Judge Audra Mori, Case 19STCV32822 2023-01-10 Tentative Ruling

Plaintiffs Andrea Eva Magyar (“Magyar”) and Sandor Vlaszof (“Vlaszof”) (collectively, “Plaintiffs”) filed this action against Defendants Kaiser Permanente Medical Center (“Kaiser”) and Modern Parking, Inc. (“Modern”) (collectively, “Defendants”) for negligence and premises liability. Plaintiffs allege that on September 21, 2017, Magyar parked at the rooftop level of Kaiser’s parking structure, which was in the possession and control of Modern, and that as Magyar proceeded to take the stairs down, she slipped and fell down the wet stairs. The complaint includes a claim for loss of consortium by Vlaszof.

On August 24, 2021, the Court heard Kaiser’s motion for summary judgment and Modern’s joinder to motion for summary judgment and took the matter under submission. Thereafter, on August 25, 2021, the Court granted the motion for summary judgment and the joinder to the motion. (Min. Order, Aug. 25, 2021.)

Judgment was entered in favor of Kaiser on September 15, 2021, and Kaiser filed and served a Notice of Entry of Judgment on September 16, 2021. On October 1, 2021, Kaiser filed its Memorandum of Costs seeking $9,036.96 total in costs, which includes $1,447.20 for filing and motion fees, $150 for jury fees, $2,816.51 for deposition costs, $4,033.25 for witness fees, and $590.00 for court reporter fees.

On October 18, 2021, Plaintiffs filed the instant motion to strike, or in the alternative, to tax costs. Kaiser opposes the motion. As of January 5, 2023, no reply has been filed.

Plaintiffs contend the cost items in Kaiser’s memorandum are inappropriate and objectionable. Plaintiffs argue the motion and filing fees requested are inflated and should be reduced. Further, Plaintiffs contend that Kaiser is not entitled to any witness fees in this matter, as Plaintiffs contend the cost shifting provision of CCP § 998 does not apply in this case, and that Kaiser fails to establish which of the subject fees were incurred after Kaiser’s CCP § 998 offer to Plaintiffs. Additionally, Plaintiffs aver that Kaiser’s CCP § 998 offer was invalid. Further, Plaintiffs assert that the court reporter fees requested by Kaiser are improper, that an award of costs should be stayed pending Plaintiffs’ appeal of the underlying summary judgment.

Kaiser, in opposition, argues it is entitled to costs as a prevailing party, and that its requested fees are reasonable and allowable. Kaiser further contends that its expert costs are recoverable under CCP § 998(c)(1) because its § 998 offer was certain and made in good faith. Kaiser claims that all of its expert fees are post-offer fees, and Kaiser contends Plaintiffs’ motion is untimely because it was never served on Kaiser’s counsel.

On September 16, 2021, Plaintiffs filed a Notice of Appeal pertaining to the order granting Kaiser’s motion for summary judgment. Plaintiffs seemingly contend an award of costs should be stayed pending their appeal of the ruling granting the summary judgment motion. However, upon filing of an appeal, this Court retains jurisdiction to rule on matters collateral to the judgment. (CCP § 916(a).) A motion to tax costs is a collateral matter. (Hennessy v. Superior Court (1924) 194 Cal. 368, 372; Bankes v. Lucas (1992) 9 Cal.App.4th 365, 369.) Accordingly, the Notice of Appeal does not divest the Court of jurisdiction to decide the motion to strike costs.

Kaiser filed its memorandum of costs on October 1, 2021. “Any notice of motion to strike or to tax costs must be served and filed 15 days after service of the cost memorandum… If the cost memorandum was served electronically, the period is extended as provided in Code of Civil Procedure section 1010.6(a)(4).” (Cal. Rules of Court, Rule 3.1700(b)(1).) Fifteen days after October 1, 2021, was Saturday, October 16, 2021, with the next court day being Monday, October 18, 2021. Plaintiffs, thus, timely filed and served their motion to tax costs on October 18, 2021. To the extent that Kaiser’s counsel states that the motion was not received, Kaiser was able to address Plaintiffs’ motion on the merits and does not otherwise identify any prejudice. Therefore, the Court will consider the motion.

In general, the “prevailing party” is entitled as a matter of right to recover costs for suit in any action or proceeding. (CCP, §1032(b); Santisas v. Goodin (1998) 17 Cal.4th 599, 606; Scott Co. Of Calif. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108.) Assuming the “prevailing party” requirements are met, the trial court has no discretion to order each party to bear his or her own costs of suit. (Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198; Nelson v. Anderson (1999) 72 Cal.App.4th 111, 129.)

Allowable costs under CCP Section 1033.5 must be reasonably necessary to the conduct of the litigation, rather than merely convenient or beneficial to its preparation, and must be reasonable in amount. An item not specifically allowable under Section 1033.5(a) nor prohibited under subdivision (b) may nevertheless be recoverable in the discretion of the court if they meet the above requirements (i.e., reasonably necessary and reasonable in amount). If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. (Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-774.) On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs. (Ibid.) Whether a cost item was reasonably necessary to the litigation presents a question of fact for the trial court and its decision is reviewed for abuse of discretion. (Ibid.) However, because the right to costs is governed strictly by statute, a court has no discretion to award costs not statutorily authorized. (Id.) Discretion is abused only when, in its exercise, the court “exceeds the bounds of reason, all of the circumstances being considered.” (Ibid.)

Furthermore, whether or not an item is “reasonably necessary” is not the same as “merely convenient of beneficial to its preparation.” (Ladas, supra, 19 Cal.App.4th at 774.) Once proper objections are asserted, the burden of proof rests with the party seeking to recover its costs. (Ibid.) When items are properly challenged by a motion to tax costs and do not appear on their face to be proper and necessary, or if necessity is doubtful, the burden of establishing necessity is on the party claiming those items of costs. (Ibid.) “[T]he mere filing of a motion to tax costs may be a ‘proper objection’ to an item, the necessity of which appears doubtful, or which does not appear to be proper on its face. [Citation.] However, ‘[i]f the items appear to be proper charges, the verified memorandum is prima facie evidence that the costs, expenses and services therein listed were necessarily incurred by the defendant [citations], and the burden of showing that an item is not properly chargeable or is unreasonable is upon the [objecting party].’ [Citations.]” (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131.)

Kaiser’s Memorandum of Costs (Summary) lists the total for Kaiser’s filing and motion fees as $1,447.20. The Memorandum of Costs (Worksheet) attached thereto lists the total for this item as $1,597.20. However, the fees listed in item one on the worksheet and Attachment 1g total $1,447.20. Thus, it appears the $1,597.20 was an error, and the correct amount sought for motion and filing fees is $1,447.20.

Plaintiffs contend that Kaiser’s fees here are inflated and should be reduced. In making this argument, Plaintiffs seemingly assert that “[t]he charges associated with electronic filings through Journal Technologies Court Portal” are less than the charges Kaiser paid to the electronic filing service provider Kaiser used to file its motions and pleadings. (Mot. at p. 2:19-20.) As Kaiser contends, represented litigants are required to electronically file documents with the Court through an approved electronic filing service provider. (Super. Ct. L.A. County, First Amended General Order Re Electronic Filing (2019) ¶ 2(b); Super. Ct. L.A. County 8th Amended Standing Order Re: PI Court Procedures ¶ 5.) Pursuant to CCP § 1033.5(a)(14) allowable costs include, “Fees for the electronic filing or service of documents through an electronic filing service provider if a court requires or orders electronic filing or service of documents.” Kaiser submits invoices for the motion and filing fees from First Legal, (Opp. Exh. F), which is an approved electronic service provider by the Court. (<https://www.lacourt.org/division/efiling/civil_providers.aspx>.) The fact that First Legal may charge different fees than Journal Technologies does not make the fees charged by First Legal patently unreasonable. Moreover, Kaiser’s invoices shows that the filing and motion fees claimed by Kaiser were actually incurred by it. (Opp. Exh. F.)

Plaintiffs further assert that the stipulation to continue trial, for which Kaiser seeks costs of $54, was not reasonably necessary to the litigation. Kaiser, however, asserts that the stipulation was required because there were no available hearing dates for Kaiser’s motion for summary judgment prior to the then trial date, so the continuance was necessary to allow Defendant to have its motion heard. Consequently, Kaiser establishes that the stipulation to continue trial was necessary to the conduct of this litigation.

Additionally, Plaintiffs contend that the claims fees of $26.25 for delivery of courtesy copies of Kaiser’s motion for summary judgment are not permissible motion and filing fees. However, pursuant to the Court’s Standing Order Re: PI Court Procedures, courtesy copies of motions for summary judgment are required and must be submitted directly to the Court. (Super. Ct. L.A. County 8th Amended Standing Order Re: PI Court Procedures ¶ 9C.) Thus, Kaiser is permitted to recover this cost. (See CCP § 1033.5(c)(4) [“Items not mentioned in this section and items assessed upon application may be allowed or denied in the court's discretion.”].)

Plaintiffs’ motion to tax costs is denied as to item 1 for filing and motion fees.

Defendant seeks to recover expert fees pursuant to Code of Civil Procedure § 998(c)(1).

If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant's costs from the time of the offer. In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.

CCP § 998(c) thus limits awards to postoffer expert witness fees. (Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (2018) 19 Cal.App.5th 525, 551-52 n. 16.)

Reasonableness is generally determined by applying two tests: (1) whether the offer represents a reasonable prediction of the amount of money, if any, defendant would have to pay plaintiff following a trial, discounted by an appropriate factor, premised upon information that was known or reasonably should have been known to the defendant; and (2) whether defendant's information was known or reasonably should have been known to plaintiff. (Whatley-Miller v. Cooper (2013) 212 Cal.App.4th 1103, 1112-1113.)

“Section 998 is designed to encourage the settlement of lawsuits before trial. [Citation.] ‘Its effect is to punish the plaintiff who fails to accept a reasonable offer from a defendant.’ [Citation.] However, ‘ “a good faith requirement” ’ is read into section 998, requiring that ‘ “the settlement offer be ‘realistically reasonable under the circumstances of the particular case’ ” ’ and that there be ‘ “ ‘some reasonable prospect of acceptance. [Citation.]’ ” ’ [Citation.] ‘ “[A] party having no expectation that his offer will be accepted ‘will not be allowed to benefit from a no-risk offer made for the sole purpose of later recovering large expert witness fees.’ ” ’ [Citation.]”

“ ‘ “The reasonableness of a defendant's section 998 settlement offer is evaluated in light of ‘what the offeree knows or does not know at the time the offer is made....’ ” ’ [Citation.] ‘Where the defendant obtains a judgment more favorable than its offer, “ ‘the judgment constitutes prima facie evidence showing the offer was reasonable....’ ” [Citation.]’ [Citation.] ‘ “Whether a section 998 offer was reasonable and made in good faith is left to ‘the sound discretion of the trial court.’ ” ’ [Citation.] ‘ “In reviewing an award of costs and fees under Code of Civil Procedure section 998, the appellate court will examine the circumstances of the case to determine if the trial court abused its discretion in evaluating the reasonableness of the offer or its refusal.” [Citation.] “ ‘[“]The burden is on the party complaining to establish an abuse of discretion, and unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power.” [Citations.]’ ” [Citations.]’ ” (Najah, supra, 230 Cal.App.4th at pp. 143–144, 178 Cal.Rptr.3d 400; Bates v. Presbyterian Intercommunity Hospital, Inc. (2012) 204 Cal.App.4th 210, 220, 138 Cal.Rptr.3d 680 (Bates ).)

(Melendrez v. Ameron International Corporation (2015) 240 Cal. App. 4th 632, 647.)

Accordingly, the fact a plaintiff did not obtain a more favorable judgment raises a presumption that a CCP § 998 offer to compromise made by a defendant was reasonable. (Arno v. Helinet Corp. (2005) 130 Cal.App.4th 1019, 1026-27.) The plaintiff, thus, has the burden of establishing that the offer to compromise was not reasonable and not made in good faith. (Id. at 1025-26; People ex rel. Lockyer v. Fremont General Corp. (2001) 89 Cal.App.4th 1260, 1271.)

Normally, a token or nominal offer will not satisfy this good faith requirement; the offer must carry with it some reasonable prospect of acceptance. (Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal. App. 3d 692, 698.) If an offer is made with no reasonable expectation that the offer will be accepted, then the party making the offer will not be allowed to benefit from a ‘no-risk’ offer made for the sole purpose of later recovering large expert witness fees and costs. (Pineda v. Los Angeles Turf Club, Inc. (1980) 112 Cal. App. 3d 53, 63.)

Here, Kaiser seeks expert witness fees of $4,033.25. On August 7, 2020, Kaiser served each Plaintiff Magyar and Vlaszof with an offer to compromise under CCP § 998. (Opp. Exh. B.) Each compromise offered a waiver of Kaiser’s right to recover costs and to bring an action for malicious prosecution or abuse of process arising from the litigation in exchange for each Plaintiff’s dismissal of Defendant with prejudice. (Id.) Plaintiffs did not accept either offer to compromise.

To the extent that Plaintiffs argue that CCP § 998 is inapplicable because there was no trial or arbitration, Plaintiffs fail to cite any authority suggesting that Kaiser cannot recover costs as a matter of law under CCP § 998(c) unless there was a trial or arbitration. This contention is rejected.

Nonetheless, Plaintiffs contend the CCP § 998 offers were not valid because the offers were not made in good faith. Plaintiffs assert that Kaiser served the offers after Kaiser filed a petition to compel arbitration in this matter on June 22, 2020, and that at the time the offers were served, Plaintiffs could not determine the reasonableness of Kaiser’s offer because Kaiser had not disclosed the anticipated testimony of Kaiser’s expert, Ned Wolfe (“Wolfe”). Plaintiffs contend that when the offers were made, Kaiser had not challenged the merits of Plaintiffs’ claims, only that the Court jurisidiction to hear this action.

In opposition, Kaiser argues that by the time that it served the offers, Wolfe had already completed an initial evaluation of the property, and Kaiser concluded that it had a very significant likelihood of prevailing at trial. Further, Kaiser asserts that Plaintiffs knew that this case would require the retention of multiple experts.

However, although Kaiser asserts that its expert Wolfe completed an initial evaluation of the property on July 8, 2020, Wolfe asserts that he returned to the property on January 28, 2021, to conduct further testing on different steps at the property. (Opp. Exh. E at ¶¶ 8-9, 11-15.) Moreover, regardless of whether Wolfe completed an initial evaluation prior to Kaiser serving its offers on Plaintiffs, there is no showing that Wolfe’s findings were known or reasonably should have been known to Plaintiffs at the time the offers were made, and the reasonableness of a defendant's section 998 settlement offer is evaluated in light of what the offeree, Plaintiffs, knew or did not know at the time the offer was made. As Plaintiffs assert, at the time that Kaiser made the offers to Plaintiffs, Kaiser had a petition to compel arbitration set for hearing on August 19, 2020.[1] The petition to compel arbitration did not concern the merits of Plaintiffs’ claims against Kaiser. There is no evidence showing that Plaintiffs were aware of Wolfe’s anticipated testimony or findings until Kaiser filed and served its motion for summary judgment with Wolfe’s declaration attached thereto on June 8, 2021, ten months after Kaiser made the CCP § 998 offers to Plaintiffs. (See Menges v. Department of Transp. (2020) 59 Cal.App.5th 13, 26-27 [defendant provided letter to plaintiff detailing why it did not believe it had liability.].)

Furthermore, given Magyar indicated she had estimated future medical costs of $145,000.00, and that she required plastic and reconstructive surgery as a result of the incident, (Opp. Exh. L), an offer for a dismissal with prejudice in exchange for a waiver of costs and right to bring a malicious prosecution action with no further explanation was not reasonable at that time in light of Kaiser’s potential exposure. (See Pineda v. Los Angeles Turf Club, Inc. (1980) 112 Cal.App.3d 53, 63 [Although liability was tenuous, defendant's exposure was so large that it was not reasonable to assume plaintiffs would accept a $2,500 offer.].) As stated above, Kaiser’s motion for summary judgment was not filed until approximately ten months after Kaiser served their offers on Plaintiffs. The offers carried no real prospect of acceptance at the time they were made. “[F]or a section 998 offer to be reasonable, the defendant must reasonably believe that the plaintiff might accept his offer, and the plaintiff must have access to the facts that influenced the defendant's determination that the offer was reasonable.” (Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1485.)

Based on the totality of circumstances, Defendants’ CCP § 998 offer was not reasonable. Plaintiffs’ motion to tax costs is granted as to item 8 for expert witness fees in the amount of $4,033.25.

CCP § 1033.5(a)(11) provides that a party is permitted to recover “Court reporter fees as established by statute.”

Here, Kaiser seeks $590 for court reporter fees. Plaintiffs assert that the entirety of this item should be stricken because the Court did not order any proceedings or hearings to be recorded by a court reporter. Plaintiffs further assert that under CCP § 1033.5(b)(5), the court reporter fees are not recoverable as costs. CCP § 1033.5(b) does not permit charges for “transcripts of court proceedings not ordered by the court” as costs. However, court reporter fee “charges are not for transcripts. They are for court reporter fees, an entirely different expense. The parties have to pay the court reporter regardless of whether anyone orders transcripts.” (Chaaban v. Wet Seal, Inc. (2012) 203 Cal.App.4th 49, 58.)

Government Code § 68086(c) provides that the “costs for the service of the official court reporter shall be recoverable as taxable costs by the prevailing party as otherwise provided by law.” (See also Gov. Code § 68086(d)(2) [“That if an official court reporter is not available, a party may arrange for, at the party's expense, the presence of a certified shorthand reporter to serve as an official pro tempore reporter. At the arranging party's request, the court shall appoint the certified shorthand reporter to be present in the courtroom and serve as the official reporter pro tempore unless there is good cause shown for the court to refuse that appointment. The fees and charges of the certified shorthand reporter shall be recoverable as taxable costs by the prevailing party as otherwise provided by law.”].)

Kaiser asserts that the fees were incurred in connection with a court reporter at Kaiser’s motion for summary judgment hearing. Further, Kaiser submits an invoice substantiating the cost. (Opp. Exh. M.) Because substantive issues critical to the conduct of this litigation were to be raised at the summary judgment hearing, Kaiser is permitted to recover the court reporter fees.

Based on the foregoing, Plaintiffs’ motion to tax costs is granted in part in the total amount of $4,033.25 pertaining to the expert witness fees.

Hon. Audra Mori

Judge of the Superior Court

[1] After taking the matter under submission, the Court issued an order denying the petition to compel arbitration on September 4, 2020.