CALIFORNIA ATTORNEY'S FEES

Appealability, Costs: Appeal Of Post-Judgment Order Striking Request For Costs Dismissed On Appeal Against Plaintiffs Who Did Obtain A Merits Reversal Of A Demurrer To A Brown Act Mandate Petition

Reason For The Dismissal Was Plaintiffs’ Failure To Adequate Raise Or Brief The Issue. 

            In New Livable California v. Assn of Bay Area Governments, Case No. A159235 (1^st Dist., Div. 3 Dec. 18, 2020 December 18, 2020, published on Jan. 6, 2021), plaintiffs lost a Brown Act writ of mandate petition on a demurrer, a ruling reversed on appeal.  The lower court, in a post-judgment motion, struck a request by plaintiffs for costs, which plaintiffs also appealed.  The appellate court dismissed the appeal based on the abandonment doctrine, because appellants failed to adequately raise or brief the issue.  This is a reminder to practitioners that California reviewing courts usually (in our experience) will not reach out to decide an issue which has been raised summarily without proper discussion of authority or without proper citation to record support cites. 

Costs, Private Attorney General, Reasonableness Of Fees: Petitioners, In Long-Standing San Francisco Bicycle Plan CEQA Challenges, Who Achieved Limited Success, Had Costs Properly Stricken And Recovered 50% Less Than Requested Once The Lodestar Was Reduc

Bottom Line In This Case, Limited Success Will Impact Cost and Fee Recovery, Even In Public Interest Cases.

            We have seen that costs and attorney’s fees in many public interest cases, including those under the private attorney general statute, can be quite large.  However, one should keep in mind that the cost and fee requests can be slashed or denied quite a bit if the plaintiffs/petitioners only obtain limited success.  Anderson v. City & County of San Francisco, Case Nos. A143974 et al. (1^st Dist., Div. 2 Dec. 30, 2020) (unpublished) is a case on point.

            There, petitioners—in a long-standing case generating a prior appeal with limited success—did successfully challenge San Francisco’s Bicycle Plan for CEQA review.  But the victory basically was Pyrrhic in nature.  So, the final strokes for petitioners happened to be what costs and fees they could recoup.

            The trial judge struck $1,813 in costs claimed against City and only granted petitioners $153,346 in attorney’s fees under CCP § 1021.5 out of a requested $500,000 lodestar (plus another 1.5 positive multiplier request).  All of those reductions stayed intact on appeal.

            With respect to costs, petitioners obtained no monetary relief such that the other relief was put in directly in a discretionary determination by the lower court.  The lower court denied costs based on limited success, a determination affirmed under the deferential abuse of discretion standard.  (East Bay Mun. Utility Dist. v. Dept. of Forestry & Fire Protection, 43 Cal.App.4^th 1113, 1131-1134 (1996).)

            That brought the appellate court to the fee award.  After the lodestar reductions for hourly rates, a 50% reduction for limited success by the trial judge—supported by numerous cases allowing for a deduction based on this factor—was affirmed as no abuse of discretion.

            Here are the decisions cited by the 1/2 DCA as supporting this conclusion.  (See e.g., Save Our Uniquely Rural Community Environment v. County of San Bernardino, 235 Cal.App.4th 1179, 1185 (2015) [request for $221,198; award of $19,176]; Bowman v. City of Berkeley, 131 Cal.App.4th 173, 176 (2005) [$96,592 attorney fees billed; $89,696 paid; $17,314 awarded]; San Diego Police Officers Assn. v. San Diego Police Department, 76 Cal.App.4th 19, 24 (1999); Californians for Responsible Toxics Management v. Kizer, 211 Cal.App.3d 961, 974–975 (1989) [65 percent reduction].)

            BLOG COMMENT—This likely will be our last post for 2020.  Happy New Year, readers!

Allocation, Costs: No Abuse Of Discretion Where Trial Court Refused To Tax Costs Among Multiple Defendants Who Settled Out Of The Case Before Trial

Costs Incurred By Plaintiffs In Relation To Other Defendants Were Directly Relevant To Case Against Appealing Defendant And Reasonably Necessary To The Litigation.

            In Booker v. Imerys Talc America, Case No. A153995 (1^st Dist., Div. 3 December 11, 2020) (unpublished), wife and heirs of decedent continued mesothelioma-related litigation against seven defendants after his death.  Most defendants settled with plaintiffs prior to the jury trial – with the remaining two defendants found liable for increasing decedent’s risk of mesothelioma.  When plaintiffs moved post-judgment for prevailing party costs in the amount of $319,549.54, one of the two defendants filed a motion to tax costs.  Specifically, defendant sought to reduce plaintiffs’ recovery of costs by $80,890.28 for costs related to other defendants.  The trial court partially granted in the amount of $44,948.58 for the costs of expert witness services incurred prior to plaintiffs’ § 998 offers, photocopying and enlarged exhibits, but declined to tax costs related to other defendants. 

            The 1/3 DCA affirmed – finding no abuse of discretion.  First, all cases cited by defendant, to support its contention that trial courts have discretionary authority in all cases to reduce costs against a defendant by amounts apportionable to other defendants no longer in the case, were distinguishable in that they involved cases where some of the parties prevailed against the party seeking costs. Additionally, none of the cases involved a dispute concerning the trial court’s discretion to allocate costs among multiple defendants to reduce plaintiffs’ recovery of costs.  Second, the costs that the trial court refused to tax were directly relevant to plaintiff’s case against defendant and reasonably necessary to the litigation.  Plaintiffs incurred filing, motion, service of process and deposition costs – related to other defendants – in order to determine the amount of asbestos that caused decedent’s mesothelioma, determine the merit of defendant’s affirmative defenses that other defendants were responsible for decedent’s mesothelioma, and ascertain defendant’s share of fault for liability and settlement purposes.

Arbitration, Civil Rights, Costs: 4/3 DCA Reverses Fees Awarded To FEHA Defendants For Motion To Compel Arbitration Efforts And Costs Awarded For Prevailing In The Arbitration

Plaintiffs Achieved Partial Success In Their Opposition To Defendants’ Motion To Compel Arbitration, And Fees/Costs Are Not Awardable To Prevailing FEHA Defendant, Pursuant To Gov. Code § 12965(b), Unless The Court Finds Action Was Frivolous, Unreasonable, Or Groundless When Brought, Or The Plaintiff Continued To Litigate After It Became Clearly So.

            In Humphrey v. Harvest Holdings, Case No. G056614 (4^th Dist., Div. 3 December 11, 2020) (unpublished), plaintiffs opposed FEHA defendants’ motion to compel arbitration with limited success – with the trial court determining a confidentiality provision in the arbitration agreement was unconscionable, but severable, and compelling arbitration.  Defendants defeated plaintiffs’ FEHA claims in arbitration, and the arbitrator awarded defendants $3,181.35 in costs – consisting of copying charges and deposition transcript fees – as the prevailing party.  Additionally, the arbitrator awarded defendants $10,000 in attorney fees for their motion to compel arbitration efforts.  The trial court entered judgment confirming the arbitration award and denied plaintiffs’ cross-petition to vacate the arbitration award.  As to the fees/costs issue, the trial court concluded that analysis under FEHA was not necessary because prevailing defendants did not seek fees incurred for the arbitration proceedings – only for the motion to compel arbitration. 

            In a 3-0 opinion authored by Justice Goethals, the 4/3 DCA reversed in their entirety the fees and costs awarded to prevailing defendants.

            Plaintiffs’ opposition to defendants’ motion to compel arbitration achieved some success – demonstrating plaintiffs’ opposition was not frivolous, unreasonable, or groundless (the minimum threshold for FEHA defendants to recover fees under Chavez v. City of Los Angeles, 47 Cal.4th 970, 985 (2010)), so fees incurred by defendants to compel arbitration were not recoverable.  Likewise, the California Supreme Court, under Williams v. Chino Valley Independent Fire Dist., 61 Cal.4th 97, 107-109, 115 (2015) has extended that rule to apply to costs (see also Gov. Code § 12965(b).).   

            Finally, although former employer’s contract with plaintiffs contained an arbitration provision with a separate attorney fees and costs clause for the successful party on a motion to compel arbitration, the fee-shifting nature of the clause risked a chilling effect on employees’ access to court on FEHA claims.

Costs: $11,288 Costs Award To County For Outside Counsel/Paralegal’s Administrative Record Work Was No Abuse Of Discretion

If Reasonable And Necessary, CCP § 1094.6(c) Allows For Recovery Of These Costs.

            In McMillan v. County of Siskiyou, Case No. C087960 (3d Dist. Dec. 9, 2020) (unpublished), plaintiffs wanted a hearing before the County’s Planning Commission to determine whether they had vested rights to a surface mine on a 1,741-acre property.  They got their wish, but lost their claim before the Commission, then the Board of Supervisors, and then the superior court in a mandamus proceeding challenge.  The lower court then awarded County $14,655.17 in costs, mostly for preparation of the administrative record in the mandamus proceedings.  On appeal, plaintiffs challenged $11,288 of A/R preparation work by County’s outside counsel and paralegals.

            The Third District affirmed.  Code of Civil Procedure section 1094.6(c) allows for costs recovery of mandamus proceeding A/R work if it is reasonable and necessary.  Plaintiffs argued that only staff agency work, not that of County’s outside counsel or paralegals, was solely compensable, but that argument flew in the face of contrary reasoning from The Otay Ranch, L.P. v. County of San Diego, 230 Cal.App.4^th 60, 70-71 (2014).  With respect to the reasonableness and necessity of the costs under Code of Civil Procedure section 1033.5(c)(2), (3), the record revealed that the work of outside counsel and paralegal satisfied the requirements such that there was no abuse of discretion by the superior court in awarding those costs.

Costs, SLAPP: 5/5 DCA Affirms Trial Court’s Award Of Attorney’s Fees Against Unsuccessful SLAPPing Defendants And Granting Of Dismissed Plaintiffs’ Motion To Strike/Tax Defendants’ Request For Costs

Defendants’ Anti-SLAPP Motion Was Not Based On Protected Activities And Determined Frivolous, And Order On Costs Was Not Appealable Under The One Final Judgment Rule.

            In Lang v. Petaluma Hills Farm, Case No. A156614 (5^th Dist., Div. 5 November 20, 2020) (unpublished), several neighbors sued other neighbors – claiming defendant neighbors were conducting commercial cannabis-related activities without state license and county permit. 

            Defendant neighbors unsuccessfully SLAPPed back – with the trial court determining their anti-SLAPP motion to be frivolous and awarding attorney fees to plaintiffs.  The trial court also issued a preliminary injunction prohibiting defendant neighbors from conducting unlawful cannabis cultivation and cannabis tourism.  Finally, when defendant neighbors sought costs against three plaintiffs who had voluntarily dismissed their claims, the trial court granted dismissed plaintiffs’ motion to strike/tax costs without prejudice to any party bringing a new claim for costs at the conclusion of the litigation. 

            Defendant neighbors appealed the denial of their anti-SLAPP motion and subsequent award of attorney’s fees to plaintiffs, but the 5/5 DCA affirmed.  Plaintiffs’ complaint challenged defendant neighbors’ cultivation of cannabis without a permit, which was not a protected activity, and plaintiffs’ incidental references to defendant neighbors’ efforts to obtain a permit and putting up posters about their cannabis development plans did not provide a basis for striking the claim under Code Civ. Proc., section 425.16 – nor did plaintiffs’ subjective intent in filing the complaint, with intent being irrelevant under section 425.16.  Additionally, defendant neighbors’ argument that their motion to strike should have been granted because they were not cultivating commercial cannabis was to no avail.  The threshold determination was whether plaintiffs’ claims arose out of defendants’ protected activity – with the question being about what is pled, not what is proven.

            Finally, the appellate panel dismissed defendant neighbors’ appeal of the trial court’s granting of dismissed plaintiffs’ motion to strike/tax – concluding the order was not appealable under the “one final judgment” rule as it failed to dispose of all claims between the litigants as dismissed plaintiffs’ motion to strike/tax costs was granted “without prejudice to any party brining a new claim for costs at the end of litigation.”

Costs, Discovery: D.C. Circuit Decides That Only Electronic File Conversion Costs, Not Hosting, Organizing, Or Bates Stamping Expenses, Can Be Recovered By Federal Court Winners

Interpretation Of The Scope of 28 U.S.C. § 1920 Was At Issue.

            28 U.S.C. § 1920 provides:  “A judge or clerk of any court of the United States may tax as costs the following:  (1) Fees of the clerk and marshal; (2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title; (6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.” (In federal court, taxing costs means the costs can be granted—just the opposite of the terminology familiar to California state judges and practitioners.)

            Of course, electronic discovery (e-discovery) has compounded greatly the costs and expenses of litigating in federal courts, with the question naturally arising as to what e-discovery expenses can be “taxed” (recovered as a matter of right), subject to being reasonable.

            U.S. ex rel. Barko v. Halliburton, 954 F.3d 307 (D.C. Cir. 2020) did consider that very question, coming to a conclusion that some commentators have indicated it out of line with modern e-discovery practice/the expense of e-discovery—a conclusion, however, that was governed by the fact that section 1920 has not been amended since 2008 such that judicial interpretation is guided by a more outdated interpretation of document review expenses (such as when associates were relegated to review and the recoverable costs were limited to photocopying expenses untethered to the expensive pre-copying activities).

            In Barko, a district judge sustained a clerk’s taxing (granting) of a $100,000 costs bill to a prevailing employer in a False Claims Act case for the following e-discovery items:  (1) initial conversion (converting files from their native formats into a format compatible with an e-discovery hosting platform); (2) subscribing to a hosting platform facilitating the various e-discovery steps; (3) processing documents (organizing, keyword-searching, and Bates stamping documents); (4) conversion for production (converting documents into shareable formats for production to opposing counsel and transferring those files onto portable media such as USB drives); and (5) production processing (drafting production cover letters and shipping discovery materials to opposing counsel).

            The D.C. Circuit reversed, determining that only category (4) costs were recoverable, which only came to $342.41, which respect to “costs of making copies of any materials where the copies are necessarily obtained for use in the case” under § 1920(4).  “Put another way, section 1920(4) authorizes taxation of costs for the digital equivalent of a law-firm associate photocopying documents to be produced to opposing counsel,” not the previous, more expense-laden “doc review” tasks performed by the associate. 

            Here is our favorite ending observation from Barko:  “Too often ‘cost disputes embody all the acrimony of hotly contested litigation, sometimes with great nitpicking and pettifogging, refusing to “go gently into that good night” of the closed docket.’  Matter of Penn Central Transportation Co., 630 F.2d 183, 191 (3d Cir. 1980).”

Costs: $27,000 In Third Party Litigation Company Filing Expenses, Deposition Transcripts/Videos, Trial Binders, And Deposition Travel Expenses Were Properly Awarded

Losing Plaintiff Could Not Overcome Abuse Of Discretion Standard.

            Code of Civil Procedure sections 1032, 1033, and 1033.5 are the main statutory provisions which govern the award of “routine” costs to a prevailing party in California state court litigation.  This is the way it works for the prevailing party:  there are specific categories of costs which are recoverable and not recoverable; if nothing is listed or banned, then the particular costs item, if reasonable in nature, is a discretionary one for the trial court to grant or deny depending on whether it was “reasonably necessary to the conduct of the litigation” rather than merely convenient or beneficial to litigation preparation.  (Code Civ. Proc., § 1033.5(c)(2)-(4).)  A properly filled-out costs memorandum is prima facie evidence that the expenses were necessarily incurred, with the party moving to tax costs having the burden to show the costs were unreasonable or unnecessary.  A trial judge’s decision on awarding costs is generally reviewed for abuse of discretion.

            The Fifth District in Klein v. Munger, Case No. F077605 (5^th Dist. Nov. 10, 2020) (unpublished) applied these principles to a situation where a plaintiff lost an arbitration and unsuccessfully attempted to vacate the arbitration award, resulting in a postjudgment award of routine costs of about $27,000 to prevailing defendants.  Plaintiff, on appeal, challenged certain items of awarded costs, but could not surmount the deferential abuse of discretion standard such that the costs order was affirmed.

            Using a third-party litigation company to assist in filing documents was a discretionary cost request properly awarded.  Deposition transcripts/videos are a listed costs item, useful given the arbitrator indicated that the depositions and videotaped excerpts were important in adjudicating the matter.  Trial binder costs (with the binders containing arbitration exhibits) were recoverable in light of them being used in the arbitration.  (Chaban v. Wet Seal, Inc., 203 Cal.App.4^th 49, 59 (2012).). Finally, deposition travel expenses are allowable and were reasonable here given some distance that the deposing attorneys had to travel.

Employment, Multipliers, Costs: Employee Obtaining Partial Success In FEHA Case Properly Awarded $695,000 In Attorney’s Fees, No Expert Witness Fees, And Some Routine Costs

Plaintiff’s $2 Million Request, Inclusive Of A 2.0 Positive Multiplier, Did Not Gain Traction.

            Partial success and high hourly rates can often lead to reductions and rejection of a multiplier in contingency-driven cases under FEHA.  That is what basically occurred in Do v. Raytheon Co., Case No. B293950 (2d Dist., Div. 4 Oct 27, 2020) (unpublished).

            A FEHA plaintiff obtained a total $1.75 million compensatory/punitive damages award against his employer, prevailing on two out of eight claims.  Plaintiff then moved to recover close to $2 million in attorney’s fees under a FEHA shifting statute, $55,322.29 in expert witness fees, and other routine costs.  At the end of the day, the lower court awarded $695,000 in attorney’s fees, no expert witnesses fees, and some routine costs (taxing some messenger, mock trial, and jury consultant expenses).

            All of these determinations were affirmed on appeal.  No multiplier was justified, despite this being a contingency matter, because high hourly rates were being requested and plaintiff did not prevail on a significant number of claims.  Decreasing the fee claim for partial success was totally acceptable under California law, with the reduction off of the lodestar amount (around 20%) being okay.  Expert witness fees were properly denied because the experts did not testify at trial, such that they were not presumptively necessary or reasonable.  Finally, CCP § 1033.5 reasonableness requirements do govern FEHA costs requests, with the lower court’s discount of certain routine requests—messenger, mock trial, and jury consultant expenses—not being an abuse of discretion. 

Costs: $9,816.78 In Costs For 22 Medical Subpoenas Was Reasonably Granted To The Defendant, Given The Position It Took Through Affirmative Defenses.

Premature Filing Of Costs Memorandum Was No Problem Given A Lack Of Prejudice.

            In Lowry v. Port San Luis Harbor Dist., Case Nos. B300072/B302209 (2d Dist., Div. 6 Oct. 22, 2020) (published), defendant was allowed a routine costs award of $9,816.78 for service of 22 medical subpoenas in a case where the defendant alleged various affirmative defenses such as preexisting conditions, superseding/intervening causes, and unfitness for misrepresenting pre-hiring medical facts.  The trial court allowed the requested costs, a determination affirmed on appeal.  Unfortunately for plaintiff, this was an abuse of discretion standard, with nothing showing they were not necessary or unreasonable given the affirmative defenses staked by the defense.  Plaintiff argued that a prematurely filed costs memorandum, before judgment was entered, was erroneous, but the law in this area is that such a premature filing is only so if  prejudice resulted—a result rarely shown, and not in this particular case.  (Haley v. Casa Del Rey Homeowners Assn., 153 Cal.App.4^th 863, 880 (2007).)

Costs: $149,106.50 In Routine Costs (Expert Witness Fees) Were Affirmed In Favor Of The Defense In Accountant Malpractice Action

Plaintiff Did Not Meet His Burden In Showing The Expenses Were Unnecessary/Unreasonable.

            In Anton v. Barbich Hooper King Dill Hoffman Accountancy Corp., Case Nos. F073713/F074644 (5^th Dist. Oct. 20, 2020) (unpublished), plaintiff lost a malpractice case brought against accountant defendants (mainly for accounting expert testimony in a litigation involving division of fees/costs) on summary judgment based on a lack of causation.  (The summary judgment was affirmed on the merits, with the appellate court providing a nice discussion of causation in “settle and sue” malpractice cases.). The trial judge denied plaintiff’s motion to tax costs ($149,106.50 for eight expert witnesses) claimed by the defense.  The appellate court affirmed under the abuse of discretion/compelled findings standards, because there was no uncontradicted, dispositive testimony by plaintiff showing why the main expert’s testimony was not proper rebuttal testimony necessary and reasonable in this type of case. 

Costs, SLAPP, Substantiation Of Reasonableness Of Fees: SLAPP Fees Of $63,970 And Costs Of $1,680.13 Affirmed On Appeal

Vague Objections Not Entertained, But Failure To Award Positive Multiplier Was Sustained.

            In Koerber v. Project Veritas, Case No. B291770 (2d Dist., Div. 3 Sept. 29, 2020) (unpublished), the Court of Appeal affirmed a mandatory SLAPP award of $63,970 in fees and $1,680.13 in costs.  The defense requested $109,545 in fees, inclusive of a 1.5 multiplier, but the trial court did not award a multiplier and reduced the lodestar request for time spent on a demurrer.  Appellant did not provide any specific arguments as to why the fee substantiation was deficient (spreadsheets and supplemental briefing were provided) or why the fee request was inflated.  Filing/motion fees, reporter fees, and attorney service/courier expenses were all fair game for routine costs, with a component-by-component analysis provided in the affirming opinion.

Civil Rights, Costs: In Mixed FEHA/Non-FEHA Action, Costs Properly Assessed Against Nonprevailing Plaintiff

Although FEHA Case Was Not Frivolous, Costs Allowable On Non-FEHA Claims.

            Even though a losing FEHA plaintiff only gets tagged with routine costs if plaintiff’s case is frivolous, that does not mean that plaintiffs in all actions do not face exposure, which is the situation when non-FEHA claims are involved.

            Obi v. L.A. County Sheriff’s Office, Case No. B296553 et al. (2d Dist., Div. 2 Aug. 18, 2020) (unpublished) illustrates the point.  In that appeal, a plaintiff suffered an adverse summary judgment in a case with mixed FEHA and non-FEHA claims.  The trial court awarded the defense $13,191.95 in routine costs although finding that the FEHA claims were not frivolous in nature.  The appellate court affirmed the costs award because costs are recoverable with respect to non-FEHA claims, and nothing showed that the awarded costs were not incurred on all the mixed claims.  In its reply brief, plaintiff tried to challenge costs not contested in the motion to tax costs, but the 2/2 DCA said that was waived by not moving to tax them in the previous motion before the trial judge.

Costs, Section 998, Special Fee-Shifting Statutes: Plaintiff Gets Second Chance At Arbitration And Post-Arbitration Costs Where Trial Court Erroneously Interpreted That The Parties’ Insurance Agreement Precluded The Award Of Arbitration Costs

Insurance Policy Did Not Preclude Recovery Of Costs Under Sections 998 Or 1293.2 And Strictly Limited Arbitrator’s Authority To Decide Only Plaintiff’s Entitlement To Damages And The Amount Thereof.

            In Storm v. The Standard Fire Ins. Co., Case No. B299277 (2d Dist., Div. 4 July 24, 2020) (published), plaintiff and defendant insurance company arbitrated a dispute over an underinsured motorist claim she filed.  After receiving an arbitration award in excess of the unaccepted section 998 offer she made to defendant, plaintiff sought arbitration and post-arbitration costs of $39,960.02 from the trial court under Code Civ. Proc. §§ 998 and 1293.2.  Defendant argued that its insurance policy with plaintiff precluded the award of arbitration costs, and that plaintiff failed to first request costs from the arbitrator before requesting them from the trial court – with the trial court granting defendant’s motion to tax and striking plaintiff’s memorandum of costs in its entirety without considering whether the requested costs were reasonable or necessarily incurred.

            On appeal, plaintiff argued that the trial court’s conclusion that the parties’ insurance agreement precluded her recovery of arbitration costs under section 998 was erroneous.  The 2/4 DCA agreed.  Although the terms of the policy established that the parties agreed to pay their own arbitration expenses and their equal share of the arbitrator’s fee, the terms did not limit the statutory right to seek and recover those costs under section 998.  Likewise, the appellate panel found no provision in the insurance policy that precluded or limited the right to recover section 1293.2 post-arbitration costs incurred to confirm, vacate, or modify the arbitration award.  As to defendant’s contention that plaintiff could not recover costs because she failed to request them from the arbitrator, the 2/4 DCA found defendant’s reliance on Heimlich v. Shivji (2019) 7 Cal.5^th 350 misplaced.  Unlike Heimlich, where the parties had placed the issue of costs before the arbitrator, the policy provisions here strictly limited the arbitrator’s authority to decide only two issues – whether plaintiff was entitled to damages and the amount of those damages.  The arbitrator had no authority in this case to make a determination as to costs reimbursement.

            Trial court’s order reversed – with the matter remanded with instructions to consider whether plaintiff’s requested costs are recoverable and necessarily incurred pursuant to sections 998 and 1293.2.

Costs, Sanctions: Trial Court Properly Denied CCP § 128.7 Sanctions Even Though Opposition Evidence Was Not Overwhelming; However, Costs Had To Be Awarded To Attorney Obtaining Dismissal Of Ex-Client’s Malpractice Complaint

Prevailing Attorney Fell Within Mandatory Category Of A Routine Costs Grant.

            This next matter involved a contentious domestic, non-divorce temporary restraining order situation where an attorney sued for recovery of unpaid fees by one side (a male in a relationship with an ex-girlfriend) where there were malpractice allegations that the attorney had an affair with a former girlfriend of client/provided confidential information to the former girlfriend.  In the end, client’s malpractice action was dismissed on a demurrer, but the superior court clerk refused to enter a routine costs award based on the dismissal—after the trial judge refused to award CCP § 128.7 sanctions against client based on the salacious allegations in the ex-client’s case.

            The 4/1 DCA, in Kelly v. Rutman, Case No. D076022 (4^th Dist., Div. 1 July 21, 2020) (unpublished), affirmed the sanctions denial but reversed the refusal to award routine costs.

            Without going into all the specifics, the inferences from the attorney-former girlfriend relationship—although not overwhelming—did allow discretion to the trial judge to deny section 128.7 sanctions based on the overall circumstances.  Not the same result on the routine costs issue.  Here, attorney was a prevailing party when the malpractice action was dismissed—ex-client obtained no relief and a dismissal was entered in attorney’s favor (Code Civ. Proc., § 1032(a)(2)), a precise category allowing attorney recovery of routine costs.

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.