CALIFORNIA ATTORNEY'S FEES

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

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

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

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

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

            Haaverson v. Tavistock Freebirds, LLC, Case No. A164043 (1^st Dist., Div. 5 Aug. 18, 2023) (unpublished) is an interesting opinion which explores whether a complaint needs to plead a specific amount of attorney’s fees to sustain a subsequent default judgment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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Waiver Principles, Pure And Simple.

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

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

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

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

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

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

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

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

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

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

            Justice Moore authored the 3-0 opinion.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

$61,122.27 Was The Tab.

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

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

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

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

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

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

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

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

Civil Rights, Costs: Costs Relating To Non-FEHA Claims Affirmed, But Remand To Determine If Some Costs Were Justified Because FEHA Claim Was Frivolous

Lack Of Trial Court Findings Required A Limited Remand On Possible FEHA Costs.

            In a FEHA/non-FEHA mixed case, routine costs that true non-FEHA claim costs are recoverable but that overlapping FEHA/non-FEHA claim costs which cannot be apportioned can only be recovered if the FEHA claim was frivolous.  (Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4^th 1040, 1059.)

            Roman helped decide what costs were and were not recoverable in Williams v. Simpson Strong-Tie Company, Inc., Case No. A162992 (1^st Dist., Div. 5 June 28, 2022) (unpublished).  Plaintiff lost a mixed FEHA/non-FEHA case, but he appealed a $46,227.63 cost award to defendant.  Because many of the costs were non-FEHA related based on the juncture of the case or were not challenged, $33,728.99 in costs were sustained.  As to the remaining $12,498.64 in costs incurred when both FEHA and non-FEHA claims were at issue, the matter was remanded for further proceedings because the lower court failed to determine if the FEHA case was frivolous or whether the costs were allocable. 

Costs: Where Successor Trustee Had To Join Parties Ultimately Dismissed To Obtain Possession Of Premises, Routine Costs Were Properly Awarded To Trustee For Activities Relating To the Dismissed Defendants

Prevailing Party Determination Is Pragmatic On Costs Awards As Well.

            Successor trustee in Sutherland v. Arent, Case No. A161411 (1^st Dist., Div. 1 June 14, 2022) (unpublished) was awarded costs after she finally obtained possession to a rental cabin by including dismissed defendants, with the dismissed defendants relinquishing possession to the trustee.  The primary defendants argued that they should not be saddled with routine costs relating to activities associated with the dismissed defendants.  The appellate court disagreed, holding that costs associated with a dismissed defendant are recoverable against remaining defendants where the remaining defendants’ actions made it necessary to add the dismissed defendants as parties.  (Transamerica Title Ins. Co. v. Green (1970) 11 Cal.App.3d 693, 704; Davis v. Wilde (1961) 197 Cal.App.2d 855, 857.)

Costs: 9th Cir. Reverses FRCP 41(d) Fees As Costs Award For No Statutory Entitlement and No Allegations/Proof Of Bad Faith – Determining Fees Are Not Automatically Costs, But Majority Refuses To Determine If Allowed For Bad Faith/Forum Shopping

Partially Concurring/Dissenting Justice Would Vacate Costs Award And Remand To Determine If Bad Faith Existed, Wanting Ninth Circuit To Join Sister Circuits Finding That Bad Faith Can Be A Predicate For A Fees As Costs Award.

            Moskowitz v. American Savings Bank, F.S.B., No. 20-15024 (9^th Cir. June 10, 2022) (published) involved an interesting “attorney’s fees as costs” issue which drew a split decision.

            The plaintiff in a Telephone Consumer Protection Act case (which has no statutory basis for fees to a prevailing party) lost on a successful summary judgment motion by the defense after voluntarily dismissing a previous case against defendant in Connecticut (the dismissal being without prejudice and without costs).  The Ninth Circuit affirmed the summary judgment grant.  Defendant moved for routine costs and then attorney’s fees as additional costs under Federal Rules of Civil Procedure, rule 41(d), which were awarded by the district judge.  The Ninth Circuit majority, in a decision authored by Circuit Judge Bea, affirmed the routine costs award but reversed the “fees as costs” award.  Circuit Judge Wardlaw, in partial concurrence and in partial dissent, would have vacated and remanded the “fees as costs” award rather than reverse it outright.

            The Ninth Circuit, across the board, agreed that attorney’s fees are not automatically costs; rather, there must be a statutory basis for fees (none existed under the TCPA) or there must be allegations/proof of bad faith conduct, including forum shopping.  The majority found that bad faith was neither alleged nor proven, such that a reversal of the “fees as costs” award should occur.  In dissent, Circuit Judge Wardlaw would have vacated the “fees as costs” award and remanded to determine if there was bad faith, writing that the Ninth Circuit should join sister circuits to reach consensus that rule 41(d) did allow fees as costs where bad faith was shown. 

Costs, Laffey Matrix, Reasonableness Of Fees: Losing Defendants/Cross-Complainants Properly Saddled With RFA Proof Of Sanctions Fees And Routine Costs

Prevailing Parties Requested $393,945.30 In Fees, But Only Awarded $38,920.14—A Win, But Adverse Party Still Unsuccessfully Appealed.

            The next case, Duncombe v. Barfresh Food Group, Inc., Case No. B308385 (2d Dist., Div. 2 May 31, 2022) (unpublished), demonstrates an important lesson:  where you obtain a significantly diminished fee award at the trial court level, you need to think long and hard on whether to appeal.

            In this one, plaintiff/cross-defendant won a jury verdict as far as obtaining consulting fees under a contract with the other side relating to consulting services in Australia.  That verdict was $43,962.56, with nothing recovered on the defense’s cross claims.  Based on some denial of RFAS ultimately proven at trial, the defense moved for attorney’s fees of $393,945.30 under the RFA costs-of-proof sanctions provision.  They also sought some routine costs of $9,000, with the non-prevailing party not filing a motion to tax costs.  In the end, the trial judge awarded $38,920.14 in costs-of-proof sanctions fees and the entirety of the requested costs.  The adverse party did appeal despite the diminished fee award.

            The appellate court affirmed.  The RFAs denied were material, such that the inquiry focused on the reasonableness of the fees.  The trial judge had a lot of discretion in this area given her involvement of the case.  The side asking for fees utilized the D.C. Laffey Matrix to support the requested hourly rates, a matrix which is an acceptable one to use within the discretion of the lower court.  As far as the costs award, the adverse party never filed a motion to tax costs such that the challenge was waived.

Costs, Employment: $17,274.23 Costs To Prevailing Defendant In FEHA Case Affirmed Because Plaintiff’s Case Was Frivolous

Rosenman Written Finding Requirement Did Not Apply To Statutory Costs Award, With 2/1 DCA Articulating A Split In Thinking On The Written Requirement Dictate of Rosenman.

            In Schoensiegel v. Abbott Laboratories, Inc., Case Nos. B312628/B314633 (2d Dist., Div. 1 May 24, 2022) (unpublished), plaintiff lost her FEHA action based on a successful summary judgment motion, with the trial court awarding the defense $17,274.23 in statutory costs based on the perception that plaintiff’s case was frivolous.  (If a case is deemed frivolous, this is a ground upon which to award costs to a prevailing FEHA defendant.)

            On appeal, plaintiff principally argued that the lower court failed to issue written predicate findings before awarding costs as required by Rosenman v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, 91 Cal.App.4^th 859, 868 (2001).  The 2/1 DCA held that the Rosenman requirement only applied to attorney’s fees, not statutory costs.  Further, it did note that Rosenman was disagreed with by Robert v. Stanford University, 224 Cal.App.4^th 67, 72 (2014), which found that the failure to issue findings should not give rise to an automatic reversal in the absence of prejudice.  The 2/1 DCA panel did not take a position on this difference in appellate thinking, but its overall reasoning seems to suggest it liked the conclusion reached in Robert. 

Costs, Prevailing Party, Section 1717, Section 998: Fifth District Deals With Various Prevailing Party Issues For Costs And Fees Award To Litigants Who Both Claimed To Have Prevailed

Plaintiff Winning Some Money Entitled To Routine Costs, But Defense Entitled To Prevailing Party Fees And Some Other Routine Costs Relating To Fee And Expert Witness Work, Some Other CCP § 998.

            Mike Murphy’s Enterprises, Inc. v. Fineline Industries, Inc., Case No. F080503 (5^th Dist. Apr. 13, 2022) (unpublished) is a good opinion to show the logical analysis of determining routine costs and fees awards where there is a mixed result and a CCP § 998 offer is involved.  Here is what the appellate court developed as the analytical framework:  (1) a court determines the prevailing party for a purpose of routine costs under CCP § 1032, with the prevailing party for 1032 purposes obtaining at least its preoffer costs; (2) if a party qualifies as a prevailing party under § 1032, the court turns to whether the prevailing party’s net monetary recovery exceeds any qualifying but rejected § 998 offer (which entails taking the amount awarded and adding preoffer interest and any properly requested costs), with costs including attorney’s fees if allowed by statute or contract); (3) in conjunction with the 998 analysis, the court must determine if the plaintiff is the prevailing party under section 1717 such that those preoffer fees may be included in the 998 net recovery analysis; (4) the court then considers the contractual provisions, the effect of section 1717 on the fees provisions, and finally the effect of the rejected 998 settlement offer such that if the net recovery is greater, the plaintiff is the prevailing party for the whole case or if the net recovery is lower, defendant will be treated as the prevailing party at all times after the settlement was made.

            In the actual case, plaintiff lost many of his contractual theories to defendant, but did win about $63,000 on his contractual claim.  Earlier in the case, defendant sent a 998 offer for $85,000 which was not accepted.  Eventually, the lower court determined defendant was the prevailing party for both fees and costs, especially under 998, awarding it about $564,300 in fees, costs, and expert witness fees—when offset against the $63,000 award to plaintiff, defendant had a favorable judgment of $501,284.95.  Plaintiff appealed.

            The Fifth District affirmed most of the trial judge’s awards, except for a routine costs award denial to plaintiff and except for taxing some of defendant’s routine costs a little.  Plaintiff was the prevailing 1032 party because it did receive positive money, such that it was entitled to its preoffer costs.  However, the trial judge was correct in determining that plaintiff properly excluded preoffer fees because he did determine that defendant was the prevailing party on the contract under section 1717, not plaintiff, in a mixed-results case—meaning that plaintiff did not have the net recovery for purposes of preoffer fees or postoffer costs.  Then, because defendant was entitled to fees and costs as prevailing party under both sections 1717 and CCP § 998, the appellate court only disagreed with the trial judge in minor respects, finding these costs were not recoverable: (1) past discovery sanctions; (2) filing costs in a separate federal action (which cannot be deemed costs awarded to a prevailing state court party); and (3) some County of Tulare production fees.  It did find that items such as CourtCall expenses and pro hac vice costs were proper.  In the end, it remanded to award plaintiff preoffer costs and to strike some defense costs items, but otherwise enter judgment pretty close to what occurred before the trial judge.

Costs, Deadlines, Requests For Admission, Section 998: 2/8 DCA Affirms Denial Of Costs Of Proof Sanctions And Untimely Fee Request, Sustains Some Costs Despite A Costs Memo Verification, And Reversed Expert Fee Award Based On Invalidity Of 998 Offer

Panoply Of Issues Addressed In This One.

            In Bogdan v. Polak, Case Nos. B306264/B309780 (2d Dist., Div. 8 Apr. 6, 2022) (unpublished), landlord won a gnarly retaliatory eviction lawsuit against tenant based on some nonsuits and an eventual jury trial.  In postjudgment proceedings, the lower court denied landlord’s attorney’s fees request as untimely, awarded some routine costs even though landlord failed to verify the costs memorandum, awarded expert witness fees under a CCP § 998 offer to landlord, and refused a costs-of-proof sanctions request for RFA denials.

            Everything was affirmed by the appellate court, except for a reversal of the expert witness award.

            Landlord’s fee motion was untimely; despite landlord’s argument that more time was allowed based on specific emergency orders during the pandemic, the appellate court found that those orders only allowed for “grace” if the litigant had difficulty filing documents, which it did on other items during the COVID-19 crisis.  The denial of tenant’s motion to tax costs was correct because attaching a costs memorandum verification is not jurisdictional and landlord substantially complied with the requirements.   However, the expert witness costs award was overturned because the CCP § 998 offer conditioned entry of any judgment on the offering party giving additional authority for the entry, which made the offer conditional and invalid.  Finally, no costs-of-proof sanctions could be awarded because the requesting party provided a table of RFAs, answers, and trial proof, but—alas!—did not provide the record citations to support the argument.

Costs: Trial Court’s Judgment Vacating Costs Awarded Against Gambling Licensee By The California Gambling Control Commission And Authorizing Remand To Administrative Law Judge Affirmed On Appeal

The Commission Awarded Costs To The Bureau Of Gambling Control After Concluding ALJ’s Denial Of Costs Was Based On Misinterpretation Of The Law Governing Costs Awards, But Should Have Remanded The Issue To The ALJ, And Nothing In Bus. & Prof. Code § 19930(d)(1) Prevented Trial Court From Vacating The Award And Remanding To The Commission With Leave For It To Remand The Issue To The ALJ.

Gambling Room, Looking East – Town of Locke, Dai Loy Gambling Museum, 13951 Main Street, Locke, Sacramento County, CA. Jet Lowe, Creator. 1984. Library of Congress.

            The Department of Justice, through its Bureau of Gambling Control, investigates gambling license applicants, monitors the conduct of licensees, and initiates and prosecutes disciplinary actions against licensees accused of committing violations of the Gambling Control Act (Bus. & Prof. Code, div. 8, ch. 5; § 19800).  One such licensee saw his gambling license revoked/not renewed by the California Gambling Control Commission following a hearing before an administrative law judge (ALJ) where licensee was found to have committed 21.5 violations (and for those who are curious – no, there is no explanation for how a half-violation could be committed).  Additionally, the Commission hit licensee with a monetary penalty of $13,672,000 and costs of $127,880. 

            Licensee challenged the Commission’s decision through a petition for a writ of mandate before the trial court – achieving partial success with the trial court’s determination that the Commission may have relied on unproven misconduct in reaching its decision, and by having the penalty and costs vacated for exceeding the amount supported by law and remanded for redetermination based on the trial court’s conclusion that the monetary penalty exceeded the amount supported by law and that the costs could only be assessed by the ALJ on remand from the Commission.  This led to an appeal by both the licensee and the Commission in Swallow v. Cal. Gambling Control Com., Case No. C089329 (Third Dist., April 4, 2022) (unpublished).

            The Third District affirmed the trial court’s judgment with exception to the monetary penalty – although finding that the penalty was not supported by law, analyzing the issue differently than the trial court and ordering the Commission to reconsider the penalty in line with the appellate panel’s opinion.  However, we focus on the costs issue, which the licensee unsuccessfully argued on appeal had been improperly remanded for further proceedings.

            The Bureau of Gambling Control’s request for an award of costs under § 19930(d) was denied by the ALJ because the Bureau submitted its proof of costs after the conclusion of, rather than during, the hearing on the charges against licensee.  Based on its determination that the ALJ made an error of law, the Commission awarded costs to the Bureau – which the trial court reversed and remanded to the Commission with leave for it to remand the case back to the ALJ.  On appeal, licensee did not address ALJ’s mistake, but argued that the trial court’s remand violated § 19930(d)(1).  The Third District – finding licensee’s argument to be without merit – agreed with the trial court that § 19930(d)(1) does not prohibit such remand to the ALJ for reconsideration of the Bureau’s costs request under a proper interpretation of § 19930(d), and affirmed.

Costs: 4/1 DCA, In A Majority Decision, Affirms That Deposition Costs Taken In Another Related Case, Not The Case Where Costs Are Claimed, Cannot Be Claimed As Costs

Dissent Found That Stipulation By The Parties To Use In Another Case Where Both Cases Were Pending Should Have Allowed Costs Recovery In The Case Where Costs Were Claimed.

            In Anderson v. Way West, Inc., Case No. D077648 (4^th Dist., Div. 1 March 14, 2022) (unpublished), majority and dissenting opinions came to different conclusions on whether deposition costs incurred in another case were recoverable in a second case where the parties stipulated that the deposition could be used in the second case. 

            Relying on In re Bauer’s Estate, 59 Cal.App.2d 161, 163, the majority determined that a “bright line” rule was preferable by which the deposition costs in a prior case should not be allowable in costs in another matter, whether concluded or still pending, and notwithstanding any stipulation to allow use of the deposition in another matter.

            The dissent saw things differently.  Based on a distinction in Bauer’s that the prior case had actually concluded, the dissent would fashion this rule:  (1) when the parties agree after a case concludes that a previously taken deposition can be used in another proceeding, that agreement does not change the fact that the costs of the deposition were incurred in the first action alone (so no costs could be imposed); and (2) when the parties agree before taking a deposition that it will serve as discovery in two or more pending cases, the costs of that deposition are incurred in each of those actions (costs can be imposed). 

Consumer Statutes, Costs: Recovery Of $133,239.75 In Attorney Fees, Pre-Judgment Interest And Costs Affirmed For Song-Beverly Plaintiff Who Had Paid Only $6,204.68 Under A Consumer Credit Contract.

2/8 DCA Agreed With Pulliam That The Holder Rule Cap Does Not Preclude Recovery Of Attorney Fees And Further Determines That The Cap Does Not Preclude Recovery Of Costs, Nonstatutory Costs, Or Prejudgment Interest.

            In Melendez v. Westlake Services, LLC, Case No. B306976 (2d Dist., Div. 8 January 28, 2022) (published), plaintiff who purchased a car through a retail installment contract sued the seller and holder of the contract for violations of CLRA, the Song-Beverly Consumer Warranty Act (California’s lemon law, Civ. Code, § 1790 et seq.), Civil Code § 1632 (requiring translation of contracts negotiated primarily in Spanish), and the unfair competition law (Bus. & Prof. Code, § 17200 et seq.), along with fraud and negligent misrepresentation claims. Through a settlement agreement, plaintiff ultimately recovered the $6,204.68 he had paid under the retail installment contract, with the remaining contract balance waived.  Additionally, pursuant to the terms of the agreement, plaintiff moved for and was awarded recovery of $115,987.50 in attorney fees, $2,956.62 in prejudgment interest, and $14,295.63 in costs.

            Defendant appealed and argued that the Federal Trade Commission’s Holder Rule – promulgated in 1975 as a consumer protection measure by which the holder of a consumer credit contract is subject to all claims the debtor could assert against the seller of goods/services obtained under the contract – limits the debtor’s recovery from the holder to the amount paid by the debtor under the contract. The 2/8 DCA disagreed.

            In affirming the trial court’s fees award, the panel followed the conclusions set forth in Pulliam v. HNL Automotive Inc., 60 Cal.App.5^th 396 (2021) [discussed in our February 02, 2021 post] – that the Holder-Rule limitation on recovery does not apply to attorney fees, and that the FTC’s contrary interpretation is not entitled to deference.  The panel also affirmed the trial court’s prejudgment interest and costs award to plaintiff – applying Pulliam’s fee recovery rationale, along with the conclusions set forth in Lafferty v. Wells Fargo Bank, N.A., 25 Cal.App.5^th 398 (2018) [discussed in our July 20, 2018 and June 11, 2020 posts] as to prejudgment interest and costs – though disagreeing with Lafferty’s conclusion on fee recovery.

Costs: California Supreme Court Decides That Unused Trial Exhibit Copies And Demonstrative Aids Can Be Awarded As Routine Costs In The Discretion Of The Lower Court

No Categorical Grant On This Costs Category, But Discretionary Call For Lower Court.

            In Segal v. ASICS America Corp., Case No. S263569 (Cal. Supreme Court Jan. 13, 2022) (published), the California Supreme Court confronted a split on appellate thinking on whether trial exhibit photocopies and demonstrative aids, not used during the trial, can be awarded as routine costs under Code of Civil Procedure section 1033.5.  Although determining that these costs are not categorically recoverable under section 1033.5(a)(13) (because the unused materials were not helpful to the trier of fact because they were never presented before the trier of fact), they were not expressly prohibited under section 1033.5(b).  However, that did mean that they could be discretionarily recovered as costs under section 1033.5(c)(4) if they are determined by the lower court to be reasonably necessary to the litigation.  Our high state court also indicated that the same discretionary rule would apply to exhibits or materials found to be inadmissible at the trial level.  Again, a trial judge’s discretion will be key on the recovery of these types of claimed costs.   The opinion was authored by Chief Justice Cantil-Sakauye.

Costs: Fifth District Discusses A Myriad Of Costs Issues, Agreeing That Some Were Improperly Awarded But Others Were Properly Awarded

Costs Necessary And Reasonable To The Litigation Are Discretionary Award Calls By The Trial Judge.

            In O’Neal v. Stanislaus County Employees’ Retirement Assn., Case No. F079887 (5^th Dist. Dec. 8, 2021) (unpublished), non-prevailing plaintiffs appealed certain costs awarded to The Retirement Association and Stanislaus County.  The Fifth District concluded that some costs were improperly awarded but others were properly ordered, with the major takeaways being these:  (1) summary judgment exhibit costs and costs of a person never deposed were not properly awarded; (2) copies of trial exhibits is a discretionary costs award such that there was no abuse of discretion in so awarding; (3) messenger fees for filings by outside, non-local counsel are a discretionary costs item which can be awarded by the trial judge; (4) UPS shipping costs are not allowable under the costs statutes; (5) CourtCall telephonic appearance expenses can be awarded in the trial judge’s discretion; (6) unused trial exhibit expenses are properly awardable discretionary costs, although noting that the issue is pending before the California Supreme Court in Segal v. ASICS America Corp., No. S263569; and (7) transcript costs for transcripts not ordered by the court are not a proper costs item.

            BLOG UPDATE:  Segal was argued and submitted on November 3, 2021, so a decision should be upcoming in the near future.

Costs: Court Transcripts, Electronic Presentations, Arbitration Transcripts, and Trial Support Vendor Fee Items Considered In Discussion Of Properly Awarded Routine Costs

Only One Item Out Of The List Was Improperly Awarded.

            The general rules for awarding routine costs to a prevailing party can be distilled down this way:  some are expressly allowable; some are expressly not allowable; and if costs are not mentioned in the first two categories, they are awardable in the courts discretion if found reasonable and necessary to the conduct of the litigation.  (Code Civ. Proc., § 1033.5(a), (b), (c)(4).)  The appellate court in Engel & Engel, LLP v. Shuck, Case Nos. B297421/B300755 (2d Dist., Div. 2 Nov. 4, 2021) (unpublished) affirmed a lower court’s award of three items of costs, but reversed one costs award as being improper.  Here are the results:  (1) trial transcripts were improperly awarded because they are not recoverable unless “court ordered” (which they were not) and are distinct from allowable court reporter fees; (2) electronic presentation expenses were proper because the lower court expressly found they were helpful; (3) arbitration transcripts were allowable because only court transcripts are expressly disallowed unless court ordered; and (4) a trial support vendor’s fee was proper because it was subsumed in the electronic presentation component. 

Costs: 2/2 DCA Refuses To Carve Out Costs Exception For Prevailing Defendant In Knox-Keene Act Cases

Costs Determination Remanded To Address Specific Objections To Claimed Costs By Kaiser.

            In Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc., Case Nos. B304183/ B306322 (2d Dist., Div. 2 Nov. 4, 2021 partially published; costs discussion unpublished), Kaiser was the prevailing defendant for costs because no relief was obtained against it and it obtained no relief in a Knox-Keene Act emergency medical services case.  The appellate court found that it was error for the lower court to deny costs.  The other side argued that the appellate court should fashion an exception for cases under the Act, but the court refused on the ground that it is “not our role to rewrite statutes [inclusive of the general costs statutes].”  The matter was remanded to consider opponents’ objections to specific items.

Costs, Experts, Section 998: Trial Court’s Costs Award To Prevailing Plaintiffs, Which Accounted For Costs From Two Trials Where First Trial Resulted In Mistrial Due To Plaintiffs’ Counsel, Affirmed On Appeal

Trial Court’s Order Awarding Costs Did Not Operate As An Improper Reconsideration Of A Previous Order, And Defendants Failed To Support With Any Authority Their Contention That Plaintiffs Could Not Recover Fees Where Their Attorney Caused Mistrial.

            In Esparza v. Win Distribution, Case No. E072880 (4^th Dist., Div. 2 October 25, 2021) (unpublished), the 4/2 DCA analyzed whether a party whose counsel’s conduct resulted in a mistrial but prevailed at a second trial can recover costs from both trials.

            A family of four personal injury plaintiffs prevailed in a second jury trial following a mistrial of the first.  Afterward, the trial court awarded plaintiffs $188,057.53 in ordinary costs which accounted for both trials after partially granting defendants’ motion to tax.  Because plaintiff husband’s portion of the award exceeded the $10 million Code Civ. Proc., § 998 offer of compromise he made to defendants, the trial court also awarded him $366,976.42 in expert witness fees plus prejudgment and postjudgment interest exceeding $2 million.

            Defendants, a commercial truck driver and his employer, appealed the judgment and argued, alternatively, that their motion to tax costs from the first trial had been improperly denied and resulted in an improper award of expert fees and prejudgment interest to plaintiffs. Relying on Mullin v. Rousseau, 112 Cal.App. 719 (1931), argued that plaintiffs could not be awarded costs for both the first and second trial when their own attorney’s closing argument prompted the mistrial. 

            The 4/2 DCA disagreed and affirmed the judgment, including the costs award.  Although Mullin also involved the plaintiff prevailing at a second trial after plaintiff’s counsel caused a mistrial in the first trial, costs for both trials being awarded to plaintiff, and defendant’s motion to tax costs from the first trial being denied – Mullin is inapposite. In Mullin, the trial court charged the costs of the first trial to plaintiff as a penalty for the attorney’s misconduct. When the trial court subsequently awarded plaintiff with those same costs from the first trial, that award operated as an order reconsidering the prior costs award – which was improper.  Here, the trial court denied defendants’ request for the attorney fees and costs of the first trial as Code Civ. Proc., § 128.5 sanctions – finding plaintiff’s counsel’s made an honest mistake during closing arguments which did not warrant the imposition of sanctions. Therefore, the trial court’s order was not improper as it did not operate as a reconsideration of a previous order.  Additionally, defendants failed to support their contention with any authority.

Appealability, Costs, Deadlines: $10,800 Costs Recovery To Certain Defendants After Plaintiff Dismissed Case Without Prejudice And Refiled In Texas Was Not Erroneous

4/3 DCA Sides With The View That A Costs Award Entered After A Voluntary, Without Prejudice Dismissal Is Appealable.

            In Thomas v. St. Joseph Health System, Case No. G059408 (4^th Dist., Div. 3 Oct. 20, 2021) (unpublished), plaintiff doctor sued certain health care defendants in Orange County Superior Court for interference/unfair competition.  Certain defendants gained a tentative ruling by which a motion to quash based on lack of personal jurisdiction was going to be set for a final hearing, based on the notion that the case belonged in Texas.  (The lower court had allowed plaintiff to take jurisdictional-directed depositions in both California and Texas in order to oppose the motions to quash.)  Before that hearing could be held, plaintiff filed a voluntary, without prejudice dismissal and later refiled the case in Texas.  Defendants filed a costs memorandum, with the trial judge awarding $10,800 to defendants and denying a motion to strike/tax costs.  Plaintiff appealed.  The costs order was affirmed, in a 3-0 opinion authored by Orange County Superior Court Judge Linda Marks, sitting by assignment.

            In a footnote, the 4/3 DCA panel observed that there is a split in authority on whether a costs order entered after a voluntary dismissal without prejudice is an appealable order.  (Compare Gassner v. Stasa, 30 Cal.App.5^th 346, 351-355 (2018) [is] with Monn Chong Loong Trading Corp. v. Superior Court, 218 Cal.App.4^th 87, 92 (2013) [isn’t, but can be treated as a discretionary petition for writ of mandate].)  The panel sided with Gassner, but also indicated it would have reviewed it under the mandate petition alternative.

            Plaintiff argued that defendants filed the costs memorandum 9 days too late based on the 15-day deadline, but that failed because no notice of entry of dismissal was served such that the longer 180-day rule applied.

            Next, plaintiff contended that the pendency of the case in Texas meant that there was no prevailing party for costs purposes.  Not so, said the appellate court.  CCP § 1032(a)(4) allows costs to “a defendant in whose favor a dismissal is entered,” with a dictionary definition of “in favor of” supporting the position that defendants had prevailed notwithstanding the pendency of the Texas action.  (The analysis likely would have been different if attorney’s fees were involved, but the result was different for costs.)

            Plaintiff then suggested that defendant needed to file the customary Costs Worksheet, but the appellate court observed that the only initial required pleading is the costs memorandum itself (CRC, rule 3.1700(a)(1)), although it is a good idea to file the Worksheet.

            The amount of costs, mainly for in-state and Texas travel deposition expenses by counsel, were reasonable, with the fact that plaintiff’s counsel’s travel costs were $450 less not altering the result—costs do not have to be the lowest possible for purposes of reasonableness.  (Landwatch San Luis Obispo County v. Cambria Community Services Dist., 25 Cal.App.5^th 638, 646 (2018).)

Costs, Section 998, Special Fee Shifting Statutes: No Abuse Of Discretion In Attorney Fees And Costs Award Of $1,454,938.70 Against One Of Three Defendants, Without Apportionment, In Wrongful Death Case

Apportionment Of Attorney Fees Was Not Feasible As Plaintiffs’ Efforts Against The Defendants Were Inextricably Intertwined,  And The Case Could Not Have Been Presented Without Significant Expert Testimony To Determine Who Was Legally Responsible.

            In Hatcher v. Powell, Case No. B302730 (2d Dist., Div. 6 September 27, 2021) (unpublished), four defendants were sued in a consolidated wrongful death action following a single-car accident in Ventura County.  One of the defendants was the driver of the car, who lost control while attempting a left curve on a country road at almost twice the posted speed limit, in the dark of night, and with a blood alcohol level of .19 percent according to his blood test.  The other three defendants were a communications company, the construction company it had hired, and Ventura County.  Driver had hit construction equipment stored off the shoulder of the road when he lost control – killing two of his three passengers and injuring the third.   County settled out of the case, but the remaining defendants proceeded to trial where the jury returned a unanimous special verdict finding driver’s negligence was a substantial factor, but the negligence of communications and construction companies was not a substantial factor, in causing harm to the plaintiffs.  All told, according to our calculations, the jury awarded non-economic damages against driver of roughly $7.75 million and $455,000 in economic damages.  $1.9 million of that was awarded to the parents of one of the deceased passengers – parents who had made driver an unaccepted Code Civ. Proc. § 998 offer to settle for $500,000 each.

            Those parents then moved post-judgment for costs of $1,458,588.72, which included $544,493.80 in prejudgment interest, pursuant to Civ. Code § 3291 and Code Civ. Proc. § 998 (prejudgment interest running from the date of § 998 offer not accepted by defendant), and $760,000 in attorney’s fees pursuant to Code Civ. Proc. § 1021.4 (a fee-shifting statute allowing trial courts to award reasonable attorney fees to a prevailing plaintiff where the action for damages is based upon defendant’s commission of a felony offense for which that defendant has been convicted).  After minor deductions to the jury fees and for expert fees incurred prior to the § 998 offer, the trial court awarded $1,454,938.70 in fees and costs against driver.

            Although not denying liability, driver appealed – claiming the trial court abused its discretion in the amount of its award of attorney’s fees and costs – and argued communications and construction companies bore some responsibility.  However, the 2/6 DCA agreed with the trial court’s conclusions.  It was not feasible to apportion fees amongst the defendants because plaintiffs’ efforts against the defendants were inextricably intertwined, and the case could not have been presented without significant expert testimony to determine who was legally responsible.  The trial court had properly considered the time spent, reasonable hourly rates, complexity of the issues, success achieved, and skill of the attorneys in awarding fees and costs that were proportionate to the judgment obtained. (Serrano v. Priest, 20 Cal.3d 25, 48- 49 (1977); Harman v. City and County of San Francisco, 158 Cal.App.4th 407, 419 (2007).)

Common Fund, Costs: Trope Limitation Prevents Self-Represented Attorney From Obtaining Fees Under Common Fund Theory, But Routine Costs Are Awardable

The 2/6 DCA, in a scholarly opinion written by Justice Yegan, faced the questions of whether a self-represented attorney, who was also the winning party, could seek recovery of attorney’s fees and costs under the nonstatutory common fund theory.  Different answers were the conclusions on the two issues.

            In Leiper v. Gallegos, Case No. B309986 (2d Dist., Div. 6 Sept. 23, 2021) (published), the appellate court agreed with the trial court that the self-represented attorney, under the Trope limitation (although it was an open issue), could not recover almost $96,000 in requested fees in a common fund case.  The reviewing court followed the holding of Bruno v. Bell, 91 Cal.App.3d 776, 783 (1990) to reach the result on fees with respect to pro se attorneys.    However, with respect to costs of around $3,000 (excluding attorney’s fees), the 2/6 DCA panel found no convincing reason why they could not be awarded given a pro se attorney could obtain costs under the routine costs CCP provisions. 

Costs: No Oral Hearing Required On Appellate Costs Motion

Nice Dissection Of Appellate Routine Costs, Which Were Allowed.

            No reason for us to discuss in detail the case of Pacheco v. Tuttle, Case No. B302508 (2d Dist., Div. 3 Sept. 22, 2021) (unpublished), unless trial and appellate practitioners want to dive in the weeds, given that an appellate costs award of $1,627 was at issue—we kid you not!

            The post-worthy takeaways are these:  (1) no hearing is required on a motion to tax costs (different with respect to a pretrial attachment or summary judgment motion); (2) defendant bears the burden of showing a costs item was unreasonable after plaintiff provided a verified costs memorandum which is prima facie evidence on the issue; and (3) nothing showed that a governmental entity was limited to a 15 cent per page charge for printing/copying appellate briefs. 

Costs, Prevailing Party: Where Neither A Plaintiff Nor A Cross-Complainant Obtains Any Relief, Defendant Is The Prevailing Party For Costs, Absent A Costs Waiver

May Sound Quirky, But It Is The Law!

            In Bernstein v. Sebring, Case No. C088375 (3d Dist. Sept. 21, 2021) (unpublished), plaintiff/cross-defendant and defendant/cross-complainant partially settled some claims (where costs were waived) but proceeded to trial on some remaining claims.  The trial judge ultimately dismissed plaintiff’s complaint, and defendant voluntarily dismissed his remaining cross-claim.  The trial judge decided plaintiff, as a cross-defendant, was the prevailing party entitled to routine costs.  The Third District reversed.  Because neither party obtained any relief, the defendant was the prevailing party, with plaintiff as a cross-defendant not counting in the prevailing party analysis.  (McLarand, Vasequez & Partners, Inc. v. Downey Savings & Loan Assn., 231 Cal.App.3d 1450, 1454-1455 (1991).)  So, in a reversal of fortune, defendant was the prevailing party entitled to costs.  (Building Maintenance Service Co. v. AIL Systems, Inc., 55 Cal.App.4^th 1014, 1025 (1997).)