CALIFORNIA ATTORNEY'S FEES

Costs: Fifth District Agrees That Unity Of Interest Principle Was Repealed In The Routine Costs Area

It Endorsed The Reasoning In The Charton Opinion.

               In Mosley v. Pacifica Bakersfield, L.P., Case No. F084699 (5^th Dist. Sept. 20, 2024) (unpublished), a co-defendant dismissed right before trial was awarded a little over $28,000 in routine costs against plaintiff, who won sizable damages.  The Fifth District affirmed, deciding that (1) CCP § 1032(a)(4) and (b) made the dismissed defendant a prevailing party, and (2) Charton, 247 Cal.App.4^th 730, 734 correctly reasoned the “unity of interest” principle was repealed from the costs statute such that a lower court has no mandatory duty to apportion where multiple defendants are represented by the same counsel.

Costs: With Respect Trial Transcription Costs, Court Reporter Fee Are Awardable But Transcript Preparation Is Not Unless Transcripts Ordered By The Court

Also, Messenger And E-Filing Charges Are Allowable In The Court’s Discretion.

               McCluskey v. Hendricks, Case No. B331457 (2d Dist., Div. 2 July 16, 2024) (unpublished) reinforced these principles for recovery of routine costs: (1) court reporter fees for trial transcription are recoverable (CCP § 1033.5(a)(11); Gov. Code, § 68086(d)(2)); (2) actual trial transcript preparation costs are not recoverable unless ordered by the court (CCP § 1033.5(b)(5)); and (3) messenger and e-filing charges are allowable in the discretion of the lower court if reasonably necessary for the litigation. 

Costs, Deadlines, Probate, Reasonableness Of Fees, Special Fee Shifting Statutes: $175,252.50 Fee Award Under Financial Elder Abuse Statute Affirmed On Appeal

Fee Request Reduced Down From $203,865; Two Awarded Routine Costs Components Remanded For A Further Hearing.

               In Thompson v. Ito, Case No. G061437 (4^th Dist., Div. 3 June 12, 2024) (unpublished), a defendant losing a trust undue influence case and determined to have committed financial elder abuse was hit with an adverse attorney’s fees award of $175,252.50 out of a requested $203,865 (reductions made based on excessive hourly rates, clerical work, and some discovery work not allowed by the lower court).  The award was made under Welfare & Institutions Code section 15657.5, providing that a fee award is mandatory where financial elder abuse is found.  The lower court also awarded the full costs request of $27,961.07 to the winning plaintiff. 

               Defendant’s appeal was mainly unsuccessful except for a remand to have a further hearing on two components of the costs award.

The argument that no attorney’s fees could be awarded while a merits appeal was pending (with the financial elder abuse findings affirmed earlier) lacked merit because the issue was a collateral matter not embraced within the merits judgment.  (Bankes v. Lucas, 9 Cal.App.4^th 365, 369 (1992), superseded by statute on other grounds; Korchemny v. Piterman, 68 Cal.App.5^th 1032, 1052 (2021).)

               Fees were mandatory against a party found to have committed financial elder abuse, so no “prevailing party” analysis was necessary.

               The fee award was no abuse of discretion, given that the lower court did reduce the request, that appellant raised new arguments on appeal (with those challenges forfeited), and that appellant failed to specify which block-billed entries should be disallowed.

               With respect to the costs award, appellant did not file a motion to tax costs, but the lower court did not err in allowing entertainment of his fee opposition challenges to costs.  Two components, the award of lodging and parking costs (which are discretionary items to be allowed or disallowed) for one person—totaling $2,468.67—was reversed and remanded because it was unclear the role of the claiming person in the case.  However, because the costs claimant would be given the opportunity to meet this objection, the matter was remanded to have a hearing on these two costs components only.

               Justice Motoike authored the 3-0 unpublished opinion.

Costs, Discovery: Court Of Appeal Found Nothing Wrong In Allowing Recovery Of Routine Costs For Filing Discovery Motions, Even If They Were Unsuccessful And Costs/Fees Were Denied Against Defendants In The Discovery Proceedings

No Authority Shown To Conclude Otherwise, With Routine Costs And Actual Discovery Sanctions Serving Distinct Purposes.

               In BBBB Bonding Corp. v. Pilling-Miller, Case Nos. H050703 et al. (6^th Dist. May 10, 2024) (unpublished), plaintiff lost trade secret misappropriation and related claims, with costs of $34,989 out of a requested $44,989 awarded to the prevailing defendants.  Among other items, defendants requested filing fees for discovery motion which were unsuccessful, even though the lower court denied imposition of attorney’s fees against defendants in the earlier discovery motion proceedings.  Plaintiff claimed error, arguing that the denial of motion fees as a discovery sanction precluded the award of routine motion filing fees to defendants.  The trial court disagreed, as did the appellate court.  Plaintiff cited no authority showing that such minor routine costs were precluded, with the appellate court adding that the policies behind discovery sanctions on the merits and an award of routine filing fees serving distinct purposes.

Costs, Employment: Labor Code § 1194(a) Mandatory Prevailing Employee Statute Prevails Over Discretionary Routine Costs Provision Giving Discretion To Deny Fees For Limited Success

Reasonableness Of Fees Will Be An Issue On Remand.

               Justice Viramontes, in Gramajo v. Joe’s Pizza on Sunset, Inc., Case Nos. B322697 et al. (2d Dist., Div. 8 Mar. 25, 2024) (published), confronted a situation where an employee recovering $7,659.93 for minimum wage and overtime claims in a long jury trial then sought $296,920 in Labor Code § 1194(a) prevailing employee fees.  The trial court denied fees entirely as unreasonable under CCP § 1033(a) which gives lower courts discretion to deny prevailing plaintiffs their litigation costs when plaintiffs file their case as an unlimited civil case but only recover an amount available in a limited case.  The 2/8 DCA panel reversed, finding the Labor Code provision was mandatory and entitled employees to reasonable litigation costs irrespective of the amounts recovered.  However, the panel expressed no opinion on the reasonableness of the fees, with the code provisions irreconcilable such that the Labor Code provision prevailed in this context.  In doing so, the appellate court narrowed Chavez to a FEHA situation (where fees are discretionary), but not a mandatory fee shifting situation.

Costs: Teacher Losing Administrative Mandamus Proceeding Was Liable For $3,951.74 In Routine Costs

His Claim Of Indigency Was An Immaterial Consideration.

               In Kissner v. Loma Prieta Joint Union School Dist., Case No. H050873 et al. (6^th Dist. Mar. 15, 2024) (unpublished), petitioner teacher challenged his layoff under the Education Code, but he lost before an ALJ and later lost an administrative mandamus writ proceeding before the superior court.  The lower court ordered him to pay District’s routine costs of $3,951.74, consisting mainly of District’s preparation of the ALJ transcripts after teacher requested an indigency fee waiver. 

               On appeal, teacher argued that, as an in pro per litigant, he was excused from paying costs, an argument rejected by both the trial and appellate courts.  The Sixth District first noted the general rule:  courts have no discretion to deny costs based on the losing party’s lack of resources. (See Nelson v. Anderson (1999) 72 Cal.App.4th 111, 129 [concluding that there is no “discretion to consider a party’s ability to pay” under section 1032 of the Code of Civil Procedure]; see also Alfaro v. Colgate- Palmolive (LAUD Asbestos Cases) (2018) 25 Cal.App.5th 1116, 1124-1125 [finding “no authority . . . for the court to analyze whether costs are reasonable based on the losing party’s ability to pay” under section 1033.5 of the Code of Civil Procedure].)  Teacher argued the result was different under CCP § 1094.5 in mandamus writ proceedings, but the reviewing court dispatched that contention by observing that record preparation was taxable by the prevailing party, not just a prevailing petitioner, such that the Legislature created no “indigency exception” under section 1094.5.

Allocation, Costs, Trade Secrets: Plaintiff Obtaining Permanent Injunction Was Entitled To Contractual Attorney’s Fees, But Fee Determination By Lower Court Remanded To Reconsider 75% Reduction In Request And Denial Of Discovery Work

4/3 DCA Also Determined Contractual Expenses Must Be Pled And Proven As Damages, As Well As Reversed A Nonsuit On Whether The Trade Misappropriation Was Willful and Malicious.

               In Applied Medical Distrib. Corp. v. Jarrells, Case No. G062056 (4^th Dist., Div. 3 Mar. 8, 2024) (published), plaintiff former employer Applied sued former employee Jarrells and his new employer for trade secret misappropriation, contractual breach of using proprietary information under a contract with a fees, costs, and expenses clause, and breach of fiduciary duty.  The jury found Jarrells had misappropriated trade secrets, but he suffered no damages and or unjust enrichment.  Later, the trial court granted Applied’s request for a permanent injunction (after earlier granting a stipulated-to preliminary injunction) and partially awarded it requested fees, costs, and expenses (with the fee request being about $3.9 million).

               On appeal by Applied, the 4/3 DCA—in an opinion by Justice Gooding, the appellate court’s most recent appointed member—affirmed in part and reversed in part. 

               The lower court did not err in crediting Applied’s assertion that it had excluded all noncompensable time on certain work.  It also did not err in concluding that Applied was only entitled to compensation for work in obtaining injunctive relief based on the breadth of the contractual fees, costs, and expenses clause.

               However, the appellate court found that the lower court made two improper reductions.  First, the lower court erred in only awarding 25% of the fee request based on Applied recovering on one out of four causes of action because that reduction failed to appreciate intertwined work potentially worthy of compensation on the other counts.  Second, the lower court improperly denied for discovery work relating to obtaining the permanent injunction because that was a merits determination for which compensation was recoverable.

               The reviewing panel concluded that the lower court properly awarded litigation expenses under the fees, costs, and expenses contractual clause because the expenses needed to be plead and proven as damages at trial, bringing the 4/3 DCA in alignment with the majority of intermediate appellate courts which have confronted this issue.  (In doing so, it distinguished Thrifty Payless which came to a different result under much different circumstances.)

               Finally, the 4/3 DCA determined that the lower court erred in granting nonsuit on whether the trade misappropriation was willful and malicious.  This meant that a jury trial was necessary to revisit the issue; and, if it decides that the misappropriation was elevated in nature, the lower court would then have to determine fees to which Applied would be entitled under Civil Code section 3426.4 (CUTSA’s statutory fee authorization).

Costs, Fees On Fees, Lodestar: Fee Award Reversed Because Unavailability Of Out-Of-Venue Counsel Should Have Been Considered, 30% Reduction For Pre-Trial Settlement Efforts Was Unwarranted, And Fees On Fees For Reply Work Should Have Been Considered

However, Denial Of Expert Witness Fees As Costs For Non-Court Ordered Witness Was No Abuse Of Discretion.

               In California Open Lands v. Butte County Dept. of Public Works, Case No. C097297 (3d Dist. Mar. 4, 2024) (unpublished), plaintiff reached a settlement with a county government in a conservation easement case with Clean Air Act issues.  Nonprofit plaintiff moved for $766,078 in private attorney general fees and $59,325.07 in costs, with hourly rates based on San Francisco rather than Butte County rates.  The lower court partially granted the fee request, but used lower Butte County rates because it did not deem the matter complex, reduced fees by 30% based on perceived pre-lawsuit settlement proposals by the municipal entity, and did not award work on reply papers for the “fees on fees” request.   It also denied the costs request, most of which encompassed expert witness work for experts neither authorized by the court nor subject to CCP § 998 shifting.

               The appellate court reversed and remanded the fee award on three grounds:  (1) nonprofit did produce evidence that it could not retain local counsel versed in conservation easement and Clean Air Act matters, which needed a revisit for whether higher out-of-market rates were justified; (2) the 30% reduction for settlement efforts had no evidentiary support in the record; and (3) reply paper work should be considered in awarding attorney’s fees on the “fee on fee” request.

               With respect to the expert fee costs denial, those determinations were affirmed.  Nothing showed that one of the experts was ordered by the court, so it was not a proper costs item.  Another expert was a consulting expert, with nothing cited to show this was a proper cost.  Finally, nothing in the routine cost statute allowed staff costs to be awarded for the work of an executive director of the nonprofit to enforce the conservation easement.

Costs, Employment: Neeble-Diamond Opinion Now Certified For Publication

Prevailing FEHA Defendant Must Bring A Motion To Obtain Discretionary Costs Because Losing Plaintiff’s Case Must Be Shown To Be Objectively Frivolous In Nature.

            On January 15, 2024, we posted on Neeble-Diamond v. Hotel California by the Sea, LLC, Case No. G061425, which was issued on January 11, 2024 as an unpublished opinion.  We can now report it was certified for publication on February 5, 2024.   The opinion holds that a prevailing FEHA defendant cannot recover costs solely through a costs memorandum, because all costs are discretionary and need to have a noticed motion to decide if losing plaintiff’s case was objectively frivolous.  Without that showing on a noticed motion, a costs memo is not the proper vehicle for the defense to pursue costs in this area. 

Costs, Section 998: Ouf-Of-State Deposition and Expert Witness Costs Were Justified

Section 998 Offer Was Proper, So Expert Witness Expenses Properly Awarded.

            In Tayefeh v. Kern Medical Center, Case No. F085746 (5^th Dist. Jan. 29, 2024) (unpublished), the lower court and appellate courts affirmed certain costs for prevailing defendants for certain out-of-state deposition expenses and expert witness costs.  Those determinations were affirmed on appeal.  Because the out-of-state deposition needed to be taken to preserve testimony, there was no abuse of discretion in allowing these costs.  With respect to the expert witness fees, the appellate court had to assess the propriety of a CCP § 998 offer, but concluded it was made in good faith based on the information known to all parties, such that the expert witness preparation costs were not unreasonable. 

Costs, Reasonableness Of Fees, Unlicensed Contractors: Owners Winning Small Amount In Unlimited Case Against Unlicensed Contractor Were Not Entitled To Attorney’s Fees Or Routine Costs

Reason Was That Owners Sought Overly Inflated Fees And Costs, With Fees Not Allowable Because They Did Not Relate To Construction Performance Under B&P § 1029.8.

            In a very contentious dispute between residential property owners and carpentry contractors, the trial and appellate courts in Romero v. Brocca, Case No. B316715 (2d Dist., Div. 1 Jan. 23, 2023) (unpublished) affirmed determinations that no one prevailed for purposes of an attorney’s fees award and that owners were not entitled to an award of a little over $41,000 in routine costs although they arguably did prevail for a costs award.  There was potential fee exposure for contractors because they were unlicensed so as to possibly trigger a fee award under Business & Professions Code section 1029.8.  However, the fee request by owners was properly denied because only a $6,500 down payment by them was involved, not unlicensed contractor performance relating to providing goods and services.  With respect to routine costs, owners submitted overly inflated costs requests, such that they were properly denied by the trial court in concluding the claimed costs were not reasonable or necessary for the litigation.

Costs: Routine Costs For Expert Only Testifying On Impermissible Legal Conclusion Reversed On Appeal

Those Costs Not Justified.

            Prevailing party, after seeking expert witness fees under a successful CCP § 998 offer, sought some fees for one expert testifying on legal conclusions.  Well, those costs were not allowed in Kreitzman v. Mercury Casualty Company, Case No. B325854 (2d Dist., Div. 7 Jan. 16, 2024) (unpublished).  The reason is not hard to divine, an expert testifying on legal conclusions is not a proper expert opinion such that the costs claimed on that expert were properly not allowed.

Costs: Because FEHA Costs Involve An Exercise Of Lower Court’s Discretion In Finding Case Was Frivolous, Costs Memorandum Is An Ineffective Means Of Seeking Costs

Same Rule Applies To Routine Costs Which Are Not A Matter Of Right.

            This case is a good reminder for practitioners representing prevailing parties to seek discretionary costs through a noticed motion, not just through a cost memorandum.

            In Neeble-Diamond v. Hotel California By The Sea, LLC, Case No. G061425 (4^th Dist., Div. 3 Jan. 11, 2024) (unpublished), a FEHA prevailing defendant was awarded routine costs of $180,369.41, via a cost memorandum not timely opposed, after the lower court denied an attorney’s fees request because the plaintiff’s case was not frivolous.   The 4/3 DCA reversed in a decision authored by Acting Presiding Justice Goethals.  The panel found that since costs in this area were discretionary (given the lower court had to determine the case was not frivolous), a cost memorandum was an ineffective means of seeking such costs.  It also cited Anthony v. City of Los Angeles, 166 Cal.App.4^th 1011, 1015-1016 in support, which came to the same conclusion in the context of expert costs which were not recoverable as a matter of right under CCP § 1032.

            BLOG UPDATE: We can now report that this opinion was certified for publication on February 5, 2024.

Costs: Costs Related To Noticed, But Untaken, Depositions And Service Related Thereto Are Not Subject To A Blanket Exception Under The Routine Costs Statutes

Rather, The Test Is Whether Whey Were Reasonably Necessary To The Litigation At The Time Incurred.

            In Garcia v. Tempur-Pedic North America, LLC, Case No. E079859 (4^th Dist., Div. 2 Jan. 8, 2024) (published), after dismissal by plaintiff of an initial suit against a manufacturer for an allegedly defective mattress, manufacturer moved for costs against plaintiff, with the lower court awarding routine costs for noticed, but untaken depositions, for obtaining a certificate of nonappearance, for a last minute cancellation of a deposition by plaintiff’s counsel, for noticing a deposition of a fact witness who subsequently died, and for service of process costs associated with the noticed depositions.  The 4/2 DCA affirmed, rejecting the notion that such costs were subject to a blanket exception; rather, the test was whether they were reasonably necessary to the litigation at the time incurred--“[h]indsight is no guide here.”  Prior to dismissal, these costs were reasonably incurred by manufacturer to properly depose fact and nonretained expert witnesses, even if the depositions did not occur for reasons not forseeable by manufacturer.

Appealabilty, Costs: Only Adding Costs To A Judgment, Through An Amendment, Does Not Rest Time To Appeal From The Original Judgment

No Substantial Modification Was Obtained By Adding Costs To A Judgment.

            In Crokin v. Primrose, Case No. G061959 (4^th Dist., Div. 3 Jan. 3, 2024) (unpublished), authored by Presiding Justice O’Leary, the 4/3 DCA agreed that adding routine costs, attorney’s fees, and interest to an original judgment through an amended judgment did not reset the time to appeal from the original judgment because the changes were not substantial.  The costs award was separately appealable, such that it should have been separately appealed.  (Torres v. City of San Diego, 154 Cal.App.4^th 214, 222 (2007); Dakota Payphone, LLC v. Alcaraz, 192 Cal.App.4^th 493, 504-505 (2011).)

Costs: $68,441.99 Costs Award Affirmed On Appeal, Avoiding Judicial Council Form Lack Of Verification Language In Costs Memorandum

Fifth District Split Decision On This Issue Did Not Need To Be Confronted.

            The Fourth District, Division Three, in an unpublished decision authored by Presiding Justice O’Leary, did not have to confront an issue which divided the Fifth District in Srabian v. Triangle Track Center, Case No. F080066 (Aug. 12, 2022), where the dissenting justice wrote a very detailed opinion indicating why use of the Judicial Council costs of memorandum form was defective in not containing “penalty of perjury” language.  In the appeal before the Santa Ana appellate court, Pars Publishing Corp. v. Ordway Corp., Case No. G061374 (4^th Dist., Div. 3 Dec. 18, 2023) (unpublished), the prevailing party was awarded $68,411.99 in costs, using the Judicial Council form found defective by the dissenting justice in Srabian.  However, because this argument was not raised in the trial court, it was deemed waived so that the 4/3 DCA panel did not have to dive into the issue.  Beyond that, there was some authentication of specific costs, in an opposing declaration under penalty of perjury, to support awarding costs even if the Judicial Council language was flawed.

Costs, Employment: Employee Assessed With Routine Costs For Not Prevailing On Labor Code Violations, Intertwined With Other Claims, Obtained Reversal As A Matter Of Law Where Employee’s Case Was Not Brought In Bad Faith

Where Wage Claims Are Not Brought In Bad Faith, Intertwined Claims Do Not Give Rise To Costs Exposure.

            In Schwade v. South Pasadena Rehabilitation Center, LLC, Case No. B318644 (2d Dist., Div. 2 Dec. 5, 2023) (unpublished), employee lost a wage/hour claim lawsuit, although involving intertwined claims, on a summary judgment.  The lower court assessed routine costs against employee to the tune of $11,937.63 even after finding that (1) employee’s wage hour claims were not brought in bad faith, and (2) the ancillary claims were intertwined with the wage hour claims.

            The appellate court reversed as a matter of law, based on the lower court’s findings.  The reversal was driven by case law indicating that a plaintiff employee should not be assessed with these costs unless bad faith is determined on intertwined wage hour claims, case law/Labor Code provisions prevailing over general cost shifting statutes of a more general nature.  (Dane Elec. Corp., USA v. Bodokh, 33 Cal.App.5^th 761, 774-775 (2019).) 

Costs, Probate: Probate Code Section 1002 Takes Precedence Over General CCP § 1032(b) Prevailing Party Provisions

Probate Court Has Discretion To Determine Whether Costs Should Be Awarded, Who Should Pay Them, And Who Should Recover Them.

            Peccia v. Guerrero, Case No. B316614 (2d Dist., Div. 3 Dec. 4, 2023) (unpublished) is an opinion reminding practitioners that specific Probate Code provisions may take precedence over more general CCP prevailing party statutory provisions.

            In this case, petitioners and respondents got involved in probate disputes involving two different subtrusts, with each side partially prevailing on certain claims relating to the different subtrusts.  The lower court determined that no attorney’s fees or costs should be awarded to either side.  One of the petitioners appealed, but he did not obtain a change in result.

Under Probate Code section 1000(a), the “rules of practice applicable to civil actions” apply to proceedings under the Probate Code, “[e]xcept to the extent that this code provides applicable rules.” Section 1002 provides: “Unless it is otherwise provided by this code or by rules adopted by the Judicial Council, either the superior court or the court on appeal may, in its discretion, order costs to be paid by any party to the proceedings, or out of the assets of the estate, as justice may require.”  Case law holds that, notwithstanding CCP § 1032(b) mandatory prevailing party costs provisions generally applicable, the probate court has specialized discretion to determine whether costs should be awarded, who pays them, and who recovers them.  (Hollaway v. Edwards, 68 Cal.App.4^th 94, 99 (1998).)  In this instance, given partially prevailing parties on both sides of the “litigation coin,” the probate court did not abuse its discretion in not awarding CCP prevailing party costs to appellant.

Costs, Section 998: In A Dispute Spanning About A Decade, Court Of Appeal Resolves Costs Issues Under General Principles And CCP § 998

Bottom Line Is That Some Routine Costs May Have To Be Paid On Remand By Prevailing Defendant.

            Hussein v. Razin, Case Nos. G061491/G061681 (4^th Dist., Div. 3 Nov. 13, 2023) (unpublished) is a decades-long dispute which finally resulted in plaintiff failing to prove his claims, in plaintiff defeating cross-claims against the defendant/cross-complainant, and with plaintiff then recovering $11 million in costs and attorney’s fees against defendant in an arbitration based on successfully defending against the cross-complaint.  There also was a defense CCP § 998 offer for a “paltry” $4.5 million, never accepted by plaintiff, based on indications that a multi-million dollar verdict was in the offing.  The lower court denied all parties’ request for routine costs.  That sent the matter to the appellate court based on appeals by all sides.

            Most rulings got affirmed by the 4/3 DCA, except for a reversal and remand for routine costs to the defendant, in an unpublished opinion authored by Justice Goethals.

            Defendant obtained a reversal for routine costs under CCP § 1032 based on its technical language that a defendant is the prevailing party where neither plaintiff not defendant obtains any relief, which includes a defendant as a cross-complainant.  (McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn., 231 Cal.App.3d 1450, 1453-1454 (1991).)  Plaintiff argued, c’mon here, I won an arbitration award of much more so that I prevailed.  The appellate court rejected this argument because arbitral proceedings are not included within the ambit of the section 1032 language; to hold otherwise you erode the black letter law on the issue. 

            Defendant argued that it was entitled to section 998 based on its rejected $4.5 million pre-trial offer.  The appellate court agreed with the trial judge’s conclusion that the offer was not in good faith because there was evidence that plaintiff would have won a significant verdict way over this amount—a “large payday.”  So, no enhanced expert fees owed by plaintiff.

Costs, Special Fee Shifting Statutes: In “Close Call” Situation, 9th Cir. Majority Affirms Denial Of EAJA And Bad Faith Atty’s Fees Where Government Lost Case Due To Unreliable Opinion Of Its Expert, But Reverses Denial Of Certain Deposition Costs

Dissenting Circuit Judge Would Have Awarded Defendants Fees Because DOL’s Case Was Not Substantially Justified When Viewed Under An Objective Standard.

            The Equal Access to Justice Act (EAJA) was enacted to curb abusive and costly lawsuits involving the federal government, authorizing a prevailing party to seek attorney’s fees and costs from a federal agency if the agency’s litigation position was not “substantially justified” or the government acted in bad faith under 28 U.S.C. § 2412(b), (d)(1)(A), (d)(2)(A). The EAJA also empowers a court to award taxable costs.  28 U.S.C. § 2412(a).

            These statutory provisions were at issue in Su (Dept. of Labor Secretary) v. Bowers, No. 22-15378 (9^th Cir. Oct. 25, 2023) (published).  DOL lost an overinflated valuation case against defendants after the district court rejected the opinion of DOL’s star expert witness.  Although defendants were awarded certain costs, the federal judge did not award fees after finding that the “substantially justified” or “bad faith” requirements were not met.  The Ninth Circuit, in a 2-1 opinion, affirmed even though acknowledging the case was “a close call.”   DOL could not predict that its expert’s opinion would be considered entirely faulty, even though one piece of it was, such that its actions were substantially justified and not taken in bad faith.  However, the entire panel did reverse the refusal to award deposition costs to defendants because there was a clear error given that the depositions were properly necessary for summary judgment purposes.

            Circuit Judge Collins dissented from the fee denial order.  He believed that too lax a standard was being used to judge the government’s actions, substituting a “could have rationally believed” standard versus an objective “substantially justified” standard.  He would have remanded to see what fees were authorized because eligibility is tied to certain “net worth” requirements of the requesting parties under section 2412(d)(2)(B).

Civil Rights, Costs: Prevailing ADA Defendant Entitled To Costs Under F.R.Civ.P. 54(d)(1) Even If The Matter Was Not Frivolous

Majority Opinion Followed Marx Decision; Dissent Would Have Followed A Contrary Pre-Marx Decision Despite Indicating The Result Might Be The Same.

            In Garcia v. Gateway Hotel, L.P., Case No. 21-55926 (9^th Cir. Sept. 15, 2023) (published), the Ninth Circuit, in a 2-1 opinion, clarified that defendants prevailing in an American with Disabilities Act (ADA) suit are entitled to seek routine costs from the plaintiff under Federal Rule of Civil Procedure 54(d)(1), not having to prove the case was frivolous, based on Marx v. General Revenue Corp. 458 U.S. 371 (2013).  The dissent, we think, did not disagree, but believed the circuit was bound by a pre-Marx decision not embraced by the majority justices.

Costs, Default Judgments, Multipliers, Paralegal Time: $709,620 In Attorney’s Fees Entered As Part Of A Default Judgment After Entry of Terminating Sanctions Was Affirmed On Appeal

Complaint Did Not Have To Plead An Exact Amount Of Fees; 3.0 Positive Multiplier Appropriate; PAGA Settlement Administration Expenses/Paralegal and Legal Assistant Expenses Properly Allowed As Routine Costs.

            Haaverson v. Tavistock Freebirds, LLC, Case No. A164043 (1^st Dist., Div. 5 Aug. 18, 2023) (unpublished) is an interesting opinion which explores whether a complaint needs to plead a specific amount of attorney’s fees to sustain a subsequent default judgment based on a request for substantial fees.  The holding in the decision is “no,” in most situations.

            What happened here is that a lower court granted terminating sanctions against defendant such that a default judgment was eventually entered for $25,000 in PAGA penalties, $48,793.90 in costs, and $709,620 in attorney’s fees inclusive of a 3.0 multiplier.  Defendant’s main argument on appeal was that the complaint’s prayer for “reasonable attorney’s fees and costs” was an insufficient allegation on which to base a default judgment because it was “relief” within the meaning of CCP § 580(a) requiring a more exact numerical specification.  The appellate court concluded attorney’s fees did not constitute the necessary “relief,” especially where a default judgment was based on terminating sanctions—adopting the reasoning in Simke, Chodos, Silberfeld & Anteau, Inc. v. Athans, 195 Cal.App.4^th 1275, 1286-1288 (2011).)  However, it examined other cases and reasoned that the result was likely the same in routine default judgment cases.  The appellate panel stated it this way: “Requiring that a plaintiff include an estimate of attorney fees that may be incurred up to the point of trial in the complaint would not meaningfully assist a defendant in making any informed choice. Unlike damages which are more or less fixed in their amount and do not depend on the manner of default, attorney fees will vary greatly depending on whether a default is taken following a defendant’s failure to answer or, like here, following lengthy discovery, motion practice, and terminating sanctions. Because of the speculative nature of any attorney fee estimate at the outset of litigation, a plaintiff is in no better position than a defendant to make that estimate. Indeed, a defendant is arguably in a better position than the plaintiff to estimate the amount of fees to be incurred by the plaintiff because that amount depends, in large part, on how the defendant chooses to proceed in litigation. Therefore, a complaint’s request for “reasonable attorney fees” provides sufficient notice to a defendant that fees are sought while recognizing the near impossibility for the plaintiff to predict what the actual fees will be.”

            Plaintiff was the prevailing party for fees under PAGA.  With respect to the 3.0 multiplier, the degree of skill and difficulty of the case justified an enhancement.

            PAGA administrative expenses to distribute the penalty to 408 employees correctly were awarded by the lower court as routine costs to plaintiff.   Finally, paralegal and legal assistant expenses were awardable as “reasonably necessary to the conduct of the litigation” under the discretionary costs provision, CCP § 1033.5(c))2). 

            BLOG OBSERVATION—We would indicate that if attorney’s fees are awardable as damages, this case might have turned out differently or would need a different analytical path for adjudication of the issue. 

Costs: Plaintiff’s Failure To Renew A Tax Costs Motion Taken Off Calendar Resulted In A Modified Judgment Years Later With The Costs Added

Plaintiff Did Not Subsequently Renew His Objections At The Trial Level, Meaning The Addition Of Costs Was A Ministerial Act Rather Than A Substantial Amendment to the Judgment.

            Max v. Shih, Case No. B322716 (2d Dist., Div. 1 July 27, 2023) (unpublished) is a situation which reminds counsel to renew motions to strike costs, after they are taken off calendar, to avoid arguments that the costs memoranda are beyond challenge when it comes to being included in a subsequent amended judgment.  What happened in this one is that plaintiff moved to tax costs filed by the defense, with the motion taken off calendar by the trial judge for insufficiency, but never renewed.  Years later, the defense requested an amended judgment to include the costs not challenged earlier, a request which was granted.  Plaintiff’s challenges on appeal to the amended judgment were unsuccessful.  The main problem was that addition of costs, absent a motion to tax, is a ministerial clerk act, not a significant amendment to a judgment (at best, a clerical correction to a judgment).  On the merits, a joint memorandum of costs by joint respondents was proper because all of them prevailed so that sharing trial counsel and costs did not require an allocation of a different, more diminished, nature.

Costs, Private Attorney General: In Case Involving Extension Of 241 Toll Road Near San Clemente, 4/2 DCA Affirms Denial Of 1021.5 Fees To HOA, Reverses And Remands Denial Of Fees To Environmental Parties, And Affirms Award Of Costs Against HOA

Lots Of Moving Parts Here, But The Remand For Environmental Parties Is Not An Automatic Endorsement Of Receiving 1021.5 Fees.

            City of San Clemente v. Department of Transportation et al., Case No. E077153 (4^th Dist., Div. 2 June 29, 2023) (published) arose out of the Corridor Agency’s approved extension of State Route 241 (known as the “toll road” to Orange County residents) near San Clemente, which resulted in lawsuits by Environmental Parties and an HOA, respectively, to protect environmental interests and homeowners’ interest in not having the extension too close.  Environmental Parties were able to get the Corridor Agency to agree to a settlement agreement by which an environmental “avoidance area” was created.  HOA’s suit challenged the settlement agreement as being ultra vires, but it dismissed its case after suffering some key losses. Eventually, Corridor Agency proceeded with an option which steered clear of the “avoidance area” and HOA.

            This is where the attorney’s fees/costs motion frenzy began, with fee requests brought under the private attorney general statute (CCP § 1021.5) and costs presented under the routine cost statute.  HOA moved for about $1.85 million in fees on a catalyst theory against Corridor Agency; Environmental Parties moved for about $1.139 million in fees against HOA; and Corridor Agency and Environmental Parties moved for costs totaling about $190,000 against HOA.

            The lower court denied the fee requests, but it awarded reduced costs of about $102,000 against the HOA.  Environmental Parties appealed the fee denial, and HOA cross appealed in relation to the fee denial and cost awards.  The 4/2 DCA, in a lengthy opinion, affirmed the HOA fees denial and costs awards, but reversed and remanded with respect to the fee denial involving the Environmental Parties.

            Denial of HOA’s fee request focused on whether it was successful for 1021.5 catalyst purposes.  The problem for HOA was that the Corridor Agency’s decision to “steer clear” was motivated by factors other than HOA’s litigation.  Beyond that, HOA’s primary litigation objective was to invalidate the settlement agreement, and they were not successful given the dismissal of its suit.

            Costs against the HOA were proper because its dismissal made costs recovery a “matter of right” as to Corridor Agency and the Environmental Parties.

            That left the Environmental Parties’ appeal of the denial of their fee request.  The 4/2 DCA decided that a narrow 1021.5 exception articulated in its Joshua S. case did not apply because Environmental Parties did vindicate public interests through the “avoidance area” settlement such that HOA’s challenge to that settlement would have been detrimental to broader public environmental interests—finding persuasive the reasoning in Wal-Mart Real Estate Business Trust v. City Council of San Marcos, 132 Cal.App.4^th 614 (2005) to the contrary.  However, the reversal and remand were not all good news for Environmental Parties.   The appellate court expressly instructed the lower court to explore if those parties’ prior enforcement actions were necessary (another 1021.5 element).  I guess we shall see if there are follow-up decisions on this remaining fee issue.

Appeal Sanctions, Costs: Prevailing Party Was Entitled To An Amended Judgment With Costs Requests Included Because The Other Side Did Not File Any Motion To Strike/Tax Costs

However, Appeal Sanctions Were Denied Because They Were Improperly Sought In Respondent’s Brief, Rather Than Through A Separate Motion.

            The next case, Black v. Fireman’s Fund Ins. Co., Case No. A165731 (1^st Dist., Div. 1 May 11, 2023) (unpublished), has two lessons, where a prevailing party did obtain an amended judgment to add unopposed routine costs requests and where the party successfully winning an appeal only asked for frivolous appeal sanctions in its respondent’s brief.

            The lessons, two in number.  First, the failure to file a motion to strike or tax costs means any challenges are forfeited on appeal, with the clerk needing to immediately enter the costs on the judgment.  (CRC 3.1700(b)(4); Oak Grove School Dist. v. City Title Ins. Co., 217 Cal.App.2d 678, 698 (1963).)  [NOTE:  Based on the pandemic disruption, it is best to move the court to add these costs to the judgment, given that clerks are inundated so that they fail to do this in due course.  But this is also best post-pandemic procedure by a party entitled to costs.]   Here, the failure to file such motions, forfeited any appellate challenge to the amended judgment including costs.  Second, appellate sanctions cannot be requested in a respondent’s brief, but must be done so through a separate motion.  (Cowan v. Krayzman, 196 Cal.App.4^th 907, 919 (2011).)  In this case, respondent’s failure to do so prevented the award of any frivolous appeal sanctions.

Costs: Prevailing Party On Appeal Allowed $1,500 In Printing/Copying Appellate Costs For Appellate Briefs/Other Pleadings

Counsel Press Expenses Were Allowed, With Unsuccessful Motions Still Entitled To Allowance.

            In Kleidman v. Feeva Technology, Inc., Case No. H049681 (6^th Dist. May 10, 2023) (unpublished), the losing party challenged $1,500 in appellate costs for printing and copying briefs, arguing that it included motion and other pleadings (not just briefs) and that it was excessive to use Counsel Press, an outside service, to process the printing, copying, and filing of the appellate paperwork.  The trial court denied losing party’s motion to tax these appellate costs, and the appellate court affirmed.

            The Advisory Committee comment to CRC 8.278(d)(1)(D)-(E) allows for electronic filing service providers’ efforts to be reimbursed.  No legal authority was advanced to show that the definition of “briefs” excluded any other appellate proceedings not specifically titled as a brief.  Finally, prevailing party costs recovery depends on prevailing overall (which the prevailing party did here), not just some interim losses on a single motion or hearing that occurred during the appeal.   (See CRC 8.278(a)(1) [defining a prevailing party based on whether the court affirmed or reversed a judgment].)

Costs: Computerized Legal Research Costs Are Not Allowable As Routine Costs, But Electronic Hosting Expenses, Even If Not Ordered By The Trial Court, Are Discretionarily Reimbursable

1/4 DCA Follows Ladas On The Computerized Legal Research Issue. 

            Kung v. Carthy, Case No. A161965 (1^st Dist., Div. 4 May 3, 2023) (unpublished) considered whether computerized legal research costs and electronic hosting expenses (expenses not expressly approved by the trial judge) are reimbursable.  Number 1 was decided to not be a reimbursable cost, although number 2 could be reimbursable in the discretion of the lower court.

            The lower court denied allowing these items as reimbursable costs to the prevailing party. 

            The conclusion on electronic hosting expenses was reversed and remanded.  The reason was that CCP § 1033.5(a)(15) did not automatically deny reimbursement, but allowed the lower court to decide whether these expenses were reimbursable in its discretion, relying on Segal v. ASICS America Corp.,12 Cal.5^th 651, 665-667 (2022).  The automatic denial had to be reversed and remanded so the lower court could exercise its discretion on this costs issue. 

            However, the conclusion on the legal computerized research issue was affirmed.  It was supported by Ladas v. California State Auto. Assn., 19 Cal.App.4^th 761, 776 (1993), with the Legislature never amending the routine costs statute to ameliorate this result.  Beyond that, computerized legal research is akin to an attorney overhead expense for maintaining a law library, so the end result was correct.

Costs, Prevailing Party: Party Achieving Partial Success, And Reversal Of Prior Fee Prevailing Party Adverse Against It, Was Not Entitled To Fees On Remand Because Lower Court Properly Determined It Did Not Prevail

The Appellate Win Did Not Allow For Prevailing Party Fees, Because The Ultimate Litigation Outcome Result Was Dispositive—No One Prevailed.

            The next case, Waterwood Enterprises, LLC v. City of Long Beach, Case No. B316269 (2d Dist., Div. 1 Apr. 26, 2023) (unpublished) had a topsy-turvy procedural history, but it at long last has seemed to have reached its end.

            Waterwood won a $45,000 compensatory verdict, after requesting damages of around $235,000, against City of Long Beach.  However, when it came time to consider attorney’s fees, the lower court denied fees to Waterwood and awarded $230,000 in contractual fees to City after considering some settlement offers and other matters which the appellate court in a prior appeal determined to be in error, determining that a remand was in order to see if Waterwood prevailed or if no one prevailed. 

            On remand, Waterwood requested fees of over $348,000 for trial court efforts as well as $81,461 in fees for prevailing on the prior appeal.  The lower court determined that the case was a mixed positive result for Waterwood, denying both lower court and appellate fees.  Those determinations were affirmed on appeal, because the trial judge had considerably discretion to determine no one prevailed under Hsu v. Abbara (Our Leading Case No. 2).  With respect to denial of appellate fees, one cannot segregate appellate wins but has to examine who prevails in the overall matter, with the lower court determining that did not happen.  (Wood v. Santa Monica Escrow Co., 176 Cal.App.4^th 802, 804, 806, 808 (2009).)

            However, Waterwood was entitled to appellate routine costs as the prevailing party, with the lower court clerk erring by failing to enter judgment on that issue after the filing of a timely costs memorandum.  However, no interest was due before entry of judgment because Waterwood never raised the issue before the lower court to get to a judgment before this appeal was decided. 

Costs: Defendant’s Failure To File A Verified Memorandum Of Costs, After Being Given Extra Time By The Court, Precluded Recovery Of Costs

Lower Court Also Granted Plaintiff CCP § 473 Relief From A Late-Filed Motion To Tax Costs, But No Costs Could Be Recovered Given Plaintiff’s Waiver By Failing To File A Costs Memo.

            The procedural events in Cielo Homeowners Assn. v. Bennett, Case No. D079743 (4^th Dist., Div. 1 Mar. 10, 2023) (unpublished) were, to say the least, bizarre.  In the end, a plaintiff’s failure to file a verified memorandum of costs on appeal was dispositive.

            Plaintiff won a reversal of a judgment earlier, with the appellate court awarding her costs on appeal.  Plaintiff’s husband, a non-party, served a memorandum of costs on appeal never signed by plaintiff, and he apparently never filed the costs memo.  Defendant filed a motion to tax costs, but admittedly filed it three days late, asking for CCP § 473 relief from the lower court.  A lower court order directed plaintiff to file a verified memorandum of costs on appeal to a date certain, which she did not do.  She did not appear at the hearing on the motion to tax costs, which was granted after the lower court granted the § 473 relief sought by defendant.

            The appellate court sustained the denial of the motion to tax costs.  Granting the 473 relief was warranted; but, in any event, plaintiff’s failure to file a costs memorandum meant there were no costs to strike or tax anyway.  The ultimate result was affirmed on appeal.

Costs, Prevailing Party, Private Attorney General, Section 998, Trespass: Prevailing Defendant/Cross-Complainant Obtains Attorney’s Fees Under Trespass Fee Shifting Statute Despite Receiving Nominal Damages And Also Receives Routine Costs

Losing Plaintiff/Cross-Defendant Denied Private Attorney General Fee Request In Opinion With Several Cross-Over Issues. 

            Direct Action Everywhere SF Bay Area etc. v. Diestel Turkey Ranch, Case No. A162702 (1^st Dist., Div. 2 Mar. 1, 2023) (unpublished) is an opinion with many cross-over issues as identified in our main title to this post.

            In this one, plaintiff sued defendant for alleged false advertising and unfair competition violations, with defendant cross-complaining against plaintiff, as a cross-defendant, for trespass, conversion, and unfair competition.  Defendant won on both suits after an 8-day bench trial.  The lower court also determined that defendant was the prevailing party, awarding defendant/cross-complainant routine costs of $68,734.37 minus $4,950 in mediator expenses and $72,848.25 in attorney’s fees under CCP § 1021.9 (the trespass fee-shifting statute).  The lower court denied plaintiff’s request for $1,541,000 in private attorney general fees under CCP § 1021.5. 

            On appeal, the costs and fee rulings were all affirmed.  Plaintiff argued that nominal damages will not support a trespass fees award (citing treatises to that effect), but the appellate court disagreed:  “section 1021.9 does not delineate between the type of damages awarded in a trespass action, but rather states that a party ‘shall be’ entitled to its fees and costs when it prevails in an action for damages to its personal or real property resulting from trespass.”  In this case, the lower court determined that plaintiff trespassed six times resulting in the loss of two turkeys such that tangible damages did occur, awarding $8.00 in damages and a permanent injunction.  That sufficed for 1021.9 purposes:  cross-complainant suffered tangible harm even though cross-complainant failed to adduce proof of the trespass loss.  Plaintiff argued fees were unwarranted because this could have been brought as a small claims or a limited case (citing Chavez, our Leading Case #13), but that argument failed because a case praying for a permanent injunction must be brought as an unlimited matter.  Plaintiff ended by contending that cross-complainant did not beat its CCP § 998 offer, but that lacked merit because cross-complainant’s pre-offer costs well exceeded the offer on the cross-complaint and plaintiff’s 998 offer only offered a temporal permanent injunction versus the unlimited permanent injunction obtained by cross-complainant.

            With respect to plaintiff’s 1021.5 request, that was dispatched because plaintiff was not successful and was no catalyst for any changes.

            On the routine costs side, the lower court’s rulings were correct, reminding litigants and practitioners that court reporter costs are recoverable (even if the transcript costs are not) and deposition costs for witnesses not testifying at trial are allowable in the lower court’s discretion.

Costs: Failure To File A Costs Memorandum Or File A Motion To Tax Costs As To A Competing Costs Memorandum Both Constituted A Waiver If Not Timely Filed, Absent A Court Extension

Waiver Principles, Pure And Simple.

            Brady v. Clark, Case No. E078212 (4^th Dist., Div. 2 Feb. 8, 2023) (unpublished) is a simple reminder for litigants—if you are claiming routine costs as a prevailing party, file a timely costs memorandum; and, if you are going to oppose a dueling costs memorandum against you, you need to file a timely motion to tax costs.  (Hydratec, Inc. v. Sun Valley 260 Orchard & Vineyard Co., 223 Cal.App.3d 924, 929 (1990) [need to file a timely costs memorandum]; Douglas v. Willis, 27 Cal.App.4^th 287, 289 (1994) [need to file a timely motion to tax costs to timely object to a costs memorandum].)

Costs: $240,170 Out Of $322,812 In Costs Awarded In Personal Injury Action Against Defendant Were Improperly Awarded

Costs For Non-Expert Treating Physicians And Exhibit Work By Law Firm Regularly Salaried Employee Were Not Proper Subjects Of An Award.

            Plaintiff husband (and his wife to some extent) were awarded over $3.7 million in a vehicular personal injury action against defendant, with the lower court later awarding plaintiff $322,812 in costs (out of a requested $351,320).  Defendant appealed certain of the awarded cost items, and that was a good move in Kirk v. Jelly Belly Candy Co., Case No. B322612 (2d Dist., Div. 7 Nov. 15, 2022) (unpublished opinion authored by Justice Segal).

            The first cost item found to be improperly awarded was $234,740 under Code of Civil Procedure section 998 for testimonial expenses of plaintiff’s three treating physicians.  Because they were only percipient witnesses, and not designated as expert witnesses, section 998’s potential costs-shifting for expert testimony component was inapplicable.

            The second cost item found to be improperly awarded was $5,430 for model, enlargement, and exhibit photocopying work by a trial technician.  Although that can be proper where the technician is a truly independent consultant, the problem here was that the technician was a regularly salaried employee of plaintiff’s law firm such that his costs were no more awardable than if the work had been performed by an attorney or paralegal [because they are proper “routine costs”].  To the extent that El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4^th 612, 615 (2017) implied otherwise, the 2/7 DCA panel disagreed that a cost of this sort could be “incurred” when it involved labor of a regularly salaried law firm employee of a party.

            However, other cost items were sustained as proper.  Two third-party retained expert fees were fine even though they did not ultimately testify at trial.  Remote court appearance costs were okay, subject to the lower court’s discretion in finding them reasonable and necessary.  (LandWatch San Luis Obispo County v. Cambria Community Services Dist., 25 Cal.App.5^th 638, 646 (2018).)   Finally, just like messenger costs in the discretion of the court, court filing service company expenses were properly allowed. 

Costs, Judgment Enforcement: CourtCall and Electronic Filing Fees Are Discretionary Costs Which Can Be Awarded

Appellant’s Claim For An Offset Based On An Appellate Costs Award Was Rejected Because Appellant Failed To Renew His Judgment Before The 10-Year Deadline Ran.

            In Henry v. Dawson, Case No. G061115 (4^th Dist., Div. 3 Nov. 15, 2022) (unpublished), the 4/3 DCA affirmed that CourtCall and electronic filing expenses are allowable in the discretion of the lower court.  (Code Civ. Proc., § 1033.5(c)(4); LandWatch San Luis Obispo County v. Cambria Community Services Dist., 25 Cal.App.5^th 638, 646 (2018) [CourtCall is not a prohibited telephone charge, but a means by which a party can make an appearance without being physically present in court].)  Appellant also requested an offset for a prior appellate costs award; however, because such an award constitutes a separate judgment (Los Angeles Unified School Dist. v. Wilshire Center Marketplace, 89 Cal.App.4^th 1413, 1419 (2001)), his failure to renew the appellate costs judgment—which was still valid when a motion was filed—means there was no valid judgment to offset given that the motion did not toll the mandate to renew the judgment (something which was not done).

            Justice Moore authored the 3-0 opinion.

Costs, Employment: Costs Award, Mainly, Affirmed On Appeal In Case Where Plaintiff Employee Suffered A Summary Judgment Loss On Whistleblower, Retaliation, And Breach Of Contract Claims

Breach Of Contract Costs Were Distinct, So That They Were Warranted Versus Costs On FEHA-Related Claims Never Determined To Be Frivolous.

            In Hussain v. Peralta Community College District, Case No. A164189 et al. (2d Dist., Div. 4 Oct. 5, 2022) (unpublished), plaintiff employee lost his retaliation, whistleblower, and contract claims against defendant through summary judgment, with the trial court awarding apportioned routine costs against him in the amount of $6,974.29.  The appellate court affirmed, although reducing the costs down to $6,812.55.  The lower court’s determination that the breach of contract claim was distinct (which would allow an award of costs unless the contract claim was inextricably intertwined with non-frivolous FEHA claims, not the case here) was sustained on appeal.  The lower court did not abuse its discretion by allocating deposition costs at 33 1/3% based upon the claims at issue.  Finally, because mainly expert witness fees related to a FEHA claim (with no determination that it was frivolous), that cost item had to be reduced from the total awarded by the trial judge. 

Costs, Prevailing Party: $2.15 Million Fee Order Affirmed, But $205,480.27 In Not Court-Ordered Electronic Document Hosting Charges, Denied, Were Ordered For Consideration On Remand

Decision Looks Like It Recognizes That The Modern Costs Of ESI Discovery Expenses May Be Compensable In The Lower Court’s Discretion.

            In Russo v. Andrews, Case No. A155999 et al. (1^st Dist., Div. 5 Sept. 28, 2022) (unpublished), defendants beat plaintiff in a contentious LLC operating agreement dispute, with defendants awarded damages and equitable relief on their cross-complaint except for one cause of action.  The fees order and one aspect of a cost award were at issue on appeal.

            The trial judge awarded defendants $2.15 million as prevailing parties.  The appellate court agreed, because the defendants/cross-complainants achieved their primary litigation objectives on capital contributions, dilution, and management ouster issues.

            That took the Court of Appeal to the trial judge’s denial of $205,480.77 in non-court-ordered electronic document hosting charges which were requested by the defense, an issue which had to be remanded.  That cost was neither allowed nor prohibited under the CCP § 1033.5 regime such that the lower court had discretion on the issue.  However, the record showed that the trial judge believed it did not have discretion, so the matter went back.  However, the panel made it clear that electronic hosting charges, even those just voluntarily done without a court order, may be fair game for a costs award.

Construction, Costs: Litigant Prevailing On Payment Bond Improperly Denied Costs And Fees Under Routine Costs Statute And Civil Code Section 9564(c)

It Did Not Matter That Someone Else Paid Or Reimbursed Costs And Fees—Entitlement Was There.

            In Cell-Crete Corp. v. Federal Ins. Co., Case No. E075264 (4^th Dist., Div. 2 Sept. 8, 2022) (published), defendant prevailed in a case involving a payment bond, which raised whether defendant was entitled to routine costs and prevailing party fees under Civil Code section 9564(c) [a fee-shifting provision in favor of a prevailing party upon a payment bond].   The lower court denied both costs and fees to defendant on the basis that they were paid by a third-party insurance carrier.

            The 4/2 DCA reversed.  As to costs, defendant prevailed such that it is irrelevant who paid them.  (Litt v. Eisenhower Medical Center, 237 Cal.App.4^th 1217, 1222 (2015).)  Same result occurred as to fees: (1) section 9564 does not have language indicating the fees had to be “incurred;” and (2) even if they had to be “incurred,” case law establishes that a litigant does incur fees even if a carrier or indemnitor pays them (Lolley v. Campbell, 28 Cal.4^th 367, 373 (2002)).

Costs: Fifth District, In A 2-1 Split Decision, Confirms That Judicial Council Trial Court Costs Memorandum Form Sufficed For A Verification Despite Not Having “Under Penalty of Perjury” Language

Panel Also Concluded That Aggregate Costs Descriptions And Failure To Apportion Out For Nonprevailing Parties Are Solid Bases To Tax Costs.

            In Srabian v. Triangle Truck Center, Case No. F080066 (5^th Dist. Aug. 12, 2022) (unpublished), the Fifth District faced an interesting legal question where a prevailing party used the MC-010 Judicial Council form for claiming costs, which does not have “under penalty of perjury” language.  So, the question was whether this was a compliant verification.  The majority concluded that it was under CCP § 2015.5, while a dissenting justice found it was not properly sworn to as to comply with CRC 3.1700(a)(1) dictates.  What this might countenance is that practitioners include penalty of perjury language in a costs memorandum (adding it to the MC-010 form), with the Judicial Council maybe contemplating an action to include this added language—given that this issue likely may be raised in future cases.

            With respect to other issues, the appellate court did agree with some “tax costs” decisions by the lower court, the most important ones teaching us this:  (1) each defendant must be considered separately as far as determining the propriety of claimed costs; (2) an aggregate dollar amount without any costs itemization may not be facially proper, especially with respect to specifying costs for each deponent; (3) there is no need for a trial judge to shift through invoices to determine what is proper; and (4) where apportionment is raised as an objection, the burden may indeed shift to the costs claimant for purposes of showing which claimed costs are appropriate.

Bankruptcy Efforts, Costs, Ethics: Ninth Circuit Reiterates That Costs Associated With Attorney Disciplinary Proceedings Are Nondischargeable In A Chapter 7 Case

$61,122.27 Was The Tab.

            In Kassas v. State Bar of California, No. 21-55900 (9^th Cir. Aug. 1, 2022) (published), the Ninth Circuit reiterated that, in line with In re Findley, 593 F.3d 1048 (9th Cir. 2010), the costs associated with a Chapter 7 debtor attorney’s disciplinary proceedings were nondischargeable under § 523(a)(7).

Costs: Challenges To Three Items Of Awarded Routine Costs Were Rejected On Appeal

Electronic Filing Fees, Messenger Costs For Serving Reply Papers, and Private Court Reporter Fees Were At Issue.

            Plaintiff losing her case was hit with a relatively small routine costs award.  On appeal in Koerber v. Encyclopaedia Britannica, Inc., Case No. B312047 (2d Dist., Div. 2 July 13, 2022) (unpublished), plaintiff to no avail challenged three items of the costs award.  In affirming, the 2/2 DCA reasoned in these ways why the costs were proper: (1) electronic filing fees are recoverable under CCP § 1033.5(a)(1); (2) overnight courier or messenger fees for serving a reply brief are discretionarily allowable if reasonably necessary to the litigation (Foothill-De Anza Community College v. Emerich, 158 Cal.App.4^th 11, 30 (2007)), with overnight service of replies being one of the recognized service methods; and (3) private court reporter service expenses are authorized under CCP § 1033.5(a)(11) [not capped as they are for court reporter services provided by the court under the Government Code], with $425 not being a patently unreasonable charge. 

Costs: Plaintiff Unsuccessfully Appeals Postjudgment Costs Order Awarding $3,451.11 To Prevailing Defendants Arguing That His Deposition Testimony Should Have Been Precluded And Therefore Was Not A Recoverable Cost

Plaintiff’s Challenge To The Costs Order Was Precluded As It Ultimately Attacked A Prejudgment Order That Plaintiff Did Not Appeal And Did Not Challenge In Appeal Of The Judgment And Underlying Summary Judgment Ruling.

            In Lopez v. Irvine Company LLC, Case No. G059354 (4^th Dist., Div. 3 July 1, 2022) (unpublished), defendants defeated plaintiff’s housing discrimination claims through a summary judgment motion.  Afterward, the trial court awarded defendants $3,451.11 out of the requested $4,463.01 in costs, which included $1,956.95 in costs associated with plaintiff’s deposition.  Plaintiff argued on appeal that his deposition testimony should have been precluded due to defendants’ failure to disclose that the company providing the deposition services was a tenant in a building owned by one of the defendants, and that this affiliation created a “hostile environment” for his deposition.  Because his deposition testimony should have been precluded, plaintiff contended, the trial court erred in awarding defendant costs related to his deposition.

            In a 3-0 opinion authored by Acting Presiding Justice Goethals, the 4/3 DCA affirmed.  Prior to judgment, the trial court denied plaintiff’s motion to have his deposition testimony suppressed and for $10,000 in sanctions to be imposed based on the same failure to disclose the affiliation argument.  Because plaintiff did not appeal that prejudgment order, nor did he claim that the trial court erred with regard to that order when he appealed the judgment and underlying summary judgment ruling, he was precluded from making that argument with regard to the costs award.  To allow plaintiff to re-raise the same argument in challenging the costs award “‘“would have the effect of allowing two appeals from the same ruling.”’” (Hersey v. Vopava, 38 Cal.App.5th 792, 797-798 (2019).)