CALIFORNIA ATTORNEY'S FEES

Costs: Dismissal Of Unlawful Detainer Defendant Gave Entitlement To Recovery Of Mandatory Routine Costs

Lower Court’s Determination That No Party Prevailed For Routine Cost Purpose Was Reversed With Directions To Award Costs To Dismissed Defendant.

               In Shapell SoCal Rental Properties, LLC v. Chico’s FAS, Inc., Case No. G063663 (4^th Dist., Div. 3 June 17, 2025) (unpublished), tenant and landlord were involved in an Orange County unlawful detainer action and a Los Angeles County breach of lease action.  After a prior OC appeal resulted in the vacating of a default and a default judgment for possession in the UD action, tenant answered the OC action.  Earlier, while the earlier appeal was pending, tenant vacated the premises because the lower court denied a stay of execution request relating to the judgment for possession.  In the Los Angeles action, tenant served a CCP § 998 offer on landlord, an offer which was accepted, resulting in entry of a judgment for the § 998 offer amount plus costs.  Landlord unsuccessfully moved for summary judgment in the UD action.  At an OSC re dismissal hearing in the UD action, the lower court dismissed the action without prejudice.  Tenant filed a costs memo for $6,348, landlord filed a costs memo for $8,799.37, and both sides filed motions to tax costs.  The lower court found no side prevailed, exercising its discretion to not award costs to anyone. 

               The 4/3 DCA, in an opinion authored by Acting Presiding Justice Sanchez, affirmed the denial of costs to landlord but reversed the denial of costs to tenant—directing that it be awarded $6,348.  The basis of the reversal was CCP § 1032(a)(4), which makes it mandatory to award costs for a dismissal entered in favor of defendant—a legal question reviewed de novo.  This mandatory nature of the award was no different in UD actions (Mitchell Land & Improvement Co. v. Ristorante Ferrantelli, Inc., 158 Cal.App.4^th 479, 483 (2007)), with plaintiff’s clever arguments to preempt the statute found unavailing on appeal.  

Construction, Costs, Ethics, Indemnity, Fee Clause Interpretation, Section 1717: $4.176M Contractual Fee Award To General Contractor And Against Owner Affirmed On Appeal, But Expert Witness Costs Award To General Contractor Reversed As A Matter Of Law

Case Explores Fee Clause Interpretation, An Award Of Fees To An Unlicensed Associate Supervised By A California Attorney, And An Award Of Expert Witness Costs Which Were Not Pled Or Proven As Damages.

               The Whiting-Turner Contracting Co. v. 250 Fourth Development LP, Case No. A169470 (1^st Dist., Div. 5 June 13, 2025) (unpublished) is case where both sides got something on appeal, although construction general contractor was probably more pleased.  However, it did explore a plethora of issues of interest to us as fee bloggers.

               General contractor won a construction contract breach case against owner.  Later, the lower court awarded general contractor $4,716,845.21 in attorney’s fees under contractual construction agreement provisions in owner’s favor (made reciprocal by Civil Code section 1717) as well as $619,516 in expert witness costs.  On appeal, general contractor retained the fee victory, but owner overturned the expert witness costs award.

               Fee Clause Interpretation/Section 1717.  The fee award was sustained based on a broadly worded fee recovery clause (see AIA Owner/Contractor Forms A102-2007) in the owner/contractor agreement, which did allow for direct recovery by owner yet became reciprocal for general contractor based on section 1717.  Even though there was ending indemnity language which might have led to a different result in isolation, construction of the entire clause showed general fee entitlement to general contractor by virtue of section 1717.  (Because this relates to AIA contracts, it should be instructive to construction practitioners in the cited contractual provisions.)

               Ethics—Unlicensed Attorney Compensation.  Owner challenged some fees awarded to an unlicensed associate, before he was admitted pro hac vice in California, with a referee awarding fees to the associate at a paralegal rate.  The appellate court observed that the Birbrower general prohibition against awarding fees to unlicensed attorneys does have exceptions as to registered in-house counsel, out-of-state attorneys in arbitration proceedings, and out-of-state attorneys on short-term litigation projects (CRC, rules 9.46, 9.43, 9.47).  Because the out-of-state associate was supervised by an actively licensed California attorney, CRC rule 9.47(c)(4) likely applied, but it was made unnecessary by the referee’s decision to award fees at a lower paralegal rate (not tantamount to the practice of law)—more underscored because the associate did not make court appearances or provide legal advice to the client.

               Expert Witness Fees as Costs.  This related to an award of fees for expert witnesses not ordered by the court, which is not allowed under CCP § 1033.5(a)(8), (b)(1).  However, that did not end the issue as general contractor was relying on the contractual provision allowing recovery of fees and costs.  The appellate panel did observe that most  intermediate appeal decisions supported owner’s position that such expert witness fees must be pled and proven as damages at trial, not under a cost memorandum.  But it then confronted Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC, 185 Cal.App.4^th 1050, 1056, 1058-1060, 1065-1066 (2010), which held otherwise but in the context of a reciprocal expert fee contractual provision inuring to the overall “prevailing party.”  The 1/5 DCA found the Thrifty contract provision distinguishable because the expert witness costs provision in the case before it only benefited owner—the result being that section 1717’s reciprocity principles could not make it applicable in favor of general contractor.  This is an important nuance, because it shows that unilateral costs provisions will only be enforced in favor of the benefited unilateral party. 

Costs, Employment: On Remand From California Supreme Court, Third District Reverses Appellate Costs Award To Prevailing Defendant In A FEHA Action

Pollock Analysis Dictated The Overturn.

               In York v. City of Sacramento, Case No. C097761 (3d Dist. May 14, 2025) (unpublished), the Third District in an earlier opinion affirmed a summary adjudication order against plaintiff in a FEHA case and awarded appellate costs to the prevailing employer.  The California Supreme Court granted review and remanded for the DCA to perform the analysis set forth in Pollock v. Tri-Modal Distribution Services, Inc. (2021) 11 Cal.5^th 918, 947-951 to determine if plaintiff’s case was frivolous, groundless, or without foundation before awarding appellate costs.  On remand, the Third District determined plaintiff’s case was not groundless, overturning the costs award in the defense’s favor.

Costs, Employment: Prevailing Defendant Employer Improperly Awarded Costs In PAGA Action Against LWDA Where It Did Not Participate In The Underlying Litigation

$124,585.24 Costs Award Vacated As A Matter Of Law On Appeal.

               In Rose v. Hobby Lobby Stores, Inc., Case No. A169640 (1^st Dist., Div. 2 May 14, 2025) (published), defendant employer prevailed in a PAGA action brought by plaintiff employee, with the California Labor and Workforce Development Agency (LWDA) not participating in the litigation although having notice of it because a PAGA action is a type of qui tam action.  Eventually, after LWDA intervened on a post-judgment costs motion against employee, the trial court awarded $124,585.24 in costs to be paid by LWDA.

               On appeal, the appellate court reversed.  Nothing in the Labor Code or general costs statute allowed for an award of costs against LWDA unless it participated in the litigation, which it did not.  That is the holding in this opinion, with the Court of Appeal not having to decide whether a prevailing defendant in a PAGA action is entitled to recover its litigation costs under the general costs statute, CCP § 1032(b).

Costs: Prevailing Defendant Was Entitled To Most Routine Costs . . .

However, Because Statute Allowing CourtCall Costs As Being Mandatory Was Repealed, Matter Had To Be Remanded To Determine If It Was A Correct Discretionary Costs Matter Under The General Routine Costs Statute.

               Prevailing defendant, winning on a summary judgment motion, was granted certain costs for deposition transcripts and record subpoenas given that co-counsel needed the deposition transcripts, and the subpoenaed records were relevant on damages before defendant obtained summary judgment.  The 4/3 DCA, in Safavi v. Ritzau, Case No. G062901 (4^th Dist., Div. 3 May 6, 2025) (unpublished), affirmed those determinations.

               However, it did reverse and remand a minimal costs award of CourtCall expenses because it was granted under CCP § 367.6(c), which was repealed on January 1, 2023 before the costs award was issued [that provision made it mandatory to award CourtCall expenses] such that it was not good authority for a costs award.  However, the appellate panel did remand to allow the lower court to grant the requested fees under the discretionary provision of CCP § 1033.5(c)(4), where cases have allowed CourtCall expenses to be awarded.  The amount was around $376, so we can only assume this matter will be settled before a remand is necessary—but who knows!  Justice Scott authored the 3-0 opinion.

Appeal Sanctions, Costs, Family Law: Although Prevailing Party On Appeal Entitled To Costs, There Was No Bases For Appeal Attorney’s Fees Or Appellate Sanctions

Sanctions Award Under Family Code Section 271 Was Defective Because Prevailing Party Failed To Give Notice Of Seeking This Relief.

               In Marriage of Terry, Case No. B334907 (2d Dist., Div. 6 Apr. 21, 2025) (unpublished), a prevailing party on appeal was awarded three components by the lower court:  (1) routine costs; (2) $23,587.20 in attorney’s fees on appeal (with no explanation); and (3) $2,340 in sanctions under Family Code section 271 for preparing and attending a hearing on these various issues.

               The 2/6 DCA affirmed the routine costs award, but it reversed the (2) and (3) components.

               Prevailing party timely filed a costs memorandum such that routine appellate costs were properly awarded.

               The problem with the appellate fees award was there was no contractual or statutory basis for a fee award, because prevailing party cites no substantive grounds to support a fee award in this marital dissolution case—a reversal as a matter of law. 

               With respect to sanctions, the appellate court concluded that prevailing party never raised section 271 as a basis for fees before the trial court—instead just claiming they fell within routine costs (although one needs an independent fee basis anyway).  So, the other side was given no opportunity to contest this issue, requiring another reversal as a matter of law.

Costs: Appellate Court Rejects Argument That Confidentiality of Medical Information Act Precludes Award Of Costs To Prevailing Defendant

Appellate Panel Found No Prejudice For Premature Costs Memorandum Filing and Affirms Most Awarded Costs To The Defense.

               Doe v. Santa Cruz-Monterey-Merced Managed Medical Care, Case No. H051821 (6^th Dist. Apr. 17, 2025) (unpublished) is a situation where a defendant obtained summary judgment against plaintiff on a Confidentiality of Medical Information Act (Civ. Code, §56) claim.  Defendant filed a costs memorandum for recovery of routine costs, which the lower court granted after taxing certain costs such that the ultimate award was $19,065.72.

               Plaintiff appealed on three grounds, losing two and gaining some minor traction on the third.

               The initial argument that the premature filing of the cost memorandum was infirm was found unpersuasive, because it is a mere irregularity and there was no prejudice because the lower court did conduct a hearing on the cost issues.

               The second argument was that the CMIA does not allow recovery of costs to a prevailing defendant because the statute only mentions recovery of fees and costs to a prevailing plaintiff.  The appellate court rejected this argument because nothing in the CMIA disallows recovery of costs to the defense, relying on analogous reasoning from the California Supreme Court’s Murillo opinion in reaching that conclusion.

               Finally, the appellate court sustained the lower court awarding these costs: (1) videotaping depositions; (2) eCheck fee added to electronic filing charges; (3) remote appearance notice filing fees; (4) electronic filing fees charged by a third-party provider; (5) discovery motions; and (6) withdrawn motions.  However, it did reduce the costs award a little more by finding that a Portland attorney saying she had a San Francisco office should not have garnered deposition travel and meal expenses to the Bay Area office, as well as finding that electronic serving of document costs were merely convenient rather than necessary to the litigation.

Civil Rights, Costs: Failure To Consider Plaintiff’s Financial Position In FEHA Costs Award Led To A Reversal

Other Items Also Had To Be Revisited.

               In the FEHA area, if appropriately raised, lower courts must take into account plaintiff’s financial situation in making a costs award against a non-prevailing FEHA plaintiff even where plaintiff’s case was deemed frivolous.  The lower court did award costs against the plaintiff, finding indigency was irrelevant in a FEHA case.  The Court of Appeal reversed in Ross v. Trustees of Cal. State University, Case No. B318731 (2d Dist., Div. 8 Apr. 7, 2025) (unpublished) because indigency is a factor to be considered.  Once that was recognized, the appellate court also questioned certain other routine costs which were granted but appeared suspect on appeal.  But we would surmise the indigency ground for reversal led the parade on the revisit of other costs in this appellate opinion.

Civil Rights, Costs: Lower Court’s Award Of Costs Against Dismissing FEHA Plaintiff Reversed As A Matter Of Law.

No Indication Case Was Frivolous.

               We have posted on an emerging trend in FEHA cases, which is that routine costs cannot be assessed against a non-prevailing plaintiff unless the case is deemed frivolous. Vanrooy v. Jacobes-Downing-Hughes, Inc., Case No. C100312 (3d Dist. Apr. 7, 2025) (unpublished) is a continuation of that theme.  There, plaintiff’s claims were dismissed for failure to serve a complaint within the three-year mandatory service period, with the lower court awarding routine costs.  The costs award was reversed on appeal because nothing indicated that plaintiff’s case was frivolous or that costs could be apportioned between FEHA and non-FEHA claims. 

Costs, Prevailing Party, Reasonableness Of Fees: Most Of Costs Award Is Affirmed, As Well As Substantial $1,751,500 Fee Award Is Sustained On Appeal

Certain Costs Not Awardable, With Lower Court’s Fee Reduction For Incivility And Abusive Litigation Found To Be No Abuse Of Discretion.

               In Madison v. Theodore, Case Nos. B310551 et al. (2d Dist., Div. 7 Jan. 8, 2025) (unpublished), appellant lost a fiduciary duty-based case against plaintiffs to the tune of $3.9 million based on a project to operate a luxury villa in Cabo San Lucas.  Costs and fee were awarded to defendants, specifically, about $160,000 in costs and $1,751,500 in attorney’s fees out of a $2,124,450 fee request.  With some minor revisions, the judgments were affirmed on appeal.

               About $87,371 from the routine costs award was stricken on appeal—they were for non-court authorized hearing and trial transcripts (with the deposition costs argument not succeeding on appeal) and for preliminary injunction bond costs in a separate action.  With respect to fees, the lower court properly reduced the fee request by $340,850 for incivility and abusive litigation tactics, including mistrial allegations (Karton v. Ari Design & Construction, Inc., 61 Cal.App.5^th 734 (2021).  Appellant’s argument that he should be allowed an offset for non-prevailing costs and fees rang hollow because there can only be one prevailing party under Civil Code section 1717, which was the other side.

Costs: Although Employer Prevailed On Appeal, DCA Decides It Should Not Be Granted Costs On Appeal Based On Omissions And Legal Misstatements In Appellate Proceedings

Employer Had To Bear Appeal Costs Rather Than Obtaining An Award Of Them.

               In Nelson v. Golden Queen Mining Co., Case No. F086907 (5^th Dist. Jan. 7, 2025) (unpublished), employer won a reversal and remand of a decision denying a motion to compel an arbitration as against an employee.  However, the Court of Appeal held that all parties should bear their own costs on appeal.  Employer argued it was the prevailing party and was entitled to costs on appeal.  The Fifth District disagreed, because (1) employer’s appellate civil case information statement did not check a box indicating that CAA proceedings were entitled to calendar preference over other civil cases (Ramirez v. Golden Queen Mining, LLC, 102 Cal.App.5^th 821, 829 (2024)); and (2) employer misstated the law in two appellate extension of time requests by stating that the case was not entitled to priority.  The omission and misstatements allowed the appellate court to have employer bear costs on appeal despite being a prevailing appellant under CRC, rule 8.278(a)(2). 

Costs: Expert Witness Fees, Unsuccessful/Withdrawn Motions, Unused Witnesses/Experts/Exhibits, Subpoened Documents Not Used At Trial, And Investigative Expenses Considered On Appeal

Most Were Discretionary By The Lower Court, Except For Investigative Fees Which Are Not Allowed.

               In Slutske v. Gratton, Case No. B325068 (2d Dist., Div. 1 Dec. 31, 2024) (unpublished), the appellate court largely affirmed a lower court’s determination that the following costs were allowable in its discretion based on CCP § 998 or “reasonable/necessary” catchall leeway allowed under the costs statute:  (1) expert witness fees allowable after non-acceptance of a 998 offer; (2) unsuccessful or withdrawn motions allowable if reasonable/necessary; and (3) costs of witnesses/experts not testifying at trial or exhibits not used at trial allowable if reasonable/necessary.  However, investigative expenses were stricken as allowable costs, with neither side arguing because they are expressly not allowable (CCP § 1033.5(b)(2)).  The DCA also determined that costs for subpoenaed documents not used at trial were expressly allowable because they are “deposition costs.”

Costs, Special Fee Shifting Statute: More Than $73,000 In City Attorney Time Needed To Complete CEQA Administrative Record Affirmed On Appeal

Yes, Attorney, Paralegal, And Engineering Time Can Be Available As Allowable Costs And Fees To A Prevailing City In A CEQA Case.

               Public Resources Code section 21167.6(b)(1) authorizes an award of allowable fees or costs in a CEQA case to a prevailing party, which may include reasonable attorney, paralegal, and engineering fees in completing an administrative record which is required in a CEQA case. 

               In Russian Riverkeeper v. City of Ukiah, Case Nos. A168090/A169390 (1^st Dist., Div. 3 Dec. 20, 2024) (unpublished), City closed a landfill with a cover system, certified an environmental report, and approved the landfill closure, decisions challenged unsuccessfully by plaintiffs in a CEQA case.  The merits determination was affirmed on appeal.  However, the lower court also awarded more than $73,000 to City for its attorney’s help in preparing the administrative record essential in CEQA cases.  That ruling also was affirmed because when private litigants cede the record preparation to the City, attorney’s fees can be awarded in the lower court’s discretion under the right circumstances.  (See The Otay Ranch, L.P. v. County of San Diego, 230 Cal.App.4^th 60, 70-71 (2014); No Toxic Air, Inc. v. Lehigh Southwest Cement Co., 1 Cal.App.5^th 1136, 1142 (2016).)

Appealability, Costs, Fee Clause Interpretation: Lower Court’s Grant Of Expert Fee Costs To Defendant And Denial Of Attorney’s Fees To Defendant Affirmed On Appeal

Lack Of Adequate Record Doomed Both Appeals, But They Also Failed On The Merits.

               In Paige v. Nolan, Case No. B322162 (2d Dist., Div. 5 Dec. 13, 2024) (unpublished), plaintiff refused a CCP § 998 offer in a legal malpractice case, with defendant attorney winning.  The lower court did award attorney some expert witness fees based on the 998 offer, but it denied attorney’s request for fees based on a narrow retainer agreement clause.  Both sides appealed, but the results held up on appeal. 

               Both sides had problems because they had no reporter’s transcripts to show what occurred at the costs/fees hearings.  That alone justified a denial of respective appeals.

               But, even if the merits were considered, there was enough evidence of record to support the expert witness fee award.  With respect to the fee denial request by attorney, the retainer agreement was narrowly focused on fee collection issues, not professional malpractice claims, such that the fee denial was proper. 

Costs, Prevailing Party: Plaintiff Dismissing Case After Obtaining Nonmonetary Relief Requested During The Litigation May Be The Prevailing Party

Lower Court Erred In Not Granting Routine Costs Under Mandatory Prevailing Party Costs Provisions; But, On Remand, It Needed To Determine If Plaintiff Prevailed Under The Discretionary Prevailing Party Costs Provision.

               Our title and subtitle above capture what happened in Fillerup v. Franchise Tax Board, Case No. C099158 (3d Dist. Dec. 11, 2024) (unpublished), but we provide a little more flavor.  However, here are the general rules for recovering routine costs:  (1) there are certain mandatory categories for cost recovery, including parties who get a net monetary recovery and a defendant in whose favor a dismissal was entered; and (2) other categories, including a party obtaining non-monetary relief outside of the mandatory situations, can be awarded costs in the discretion of the lower court.

               Fillerup involved a situation where a plaintiff taxpayer sued the FTB claiming that the Board misapplied an estimated tax payment; and, after much wrangling and with the litigation pending, the Board ultimately gave taxpayer the relief he wanted.  Taxpayer then dismissed his lawsuit without prejudice based on getting what he desired.  Taxpayer moved for $565 in routine costs, with the FTB winning a motion to strike plaintiff’s costs memo.  (We leave it to readers to determine if this amount was worth contesting.). Plaintiff appealed the lower court’s denial of costs based on plaintiff not winning in mandatory prevailing party cost categories.

               The Third District reversed.  The lower court erred in failing to determine if plaintiff fell within the discretionary prevailing party costs category because he obtained the non-monetary relief he wanted as far as reallocation of his tax payments.  The matter was remanded so the lower court could determine if discretionary costs were appropriate.

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.