Property Manager’s 998 Offers Were Not Token, Although Some Expert Fees, Exhibits Not Used At Trial, And Attorney Lodging Costs Had To Be Excluded Or Revisited.
Lewis v. RDM Mgt., Inc., Case No. B280728 (2d Dist., Div. 7 March 2, 2020) (unpublished) is a situation where plaintiff tenants in a 23-unit apartment obtained a $729,780 compensatory damages award against apartment owners for sewer spills, although a defendant property manager was exonerated completely. The trial judge granted property manager $137,559.43 in routine costs based on CCP § 998 offers which were directed to various tenants. Tenants appealed from denial of their motions to strike/tax costs.
Tenants were somewhat successful on appeal, although property manager garnered a lot of the costs it sought.
Plaintiffs first argued that there needed to be a reduction based on owner not prevailing under a “unity of interest” exception (put another way, a reduction for the costs incurred for representing the unsuccessful owners). The 2/7 DCA found that this exception was no longer viable under Charton v. Harkey, 247 Cal.App.4th 734, 742 (2016), authored by our local 4/3 DCA.
The appellate court then found that property manager’s $35,000 in aggregate offers to the tenants were not “token,” but within the “range of possibilities” as the ultimate zero judgment validated with respect to the 998 offers.
However, the Court of Appeal did find that two reductions were in order: (1) expert fees for a first trial which were not incurred, and (2) attorney lodging costs, which were only convenient to the case. With respect to exhibits not used at trial, a remand was in order to see if these expenses were justified. Finally, trial technology costs were proper given that more and more trial lawyers are using this technology to present their cases to juries, as allowable under Bender v. County of Los Angeles, 217 Cal.App.4th 968, 991 (2013).
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