CALIFORNIA ATTORNEY'S FEES

Costs: Where Both Plaintiff And Cross-Complainant Did Not Prevail, CCP § 1032 Required An Award Of Winning Costs To the Successful Defendant

However, Appellate Court Strongly Suggested That Attorney’s Fees Were Not Automatic, Given The Lower Court Can Find No One Prevailed—Fee Standard Is Different.

            In The Real Estate Store v. Michel, Case No. B301771 (2d Dist., Div. 3 July 8, 2020) (unpublished), defendant obtained a reversal of a “each side bears its own costs and fees” ruling, where routine costs had to be awarded to the defense.  However, the appellate panel strongly suggested that a fee award was not automatic because the lower court employs a discretionary standard when there are mixed results as far as determining who is the prevailing side.

            Here, a jury returned a verdict in favor of defendant on a complaint and in favor of the cross-defendant on defendant’s cross-complaint.  The lower court ruled that each side was to bear its own costs and fees, prompting an appeal by the defense.

            The 2/4 DCA reversed, determining routine costs were mandatory.  Numerous cases confirmed that CCP § 1032(a)(4) required an award of such costs to a defendant in a situation where neither the plaintiff nor the cross-complainant obtained any relief.  (McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn., 231 Cal.App.3d 1450, 1453-1455 (1991); Zintel Holdings, LLC v. McLean, 209 Cal.App.4^th 431, 438-440 (2012); Cussler v. Crusader Entertainment, LLC, 212 Cal.App.4^th 356, 370-372 (2012); Schrader v. Neville, 34 Cal.2d 112, 113-115 (1949).)  However, on remand, a fee award was not automatic because the routine costs standard for a “prevailing party” is not determinative, because Civil Code section 1717 allows the trial judge to determine no side prevailed especially in a “mixed results” scenario. 

Costs: Lemon Law Plaintiff Losing Case Properly Assessed With Certain Subpoena Fees, Expert Witness Fees, And Deposition Costs

On Appeal, Taxed Deposition Costs Were Additionally Awarded On Defense Cross-Appeal.

            In Nguyen v. House of Imports, Inc., Case Nos. G056789/G057216 (4^th Dist., Div. 3 June 25, 2020) (unpublished), plaintiff lost a consumer remedies/lemon law case after rejecting two CCP § 998 offers.  In the end, he was saddled with some routine costs.  Plaintiff appealed those cost losses, but he did not win anything.  The defense cross-appealed a refusal to award $7,742 in deposition costs, which actually resulted in a modification to allow these costs.

            Plaintiff challenged some defense witness service of process fees, but that challenge was rejected.  After all, “a trial is a fluid process, particularly for defendants, who present their case last.  Therefore, there may be occasions where it is necessary to subpoena witnesses who ultimately do not testify.”  Next, plaintiff contested $31,068.55 in expert witness fees as far as amount, but the expert’s trial witness preparation costs were not excessive given the expert was a key witness whose testimony was necessary to obtain a defense verdict.  Finally, the defense’s claim for $7,742 deposition costs was righteous, given that 11 of 13 depositions were taken by plaintiff and plaintiff failed to shift the burden from the verified costs memorandum as far as showing the costs were not reasonable or necessary in nature.  Costs award affirmed, plus another $7,742 to the defense.

            Acting Presiding Justice Moore authored the 3-0 panel decision. 

Civil Rights, Costs, Substantiation Of Reasonableness Of Fees, Reasonableness Of Fees: Except For Correction Of Routine Costs Math, FEHA Fee Award Of About $1.1M And Almost $107K In Costs Affirmed On Appeal Where Plaintiff Won $650K In Damages

Limited Success/Allocation Fee Challenges Rejected On Appeal; Expert Witness Fees Can Be Sought Through A Costs Memorandum. 

            In Abarca v. Citizens of Humanity, LLC, Case No. B290090 (2d Dist., Div. 3 June 18, 2020) (unpublished), a FEHA plaintiff won a jury verdict on disability discrimination/retaliation claims, although losing two other claims, to the tune of compensatory and punitive damages totaling $650,000 ($550,00 of which were punitive damages).  Plaintiff’s attorneys, under a liberal FEHA fee-shifting statute, moved to recover a fee lodestar of $1,652,255 plus a 2.0 positive multiplier (total fee request of $3,304,510) as well as costs of $142,299.92 (a lot of which were for depositions, expert witness fees, models/blowups, etc.).  In the end, the trial judge awarded $1,084,160 in fees after reducing hourly rates and denying the multiplier request and also awarded costs of around $116,000.

            The appellate court affirmed everything, except to modify routine costs down to about $107,000 based on some transparent math errors.

            The defense attacked reliance on reconstructed time, but this was a credibility determination for the lower court below.  As far as limited success or apportioning fees on unsuccessful claims, the appellate court found that (1) the $650,000 verdict was not limited success given that the defense only offered to initially settle the case for $149,999.99; and (2) the intertwined unsuccessful claims were not a reason to reduce the fee under the particular circumstances of the case.  With respect to routine costs, a lot of the defense opposition centered on whether expert fees needed to be claimed by noticed motion versus a cost memorandum, with plaintiff claiming through a cost memorandum.  As we see it, the appellate court seemed to endorse the view, based on an analogous CCP § 998 situation, that these fees could be claimed through a cost memorandum (Jonkey v. Carignan Construction Co., 139 Cal.App.4^th 20, 27 (2006), especially given no procedural specification under the FEHA cost-shifting statute to the contrary.  However, there was no need to really confront the issue, because no prejudice was shown—the defense did oppose the costs through a motion to tax with full briefing by everyone.  As far as models, blowups, and exhibit photocopies, courtroom technology has become more commonplace and less expensive such that earlier cases where the costs were exorbitant were not persuasive.  (Bender v. County of Los Angeles, 217 Cal.App.4^th 968, 991 (2013).)  Everything affirmed, except for the appellate court to correct some minor arithmetic errors. 

Costs: 2/4 DCA Affirmed Routine Costs For Preparing Exhibits/Closing Demonstratives Not Used At Trial, For Second Defense Counsel’s Deposition Travel Expenses To Japan, And For Certain Deposition/Trial Interpreter Expenses

“Pragmatic Take” On Routine Costs Was Explained On Appeal, With Non-Used Exhibits Costs Allowable Despite Siding On A Split In Intermediate Appellate Thinking—If They Were Helpful.

            Segal v. ASICS America Corp., Case No. B299184 (2d Dist., Div. 4 June 15, 2020) (published) confronted allowing routine costs—although, given modern litigation expenses, maybe far from routine as maybe contemplated under the routine costs statutes—with respect to allowing costs for (1) exhibits and closing argument demonstratives not ultimately used at trial; (2) travel expenses for a second attorney to attend depositions in Japan; and (3) interpreter fees for Japanese depositions and trial testimony.  In the end, all of these costs were allowed, with the 2/4 DCA publishing to explain that a “pragmatic approach” should guide routine costs recovery in modern litigation, even though the exhibit category had resulted in a prior split in appellate thinking.

            Without getting too much into the weeds, the exhibit/demonstratives costs items was proper—despite a split in thinking (Seever/Ladas—not recoverable; Applegate/Benach—recoverable)—because litigation attorneys cannot be clairvoyant on what and what is not is admissible, so discretion is allowed to the lower court, with no definitive prohibition in light of what modern litigators have to prepare for and maybe present before jurors.  When it came to the travel costs to Japan by a second counsel to help with a deposition, this was not be unexpected given modern litigation where it is routine to send more than one attorney to defend or take a deposition in a complex case.  Then, when it came to interpreter fees, it would be tough to argue that a deponent not that proficient in English would have the expenses in translating as being a foreseen routine cost, whether in deposition or at trial (and it could be awardable as foreseen and reasonable).   So, in the end, pragmatism rules in this area—costs award affirmed in toto!

Costs, Employment: Plaintiff Obtaining Only $900 In Statutory Penalties And A Minor Statutory Fees Award On A Single Claim Properly Denied Costs

Defense, Also, Properly Denied Costs Because Plaintiff’s Claims Were Found To Be Nonfrivolous.

            In Wergechik v. Anaheim Arena Management, LLC, Case Nos. G056079/G056318 (4^th Dist., Div. 3 June 3, 2020) (unpublished), plaintiff did prevail on FEHA claims against defendants, but she was only awarded a $750 penalty and $150 in statutory attorney’s fees on a single claim.  Both sides claimed routine costs, with the trial court striking the costs memoranda and awarding nothing.  The appeals by both sides were unsuccessful.

            With respect to plaintiff’s claim for costs of $57,365.23, she recovered far less than $25,000 in damage such that the trial judge had discretion to deny costs given that the defense obtained a “lopsided victory.”  (Code Civ. Proc., § 1033(a).)  Then, when it came to the defense requests of $247,719.39 in costs, the problem here was that the trial judge found plaintiff’s claims were not frivolous, notwithstanding a defense § 998 offer which might have led to a different result, so that the costs denial was legally proper—forget there is some difference in thinking, but it got clarified in a recent legislative amendment and a more recent appellate decision endorsed by this deciding appellate court.  (Gov. Code, § 12965(b); Scott v. City of San Diego, 38 Cal.App.5^th 228, 243 (2019) [4/1 DCA opinion].)

            Justice Fybel authored this decision on behalf of the 4/3 DCA.   

Costs, Special Fee Shifting Statute: Governmental Entity Could Not Charge Redaction Expenses As “Data Extraction” Costs Under The Public Records Act

Two Provisions Had To Be Harmonized To Get To The Holding.

            In National Lawyers Guild v. City of Hayward, Case No. S252445 (Cal. Supreme Court May 28, 2020) (published), the California Supreme Court decided that City was not allowed to charge a Public Records Act requestor the expenses of redacting statutorily-exempt information because those expenses were not for “data extraction” under Government Code section 6253.9(b)(2).  In the process, a couple of PRA provisions had to be harmonized in getting to the ultimate holding.  Justice Kruger authored the lead opinion, with a concurrence to address some possible future nuances.

Costs, Prevailing Party: Where There Were Several Judgments, With Plaintiff Not Prevailing On A Misappropriation Claim In The Second Phase, Defendant Was Entitled To Routine Costs

Case Involved Applying DeSaulles Under Unusual Circumstances.

            Ajaxo, Inc. v. E*Trade Financial Corp., Case No. H043530 (6^th Dist. Apr. 23, 2020) (published) is must reading for practitioners in trade secret cases when it comes to royalty awards under California’s Uniform Trade Secret Act.  It also has an interesting published discussion on who is the prevailing party under unusual circumstances where there were two several final judgments, the first of which was satisfied by the defendant claiming it was the prevailing party entitled to costs for defensing the misappropriation claims in a second judgment.

            Because the opinion is 86 pages long, we summarize the highlights for purposes of this blog.

            Defendant was found liable to plaintiff on a breach of contract trade misappropriation count but not a classic trade misappropriation count.  Defendant satisfied the judgment under the contractual claim, including fees and interest.  However, subsequent appeals revived the classic trade misappropriation count, remanding it to see if the trial judge was inclined to award a reasonable royalty—which he ultimately did not in the second phase of proceedings.  He then awarded defendant around $214,000 in routine costs for prevailing under the second phase “several judgment.”

            Unfair, claimed plaintiff, relying on the view that there can be only one prevailing in the entire action, based on reasoning in DeSaulles v. Community Hospital of Monterey Peninsula, 62 Cal.4^th 1140, 1157 (2016) [reviewed in our March 19, 2016 post].

            The appellate court affirmed the costs award to defendant.

            Although acknowledging the general rule that one looks to the “action as a whole,” the odds defied that in this case because there was more than one final judgment given the unusual procedural posture of the case.  Defendant had satisfied the first judgment in full such that it would be anomalous to decide plaintiff was the prevailing party under a second judgment by which it recovered nothing.  So, despite discussing DeSaulles in depth, the particularized circumstance of this case resulted in affirming the substantial costs award in defendant’s favor.

Costs, Experts, Insurance, Section 998: Denial Of All But $11,753.94 Of Prevailing Personal Injury Plaintiff’s $83,048.06 Costs Request Affirmed On Appeal

An Invalid Section 998 Offer And A Failure To Reserve The Right To Seek Prevailing Party Fees In Agreements To Split Costs Sealed Plaintiff’s Fate.

            In Anthony v. Li, Case No. A156640 (1^st Dist., Div. 3 April 13, 2020) (published), a prevailing personal injury plaintiff, to whom a jury awarded $650,235.00 in damages which exceeded a $500,000 section 998 rejected by defendant, moved post-trial for recovery of $83,048.06 in costs.  However, the trial court granted only a small portion of the requested costs – denying the requested $62,082.50 for section 998 post-offer expert fees, $2,650 for mediation fees, and another $6,561.62 for court reporter fees.

            Plaintiff appealed, but the 1/3 DCA affirmed – finding the trial court had properly taxed the costs. 

            First, as to the expert witness fees, the simple explanation for the denial is that plaintiff had made an invalid section 998 offer.  However, as the saying goes – the devil is in the details.   

            Defendant Li resided outside of the United States.  He was driving a rental car at the time of the accident – for which he had purchased a $1 million liability insurance policy.  Plaintiff originally sued both Li and the holding corporation doing business as the rental car company, which held the insurance policy, but later dismissed Holding Corp. with prejudice.  Afterward, plaintiff tendered a joint section 998 offer that was not apportioned and required acceptance by, and entry of judgment against, both Defendant Li and Holding Corp.   Plaintiff argued his joint 998 offer was proper because: (1) Li and Holding Corp. were “one and the same” as plaintiff had included Holding Corp. in 998 offer as an insurer; (2) the law allowed plaintiff to make a section 998 offer to an insurer pursuant to Meleski v. Estate of Albert Hotlen (2018) 29 Cal.App.5^th 616 [discussed in our December 6, 2018 post]; (3) Defendant Li was not a participating in the action which was being litigated by Holding Corp., as the insurer; (4) Defendant Li was a named defendant solely for the purpose of reaching insurance under Civ. Code section 1939.33; and (5) Defendant Li was a foreign national who was unaware of the lawsuit, and plaintiff was not allowed to collect against Li because he had agreed to limit his recovery to insurance. 

            The 1/3 DCA disagreed.  First, plaintiff’s 998 offer did not advise defendants that the offer was directed at Holding Corp. as the insurer responsible for any judgment entered against Li.   Rather, it was presented as a section 998 offer to more than one defendant - as opposed to a defendant and insurer - and requiring acceptance by both defendants making it invalid. As such, Meleski was of no help to plaintiff.  Additionally, the 1/3 DCA determined that if plaintiff had made the 998 offer solely to Defendant Li, and Li had rejected it, then plaintiff – after judgment exceeding the 998 offer was entered against Li – would have had recourse by bringing a second direct action against Holding Corp., as the insurer, to recover any judgment and statutory cost award entered against Li.

            Next, as to the mediation and court reporter fees, the parties had entered into agreements for a voluntary mediation and for court reporter fees that stated that the fees were being equally divided and paid by plaintiff and defendant[s].  No language reserving the right to later seek the fees as prevailing party costs was added to either of the agreements.  The language in the agreements was unambiguous, and the trial court properly enforced those agreements as written.  (Carr Business Enterprises, Inc. v. City of Chowchilla (2008) 166 Cal.App.4^th 25, 30 and Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4^th 498, 539-540.)

Costs, Prevailing Party, Section 998, Section 1717: Trial Court Order Denying All Attorney’s Fees And Costs To Defendants Reversed On Appeal

Defendants Will Be Entitled To Substantial Fees/Costs On Remand, Not To Mention An Attempt To Garner Even More Fees.

            This next case is a very substantial reverse of fortune on appeal.  So, that takes us to posting on Abregov v. Lawrence, Case No. G056866 (Abregov II) (4^th Dist., Div. 3 Mar. 19, 2020) (unpublished).

            Plaintiffs sued several defendants for alleged breaches of the parties’ shareholder agreements and fiduciary duties, contractual and tort in nature.  Defendants cross-claimed.  Eventually, after a two-phased bench trial, plaintiffs recovered nothing, and defendants obtained some relief on their cross-complaint in the form of a declaration that a company was not a statutory close corporation.

            Defendants then sought $626,341.65 in costs ($472,380.81 of which were expert witness/fees and costs) after plaintiffs rejected a CCP § 998 offer.  Because there was a prevailing party contractual clause in the shareholder agreement, defendant also moved for almost $8.3 million in attorney’s fees under Civil Code section 1717 and/or CCP § 998.  This, of course, prompted motions to tax or strike costs and vigorous opposition to the fee request.

            Although the judgment contained a provision that defendants prevailed, the trial judge believed he had been “snookered” into so finding, ultimately denying the defense postjudgment motions for costs and attorney’s fees and not addressing the defense request for 998 costs.

            Routine Costs.  The trial court erred on this issue.  Defendants did obtain relief on the cross-complaint such that they were prevailing parties entitled to litigation costs as a matter of right.  (CCP § 1032(b); Zintel Holdings, LLC v. McLean, 209 Cal.App.4^th 431, 438 (2012).). So, a remand was in order so that specific costs items could be reviewed under plaintiffs’ motion to tax costs.

            Section 998 Costs.  Given that section 998 allows for broader costs such postoffer attorney’s fees if based on a contract and expert witness fees, the appellate court next reviewed defendants’ offer to settle the complaint for $500,000 in exchange for a dismissal with prejudice “of all claims Plaintiff has asserted against the Offeror Defendants in the above-captioned action,” with all parties being their costs/fees.  In this area, section 998 allows fees, as long as there is a contractual basis (and there was here), even in the absence of a prevailing party determination as long as the judgment was more favorable than the statutory offer (which it was).  (Scott Co. v. Blount, Inc., 20 Cal.4^th 1103, 1114 (1999).).  The “all claims” language in the 998 offer did not invalidate it because only involved the claims in the complaint, not asking for broader releases or a release of non-alleged claims.  (One Star, Inc. v. STAAR Surgical Co., 179 Cal.App.4^th 1082, 1096 (2009).). Because plaintiffs failed to obtain a more favorable judgment, the defense was entitled to 998 postoffer costs and reasonable attorney’s fees.

            Section 1717 Fees.  Defendants did prevail under the shareholder agreement fees clause such that the fee denial on this basis was reversed.  The appellate court decided that a voluntary cancellation of shares did not tarnish this conclusion (although the trial judge believed otherwise) because the defense achieved a “lopsided” victory on all of plaintiffs’ claims.  However, the lower court on remand needed to determine if the fees clause was broad enough to cover fee recovery on noncontract causes of action.  (Brown Bark III, L.P. v. Haver, 219 Cal.App.4^th 809, 818 (2013).)

            Assigned Justice Dunning, a retired judge of the Orange County Superior Court, penned the 3-0 opinion.

Costs: Deposition, Witness Appearance, Official Court Reporter, And Exhibit Routine Costs Awarded For Trial Efforts Affirmed On Appeal

Multiple Challenges Rejected By Appellate Court.

            In Arambula v. Irvine Unified School Dist., Case No. G057396 (4^th Dist., Div. 3 Mar. 16, 2020) (unpublished), a trial court loser recovering nothing decided they should challenge very routine costs which were awarded by the trial court.  Bad move.

            Appellant challenged deposition costs for the defense to take plaintiff’s deposition.  The challenge to this was far from persuasive—“[a]ppellant has not cited any case where allowing the costs of taking the deposition of the opposing party was found to be an abuse of discretion.”

            Next up was a challenge to a $37.64 witness fee, but the problem was that the costs memorandum and subsequent papers supported it as prima facie proper.

            Then, a challenge to an official court reporter fee for trial court proceedings.  Although appellant did get a prior fee waiver, this simply meant he did not have to pay upfront, but this did not excuse him from having to pay the opposite side’s reporter costs after that party prevailed at the trial court level. 

            We then go to the awarded costs of $53.20 in discretionary trial exhibit costs.  Even though some of these exhibits were not used because the court granted a judgment on the pleadings, the defense could not foresee this result such that the expenses were necessary trial preparation expenses. 

            Finally, the “pocketbook” defense—I do not have an ability to pay.  This did not resonate given that appellant litigated quite actively for over two years and then appealed.  No abuse of discretion under the facts, with the lower court’s costs award affirmed in toto.  Acting Presiding Justice Moore authored the 3-0 opinion.

Costs, Employment, Prevailing Party: $3,881.39 In Routine Costs, Out Of A Requested $38,813.96, To A Prevailing Wage Claim Plaintiff Was No Abuse Of Discretion

Reason Was That Plaintiff Only Had Limited Success, So No Abuse Of Discretion In The Reduction By The Lower Court.

            So, a plaintiff prevails on a wage/hour claim for unpaid wages under Labor Code section 218.5, but only gets a minimal award which was limited success when other claims are considered?  Does that plaintiff get full requested costs as the prevailing party?  Answer:  Of course not, not automatically.

            Pak v. Joo, Case Nos. G055470/G055978 (4^th Dist., Div. 3 Mar. 11, 2020) (unpublished) illustrates this point well.

            There, plaintiff appealed from a 10% routine costs award of $3,881.39 out of a requested $38,813.96, when she recovered only $12,500 on a Labor Code section 218.5 unpaid wage claim in a lawsuit seeking much, much more.  That award was affirmed on appeal.  Plaintiff only obtained limited success of her litigation objectives as a whole, such that the trial judge had discretion to reduce prevailing party routine costs based on this end result.  (Sharif v. Mehusa, Inc., 241 Cal.App.4^th 185, 192, 195 (2015).).

Costs, Section 998: Most Of $137,559.43 Costs Award To Successful Defendant Property Manager Affirmed On Appeal As Against Unsuccessful Plaintiff Tenants

Property Manager’s 998 Offers Were Not Token, Although Some Expert Fees, Exhibits Not Used At Trial, And Attorney Lodging Costs Had To Be Excluded Or Revisited.

            Lewis v. RDM Mgt., Inc., Case No. B280728 (2d Dist., Div. 7 March 2, 2020) (unpublished) is a situation where plaintiff tenants in a 23-unit apartment obtained a $729,780 compensatory damages award against apartment owners for sewer spills, although a defendant property manager was exonerated completely.  The trial judge granted property manager $137,559.43 in routine costs based on CCP § 998 offers which were directed to various tenants.  Tenants appealed from denial of their motions to strike/tax costs.

            Tenants were somewhat successful on appeal, although property manager garnered a lot of the costs it sought.

            Plaintiffs first argued that there needed to be a reduction based on owner not prevailing under a “unity of interest” exception (put another way, a reduction for the costs incurred for representing the unsuccessful owners).  The 2/7 DCA found that this exception was no longer viable under Charton v. Harkey, 247 Cal.App.4^th 734, 742 (2016), authored by our local 4/3 DCA.

            The appellate court then found that property manager’s $35,000 in aggregate offers to the tenants were not “token,” but within the “range of possibilities” as the ultimate zero judgment validated with respect to the 998 offers. 

            However, the Court of Appeal did find that two reductions were in order: (1) expert fees for a first trial which were not incurred, and (2) attorney lodging costs, which were only convenient to the case.  With respect to exhibits not used at trial, a remand was in order to see if these expenses were justified.  Finally, trial technology costs were proper given that more and more trial lawyers are using this technology to present their cases to juries, as allowable under Bender v. County of Los Angeles, 217 Cal.App.4^th 968, 991 (2013).

Costs, Section 998: Two $50,000 998 Offers Were Made In Good Faith, Justifying Personal Injury Plaintiffs’ Receipt Of Postoffer Costs Of $99,833.53, With Two Minor Modifications On Appeal

Fifth District Struck $4,608.53 For Models/Blowups/Exhibit Photocopies And $2,850 Court Reporter Fee For Lack Of Particularized Detail.

            The Fifth District, in Childress v. Aaron, Case No. F077027 (5^th Dist. Feb. 28, 2020) (unpublished), did a nice, scholarly job of discussing Code of Civil Procedure section 998 good faith principles and Code of Civil Procedure 1033.5 costs substantiation requirements.

            There, two plaintiffs brought a vehicle personal injury action against defendant, who was intoxicated and hit them, causing continuing pain and need for medical treatment based on plaintiffs’ discovery and deposition testimony.  They both served $50,000 section 998 offers three and a half months after filing the complaint and extended the offers until 10 days after plaintiffs’ depositions were completed.  The defense did not accept the offers, with one plaintiff netting an aggregate damage award by a jury of $71,250 while the other plaintiff netted an aggregate of $115,050.  Based on “beating” the 998 offers, plaintiffs’ sought postoffer costs from defendant of $100,109.91 (which included expert witness fees of $49,320 as well as some prejudgment interest).  The trial judge disallowed $276.38 in costs, but otherwise granted the request in major part.  Defendant appealed.

            The Fifth District affirmed, except to strike two cost items for lack of specificity by the plaintiff claimants.

            Defendant could not surmount the governing abuse of discretion standard as far as whether the 998 offers were made in good faith and reasonable in nature.  Because the plaintiffs obtained a more favorable judgment than the 998 offers, the ensuing judgment was prima facie evidence that the offers were reasonable.  (Santantonio v. Westinghouse Broadcasting Co, 25 Cal.App.4^th 102, 117 (1994).)  The 998 offers were within the range of possible results given that plaintiffs continued to complain about pain despite some clinical test showing no obvious objective problems.  The defense also had sufficient evidence to assess the offers, given the offers were extended until completion of plaintiffs’ depositions and discovery responses showing that plaintiffs continued to have pain/suffering. 

            That brought the appellate court to the defense challenges to the reasonableness and necessity of the postoffer costs actually awarded.  The major items, especially the expert witness fees, were reasonable and listed on close to a line item basis.  Although arguing one expert’s costs were not reasonably necessary because the jury did not ultimately award a measure of damages advocated by the expert, “[d]efendant offers no authority for the proposition that expert testimony on a measure of damages not ultimately awarded by the jury is not reasonably necessary to the conduct of the litigation”—this would be hindsight reasoning not applicable to a jury verdict.  (Slip Op., p. 19.)

            However, the appellate panel did strike $4,608.53 for models/blowups/exhibit copies and $2,850 for court reporter fees based on lack of substantiating detail from plaintiffs in their costs papers.  Only a raw total for the first costs item was provided, which was not specific enough to show that the expenses were reasonable in nature.  With respect to the court reporter fee, plaintiffs also failed to provide details or indicate how they were awardable given that the lower court did not order transcripts of court proceedings.  So, with that, a postoffer costs award to plaintiffs, after a little trimming, was sustained to the tune of $92,375—almost the amount of the two 998 offers totaling $100,000. 

Civil Rights, Costs: Winning FEHA Plaintiff Properly Awarded $64,356 In Expert Witness Fees Through Costs Memorandum Procedure

Plaintiff Did Not Necessarily Have To File Noticed Motion Where Trial Court Did Exercise Discretion In Awarding Them Through The Costs Memorandum Process.

            A FEHA plaintiff won a very nice jury verdict of $2 million in compensatory damages and $6.1 million in punitive damages (reduced on appeal to $4.264 million based on a net worth issue) against a defendant for whistleblower retaliation, disability discrimination, medical leave discrimination, wrongful termination, and intentional infliction of emotion distress.  The trial judge also awarded plaintiff $64,356 in expert witness fees after plaintiff filed a costs memorandum objected to by the defense but granted nonetheless by the lower court.   (FEHA allows these types of expert witness fees to prevailing plaintiffs in the discretion of the lower court.)

            The 2/7 DCA, in Joseph-Mitchell v. SEIU Local 721, Case No. B289210 (2d Dist., Div. 7 Jan. 8, 2020) (unpublished), affirmed.  Interpreting Anthony v. City of Los Angeles, 166 Cal.App.4^th 1011 (2008), the appellate panel concluded that a memorandum of costs or filed motion on FEHA expert witness fees will do the trick, especially where the trial judge did exercise discretion in awarding those fees.   So, a noticed motion was not necessary under the circumstances.

Costs, Experts, Insurance, Section 998: Trial Court Properly Awarded Costs, Including Almost $70,000 In Expert Witness Fees, To Successful Defendant After Plaintiff’s Rejection Of Defendant’s Section 998 Offer

Plaintiff May Have Been Overreaching When He Followed Defendant’s $15,001 Offer With His Own $299,995 Offer Given Jury’s Return Of Defense Verdict.

            Grayfer v. Wawanesa General Ins. Co., Case No. B285554 (2d Dist., Div. 7 November 18, 2019) (unpublished) provides a cautionary tale about the risk involved in overreaching and rejecting reasonable section 998 offers.

            Plaintiff sued his insurance company after his car was stolen – valuing his car at $31,263.43 in his complaint.  Insurance company made a Code Civ. Proc. § 998 offer to settle plaintiff’s claims for $15,001, but plaintiff rejected the offer and served his own offer in the amount of $299,995.  The insurance company rejected plaintiff’s offer and the matter proceeded to trial.  Following the defense verdict returned by the jury and entry of judgment in its favor, the insurance company filed its memorandum of costs which included almost $70,000 in expert witness fees.  Plaintiff moved to tax costs – especially the expert witness fees – arguing insurance company was not entitled to recover fees because its 998 offer was unreasonable and made in bad faith, the experts were not court ordered, and the amounts incurred were unreasonable and unnecessary.  The trial court rejected plaintiff’s arguments – finding the 998 offer reasonable in light of Plaintiff’s claimed emotional distress, the value plaintiff placed on his stolen car, insurance company’s denial of liability for plaintiff’s loss, and the ultimate jury verdict confirming insurance company’s stance on liability.

            After entry of the order awarding its costs/expert witness fees, the insurance company levied plaintiff’s bank accounts, to which plaintiff filed a claim of exemption asserting social security and disability payments were deposited into the levied accounts.  After a hearing on plaintiff’s exemption claim, the trial court found one single account was exempt as it received social security benefits, but found no exemptions for plaintiff’s other accounts.

            Plaintiff appealed the rulings on both his motion to tax costs and his claimed exemption motion, and the 2/7 DCA affirmed – finding no abuse of discretion in the costs ruling and no error in the claim of exemption ruling.

Costs, Special Fee Shifting Statute: Venue Transfer Order—Under Penalty Of Dismissal—Ran From Service Of Minute Order, With Plaintiff’s Noncompliance Leading To A Reversal

Failure To Dismiss Case Lead To A Real Reversal Of Fortune!

           In Southwestern Law School v. Benson, Case No. BV032895 (L.A. County Superior Ct. App. Div. Oct. 25, 2019, posted Nov. 14, 2019) (published), a very narrow issue was presented on appeal, with dire consequences for the plaintiff.  The issue was whether a plaintiff which did not pay for costs and expenses, including attorney’s fees, under a venue transfer order under CCP § 399(a), was subject to dismissal based on receiving a minute order on the venue transfer order conditions.  The answer to the issue was “yes,” but with repercussions being of a fairly dramatic fashion.  Plaintiff did not pay the transfer costs/expenses, the defense dismissal order was denied, and—on appeal—this failure to dismiss was found erroneous because the minute order provided notice of what plaintiff should have done (but did not do).  As a result, a civil judgment of $28,341.10 (inclusive of $2,500 attorney’s fees and $95 in costs) in plaintiff’s favor evaporated on appeal, all based on failure to pay a couple of thousands of dollars in venue transfer fees.

Costs: Prevailing Defendant Did Not Have To Raise Winning Arguments Earlier In The Litigation, Through A Demurrer, In Order To Recoup Routine Costs

CCP § 1033.5 Has No Optimal Efficiency Requirement, Only That The Costs Were “Reasonably Necessary” To The Litigation.

            The losing plaintiff on a summary judgment motion contested an award of routine costs in Harris v. VII Pier Pointe Owner, LLC, Case No. B280729 (2d Dist., Div. 4 Oct. 14, 2019) (unpublished).  Plaintiff’s argument was that defendant did not have to wait until summary judgment to raise the winning argument, which could have been made instead through an earlier demurrer.  Plaintiff contended, on this basis, that routine costs were not “reasonably necessary” to the litigation based on the premise the winning argument could have been raised earlier.  The appellate court was not impressed, putting it this way: “[Plaintiff] cites no authority, however, for the proposition that to recover costs, a party must raise its ultimately winning argument at the earliest opportunity. Code of Civil Procedure section 1033.5 does not require absolute necessity or optimal efficiency -- the prevailing party’s costs need only be ‘reasonably necessary.’”  Not to mention, a defendant may have good reasons to not tip its hat on a meritorious argument too early in the litigation or raise it on demurrer only to have a favorable ruling reversed on appeal given the stricter review standards applicable to demurrer dismissals.

Costs, Experts, Section 998: Sixth District Affirms Denial Of $26,950.50 In Expert Witness Fees To Prevailing Defendant Because Section 998 Offer Was Not Apportioned Among Plaintiffs

Defendant’s Treatment Of Mother And Son Plaintiffs As Spouses For Section 998 Purposes Did Not Fly.

            In Roe v. Hollister School Dist., Case No. H043658 (6^th Dist., Sept. 26, 2019) (unpublished), mother and son plaintiffs (Jane and Jonnie Roe) sued school district and others for an incident involving the five-year-old son and another six-year-old student.

            During the course of this litigation, the school district and co-defendants served plaintiffs with a joint section 998 offer to pay Plaintiffs and their attorney a single check for $200,000 as settlement for all claims, costs and attorney’s fees.  The offer did not allocate the $200,000 offer between mother and son.  Plaintiffs did not accept the offer, and the case proceeded to jury trial.

            After prevailing at trial, the school district sought to recover $26,950.50 in expert witness fees under Code Civ. Proc. section 998 because plaintiffs had rejected the 998 offer and had not achieved better results at trial.  Plaintiffs moved to tax the costs as to the expert witness fees on the ground that the failure to allocate the offer between mother and son rendered it “legally invalid.”  For its part, the school district argued that “[f]or all practical purposes John Roe is the second plaintiff in this case” because Jonnie was a minor and John was his father and guardian ad litem.  The trial court rejected this contention and denied school district’s request for expert witness fees.

            On appeal, school district relied on cases that recognize an exception to the rule that section 998 offers must be apportioned between individual offerees.  This exception is for joint offers made to spouses “because a cause of action is community property as is any recovery.”  Relying on this exception, school district claimed that that separate offers were not necessary “under community property rules because any financial recovery by Jonnie lessens the burden upon his parents to support him, AND lessens the burden upon his parents’ community property.” 

            The Sixth District disagreed and affirmed the trial court’s ruling – finding that mother and son do not share property rights, and that father’s role as guardian ad litem did not grant him a personal property interest in any recovery the child might obtain.  The Sixth District summed up its decision this way: “Try as it might, the [school] District cannot force Jane and Johnnie into the exception that applies where two plaintiffs are husband and wife.”   

Costs: Awarded Costs Of $199,464.98, Consisting Mostly Of Deposition Costs Incurred In Related Federal Proceeding, Upheld On Appeal Because Coordination Order Was At Play And Apportionment Among Actions Not Necessary

The Coordination Order Called For Extensive Discovery Coordination Among The Federal And State Court Actions Such That Costs Incurred For Depositions Noticed In The Federal Proceeding Were Incurred In The California Proceeding.

1921 Model T Ford

            In In re Automobile Antitrust Cases I and II, Case No. A152893 (1^st Dist., Div. 4 Sept. 25, 2019) (unpublished), a number of automobile manufacturers and dealer associations were sued under the Cartwright Act (Bus. & Prof. Code, §§ 16720-16728) and the unfair competition law (Bus. & Prof. Code, §§ 17200-17210).  Multiple lawsuits were filed in California and a similar lawsuit against many of the same defendants in federal court.  Parallel cases were also pending in a number of other state courts.

            The allegations were that defendants had conspired to keep new vehicle prices higher than they would have been in a properly competitive market by preventing new, virtually identical, lower priced cars from being exported to the U.S. from Canada.

            The California lawsuits were coordinated into one proceeding, and discovery was coordinated among the California, federal, and other state actions under a June 2004 discovery coordination order which provided detailed provisions governing the taking and use of discovery in the separate proceedings – with the federal proceeding being “the lead case for discovery and discovery-related pretrial scheduling.”

            After prevailing on summary judgment in federal court in July 2009, Ford Motor Company (Ford U.S.) and Ford Motor Company of Canada, Ltd. (Ford Canada), along with other defendants, were denied their requests for costs awards.  The denial was based on federal case law, under Fed. R. Civ. P.,  Rule 54, that allows a district to deny costs awards to a prevailing party if the case “ ‘presented a close question that required considered balancing[.]’ ”

            However, Ford U.S. and Ford Canada (the two remaining defendants) got another bite at the apple after each separately prevailed on summary judgment in the California proceeding in November 2011 – resulting in a 2012 costs award of $199,464.98 with only a $1,625 reduction for disallowed costs included in the joint request. 

            Plaintiffs appealed the judgments and separately appealed the costs award.  In July 2016, judgment was reversed and remanded as to Ford Canada.  Judgment in favor of Ford U.S. was affirmed on appeal.  Plaintiffs then moved to dismiss the cost order appeal as moot, and the 1/4 DCA granted the motion.

            On remand, Ford U.S. moved, once again, for a costs award as a prevailing party.  In addition to the previous jointly awarded $199,464.98, Ford U.S. sought to recover interest on that amount from the date of the 2012 costs order.  The trial court granted the costs award request (the 2017 cost order), but denied the request for interest.

            Plaintiffs appealed – contending the deposition costs were not recoverable because they were incurred in the federal proceeding, and that any costs award should be apportioned between Ford U.S. and Ford Canada.  They further argued that if any deposition costs were allowed, they should be apportioned among the seven separate cases that made use of the discovery taken.  Finally, Plaintiffs argued that some depositions taken were not reasonably necessary to Ford U.S.’s defense in the California proceeding.

            The 1/4 DCA disagreed and affirmed Ford U.S.’s costs award. 

            It found that in light of the coordination order in the related actions, the costs of conducting discovery could not be characterized as having been incurred in just one action and not in the others, and were therefore absolutely recoverable. Ford U.S. was entitled to recover these costs “as a matter of right” under Code Civ. Proc. section 1032. 

            As to apportionment, the 1/4 DCA found no abuse of discretion.  It found reasonable the trial court’s resolutions that there were not “seven separate cases of equal dignity and equal work,” and that there was only a “singular conspiracy” at the core of each of the actions – meaning what any plaintiff knew about that conspiracy was relevant and had impact in the other actions.  Likewise, the 1/4 DCA found no abuse in discretion as to lack of apportionment between Ford U.S. and Ford Canada – that the evidentiary showing was that Ford U.S. had reasonably incurred the costs awarded, and that the depositions taken were reasonably necessary to Ford U.S.’s defense.

Costs, Deadlines, Reasonableness Of Fees, SLAPP: 2/3 DCA Affirms SLAPP Fee Award To Defendant Of $53,915.50, The Full Defense Request, Rejecting Untimely Motion Filing Argument

However, Costs Award Reversed Because It Was Untimely Filed And Prejudiced Plaintiff.

            In Residual Income Opportunities, Inc. v. Cynergy Data, LLC, Case No. B289219 (2d Dist., Div. 3 Aug. 29, 2019) (unpublished), the defense won a SLAPP motion, filing for recovery of costs to the tune of $3,567.77 and moving for attorney’s fees totaling $53,915.50.  The trial judge denied plaintiff’s motion to tax costs and rejected its opposition arguments by awarding fees as requested by the defense.  Plaintiff appealed, obtaining no change on the fee award but obtaining a reversal of the costs award.

            Attorney’s Fees Award.  Plaintiff first argued the fee motion was untimely, because it was filed 61 days after notice of entry of the SLAPP order.  The appellate court disagreed, because the 60-day deadline under CRC 3.1702 was extended two court days pursuant to CCP § 1010.6(a)(4)(B).  The amount of the award was no abuse of discretion, because (1) the trial court was in the best position to reduce for any duplication, which was not done; (2) paralegals can be compensated and do not have to show their licenses as part of any fee request; (3) the work descriptions in submitted billings were not vague; and (4) $330-790 hourly rates were reasonable for L.A.-venued work, especially given the defense attorneys made a voluntary 15% across-the-board reduction.  Fee award affirmed.

            Costs Award.  The filing was determined to be untimely, coming 46 days after service of a notice of entry of the SLAPP grant (which acted to dismiss the extant complaint as against Cynergy).  This was beyond the 15-day deadline set forth in CRC 3.1700(a)(1).  Cynergy argued that the minute order dismissing the case was unsigned such that time to file was extended, but the appellate court determined that there was a SLAPP grant order which was signed, a document qualifying as a judgment triggering the 15-day costs filing deadline.  (Code Civ. Proc., §§ 581d, 577.)  Although a trial judge can extend the 15-day deadline for up to another 30 days, the 46 days lapse divested authority from the trial court to entertain the costs request.  But, that brought the costs issue to the ultimate question of whether entertaining the costs bill was prejudicial.  The appellate panel concluded that it was, because the costs bill included demurrer expenses which it did not find to be related to the SLAPP motion work, not embracing reasoning otherwise in Metabolife Intern., Inc. v. Wornick, 213 F. Supp.2d 1220 (S.D. Cal. 2002).  Costs award reversed.

            HAT TIP—The main basis for the appeal was the fees award.  Congratulations to Joshua R. Mandell and Alicia Y. Hou of Ackerman for sustaining the fee award for Cynergy on appeal.

Costs, Deadlines: Costs Memorandum Filed Outside Of 15-Day Entry Of Judgment Deadline By Clerk Was Properly Stricken By Trial Judge

Claiming Party’s Counsel Continued To Use East L.A. Address For Pleadings, Even Though Moving To Simi Valley, Such That Clerk’s Entry Notice To East L.A. Address Supported Striking Costs Memorandum, Which Was Filed Almost Five Months Later.

            I guess we can say that the moral of AV Sikh Center v. Antelope Valley Sikh Center, Case No. B289045 (2d Dist., Div. 8 Aug. 21, 2019) (unpublished) is if you move your law practice to a new address, make sure your pleadings are consistent with that move to make sure you do not blow deadlines.

            In this one, a prevailing party’s counsel moved from an east L.A. office address to Simi Valley, even filing a change of address with the court.  However, counsel continued to file pleadings listing the east L.A. address, with the superior court clerk sending a notice of entry of judgment to counsel at the same east L.A. address.  Almost five months after the clerk served notice of entry of judgment, counsel filed a costs memorandum on behalf of his client, although indicating that he checked the internet docket along the way.  The trial judge found the costs memorandum was untimely, striking it because it was way after the 15-day deadline under CRC 3.1700.  The appellate court affirmed the result based on counsel’s confusing conduct and testimony that he checked the docket—if counsel had, the entry of judgment would have popped up.

            Lesson here:  if you change offices and send a change of location, stick to that new change!

Costs, Deadlines: Premature Filing Of Costs Memorandum In 2010 Did Not Mean It Was A Nullity, Such That 2018 Motion To Tax Costs Was Way Too Late

Unpublished Opinion Does A Nice Job Of Discussing Modern View On Premature Costs Memo Filings.

            In Paland v. Brooktrails Township Services Dist. Bd. of Directors, Case No. A156229 (1^st Dist., Div. 5 Aug. 19, 2019) (unpublished), Defendant filed and served a memorandum of costs in February 2010 seeking $1,029.02 in costs incurred on appeal.  In November 2018, the other side filed a motion to tax costs, arguing that the costs memorandum was prematurely filed before the remittitur issued in the prior appeal way back in the day.  The trial court denied the motion to tax costs as untimely, a conclusion affirmed by the 1/5 DCA.

            The appealing party argued that the lower court lacked jurisdiction to award costs because the costs memorandum was prematurely filed.  There was some older authority which supported this argument.  (See, e.g., Johnson v. Schimpf, 91 Cal. App. 26, 36-37 (1928); Abney v. Belmont Country Club Properties, Inc., 100 Cal. App. 12, 17 (1929).)  However, jurisprudence does evolve, with the modern view being that premature filing of a costs memorandum is a mere irregularity which is waived unless the opponent files a motion to strike/tax costs.  (Haley v. Casa Del Rey Homeowners Assn., 153 Cal.App.4^th 863, 880 (2007); Brown v. West Covina Toyota, 26 Cal.App.4^th 555, 560 (1994), disapproved on other grounds in Murillo v. Fleetwood Enterprises, Inc., 17 Cal.4^th 985, 996 (1998).)  Because the appealing party did not file a motion to tax costs under the time deadlines of California Rules of Court, rules 2.278 and 3.1700(b), the costs memorandum became a judgment for costs. 

Costs, Requests For Admissions: Jane Doe Plaintiff Losing At Trial Based On A Nonsuit Properly Assessed With $19,500 In Costs-Of-Proof Sanctions And With Routine Costs Of $107,440.35

Respondents Conceded $6,988.27 In Claimed Costs Were Not Allowable.

            Doe v. Dept. of Children & Family Services, Case No. B276699 (2d Dist., Div. 8 July 18, 2019) (published; previously issued as unpublished on June 20, 2019) is a case demonstrating how respondents, on appeal, can gain appellate credibility by conceding a legal issue for which there is no substantive response.

            In this case, plaintiff Jane Doe lost on a nonsuit at trial, after other claims were pared during pre-trial stages, to DCFS and other governmental defendants.  The lower court agreed that Jane Doe wrongfully denied 12 of 16 RFAs, imposing costs-of-proof sanctions for trial efforts in presenting evidence which led to the nonsuit to the tune of $19,500 (out of a requested $85,459.50).  Then, the lower court granted defendants $114,428.72 in routine costs after taxing $38,289.15 in claimed costs.  Jane Doe appealed.

            RFA Costs-of-Proof Sanctions.  The appellate court agreed that the 12 RFAs were wrongfully denied, especially ten of them in light of the County providing computer logs to refresh Jane Doe’s memory about certain visits. Her claim that she could not recall the exact dates did not resonate given the computer logs provided by the County.  Jane Doe also argued that none of the “denied” facts were used in the nonsuit determination, but the appellate court rejected this given that trial was under way and that defendants did have to present proof on the number of visits.  The nonsuit “twist” in the procedural context of this case was inconsequential.

            Routine Costs.  Respondents did a good thing upfront here.  They admitted that $6,988.37 in investigative costs were not allowable, which we believe added credibility to the defendants’ positions on appeal.  With respect to the other routine costs being challenged, they were sustained on appeal this way:  (1) filing fees were allowable because they were still “incurred” even though the government is exempt from paying such fees; (2) services fees for witnesses not called at trial are allowable in the lower court’s discretion; (3) section 998 expert fees for experts not called to testify are recoverable in the court’s discretion; (4) trial exhibit copying costs are authorized; (5) lodging and meal expenses for out-of-town depositions by attorneys and paralegals are discretionarily proper; (6) courier and messenger fees are recoverable in the lower court’s discretion; and (7) litigation support vendor fees and telephonic court appearance fees are authorized. 

Civil Rights, Costs, Employment, Section 998: Where Thrust Of Losing Plaintiff’s Suit Was A FEHA Claim, Trial Court Properly Refused To Award CCP § 998 Costs To Winning Defendant Despite Loss On Non-FEHA Whistleblower Claim

Prominence Of Suit Prevailed, Plus Appellate Court Offers Tips On What Trial Courts Ought To Follow When There Is A Split In Intermediate Appellate Thought On An Issue.

            In Thiry v. Pet Partners, Inc., Case No. E070851 (4^th Dist., Div. 2 June 20, 2019) (unpublished), plaintiff brought a mixed FEHA/whistleblower/UCF suit based on allegations of whistleblower activities and medical leave retaliation.  Plaintiff lost, with defendant moving for recovery of costs (including expert witness fees) under CCP § 998.  The lower court denied the request, determining that the FEHA request was predominant/not frivolous in nature and that no apportionment of costs could really be had on non-FEHA claims because everything was intertwined.  Defendant appealed, but the 4/2 DCA affirmed.

            The first issue really was dispositive, namely, a split on appellate thinking on whether 998 costs could be recovered in a FEHA case where the lower court determined plaintiff’s FEHA claim was not frivolous.  The 4/2 DCA followed its prior opinion in Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 19 Cal.App.5^th 525 (2018) [finding costs nonrecoverable] versus the opposite conclusion by the 4/1 DCA in Sviridov v. City of San Diego, 14 Cal.App.5^th 514 (2017) [costs were recoverable in a whistleblower case].  [NOTE:  The 2/8 DCA in Huerta v. Kava Holdings, Inc., 29 Cal.App.5^th 74, 84 (2018) followed Arave over Sviridov.]  So, ordinary fee shifting costs were not available under FEHA.  However, what about the non-FEHA whistleblower claims?  The 4/2 DCA agreed that the FEHA claims predominated, such that it would defeat FEHA policies to not allow costs given that the lower court found the claims were intertwined.

            BLOG OBSERVATION—The lower court, faced with a split on the FEHA issue, followed the conclusion reached by the 4/2 DCA reviewing court from its own venue.  The 4/2 DCA recognized that trial courts can follow any decision it finds more persuasive when a difference in appellate thinking is involved, but the appellate court did note that is generally wise for the trial court to follow the lead of the appellate court in the District in which it is located.  (See McCallum v. McCallum, 190 Cal.App.3d 308, 315 n. 4 (1987).) 

Costs, Employment: Defendant Winning Against Plaintiff’s Employment-Based Claims, Although Losing Cross-Claims, Entitled To Routine Costs, But Not Costs Under Labor Code Section 218.5

No Finding That Claims Made Or Prosecuted In Bad Faith Failed To Trigger Section 218.5 Cost-Shifting.

            Plaintiff and defendant/cross-complainant lost both of their suits after a bench trial, plaintiff losing wage/hour claims and cross-complainant losing fiduciary duty/joint venture cross-claims.  The lower court determined both sides should bear their own costs, with no determination made that plaintiff’s employment claims were brought in bad faith.  Defendant appealed, claiming entitlement to routine costs under Code of Civil Procedure section 1032(a)(4) and Labor Code section 218.5.

            The 4/1 DCA, in Thompson v. Fuhrman, Case No. D075129 (4^th Dist., Div. 1 May 28, 2019) (unpublished), determined that defendant was entitled to costs under section 1032(a)(4), but not Labor Code section 218.5.

            Even though losing his cross-claims, defendant qualified as a prevailing party for routine costs under section 1032(a)(4), because he is a defendant in a situation where neither plaintiff nor defendant obtained any relief.  It did not matter that he lost the cross-claims.  (McFarland, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn., 231 Cal.App.3d 1450, 1454 (1991); Cussler v. Crusader Entertainment, LLC, 212 Cal.App.4^th 356, 371 (2012).)  Nothing In Labor Code section 226 prevented a costs award to defendant, with the 4/1 DCA panel relying on the analogous reasoning in Plancich v. United Parcel Services, Inc., 198 Cal.App.4^th 308, 313 (2011) with respect to Labor Code section 1194. 

            However, defendant was not entitled to costs under Labor Code section 218.5.  As a nonemployee party “victor,” there had to be a determination that plaintiff’s employment claims were brought in bad faith, with that not occurring here.  So, on remand, defendant will receive some routine costs under CCP § 1032(b), but not Labor Code section 218.5.

Costs, POOF!, Private Attorney General: Plaintiff’s CCP §1021.5 Fee Award Of $827,035 Went POOF! On Appeal

Plaintiff Did Not Obtain Its Primary Litigation Objective Such That Fee Award Was Abuse Of Discretion; Prevailing Defendant’s Costs Request Was Improperly Stricken Because It Prevailed.

           San Diegans For Open Government v. City of San Diego & San Diego Tourism Marketing Dist. Corp., Case No. D072181 (4^th Dist., Div. 1 April 4, 2019) (unpublished) shows how fee entitlement cases can involve “wild swings” in fortune where an appellate court looks at the record and decides entitlement was not there. Beyond that, it independently reviews whether a prevailing defendant for a routine costs award should have it taken away based on “equitable” grounds—naught!

           In this one, plaintiff sued defendants alleging that an assessment was an illegal tax requiring voter approval. Although City did modify the assessment to a small degree, plaintiff lost the bid to put the assessment to voter approval—the primary litigation objective. However, the lower court decided that plaintiff was a “catalyst” for the assessment modification, awarding it private attorney general fees of $827,035, including a .25 negative multiplier out of plaintiff’s request for $2.6 million. It also denied District’s routine costs, rejecting the notion that it was the prevailing party under CCP § 1032.

            On appeal, City and District did very well to challenge the fee grant and the costs denial.

            After an independent review of the record, the 4/1 DCA determined that plaintiff did not obtain its primary relief vis-à-vis the illegal tax/voter relief. Instead, the circumstances showed that the City’s modification of the assessment was not causally related to plaintiff’s lawsuit. That required reversing the fee award as a matter of law – POOF!

            District successfully challenged the routine costs denial. District did fall into the categories of being a prevailing party under section 1032 after plaintiff dismissed its lawsuit voluntarily. Given that this was a matter of right, the trial judge’s determination to deny on “equitable grounds” could not thwart District’s statutory entitlement to costs.

Costs, Private Attorney General: Petitioner Winning Some Claims Which Vindicated A Local Ordinance Passed By Public Initiative Vote Was Prevailing Party For Routine Costs And Might Be Prevailing Party For CCP § 1021.5 Fees

Successful Party And Significant Benefit Prongs Met, But Remanded To See If Financial Burden Element Met Under Section 1021.5.

            The Third District in Friends of Spring Street v. Nevada City, Case No. C086563 (3d Dist. March 28, 2019) (unpublished) had found in an earlier appeal that petitioners had properly challenged real parties’ ability to operate a bed and breakfast in a residential area (in Kendall House in Nevada City), although not winning all claims under its mandate petition. In large degree, petitioners had vindicated a people’s voted local initiative, Measure G, which made B&Bs nonconforming uses in certain zoned areas, something accomplished in the earlier appeal. Later, petitioner requested routine costs and private attorney general attorney’s fees. The trial court denied both requests, which prompted petitioner’s appeal in Case No. C086563.

            The Third District reversed and remanded to award routine costs and to determine if the financial burden of CCP § 1021.5 was met—and, if so, the amount of reasonable fee recovery was due to petitioner.

            Petitioner did obtain its main litigation objective in relation to the B&B, such that it was entitled to prevailing party routine costs under CCP § 1032.

            The appellate court also did buy the trial judge’s conclusions for denying fees, namely, petitioner was not successful and did not vindicate a right involving the general public. Petitioner was indeed successful with respect to the B&B issue. Given that zoning is an important right of a public interest, the vindication of Measure G—a people’s voted initiative—was even more important. However, the lower court did not consider the financial burden aspect of section 1021.5, so a remand was in order to analyze this element of fee entitlement.

Costs, Fee Clause Interpretation, Homeowner Associations, Section 1717: Trial Court Properly Denied Fee Recovery To Prevailing Defendants Under Davis-Stirling Act Or Civil Code Section 1717 And Properly Struck The Costs Memorandum

Action Was Based On Tort, Not CC&Rs; Fee Clause Did Not Reach Tort Claims Under Section 1717; And Defendants Failed To Apportion Costs As Between Themselves.

            In the fee area, you must have a solid fee entitlement basis and you usually have to apportion costs where there are several prevailing defendants rather than claim total costs without an appropriate allocation. Schuchmacher v. McDermott, Case No. B288130 (2d Dist., Div. 3 March 28, 2019) (unpublished) is a case where prevailing defendants obtained no fees and costs because they could not establish fee entitlement and did not apportion routine costs.

            Plaintiffs suffered an adverse summary judgment against an HOA’s general manager and its current directors (who were not directors when the main plaintiff owned the condo unit) in a tort action involving insurance fire proceeds. Prevailing defendants moved to recover attorney’s fees of $361,586 and filed to recover $ 27,290 in routine costs. The trial judge denied the fee motion and struck the costs memorandum.

            The 2/3 DCA affirmed. The problem for defendants was that the tort claims were not efforts to enforce governing HOA documents, so entitlement under Davis-Stirling Act’s Civil Code section 5975(c) was lacking. Civil Code section 1717 was of no help either, because the CC&R fee clauses were narrow and did not apply to the tort claims against a general manager or the current directors. With respect to striking the costs, that was no abuse of discretion because defendants claimed all litigation costs, without apportioning between plaintiffs as well as defendants.

Costs, Damages: $298,843 Attorney’s Fees Recovery To Prevailing Cross-Defendant Subcontractor In Personal Injury Case Affirmed On Appeal

Attorney’s Fees Could Be Claimed As Costs Based On Contractual Fees Clause, Not Having To Be Plead As Damages And Not Subject To Any Reduction Because Insurance Carrier Covered Fees For Cross-Defendant.

            In Strouse v. Webcor Construction, L.P., Case No. A148863 (1^st Dist., Div. 3 March 27, 2019) (unpublished), plaintiff, employee of subcontractor ACCO, suffered a workplace injury at Cal Berkeley’s Memorial Football, ensuing him to sue general contractor Webcor for negligence. Webcor, in turn, sued subcontractor ACCO for indemnity (under an agreement with a contractual fees clause). A jury found Webcor 100% liable, and the cross-complaint was adjudicated in favor of ACCO. The trial judge later awarded ACCO $298,843 in attorney’s fees for prevailing on the cross-complaint as against Webcor.

            Webcor lost both the merits appeal and the appeal of the fee recovery.

            The appellate court determined that the fees could be claimed as costs, not having to be pled as damages so as to justify entitlement. It did not matter that ACCO had insurance coverage so that fees were paid by someone else did not mean fees were not “incurred.” (Staples v. Hoefke, 189 Cal.App.3d 1397, 1410 (1987).) The fee recovery was no “double recovery” in addition to the jury verdict because fees are costs, not damages.

            BLOG OBSERVATION—Keith Amelee and Lou Klein at Foley & Mansfield were the successful trial attorneys for ACCO. Co-contributor Mike was a fee expert in the lower court fee proceeding, where the trial judge issued an award with a minor discount from the fee request. On appeal, Margaret Johnson and Lou at Foley were the successful appellate attorneys before the First District. Congrats to the attorneys at Foley & Mansfield.

Costs, Deadlines: Where Matter Is Reversed On Appeal And Remanded, Clock Reset For Trial Court Costs Motion Depending On What Happens On Remand

40-Day Post-Remittitur Period Did Not Govern.

            In Mangine v. Ball, Case Nos. B285059/B286055 (2d Dist., Div. 7 March 25, 2019) (unpublished), tenant lost a case for failure to maintain her rental unit in line with building codes. The prevailing party filed for routine costs, with the trial court rejecting the tenant’s motion to tax costs and awarding $2,215 to the other side. Tenant prevailed, arguing that the costs memorandum was filed beyond the 40-day time limit from a remittitur to file for costs after there was a reversal on a prior appeal. Not so, said the 2/7 DCA panel. The reversal and remand reset a new clock to file for routine costs, which was dependent on what happened on remand. Guided by that deadline, the costs memorandum was timely filed.

Costs, Requests For Admissions: In Trip And Fall Case Resolved Against Plaintiff On Summary Judgment, Trial Court Correctly Denied “Proof of Costs” Sanctions For RFA Denials And Properly Taxed Costs To Defense To Some Degree

Mathematical Error In Costs Award Corrected, But Nonparty Could Not Be Added As Joint Obligor On Costs Award.

            Sailors v. City of Fresno, Case No. F075577 (5^th Dist. March 20, 2019) (unpublished) (there are two other unpublished consolidated cases, but the results are the same) involved a plaintiff suffering severe injuries in a trip and fall at the Fresno Convention and Entertainment Center, resulting in a suit against the City of Fresno for a dangerous property condition and against the owner/property manager for general negligence. All defendants prevailed on summary judgment motions based on the theory that the premises condition was trivial in nature, with defendants seeking significant “costs of proof” sanctions under CCP § 2033.420 based on RFA denials and also seeking routine costs. They all sought a total of $305,833.56, with close to $251,000 being on the RFA costs of proof request. The lower court denied the RFA costs of proof request, but it did award $50,314.95 in routine costs against plaintiffs and in favor of defendants.

            Plaintiff lost the merits appeal, the defense lost the appeal of the RFA costs of proof denial, and plaintiff won a small mathematical reduction in the routine costs award.

            The RFA costs of proof sanctions request was correctly denied because plaintiff did prove some requests or had a reasonable basis for denying them. Although summary judgment was granted against plaintiff, this did not mean there was a total absence of evidence but simply there was no sufficient evidence to raise a triable issue of fact. That distinction was critical in affirming that the RFA costs of proof request denial was no abuse of discretion.

            On the costs award, plaintiff argued that a nonparty was a joint obligor which should be responsible for the costs award. However, the Fifth District found no authority that a nonparty to the case or appeal could be held so responsible for the costs award. With that said, there was a small mathematical error such that the costs award was reduced to $48,065.41—with appellate courts frequently making such a change so as to end the case and not lead to an unnecessary remand.

Civil Rights, Costs: Some 998 Fee-Shifting Costs Stricken By Court Of Appeal In Nonfrivolous FEHA Case

2/8 DCA Agreed With Arave and Huerta In Reducing Costs Award.

            In Butts v. Bd. of Trustees of Cal. State Univ., Case No. B282452 (2d Dist., Div. 8 Mar. 13, 2019) (unpublished), FEHA plaintiff lost against defendant Cal. State Universities on FEHA claims, even after a reversal and remand where the loss occurred again. The lower court awarded costs of $64,063.81 in favor of the defense, some of which were shifted when plaintiff rejected defense CCP § 998 offers. On appeal, the 2/8 DCA affirmed some of the costs, but struck $38,276.22 in costs. Reason for striking costs: they were not allowable, even under section 998, because the FEHA claims were not determined to be frivolous in nature. The trial judge relied on Holman v. Altana Pharma US, Inc., 186 Cal.App.4^th 262, 281 (2010), but the Court of Appeal found Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 19 Cal.App.5th 525 (2018) and Huerta v. Kava Holdings, Inc., 29 Cal.App.5th 74, 84 (2018) more persuasive in determining that costs were not recoverable in this specific context.

COSTS, INTELLECTUAL PROPERTY: SCOTUS Decides That Litigation Expenses Are Not Recoverable By Prevailing Copyright Infringement Plaintiff Unless Covered By General Federal Costs Statutes

$12.8 Million Litigation Expense Award Remanded For A Re-Do.

       In Rimini Street, Inc. v. Oracle USA, Inc., No. 17-1625 (U.S. March 4, 2019), the U.S. Supreme Court considered whether a $12.8 million litigation expense award—inclusive of expert witness, e-discovery, and jury consulting expenses—was properly found by a district court to be a justifiable award of “full costs” under 17 U.S.C. Section 505 in favor of a prevailing plaintiff in a copyright infringement suit.  The Ninth Circuit had affirmed the expense award, but SCOTUS disagreed in the unanimous opinion authored by Justice Kavanaugh. The litigation expenses had to fall within one of six narrower categories specified in 28 U.S.C. Sections 1821 and 1920 given that the Copyright Act did not expressly allow for recovery of other expenses. Since many of the “big ticket” items likely fell outside the narrower categories, a remand was in order for the district judge to scale back the award in line with SCOTUS’ opinion.

Costs, Mediation: Co-Contributor Marc's Article On Cost-Shifting In Mediation Is In The January 29, 2019 Daily Journal

Mike & Marc Have Previously Posted About Berkeley Cement v. Regents Of The University of California.

    Co-contributor Marc's article entitled "Cost-shifting in mediation after Berkeley Cement ruling" appears today, in the January 29, 2019 Daily Journal. If you subscribe to the Daily Journal, then you can access the article on-line. Or you can read a short post dated January 17, 2019, on the California Mediation and Arbitration blog, and a post dated January 8, 2019 on the California Attorney's Fees blog.

Costs, Employment: Third Circuit Court Of Appeals Affirms $319,655.80 Costs Award Against Named FLSA Plaintiffs For ESI Vendor TIFF Conversion And Platform Loading Production Activities

Federal Appellate Court Dismisses Arguments That Costs Recovery Not Allowable Under FRCP Or FLSA, Or Was An Abuse of Discretion Under The Circumstances.

           This next case is a harbinger for risk advice which plaintiff litigators should provide to putative Fair Labor Standards Act (FLSA) plaintiff clients, because these clients could be liable for certain e-discovery vendor expenses of a substantial amount if the defense prevails, as the defense did in Camesi v. University of Pittsburgh Medical Center, Case Nos. 17-3476/18-1112 (3d Cir. Jan. 15, 2019) (nonprecedential).

            What happened here is that four named plaintiffs filed an FLSA collective action on behalf of another 2,800 unnamed plaintiffs for meal break violations, a case which was conditionally certified by the district court. Named plaintiffs then sought broad ESI production, with the district court entering an order to that effect. Later, after the defense complied through an ESI vendor who converted documents to TIFF and loaded the converted files onto the vendor’s platform for eventual production, the district court decertified the action, dismissing the unnamed plaintiffs’ claims without prejudice. Named plaintiffs then dismissed their claims in order to appeal the decertification order, an appeal the Third Circuit earlier dismissed due to lack of jurisdiction. Then, the defense sought to recover $319,655.80 in ESI vendor expenses as costs against the named plaintiffs, smartly requesting only a third of the ESI vendor expenses (with $300,000 encompassing copying charges and the remainder the ESI vendor direct expenses). The district court clerk taxed costs (in federal parlance, that means costs were allowed), with the district judge confirming this allowance. Named plaintiffs appealed to the Third Circuit with numerous challenges, all of which were rejected in the 2019 nonprecedential opinion. (In doing so, the federal appeals court relied on the reasoning in Kuznyetsov v. West Penn Allegheny Health System, Inc., 2014 WL 5393182 (W.D. Pa. Oct. 23, 2014).)

            First, named plaintiffs claimed that the costs were not recoverable under 28 U.S.C. §1920, which allows taxing of costs “where the copies are necessarily obtained for use in the case.” No, because the Third Circuit’s prior opinion in Race Tires America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012) does allow for recovery of these expenses, which the district judge awarded after a prior appeal remand to obtain more evidence to see if Race Tires allowed them. (Both Race Tires and the prior Camesi appeal decision were discussed in our March 28, 2016 post.) The costs were necessary to the case, since plaintiffs were the ones demanding the documents!

            Second, plaintiffs contended that defendants were not prevailing parties under FLSA. This argument did not itself prevail because FLSA does not address a prevailing defendant situation such that FRCP 54(d)(1) did allow for costs recovery of the subject expenses. The appeals court found the award was not violative of FLSA, because plaintiffs should be incentivized to carefully assess and not file meritless/marginal claims. Also, the Third Circuit followed the majority approach that the defense can prevail based upon a voluntary dismissal by unnamed plaintiffs. It further determined that there was nothing unfair about only assessing costs against the four named plaintiffs rather than unnamed plaintiffs too, because this would encourage named plaintiffs’ counsel to advise them, prefiling, of the risks associated should the defense later prevail (which would include a costs award against them).

            Third, the award was not an abuse of discretion. The evidence showed that the four named plaintiffs were not indigent and could bear the costs award (although we presume this will hurt). Beyond that, a district judge only permissively can deny costs based on the indigency/pocketbook factor—it is not mandatory to deny costs in this situation. No bad faith was shown by the defense, given that this side was only responding to the broad document production wanted by plaintiffs anyway.

            BLOG OBSERVATION—An interesting question is whether the result would be the same in a California state case alleging a FLSA collective action. We believe the answer may well be “yes.” Number 6 of our Top 25 decisions for 2018 was the 4/3 DCA’s published opinion in Quiles v. Parent, 28 Cal.App.5^th 100 (2018) (now final), which allowed recovery of costs to FLSA prevailing plaintiffs under FLSA even though California routine costs statutes would not permit costs recovery. In this area, Toshiba America Electronic Components, Inc. v. Superior Court, 124 Cal.App.4^th 762 (2004) held that CCP § 2031.280(b) (formerly § 2031(g)(1)) requires that the reasonable costs of ESI data translation into usable form must be borne by the demanding party. Given that California courts look to federal cases on e-discovery issues (see id. at 770; Vasquez v. Calif. School of Culinary Arts, Inc., 230 Cal.App.4^th 35, 42-43 (2014)), a good case can be made that the result in Camesi would allow recovery of ESI costs in certain respects by prevailing defendants.

Costs, Mediation: Fifth District Indicates, Quite Strongly, That Private Mediator Fees Are A Prime Candidate For Routine Costs Recovery In A Voluntary Mediation Situation

Court-Ordered Mediation Alone Should Not Determine If Costs Recoverable; However, Expert Witness Expenses Not Ordered By Lower Court Were Not Recoverable.

            The Fifth District, in Berkeley Cement, Inc. v. Regents of the University of California, Case Nos. F073455/F073586 (5^th Dist. Jan. 7, 2019) (partially published; expert fee costs discussion not published; mediation costs discussion published), confronted defense costs requests after it prevailed in front of a jury in a dispute over construction of a building on the Merced campus of the University of California. The trial judge awarded the defense $6,486.25 in expert witness fees for time spent taking their depositions and $15,590 for fees paid to mediators for a voluntary mediation agreed to by the parties.

            On appeal, the Fifth District deleted the expert witness fees costs, but affirmed the voluntary mediation expenses.

            In an unpublished discussion on the expert witness fees, the reviewing court could find no basis to sustain the costs award because this was not a court-ordered witness. (See, e.g., Ripley v. Pappadopoulos, 23 Cal.App.4^th 1616, 1624-1625 (1994); Baker-Hoey v. Lockheed Martin Corp., 111 Cal.App.4^th 592, 601-602 (2003).)

            The published discussion on the recoverability of voluntary mediation costs is significant, given that prior decisions only really dictated the recovery of court-ordered mediator fees. The Fifth District refused a categorical rejection of recovery of voluntary mediation costs, with expansive language indicating that mediation has become an accepted method of resolving cases in recent times. Otherwise, mediation costs could only be awarded in a case where $50,000 or less was in controversy—unnecessary line drawing in the ADR and modern litigation contexts. “We conclude mediation fees incurred for mediation that was not ordered by the court are not categorically nonrecoverable as ‘not reasonably necessary to the conduct of litigation.’ The question whether mediation fees should be awarded as costs in a particular matter must be determined based on the facts and circumstances of the particular action. [Plaintiff] does not contend the trial court erred in assessing the facts and circumstances of this case, when it made its determination that the mediation fees should be awarded.”

            BLOG OBSERVATION—Co-contributor Mike had the voluntary mediation costs issue pop up in a Stockton case, with the lower court determining that many reasons exist for voluntary mediation and with the mediation privilege making it difficult to determine if the mediation was truly reasonable and necessary. The Fifth District did not discuss this evidentiary complication, but its broad reasoning strongly suggests voluntary mediation costs should be recoverable in the absence of extenuating circumstances—Mike wish he had this case at an earlier point in time! But that demonstrates the importance of evolving jurisprudence.

Costs: Prevailing Party, Through Supplemental Declaration And Spreadsheet From Expert, Cured Prior Deficiencies And Garnered $4,000 For Amounts Actually Paid To Expert

Trial Court’s Second Chance To Prevailing Party Resulted In Costs Award.

            Once a prevailing party establishes that a cost item is recoverable (listed in CCP § 1033.5 or by statute, such as expert witness fees when a CCP § 998 shifting is triggered), the amount of the costs awarded is usually a discretionary call by the trial judge. If the initial costs paperwork is deficient, the trial judge can reject the costs request outright or allow for supplemental paperwork to be filed in order to cure deficiencies. The prevailing party was given a second chance in Cazden v. Expinoza, Case No. B285907 (2d Dist., Div. 4 Dec. 20, 2018) (unpublished), and that litigant made the most of it.

            Based on § 998 costs shifting, the prevailing party wanted $16,000 in expert witness costs. However, the litigant’s original papers were deficient because an attorney tried to authenticate and attest to the reasonableness of an expert’s work. (Again, this is similar to the problem confronted by recent courts in fee proceeding contexts, where clients or attorneys could not competently demonstrate work performed by others—see posts on Copenbarger [discussed in our October 20, 2018 and November 13, 2018 posts] and Eith [discussed in our December 19, 2018 post].) However, the trial judge allowed the costs claimant to file supplemental papers, with the litigant obviously having listened to the lower court’s directives.

The costs claimant filed a supplemental expert declaration with a spreadsheet, providing a road map for the work which was done. The trial judge granted $4,000 out of the $16,000 request, because claimant only paid expert a “capped” $4,000. The other side’s appeal did not change the result, given that it was not unreasonable for defense expert work to be “backloaded” toward the trial date and given that the supplemental information competently presented the expert work for the lower court’s consideration. Affirmed, rejecting 16 “oddities” (appellant’s term, not ours) in the process.

Costs: Defendant Winning One Dollar In Heavily Contested Case Was The Prevailing Party With Net Monetary Recovery For Purposes Of Routine Costs Award

Loser Provided No Authority That Pre-Litigation Payments Could Be Factored Into The Costs Calculus.       

Young Man Deposits Dollar Bill at Bank Teller's Window
    

            Defendant in a heavily contested contract case won $1 on its contract claim against a non-prevailing party. That was enough to justify an award of routine costs of the defendant because it received a net monetary judgment, said the appellate court in John Russo Industrial Sheet Metal v. City of L.A. Dept. of Airports, Case Nos. A150652/A150654 (1^st Dist., Div. 5 Dec. 18, 2018) (unpublished). Loser provided no authority for the proposition that pre-litigation money received from defendant should somehow be factored into the routine costs “prevailing party” analysis.

Costs: Order Awarding Or Taxing Costs After Voluntary Dismissal Without Prejudice Is Appealable, With 4/2 DCA Agreeing With 4/3 DCA In Split Of Opinion On Subject

However, Costs Award Against Plaintiff’s Counsel Was Void Because Routine Costs Not Normally Allowable Against Counsel.

            The 4/2 DCA, in Gassner v. Stasa, Case No. E068058 (4^th Dist., Div. 2 Dec. 17, 2018) (partially published), faced a situation where a trial judge awarded costs jointly and severally against a plaintiff and plaintiff’s counsel after a voluntary dismissal without prejudice. (The amount was only $2,698.91, but someone got riled.) The 4/2 DCA resolved a split in intermediate appellate thinking on whether a costs award or award taxing costs is appealable following a “without prejudice” voluntary dismissal. It had to confront Mon Chong Loong Trading Corp. v. Superior Court, 218 Cal.App.4^th 87, 92 (2013) [saying non-appealable] and Mesa Shopping Center East, LLC v. O Hill, 232 Cal.App.4^th 890, 897-899 (2014) [saying appealable, a 4/3 DCA opinion reviewed in our December 28, 2014 post]. Gassner agreed with Mesa Shopping Center, finding it was appealable. However, because routine costs could not be awarded against plaintiff’s counsel, the costs award was found void and reversed against counsel in an unpublished portion of the opinion.

Costs: Does FRCP 41(d) Allow For Recovery Of Attorney’s Fees As Costs When Plaintiff Previously Dismissed An Action Based On Claims Against The Same Defendant In A District Court?

Answer: Courts Are Split – Some Say No, Some Yes In The Court’s Discretion, And Others Say Yes If The Claims In The Original Suit Allowed For Fee Recovery.

            Federal Rule of Civil Procedure 41(d) provides: “If a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant, the court … may order the plaintiff to pay all or part of the costs of that previous action.”

            Fair enough, but then the real meaning of “costs” takes significance—does that include attorney’s fees? Well, the answer to the question at the federal appellate level is not uniform at all.

            Horowitz v. 148 South Emerson Associates, LLC, 888 F.3d 13, 24-26 (2d Cir. 2018) has a nice discussion on the issue. It nicely summarized the different approaches on the issue: (1) the Sixth Circuit says “no, never;” (2) the Eighth and Tenth Circuit have said “yes, in the discretion of the district court;” and (3) the Fourth, Fifth, and Seventh Circuits have on a hybrid approach basis said “yes, narrowly, but only if the statute serving as the basis for the original suit itself allows for fees recovery.” Horowitz itself lined with approach (2), which allows a district court to award fees under FRCP 41(d) in its discretion.