Judge: Curtis A. Kin, Case: BC506921, Date: 2022-10-20 Tentative Ruling
Case Number: BC506921 Hearing Date: October 20, 2022 Dept: 72
MOTIONS TO TAX COSTS (2)
Date: 10/20/22
(9:30 AM)
Case: William E. Rice et al. v.
Gary P. Downs et al. (BC506921)
TENTATIVE
RULING:
Plaintiff William E. Rice’s Motion to Tax Costs Claimed by
Defendant Nixon Peabody LLP is GRANTED IN PART.
Plaintiff William E. Rice’s Motion to Tax Costs Claimed by
Defendant Gary P. Downs is GRANTED IN PART.
I.
PLAINTIFF WILLIAM E. RICE’S MOTION TO TAX COSTS
CLAIMED BY DEFENDANT NIXON PEABODY LLP
Plaintiff William E. Rice moves to tax $24,892 of the costs
claimed by defendant Nixon Peabody LLP.
Nixon Peabody is entitled to claim costs as “a defendant as
against those plaintiffs who do not recover any relief against that defendant.”
(CCP §§ 1032(a)(4), (b).)
“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 were not
reasonable or necessary. 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.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th
761, 774.)
In Nixon Peabody’s memorandum of costs filed on November 1,
2022, Nixon Peabody claims $24,892 for “court reporter fees as established by
statute.” (See CCP § 1033.5(a)(11).) In the memorandum of costs
worksheet, Nixon Peabody lists the names of the court reporters and the fees
paid to each court reporter, totaling $24,892.
In Opposition, Nixon Peabody provides marked invoices for court reporter
expenses, totaling $24,571. (See
Meyers Decl. ¶ 3 & Ex. A.)
Rice argues that Nixon Peabody does not provide any
information regarding whether the fees are for transcripts, which may be
disallowed under CCP § 1033.5(b)(5). On the face of the memorandum of costs,
the charges are for fees, which are allowed under CCP § 1033.5(a)(11). However, among the invoices provided by Nixon
Peabody is a $256 charge for “1 CERTIFIED COPY OF TRANSCRIPT OF: FSC
hearing.” (See Meyers Decl.
¶ 3 & Ex. A [Invoice No. 19008, dated 2/9/21].) Rice does not provide any reason to find that
the fees are for transcripts.
Instead, Rice argues that Nixon Peabody did not indicate why
the court reporter fee was needed, when they occurred, and for what reason they
were incurred. Rice also argues that Nixon Peabody did not provide sufficient
information for Rice to determine whether the fees were incurred for the legal
malpractice case in BC506921, in which Nixon Peabody prevailed, or the
dissolution case in BC619678, which has not been resolved.
The burden is on Rice as the party challenging costs to show
that the court reporter fees were not reasonable or necessary. Rice could have
ascertained the nature of the proceeding to which the court reporter fees
correspond from the transcript of the proceeding and then made a showing that
the court reporter fees were not incurred for the legal malpractice case. Rice
instead relies on speculation that the court reporter fees may correspond to
the dissolution action. Such speculation is insufficient for Rice to meet his
initial burden on a motion to tax costs.
Accordingly, the Motion is GRANTED IN PART to tax costs of $577,
consisting of: (1) the $321 difference between the $24,892 claimed and the
$24,571 documented in the invoices provided; and (2) the $256 charge for a
transcript described above. Defendant Nixon
Peabody is thus entitled to costs of $69,658.81 claimed in its Memorandum of
Costs, filed March 30, 2022.
II.
PLAINTIFF WILLIAM E. RICE’S MOTION TO TAX COSTS
CLAIMED BY DEFENDANT GARY P. DOWNS
Plaintiff William E. Rice moves to tax $170,709.25 in expert
witness costs and $52,886.94 in travel costs claimed by defendant Gary P.
Downs.
Downs is entitled to claim costs as “a defendant as against
those plaintiffs who do not recover any relief against that defendant.” (CCP §§
1032(a)(4), (b).)
With respect to expert witness fees, Rice argues that none
of the expert witnesses for whom Downs claims fees were ordered by the Court.
Fees of experts not ordered by the Court are not allowable as costs, except
when expressly authorized by law. (CCP § 1033.5(b)(1).)
Downs does not contend that the expert witnesses were
ordered by the Court. Rather, Downs argues that Section 13.10 of the Amended
and Restated Operating Agreement for Highland Property Development LLC provides
a contractual basis for recovery of expert witness fees.
Section 13.10 states, in relevant part:
In the event that any dispute
between Company and the Members or among the Members should result in
litigation or arbitration, the prevailing party in such dispute shall be
entitled to recover from the other party all reasonable fees, costs, and expenses
of enforcing any right of the prevailing party, including without limitation,
reasonable attorneys’ fees and expenses, all of which shall be deemed to have
accrued upon the commencement of such action and shall be paid whether or not
such action is prosecuted to judgment.
(FAC Ex. 3; see also Correll Decl. ¶ 2 & Ex. 1)
Downs argues that Section 13.10 does not provide for any
limitation on recovery of costs.
However, “when a contract provision states only that a prevailing party
is entitled to “reasonable attorney's fees and costs,” or similar nonspecific
language, courts have held that such language must be interpreted in light of
the limits set forth in Code of Civil Procedure section 1033.5.” (Thrifty
Payless, Inc. v. Mariners Mile Gateway, LLC (2010) 185 Cal.App.4th 1050,
1065, citing Arntz Contracting Co. v. St. Paul Fire & Marine Ins. Co.
(1996) 47 Cal.App.4th 464, 491.) Only “where sophisticated parties knowingly and
intentionally negotiate a broader standard into their contract—and particularly
where . . .that standard specifically includes “witness and expert fees”—the
intent of the parties should be upheld by the court.” (Thrifty, 185
Cal.App.4th at 1066.)
Here, Section 13.10 does not expressly provide for the
recovery of expert witness fees. Accordingly, the expert witness fees for Edith
Mattai, George McLauglin, Jerome Falk, Jr., and Steve Bundy, who were not
ordered by the Court, should be disallowed in accordance with CCP §
1033.5(b)(1).
With respect to Thomas Alborg, Downs argues that fees for
Alborg were incurred after Rice rejected a CCP § 998 offer. (Watkins Decl. ¶¶
4, 6 & Ex. 2.) Downs contends that, because plaintiff failed to obtain a
judgment that was more favorable than the CCP § 998 offer, Downs may recover
the fees for Alborg. (CCP § 998(c)(1).) In this situation, the Court “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)(1).)
“[I]f the items [in a cost bill] are properly objected to,
they are put in issue and the burden of proof is on the party claiming them as
costs.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th
761, 774.) “Only if the costs have been put in issue via a motion to tax costs
must supporting documentation be submitted.” (Jones v. Dumrichob (1998)
63 Cal.App.4th 1258, 1267.)
Here, Rice raises the valid contention, which Downs does not
dispute, that none of the expert witnesses set forth in the memorandum of costs
was ordered by the Court. The burden thus shifts to Downs to demonstrate that
the fees for Alborg were “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)(1).) Downs presents no
documentation that the fees for Alborg were actually incurred. Downs also
presents no argument or evidence concerning the reasonableness and necessity of
the fees for Alborg. Accordingly, Downs fails to justify why he should be able
to recover expert fees for Alborg.
For the foregoing reasons, the expert fees shall be taxed in
their entirety.
With respect to travel costs, travel expenses to attend
deposition are allowable as costs. (CCP § 1033.5(a)(3)(C).) Accordingly,
the costs incurred on May 2, 2017 for the deposition of Nixon Peabody’s Person
Most Knowledgeable, totaling $1,829.24, are recoverable.
There is no indication in the memorandum of costs that the
other travel costs were for depositions. CCP § 1033.5(a)(3) does not “provide
for recovery of local travel expenses by attorneys and other firm employees
unrelated to attending depositions [citation] nor does it allow recovery for
‘meals eaten while attending local depositions.’ [Citation.]” (Gorman v.
Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 72.) However, travel
costs are not expressly disallowed under CCP § 1033.5(b). Accordingly, these
costs may be allowed or denied in the Court’s discretion, pursuant to CCP §
1033.5(c)(4).)
Rice argues that the travel costs were necessitated by
Downs’ retention of counsel based in San Francisco when the proceedings in this
action are based in Los Angeles. However, absent any reason to disqualify
counsel for Downs, Downs was entitled to retain the counsel of his choice. (See
Med-Trans Corp., Inc. v. City of California City (2007) 156 Cal.App.4th
655, 664.) Accordingly, transportation, parking, and lodging costs are
reasonable and necessary to counsel’s defense of Downs.
With respect to $4,582.61 claimed for meals, these costs are
not attributable to this litigation, as counsel would incur meal expenses
regardless of this litigation. For the foregoing reasons, the travel costs shall
be taxed in the amount of $4,582.61.
The motion is GRANTED IN PART. Defendant Gary P. Downs’
claim for $295,363.20 in costs is taxed in the amount of $175,291.86 ($170,709.25
expert fees + $4,582.61 travel costs).
Accordingly, defendant Downs is entitled to costs of $119,653.95 claimed
in its Memorandum of Costs, filed March 30, 2022.