Judge: Gail Killefer, Case: BC661823, Date: 2025-01-10 Tentative Ruling

Case Number: BC661823    Hearing Date: January 10, 2025    Dept: 37

HEARING DATE:                 Friday, January 10, 2025

CASE NUMBER:                   BC661823

CASE NAME:                        Betsy Merritt, et al. v. John D. Cartwright, et al.

MOVING PARTY:                 Plaintiff Betsy Merritt

OPPOSING PARTY:             Defendants John D. Cartwright and Jan Cartwright

TRIAL DATE:                        In Arbitration

PROOF OF SERVICE:           OK

PROCEEDING:                      Motion to Tax Costs

OPPOSITION:                        27 December 2024

REPLY:                                  02 January 2025

TENTATIVE:                         Plaintiff’s Merritt to tax costs is denied. Plaintiff’s is granted $15,089.30 in costs.

Background

On November 16, 2016, Betsy Merrit and Joseph Singleton (“Plaintiffs’) filed a Complaint against John D. Cartwright and Jan Cartwright (“Defendants”) for interference with contract and interference with prospective economic advantage. Plaintiffs separately settled ether claims against Cetera Advisor Networks LLC (“Cetera”), resulting in a settlement agreement.

On October 12, 2017, Defendants moved to compel arbitration before the Financial Industry Regulatory Authority (FINRA). FINRA issued a judgment confirming an arbitration award for $512,500 in favor of Plaintiff Merritt.

On March 2, 2023, the court granted the Plaintiffs petition to confirm the arbitration award, which the court confirmed. On March 24, 2023, Defendants filed a motion to compel arbitration and enforce the settlement agreement between Plaintiffs and Cetera, which the court denied.

On April 24, 2023, Defendants filed a notice of appeal from the order denying their motion to compel arbitration. On May 15, 2023, Defendants filed a notice of appeal from the judgment.

The appellate court confirmed the arbitration award and affirmed the judgment but reversed the order denying the motion to compel arbitration.

The appellate court ordered this court to enter a new order compelling FINFRA arbitration to determine how the offset in the Cetera settlement agreement should be applied, and in what amount in relation to the arbitration award. The appellate court also ordered Defendants to recover their costs on appeal from Plaintiff Merritt.

On December 2, 2024, Defendants filed a Memorandum of Costs seeking $15,089.30 in costs. Plaintiff Merritt now moves to tax cost. Defendants oppose the Motion. The matter is now before the court.

motion to tax costs

I.         Legal Standard

CCP § 1033.5 sets forth the costs recoverable by the prevailing party. To recover a cost, it must be reasonably necessary to the litigation and reasonable in amount. (Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal.App.4th 238, 244.) “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, 773-74.) “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.)¿ 

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The losing party may dispute any or all the items in the prevailing party’s memorandum of costs by a motion to strike or tax costs. (CRC, rule 3.1700(b).) A motion to strike challenges the entire costs memorandum, whereas a motion to tax challenges particular items or amounts.

II.        Evidentiary Objections

Plaintiff Merritt objects Defendants’ attachment of receipts and invoices on the basis that they are hearsay, and the Declarant lacks personal knowledge. Under hearsay exception, invoices, bills, and receipts are admissible at hearing on motion to tax costs, for the limited purpose of corroborating testimony that the charges were paid, and if the charges were paid, as evidence that the charges were reasonable. (See Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1267 (Jones).)

Plaintiff’s objections are overruled.

III.      Discussion

A.        Item 6

Plaintiff argues that Defendants’ request for $2,854.96 related to transmitting, filing and serving of record, briefs, and other papers should be taxed as excessive because no paper documents were filed, and all papers were filed and served electronically.

“Only if the costs have been put in issue via a motion to tax costs must supporting documentation be submitted.” (Jones, supra, 63 Cal.App.4th at p. 1267.) “Once this occurs, the issue becomes whether the required documentation must be of evidentiary quality.” (Ibid.)

Defendants’ opposition provides two invoices from Counsel Press, Inc. showing the costs related electronic filing, brief preparation, and document preparation. (Antwiler Decl., ¶¶ 2, 3.)

The invoices show that $2,895.96 incurred in costs, which is in excess of $2,854.96 originally claimed in the memorandum of costs. Having reviewed the invoices, the court finds that the costs were reasonably incurred and necessary for the appeal. Therefore, Item 6 will not be taxed.

Defendants request for an additional cost not included in the memorandum of costs is denied.

B.        Item 7

Plaintiff Merritt asserts that Item 7, the 11,277.00 paid as a premium on the surety bond on appeal, should be taxed because it was unnecessary and not related to issues Defendants prevailed on. California Rules of Court, rule 8.278 allows recovery of costs if they are reasonable, including costs related to “[t]he cost to procure a surety bond, including the premium, the cost to obtain a letter of credit as collateral, and the fees and net interest expenses incurred to borrow funds to provide security for the bond or to obtain a letter of credit, unless the trial court determines the bond was unnecessary.” (CRC, rule 8.278(d)(1)(F).)

The court finds that Plaintiff fails to show that the costs associated with the bond were unnecessary. Defendants assert that the bond is useful to both parties because it prevents Plaintiff from enforcing the judgment pending the arbitration regarding the issue offset but also ensures that Plaintiff has another way to collect the remainder of the judgment if the second arbitration determines that Defendants are not entitled to offset.

Accordingly, the court declines to tax item 7.

Plaintiff Merritt’s motion to tax costs is denied.

Conclusion

Plaintiff’s Merritt to tax costs is denied. Plaintiff’s is granted $15,089.30 in costs.