vs. failure to perfect.

The court found that plaintiff’s allegation in her complaint that “her attorney failed to record the lien” did not constitute a judicial admission because the defendant did not agree to the truth of the alleged admission made.  More specifically, the defendant was not relying on the substantive allegation (that he, the defendant, failed to record the lien) as an admission of fact. Rather, the defendant was procedurally trying to bar plaintiff from amending her theory in a manner the court felt was broader, rather than directly contradictory. The court concluded that a defendant cannot rely on a judicial admission that the defendant himself proves is false. (Id. at pp. 657-658.)

Not all judicial admissions are alike

Judicial admissions are not solely confined to affirmative allegations. Judicial admissions can also be determined by a party’s failure to deny an allegation. Defendants are not immune to judicial admissions and their answers should be especially scrutinized in Federal Court where general denials are not allowed. However, judicial admissions do not result from the permissible use of inconsistent counts or defenses unless they involve contradictions of fact in a verified pleading. (See Beatty v. Pacific States Savings & Loan Co. (1935) 4 C.A. 2d 692, 697-98.)

Although not often utilized by opposing counsel as judicial admissions, a stipulation as to disputed evidence or facts, if not in excess of the authority of the attorneys entering it and if conforming to procedural requirements, results in a judicial admission removing the issues agreed upon from the case in which such stipulation is made. (Gonzales v. Pacific Greyhound Lines (1950) 34 Cal.2d 749.) As such, stipulations to facts should always be fully investigated and avoided if possible, unless you as a practitioner understand the conclusiveness of the factual proposition that you are agreeing too.

Judicial admissions are not only confined to pleadings or stipulations. An oral statement by counsel in the same action is a binding judicial admission if the statement was an unambiguous concession of a matter then at issue and was not made improvidently or unguardedly. (Fassberg Const. Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720.)

Not every document filed by a party constitutes a pleading from which a judicial admission may be extracted. Section 420 of the Code of Civil Procedure explains that pleadings serve the function of setting forth “the formal allegations by the parties of their respective claims and defenses, for the judgment of the Court.” “The pleadings allowed in civil actions are complaints, demurrers, answers, and cross-complaints.” (Code Civ. Proc., § 422.10.) When these pleadings contain allegations of fact in support of a claim or defense, the opposing party may rely on the factual statements as judicial admissions. (Myers v. Trendwest Resorts, Inc., (2009) 178 Cal.App.4th 735, 746.)

Moreover, admissions in pleadings are not always dispositive of an ultimate issue or other probative facts. (Electronic Equipment Express, Inc. v. Donald H. Seller & Co. (1981) 122 Cal.App.3d 834, 850.)  Even where an admission may exist, leave to amend is routinely and should be granted. (Bahan v. Kurland, (1979) 98 Cal.App.3d 808, 812; see also Valerio v. Andrew Youngquest Constr. (2002) 103 Cal.App.4th 1264, 1272, Avalon Painting Co. v. Alert Lbr. Co. (1965) 234 Cal.App.2d 178, 184-185; Berman v. Braumberg (1977) 56 Cal.App.4th 936, 948-949.) A judicial admission is not treated procedurally as evidence. For example, the particular pleading or allegation is not formally offered in evidence but may nevertheless be relied upon and treated in argument as part of the case.

Although judicial admissions are usually conclusive, California does allow a party to amend or withdraw its admission under proper circumstances. Dang v. Smith, supra, (2010) 190 Cal.App.4th at 659, n.1 said the law recognizes that a pleader may contradict a prior judicial admission provided there is a showing of mistake or other excuse for changing an allegation of fact.

Also, pursuant to section 2033.300 of the Code of Civil Procedure, a party may withdraw or amend an admission made in response to a request for admission on leave of court granted after notice to all parties. However, the court may permit withdrawal or amendment of an admission only if it determines that the admission was the result of mistake, inadvertence, or excusable neglect, and that the party who obtained the admission will not be substantially prejudiced in maintaining that party’s action or defense on the merits. (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403.)

Evidentiary admissions

Although the statements or allegations of fact in a plaintiff’s pleadings may not constitute binding and conclusive judicial admissions, the statements in pleadings may properly be considered as evidentiary admissions or prior inconsistent statements.  (Magnolia Square Homeowners Assn. v. Safeco Ins. Co. (1990) 221 Cal.App.3d 1049, 1061; Dolinar v. Pedone (1944) 63 Cal.App.2d 169, 176; Jones v. Tierney-Sinclair (1945) 71 Cal.App.2d 366, 373; 4 Witkin, supra, Pleading, § 414, p. 511; 1 Witkin, Cal. Evidence, supra, Hearsay, § 98, at pp. 922-923.)

Evidentiary admissions should not be confused with judicial admissions.  Understanding the differences between these similar but distinct legal principles gives complex-litigation practitioners insight necessary to advance past summary judgment and ultimately prevail at trial.  Judicial admissions can have harsh consequences and can be dispositive for your client’s case.  Evidentiary admissions are those alleged admissions which you commonly see in a motion for summary judgment that you are opposing.  Unlike judicial admissions, when faced with evidentiary admissions in a summary judgment, the practitioner is required to submit other competent evidence rebutting defendant’s evidence which creates a material issue of fact allowing the case to proceed to trial.

The admissibility of evidentiary admissions derives from one of the most well-known and often repeated tenets of law: An out-of-court statement offered for its truth is hearsay and is not admissible in court. Evidentiary admissions are exceptions to the hearsay rule. They are statements made by a party or its agent, regardless of whether they are made out of court or in court, typically used to contradict or otherwise impeach the party’s current assertion. Evidentiary admissions can also assist in proving the truth of the matter asserted, depending on the circumstances surrounding the making of the statement. They are exempted from the definition of hearsay under the California and Federal Rules on the theory that their admissibility into evidence is the result of the adversary system rather than satisfaction of the conditions of the hearsay rule.

Unlike judicial admissions, evidentiary admissions are merely considered another item in evidence and are not binding or conclusive on the trier of fact. Like any other evidence, evidentiary admissions are subject to contradiction or explanation. More specifically, they can be rebutted with other competent evidence.  Thus, the classification of a statement as either an evidentiary or a judicial admission has a tremendous impact on the way an issue is treated. An evidentiary admission is an item in the mass of evidence that the jury can consider, while a judicial admission is conclusive that the evidence is automatically accepted as true!

This difference in how a court classifies the admission, as either judicial or evidentiary, may in some circumstances decide the case. For instance, in a real-estate action, where the statute of frauds presumably applies, if plaintiff’s counsel incorrectly states that the contract was oral, the court may bind the plaintiff to his or her counsel’s statement and dismiss the case for failure to satisfy the statute of frauds. (Link v. Wabash RR. Co. (1962) 370 U.S. 626, 633-34.)

The California Evidence Code sets forth the admissibility of evidentiary admissions as follows: Evidence Code section 1220 states evidence of a statement is not made inadmissible by the hearsay rule when offered against the declarant in an action to which he is a party in either his individual or representative capacity, regardless of whether the statement was made in his individual or representative capacity. (See also Evid. Code, § 1222 [admission authorized by party]; § 1235 [prior inconsistent statement.])

The Federal Rules treat evidentiary admissions similar to California State Courts. It is now well accepted that statements made by an attorney during the course of litigation, whether oral or written, are presumed to be authorized by the client, and thus constitute admissions by that party. In fact, Rules 801(d)(2)(B),(C), and (D) of the Federal Rules of Evidence provide that any relevant statement made by a party or his agent acting in the scope of his employment, which is offered against that party, is generally admissible into evidence as an evidentiary admission (Fed. R. Evid. 801(d).)

The effect of judicial and evidentiary admissions on summary judgment

As stated above, evidentiary admissions often provide inadequate support for summary judgment because the person against whom such evidentiary admissions are offered may explain the admission and thereby, in effect, controvert it or at least avoid being held to the fact apparently admitted. (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 426.)

Defendants often, and sometimes with success, rely on judicial admissions in the opposing party’s pleading to conclusively establish or eliminate triable issues of material fact. (Myers v. Trendwest Resorts, Inc., supra, 178 Cal.App.4th at 747.) In summary-judgment or summary-adjudication proceedings, admissions of material facts made in an opposing party’s pleadings are binding on that party as judicial admissions; they are conclusive concessions of the truth of those matters, are effectively removed as issues from the litigation, and may not be contradicted by the party whose pleadings are used against him or her. (St. Paul Mercury Ins. Co. v. Frontier Pacific Ins. Co. (2003) 111 Cal.App.4th 1234.)

However, a judicial admission is effective (i.e., conclusive) only in the particular case it was made. (4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 453, p. 586, e.g., Betts v. City Nat. Bank (2007) 156 Cal.App.4th 222, 235, (admission in proposed probate pleading not binding because pleading was not filed in current case.) Moreover, it is well established that fragmentary, tacit, equivocal, or ambiguous allegations in a pleading do not constitute conclusive judicial admissions.  (Kirby v. Albert D. Seeno Construction Co. (1992) 11 Cal.App.4th 1059, 1066-67, Irwin v. Pacific Southwest Airlines (1982) 133 Cal.App.3d 709, 714.)  A pleading containing legal conclusions and mixed legal-factual statements does not constitute a judicial admission, and contrary evidence is allowed. (Berman v. Braumberg (1977) 56 Cal.App.4th 936, 949 [mistaken legal conclusion], Bahan v. Kurland (1979) 98 Cal.App.3d 808, 812 [mixed legal and factual conclusion].)

Two arguments can be effectively advanced when opposing a summary judgment where the defendant has alleged that you are bound by conclusive judicial admissions. More often than not, the alleged conclusive judicial admission of fact is not actually a factual assertion at all but merely a legal conclusion that is not binding i.e., the legal conclusion depends on disputed facts.  Second, many times the alleged judicial admission is not a judicial admission, but rather an evidentiary admission which can be rebutted with competent facts. Furthermore, courts are reluctant to characterize admissions as judicial and conclusive rather than evidentiary. In Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, 482, the Court held that summary judgment should not be based on tacit admissions or fragmentary and equivocal concessions, which are contradicted by other credible evidence.

Likewise, after the summary judgment, many attorneys incorrectly attempt to characterize a fact listed as undisputed during the motion for summary judgment as conclusive in later proceedings (trial) in the same case. As such, many attorneys opposing such motions are wary of listing facts as undisputed, fearing that the fact which was undisputed at the summary judgment will be used against him or her at trial. The appellate court has provided clarity on this issue. An agreement in the separate statement that a fact is ‘undisputed’ is a concession only for purposes of the summary judgment motion. It is not evidence (because not under oath or verified); nor is it a judicial admission. (Wright v. Stang Manufacturing Co. (1997) 54 Cal.App.4th 1218, 1224.)

In Wright, defendants sought to defeat a product liability, at the time of trial, claiming that because plaintiff had not disputed some of the facts made at the time of summary judgment he was therefore bound to those “undisputed facts” at the time of trial.  The trial court found in favor of the defendants, finding that the failure to dispute the fact at summary judgment was a continuing admission and was conclusive. The Court of Appeal rejected defendants’ argument, holding that defendants failed to establish that plaintiffs’ response to their separate statement of undisputed facts [should have been] accorded the same effect as a judicial admission in a pleading. (Id. at fn. 2-3.) The Wright court held that separate statements of undisputed facts in support of a motion for summary judgment or adjudication make no binding judicial admissions. Meyers v. Trendwest follows Wright on this point. (Id., 178 Cal.App.4th at p. 747.)

Be wary of your client’s prior factual assertions.

Generally, a pleading containing an admission is admissible against the pleader in a proceeding subsequent to the one in which the pleading is filed. This is true even on behalf of a stranger to the former action. (Dolinar, supra, 63 Cal.App.2d at 176.) However, the pleading constitutes an evidentiary, rather than judicial admission, and it is always competent for the party against whom the pleading is offered to show that the statements were inadvertently made or were not authorized by him or made under mistake of fact. (Id. at 177.)

Practitioners in complex civil and business litigation should especially be wary of the consequences of judicial admissions in earlier litigation. For example, you represent a client who claims that his prior attorney committed malpractice leading to his bankruptcy. Likewise, your client has filed separate complaints against other third parties claiming that these third parties are also at fault or the cause of his demise.

Those other pleadings, and the factual allegations made in those pleadings are viewed as evidentiary and sometimes judicial admissions which can impact your ability to pursue the malpractice case and/or the damages which you would be entitled to recover. Your clients will not understand the impact of these collateral actions and/or the statements and effect on the malpractice action. A review of all complaints and pleadings should be undertaken by the practitioner in order to evaluate the effect of judicial/ evidentiary admissions in those collateral proceedings.

Superseded pleadings

An allegation in a pleading superseded by later amendment is not a judicial admission. (See Witkin 1 Evidence Ch. VI, § 97.) A pleading superseded by later amendment has been determined to be neither a conclusive judicial admission nor even an evidentiary admission but only a prior inconsistent statement that may be used solely for impeachment and not as affirmative evidence. (Meyer v. State Bd. of Equalization (1954) 42 Cal.2d 376.) Because prior inconsistent statements are now admissible under their own hearsay exception, the Meyer rule has lost its significance; and unless the courts should decide to exclude it altogether, the superseded pleading will have evidentiary effect. More recent precedent has stated that superseded pleadings may be used at trial as admissions against interest, but the party who made the pleadings must be allowed to explain the changes. (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 426.)

Conclusion

The effect of judicial admissions, especially at the time when a summary judgment is brought, cannot be underestimated. A judicial admission may (1) prove a fact that could not otherwise be proven by competent evidence; (2) prevent the introduction of damaging evidence; and (3) even create a fact that is otherwise nonexistent. Judicial admissions normally cannot be rebutted and prevent the maker of the admission from doing so. However, because of the potentially devastating impact of judicial admissions, trial courts have the discretion to accept or reject treating a statement as a judicial admission either characterizing the admission as evidentiary or allowing, in appropriate circumstances, a motion to amend or modify the pleading as a result of mistake or inadvertence. The take away is this – get the facts right at the time you prepare your complaint and understand the other pleadings that may exist in any collateral proceedings.