Award Affirmed, Because They Have To Be Reasonable And Bear A Logical Relationship to the Successful Claims.
Altman v. John Mourier Construction, Inc., Case No. C064340 (3d Dist. Jan. 10, 2013) (unpublished) is an interesting construction defect case involving an award of Stearman expenses, a specialized issue to which we now turn with some extra commentary.
We may have alluded to Stearman expenses, because they actually include litigation expenses that are not normally awardable as routine costs under Code of Civil Procedure sections 1033.5 [routine litigation costs encompass only court-ordered experts, in the absence of a CCP § 998 offer, to which we refer you to our Home “Section 998” category for more information]. So, we give a quick primer and then survey the Altman decision--of special interest for any practitioners or jurists involved in construction defect matters.
The primer, first. Civil Code section 3333, in tort actions, allows recovery for compensatory damages, whether or not anticipated (meaning that Hadley v. Baxendale contractual principles do not usually apply). In construction defect matters, case law has recognized that prevailing tort plaintiffs may recover, as part of their tort damages, expert fees incurred for investigative services that are not recoverable as routine litigation costs--CCP §§ 1033.5 and 998 notwithstanding, so-called Stearman costs from the landmark decision so deciding. (Gorman v. Tassajara Development Corp., 178 Cal.App.4th 44, 81-85 (2009); El Escorial Owners’ Assn. v. DLC Plastering, Inc., 154 Cal.App.4th 1337, 1361-1362 (2007); Stearman v. Centex Homes, 78 Cal.App.4th 611, 624-625 (2000).) However, as with many fees/costs-shifting provisions, the expenses claimed must be reasonable. (Gorman, 178 Cal.App.4th at 183.)
Okay, now that the table is set, we go to the facts and decision in Altman.
Plaintiff homeowners lost strict liability/warranty claims, won a contract claim (reversed in this appeal), and won a negligence claim totaling about $263,000. They then requested Stearman investigative expert costs of a little over $287,000. To their chagrin, the lower court awarded only $82,334 in investigative costs, prompting plaintiffs‘ appeal from this award.
The appellate court affirmed. The problem here is that Stearman claimants do not get carte blanche authority on their requests, but are subject to the same reasonableness requirements applicable generally to most fee/cost-shifting disputes. Here, the trial court did not err by apportioning out certain expenses, taking into account what claims plaintiffs actually prevailed upon. When this was done, the reduction was no abuse of discretion. Reasonableness, which may require an apportionment, was the focal substantive anchor point that led to the affirmance of the result in this case.