Judge: Frank M. Tavelman, Case: 19BBCV01010, Date: 2023-10-20 Tentative Ruling

SUBMITTING ON THE TENTATIVE
Generally, the Court will post tentative rulings prior to a hearing; however, the Court does not always do so.  If the parties wish to avoid a court appearance and submit on the tentative ruling, then all counsel must confer and agree to do so.   Each counsel must then contact the Court and advise they have spoken to opposing counsel and will submit on the tentative.  All counsel seeking to submit on a tentative must call Dept A no later than 8:45 a.m. on the hearing day or in lieu may indicate the party is submitting during calendar check-in. Notice of the ruling must be served as indicated in the tentative. If any party declines to submit on the tentative ruling, then all parties should appear at the hearing in person or remotely.
 

Case Number: 19BBCV01010    Hearing Date: October 20, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION FOR COSTS

NOTICE

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  “The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

Capital Auto Financial, Inc. (“Capital Auto”) filed suit against Jacques Ohana and Simon Ohana (“Defendants”) alleging causes of action for (1) breach of contract, (2) money had and received, (3) fraud, (4) breach of implied covenant of good faith and fair dealing, (5) unjust enrichment, (6) accounting, and (7) declaratory relief. The Ohanas filed a cross-complaint against Capital Auto and Yakov Meltzer as an individual for breach of contract.

On August 16, 2023 the Court rendered its final judgment in this matter. Pursuant to this judgment, Capital Auto is entitled to a net recovery in the amount of $46,52.49. Capital Auto now moves for an award of attorneys’ fees under California Code of Civil Procedure (“C.C.P”) § 998. Defendants filed no opposition and their time to do expired on October 10, 2023.

ANALYSIS: 

I.                    LEGAL STANDARD 

C.C.P. § 998(d) provides “If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the defendant to pay a reasonable sum to cover post-offer 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 plaintiff, in addition to plaintiff's costs.”

II.                 MERITS

In rendering the final judgment in this matter, the Court ordered that all parties were to bear their own costs and fees. This ruling was based on the Court’s review of the language in the lease agreement between the parties. The lease provided a reciprocal right to recover attorneys’ fees. Having found both parties were in part responsible for the breach of the lease, the Court concluded this reciprocal right was not available to either party. As such, Capital Auto could not seek to recover fees pursuant to the lease.

Capital Auto now asks the Court to consider an award of fees under C.C.P § 998. Capital Auto argues that they extended a settlement offer pursuant to C.C.P. § 998 which was ultimately substantially less than the recovery obtained via judgment. On September 9, 2021, Capital Auto offered that Defendants pay $29,999.99 in exchange for dismissal of this action in its entirety. (Lebedev Decl. ¶ 5.) Capital Auto argues that having obtained a higher net monetary recovery after extending this offer, they are a “prevailing party” within the meaning of C.C.P. § 1032(a)(4). Ultimately, Capital Auto argues that, while they are not the prevailing party under the lease agreement, they are still entitled to recovery as per statute.

The Court notes the legal standards for C.C.P. § 998 and C.C.P. § 1032.4 are separate and distinct. C.C.P. § 1032.4 is the general cost provision statute and requires a showing that one is the prevailing party. C.C.P. § 1032 (a)(4) defines prevailing party as follows as either (1) the party with a net monetary recovery, (2) a defendant in whose favor a dismissal is entered, (3) a defendant where neither plaintiff nor defendant obtains any relief, or (4) a defendant as against those plaintiffs who do not recover any relief against that defendant. In instances where both parties could be defined as prevailing, the trial court in its discretion determines the prevailing party, comparing the relief sought with that obtained, along with the parties' litigation objectives as disclosed by their pleadings, briefs, and other such sources. (On-Line Power, Inc. v. Mazur (2007) 149 Cal.App.4th 1079, 1087.)

In contrast, C.C.P. § 998 contains no language regarding a “prevailing party”. In addition, C.C.P. § 998(a) explicitly states that it is intended to withhold or modify the provisions of § 1032. A party’s entitlement to costs under C.C.P. § 998 derives from the other party's failure to accept a reasonable settlement offer, not from their status as a prevailing party. (SCI California Funeral Services, Inc. v. Five Bridges Foundation (2012) 203 Cal.App.4th 549, 578, citing Scott Co. of California v. Blount, Inc. (1999) 20 Cal.4th 1103.) Indeed, there are instances in which a party is not prevailing but is still able to recover under C.C.P. § 998. (See Waterwood Enterprises, LLC v. City of Long Beach (2020) 58 Cal.App.5th 955, 98.)

Regardless, the Court finds Capital Auto is entitled to attorneys’ fees under C.C.P. § 998. Under C.C.P. § 998, when there is a party with net monetary recovery, that party is entitled to costs as a matter of right and the trial court has no discretion to order otherwise. (Vought Construction Inc. v. Stock (2022) 84 Cal.App.5th 622, 635.) Here, Capital Auto has shown they obtained a net monetary recovery in excess of the settlement offer provided to defendants. As such, it stands to reason that if Capital Auto can show its offer was reasonable and made in good faith, then they are entitled to recovery under C.C.P. § 998.

When a party obtains a judgment more favorable than its pretrial offer, the offer is presumed to have been reasonable, as required to serve a basis for an award of costs under the settlement offer statute, and the opposing party bears the burden of showing otherwise. (Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513, 1528.) Here, Capital Auto’s offer of $29,999.99 is presumed reasonable by virtue of being less than Capital Auto’s ultimate recovery of $46,582.49. The burden to dispute reasonableness thus falls on Defendants. However, Defendants submit no opposition and thus their burden is unmet.

Capital Auto asks for a total of $7,725.73 in post-offer costs. This amount reflects $5,750 paid for the services of Capital Auto’s expert witness Sep Kamjoo, including his trial testimony. (Lebedev Decl. ¶ 10, Exh. B.) The amount also includes $1,975.73 paid for the services of court reporters during trial. (Lebedev Decl. ¶ 11.) Capital Auto concedes that Plaintiffs have already covered half of the reporting costs and that the $1,975.73 requested represents Capital Auto’s portion. (Id.)

Accordingly, the motion for attorneys’ fees pursuant to C.C.P. § 998 is GRANTED. Defendants are ordered to pay $7,725.73.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Capital Auto Financial, Inc.’s Motion for Costs came on regularly for hearing on October 20, 2023, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTION FOR COSTS IS GRANTED. 

DEFENDANTS ARE ORDERED TO PAY $7,725.73 IN SATISFACTION OF THESE COSTS.

CAPITAL AUTO FINANCIAL TO GIVE NOTICE.

IT IS SO ORDERED. 

DATE: October 20, 2023                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles