Judge: Elaine W. Mandel, Case: SC126782, Date: 2024-02-16 Tentative Ruling
Case Number: SC126782 Hearing Date: February 16, 2024 Dept: P
Tentative Ruling
Amir Rejaei et al.
v. Bryan Siegel et al., Case No. SC126782
Hearing Date
February 16, 2023
Siegel’s Motion
for Partial Judgment Notwithstanding the Verdict
Rejaei Plaintiffs’
Motion to Tax Costs
Bryan Siegel’s
Motion to Tax Costs
Defendant Siegel
moves for judgment notwithstanding the verdict as to Plaintiffs’ Sixth Cause of
Action for Fraud, arguing that the Rejaeis presented no evidence of recoverable
fraud damages at trial.
Additionally,
Siegel moves to tax plaintiffs Rejaeis’ memorandum of costs, while the Rejaeis
move to tax defendants Binder, Nationwide Consulting, Inc. and Plush
Properties’ memorandum of costs.
Siegel’s Motion
for Judgment Notwithstanding the Verdict
A
judgment notwithstanding the verdict can be sustained only when it can be said
as a matter of law that no other reasonable conclusion is legally deducible
from the evidence, and that any other holding would be so lacking in
evidentiary support that the reviewing court would be compelled to reverse it,
or the trial court would be compelled to set it aside as a matter of law.” Moore
v. City & County of San Francisco (1970) 5 Cal.App.3d 728, 733.
“Conflicts in the evidence are resolved against the moving defendant and in
favor of the plaintiff; all reasonable inferences to be drawn from the evidence
are drawn against the moving defendant and in favor of the plaintiff.” Fountain
Valley Chateau Blanc Homeowner’s Association v. Department of Veterans Affairs (1998)
67 Cal.App.4th 743, 750, italics omitted. When presented with a motion for
judgment notwithstanding the verdict, the trial court cannot weigh evidence or
judge the credibility of witnesses. Wright v. City of Los Angeles (1990)
219 Cal.App.3d 318, 343.
Siegel
argues the fraud verdict was improper because it was based on “benefit of the
bargain” damages. He asserts that in California, a defrauded party can only
recover “out-of-pocket” damages, unless the defendant was a fiduciary.
Siegel
cites Kenly v. Ukegawa, et al., (1993) 16 Cal.App.4th 49 for the
proposition that “in California, a defrauded party is ordinarily limited to
recovering his “out-of-pocket” loss[,]” and that absent special circumstances absent
here, “benefit-of-the-bargain” damages are not available in tort cases,
including claims for fraud.
Siegel
argues the evidence at trial showed the Rejaeis lent him $560,000 and received
payments from him totaling more than $650,000. Therefore, Siegel argues, the
Rejaeis suffered no out-of-pocket damages, i.e. money actually expended in
reliance on the false promise. He argues the jury’s award of $1,176,570 in
fraud damages – representing the principal of the loan plus unpaid interest
promised —are impermissible “benefit-of-the-bargain” damages, i.e., damages equivalent
to the amount plaintiffs would have received if the promise was fulfilled.
Siegel
argues that absent of out-of-pocket damages, the damages element of fraud
cannot be established, and the jury’s finding of liability on the fraud cause
of action (and the award for punitive damages stemming from the fraud verdict)
must be set aside.
Siegel’s interpretation
of the case law is inaccurate. The rule against benefit-of-the-bargain damages for
fraud applies only to cases involving the purchase, sale or exchange of
property. Kenly was one such case. Its holding is limited to the
property context. Kenly relied on Cal. Civ. Code §3343, a statute
explicitly limiting the damages recoverable in cases involving “fraud in
purchase, sale or exchange of property” to out-of-pocket damages.
Fraud in other
contexts is subject to no such limitation. Alliance Mortgage Co. v.
Rothwell, which Siegel cites, confirms this, stating, “in fraud cases
involving the ‘purchase, sale or exchange of property,’ the Legislature has
expressly provided that the ‘out-of-pocket’ rather than the ‘benefit-of-the-bargain’
measure of damages should apply.” Alliance, supra, (1995) 10 Cal.4th,
1226, 1240.
Later cases
affirmed that, outside the real property context, both benefit of the bargain
and out-of-pocket damages are available to successful fraud plaintiffs. E.g.,
Lazar v. Superior Court (1996) 12 Cal.4th 631, 646 (“Because of the extra
measure of blameworthiness inhering in fraud, and because there is no need for
predictability about the cost of contractual relationships in fraud cases,
fraud plaintiffs may recover “out-of-pocket” damages in addition to
benefit-of-the-bargain damages.”)
In reply, Siegel
argues Kenly “did not involve the purchase or sale of real estate, but
rather plaintiff’s purchase of a promissory note,” proving the rule against
benefit-of-the-bargain damages for fraud can be applied outside the real estate
context. Reply at pg. 2. This mischaracterizes Kenly. Kenly stated
“[t]his lawsuit grew out of an oral offer to sell a 100-plus acre farm,” and
the damages the trial court granted represented “the lost profits Kenly would
have obtained had Ukegawa honored the agreement to sell the property to him.” Kenly,
supra at 51, 53. Kenly was a real property case, and its holding
regarding benefit-of-the-bargain damages applies in that context. This is not a
case involving the purchase, sale, or exchange of property. Section 3343 and Kenly
do not apply, and the plaintiffs are not barred from recovering
benefit-of-the-bargain damages or the punitive damages that flow from those
damages. DENIED.
Motions to Tax
Costs
Rejaei Motion
Prevailing
defendants Lisa Binder, Nationwide Consulting, Inc. and Plush Properties filed
a post-judgment memorandum of costs seeking $16,156. The Rejaeis move to tax.
Timeliness
Under Cal. Rule of
Court Rule 3.1700(a)(1), “[a] prevailing party who claims costs must serve and
file a memorandum of costs within 15 days after the date of the service of the
notice of entry of judgment or dismissal by the clerk under Code of Civil
Procedure section 664.5 or the date of service of written notice of entry of
judgment or dismissal.”
The Rejaeis orally
dismissed defendants Nationwide Consulting, Inc. and Plush Properties during
trial on October 20, 2023. Rejaei request for judicial notice exhibit 2. The
Rejaeis argue defendants’ memorandum of costs is untimely because it was filed
on December 19, 2023, more than fifteen days after they were dismissed.
Nationwide and
Plush argue they were not served with a notice of dismissal and dismissal was
not entered by the clerk of the court, so the time limit for filing a
memorandum of costs did not begin to run until December 6, 2023, when the
notice of entry of judgment was filed and served.
Nationwide and
Plush are correct. The fifteen-day time limit does not begin to run until the
notice of entry of judgment or dismissal is served. Although Nationwide and
Plush were aware of the dismissal on October 20, no notice of judgment or
dismissal was served or entered until December 6. The memorandum of costs was
filed 13 days later, making it timely under rule 3.1700.
Joint
Representation
The Rejaeis argue
since prevailing defendants Binder, Nationwide and Plush were jointly
represented with non-prevailing defendant Siegel, and their defenses involved
the same facts and circumstances, it is impossible to apportion costs between
the prevailing and non-prevailing parties. The Rejaeis argue Binder, Nationwide
and Plush should be denied an award of costs.
A prevailing party
cannot be denied a cost award merely because they are jointly represented with
a nonprevailing party. Charton v. Harkey (2016) 247 Cal.App.4th 730, 735.
When, however, “less than all of a group of jointly represented parties
prevail,” the court must “apportion the costs among the jointly represented
parties based on the reason for incurring each costs and whether the cost was
reasonably necessary to the conduct of the litigation on behalf of the
prevailing parties.” Id. 738.
When a prevailing
defendant’s cost memorandum does not attempt to apportion costs between
themselves and costs incurred by nonprevailing defendants, the court is not
required to apportion costs sua sponte and has discretion to deny costs
altogether. Fundamental Investment Growth v. Gradow (1994) 28
Cal.App.4th 966, 974-975.
As prevailing
defendants, Binder, Nationwide and Plush are entitled to costs. Since they were
co-defendants with Siegel, who did not prevail, a cost award must be
apportioned to avoid a recovery of costs attributable to Siegel’s unsuccessful defense.
The defendants’ memorandum of costs worksheet indicates prevailing defendants
did apportion their requested costs, reducing the amounts claimed by 1/4 to
account for Siegel’s costs. To the extent the remaining claimed costs were
reasonable and necessary to Binder, Nationwide and Plush’s defense, they are
recoverable.
Specific Items
Filing and Motion
Fees
Line Item One of
the memorandum of costs seeks filing and motion fees totaling $2,065. The
Rejaeis argue it should be taxed by $580 to reflect fees incurred in connection
with Siegel’s defense. The memorandum of costs worksheet indicates all
requested costs have been reduced by 1/4 to omit costs associated with Siegel’s
defense. The Rejaeis do not adequately explain why this reduction is
insufficient to achieve apportionment. The filing and motion fees will not be
taxed.
Jury Fees
Moving defendants
seek $883 in jury fees. Rejaeis argue defendants failed to attach supporting
documentation to prove these fees were actually incurred. It is unquestioned
that jury trial occurred and fees were incurred in connection with the trial.
At least some jury fees are recoverable.
The costs
worksheet indicates $1,077 in jury fees were incurred between October 17, 2023
and October 30, 2023. Defendants reduced that figure by 1/4 for apportioning
purposes, claiming $808 in fees. As stated above, prevailing defendants were
dismissed on October 20, 2023. They cannot recover jury fees incurred after their
dismissal. Prevailing defendants seek thirteen days’ worth of jury fees. Ten of
those days were after dismissal. The court will tax the jury fees awarded by
10/13, or 77%. Jury fees taxed by $621.
Deposition Costs
The Rejaeis move
to tax all the costs associated with the deposition of Amir Rejaei, since the
deposition was noticed and taken by Siegel, not prevailing defendants. Richman
decl. Exh. 1. Additionally, they argue deposition costs associated with Bonnie
Rejaei should be taxed because Siegel was involved with the matters addressed
at the deposition and because the $971 cost of videotaping her deposition was superfluous
and unnecessary. Id. pg. 9.
Prevailing
defendants do not address the argument that Amir Rejaei’s deposition testimony
was noticed and taken by Siegel alone, nor do they provide adequate evidence to
show that the cost of videotaping her deposition was reasonable or necessary. Deposition
costs taxed by $1,266 for Amir Rejaei’s deposition and $971 for the cost of
videotaping Bonnie Rejaei’s deposition.
Court Reporter
Fees
To the extent
these fees were incurred after October 20, 2023, when prevailing defendants
were dismissed, they should be taxed. Defendants’ costs memorandum does not
clarify the time period for which they are seeking court reporter fees. Kristin
Cyphers was appointed as official court reporter pro tempore on October 16,
2023; moving defendants were dismissed on October 20, and the verdict issued on
October 30, 2023. Prevailing defendants are entitled to court reporter fees
from October 16-20. The court will tax the Court reporter fees by 10/14, or 71%.
Costs taxed by $6,250.
Prevailing
defendants’ requested costs will be taxed by a total of $9,108 for a total
costs award of $7,048.
Siegel Motion
Siegel moves to
strike various categories of costs claimed by the Rejaeis, arguing they are
unreasonable, unnecessary, insufficiently supported, or otherwise
unrecoverable.
Filing and Motion
Fees
Fees for
electronic filing are expressly allowed by statute if the court orders
electronic filing or service. Cal. Code of Civ. Proc. §1033.5(a)(14). Even
where a category of costs is not expressly allowed, a court may award costs
that are reasonably necessary to the conduct of litigation. Cal. Code of Civ.
Proc. §1033.5(c)(2)-(4).
Siegel argues some
of the filing and motion fees claimed by the Rejaeis are unrecoverable. Siegel
states several categories of documents were filed electronically, despite no
requirement for electronic filing/service. In opposition, the Rejaeis point out
that Under CA Rule of Court 2.253(b), as of January 2, 2019 all litigation
documents in non-complex civil cases must be electronically filed.
This litigation
has been ongoing since December 2016, before the order requiring electronic filing
was in place. The court has discretion to award or deny electronic filing fees
incurred before January 2019. The court finds e-filing was reasonably necessary
to the conduct of this litigation. The court will not tax electronic filing
costs, even though some costs were incurred before electronic filing was
mandatory.
Siegel argues the
costs should be taxed because the listed charges “do not have any dates
associated with them or adequate descriptions that would enable one to
determine exactly what the charge was for[.]” The Rejaeis’ filing and motion
fees adequately describe the documents that were filed, and the specific dates
they were filed is irrelevant. The filing costs will not be taxed.
Service of Process
Costs
Siegel requests
$2,110 in costs related to service of process on Terezia Bundova. Siegel asks
this full amount be taxed, on the grounds that service on Bundova does not
relate to him and since plaintiffs voluntarily dismissed her from the case.
Plaintiffs agree to withdraw this amount from their memorandum of costs.
Siegel argues the
remainder of costs claimed are unrecoverable, since the individuals and
entities allegedly served were not parties. In opposition, the Rejaeis state
“[m]ost of these Subpoenas were served on financial institutions in connection
with the collection of financial information of Defendant Siegel, which was
specifically permitted by the Court.” Opposition at pg. 6. The Rejaeis are
correct that such costs are recoverable. Their opposition to Siegel’s motion to
tax does not address some categories of service costs, including $3,298.42 in
costs for serving the Department of State. This seems excessive for service of
process on a public entity, which should be a simple matter, and the Rejaeis
provide no explanation as to why service was so expensive. The amount is
unnecessary and unrecoverable. Service of process costs will be taxed by
$3,298.42.
Court Reporter
Fees
Siegel argues the
request for court reporter fees should be taxed by $19,061.89. The Rejaeis seek
$30,728.78 in court reporter costs, which includes $13,145.77 in court reporter
service fees and $17,583.51 for transcripts. Siegel points out that the cost of
transcripts of court proceedings not ordered by the court are unrecoverable
under the statute. Cal. Code of Civ. Proc. §1033.5(b)(5). The Rejaeis argue the
court required the parties to provide real time transcription, making the cost
of those transcripts recoverable. Richman declaration ¶¶11-15. The court’s
recollection is that real time was requested, but not specifically ordered by
the court. This should be taxed.
Siegel argues the
parties agreed to split the court reporters’ fees equally, but the Rejaeis
incurred $13,145.77 in court reporter fees and Siegel was only charged
$11,666.89. The Rejaeis do not dispute this agreement existed. The court will
tax the amount of court reporter fees the Rejaeis may recover so that the
amount aligns with the amount Siegel was charged. Court reporter costs taxed by
$1,478.88.
Photocopy costs
The Rejaeis
request $3,635.12 for photocopies and delivery of trial documents. The costs of
photocopies of exhibits is recoverable if they were “reasonably helpful to aid the
trier of fact.” Cal. Code of Civ. Proc. §1033.5(a)(13). Siegel argues that
since out of 200 exhibits, only 34 were actually admitted during trial, most of
the photocopies were not reasonable or helpful, so this category should be
taxed.
The Rejaeis admit most
of the exhibits were not used, but argue that, given the unpredictability of
trial, it would have been imprudent not to come to trial with evidence to
respond to potential defenses and arguments defendants might have raised. While
the Rejaeis are correct that an exhibit need not be used at trial to be
recoverable as a cost, the fact that most of their exhibits were never used or
referenced suggests the amount of exhibits brought to trial was excessive. To
reflect a more reasonable “over-preparation” rate, the court will tax these
costs by 33%, or $1,199.59.
Interpreter Fees
The Rejaeis seek trial
interpreter fees for Amir Rejaei’s testimony. Siegel moves to tax these costs
on the grounds that interpreter fees are expressly recoverable only when “authorized
by the court for an indigent person represented by a qualified legal services
project[.]” Cal. Code of Civ. Proc. §1033.5(a)(12). Amir Rejaei is not
indigent, so interpreter’s fees are not a mandatory recoverable cost. The
Rejaeis correctly points out that the costs are authorized in the court’s
discretion when “reasonably necessary to the conduct of the litigation.” Cal.
Code of Civ. Proc. §1033.5(c)(4). The declaration of Steven N. Richman states
English “is not Amir Rejaei’s first language,” implying he does speak English,
and “he needed an interpreter to better express himself.” Richman decl. ¶22.
This indicates an interpreter was convenient, but not necessary. The court
exercises its discretion to disallow these costs. Taxed by $14,900.
Expert Witness
Fees
Siegel seeks to
tax $23,953 of the Rejaeis’ claimed §998 expert witness fees on the grounds
that they included experts who did not testify at trial, so were not reasonably
necessary. While the Rejaeis state they relied on the opinions of Gribin and
Associates and Mike Wakshull, despite not calling those witnesses to testify,
they do not clarify how they relied on their opinions or the subject matter in
which those witnesses are experts. The costs attributable these witnesses will
be disallowed. Taxed by $23,953.
Appearance Fees
and Parking
Siegel moves to
tax $254.15 in “appearance fees and parking.” The court agrees that it is
unclear what “appearance fees” are in this context, and local parking costs not
related to parking are unrecoverable. These costs are disallowed. Taxed by $254.15.