Judge: Gregory Keosian, Case: BC719593, Date: 2022-12-05 Tentative Ruling
Case Number: BC719593 Hearing Date: December 5, 2022 Dept: 61
Plaintiff and
Cross-Defendant Warren Braithwaite’s Motion to Strike and Tax Costs is DENIED.
I.
MOTION TO TAX COSTS
“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 by mail, the period is
extended as provided in Code of Civil Procedure section 1013. If the cost memorandum
was served electronically, the period is extended as provided in Code of Civil
Procedure section 1010.6(a)(4).” (California Rules of Court Rule 3.1700, subd.
(b)(1).)
“Code of Civil Procedure section 1032, subdivision (b) [],
guarantees prevailing parties in civil litigation awards of the costs expended
in the litigation: ‘Except as otherwise expressly provided by statute, a
prevailing party is entitled as a matter of right to recover costs in any
action or proceeding.’” (Williams v. Chino Valley Independent Fire Dist.
(“Williams”) (2015) 61 Cal.4th 97,
100.).
“If the items on a verified cost bill appear proper charges,
they are prima facie evidence that the costs, expenses and services therein
listed were necessarily incurred.” (Rappenecker
v. Sea-Land Service, Inc. (1979) 93 Cal.App.3d 256, 266.) Although
individual cost items are ordinarily challenged by a motion to tax costs, no
cost-item is effectively put in issue by “mere statements” claiming them to be
unreasonable. (Ibid.) However, where
“it cannot be determined from the face of the cost bill whether the items are
proper,” “the mere filing of a motion to tax costs may be a ‘proper objection’
to an item.” (Nelson v. Anderson (1999)
72 Cal.App.4th 111, 131, 132.)
Defendant and Cross-Complainant Nicole Guest (Guest) filed a
memorandum of costs on September 27, 2022, seeking $152,881.40 in costs.
Plaintiff and Cross-Defendant Warren Braithwaite (Braithwaite) filed the
present motion to strike and tax costs, arguing that the memorandum of costs is
untimely, and also that the $152,881.40 sought in connection with the
appointment of the receiver ought not be allocated to him.
Guest in opposition argues that it is Braithwaite’s motion
that is untimely, and that the receiver’s costs and fees are appropriately
allocated to Braithwaite.
The present motion was timely filed. The time to file a
motion to tax costs is 15 days after service of the cost memorandum. (CRC Rule
3.1700, subd. (b)(1).) The memorandum was here electronically served on
September 27, 2022, and the present motion was filed on October 14, 2022, which
is 15 days after service of the costs memorandum (October 12) plus two court
days for electronic service, as stated in Code of Civil Procedure § 1010.6,
subd. (a)(4)(B).
The costs memorandum was also timely filed. A costs
memorandum must be filed and served “within 15 days after the date of 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, or within 180 days after entry of judgment, whichever
is first.” (CRC Rule 3.1700, subd. (a)(1).) No notice of entry of judgment has
been made in this case; the date that Braithwaite uses to claim untimely
service is the date of this court’s statement of decision, issued August 29,
2022. But a statement of decision, even one declaring judgment for a party, is
not an “entry of judgment” within the meaning of the Rules of Court, which
refers to the “ministerial act of entering the judgment in the judgment book by
the clerk.” (See M.C..&D. Capital Corp. v. Gilmaker (1988) 204
Cal.App.3d 671, 674, 679 [holding no entry of judgment had occurred to render
costs memorandum untimely where judge had filed a statement of decision and
judgment in August, but notice of entry of judgment was not fied until
October].) No notice of entry of judgment has here been filed or served, and
the costs memorandum is not untimely.
Braithwaite’s motion here concerns the $147,090.95 in
receiver fees that Guest seeks in costs. While the costs of a receiver are
generally paid out of the property entrusted to the receiver’s care, “[s]everal
appellate courts have held the fees of various court-appointed assistants
necessary for the conduct of civil litigation, including special masters,
referees and arbitrators, constitute statutory costs that may be awarded under
section 1033.5, subdivision (c)(4),” which refers to allowable costs not
expressly provided for in the body of the statute. (Southern California
Sunbelt Developers, Inc. v. Banyan Limited Partnership (2017) 8 Cal.App.5th
910, 931.)
Receivers are
entitled to compensation for their own services and the services performed by
their attorneys. Generally, the costs of a receivership are paid from the
property in the receivership estate. However, courts may also impose the
receiver costs on a party who sought the appointment of the receiver or
apportion them among the parties, depending upon circumstances. Courts are
vested with broad discretion in determining who is to pay the expenses of a
receivership, and the court's determination must be upheld in the absence of a
clear showing of an abuse of discretion.
(City of Chula Vista
v. Gutierrez (2012) 207 Cal.App.4th 681, 685–686, internal quotation marks
and citations omitted.)
The case Southern
California Sunbelt Developers, Inc. v. Banyan Limited Partnership (Sunbelt) (2017)
8 Cal.App.5th 910, discussed several instances in which the costs of
receivership could be apportioned to sources other than from the receivership
estate. These circumstances were as follows:
·
Where “there is a question regarding whether
there would be money available to pay the receiver,” and the court orders the
party seeking appointment of the receiver to “pay the receiver's fees and all
or a specific part of the costs and expenses of the receivership” as a
condition of appointment (Id. at p. 928);
·
“[W]hen there are insufficient funds,” the court
may order that “the parties for whom the receiver acted may be compelled to pay
the expenses incurred for their benefit” (Ibid.);
·
Where a party’s property “is taken from his
possession by the appointment of a receiver against his consent under an
erroneous order which the defendant successfully resists” (Ibid.);
·
“[W]herein the plaintiff seeks to have a
receiver appointed over property in which the defendant claims plaintiff has no
interest or right whatsoever and the defendant resists plaintiff's claim from
the very beginning and the costs, expenses and fees of the receivership have
been occasioned by the unfounded claim and the defendant derives no benefit
whatsoever from the receivership” (Id. at p. 929);
·
When the party who obtained appointment of
receiver has “no interest in the subject matter of the suit under any view, and
the real owners of the property and those interested in the fund are in no way
benefited by the receivership” (Ibid.)
In addition, the Sunbelt
court held that a prevailing party may recover receivership expenses as costs
under Code of Civil Procedure § 1033.5, subd. (c)(4), as costs neither
specifically compensable or prohibited. (Southern California Sunbelt
Developers, supra, 8 Cal.App.5th at p. 933.)
Braithwaite argues that he
should not be charged for the receivership fees incurred in this matter because
the receiver was appointed over his objection, and given this court’s August 5,
2021 order granting Guest’s motion for summary adjudication confirming her
exclusive interest in the property, that the receiver was not appointed for his
benefit. (Motion at pp. 7–9.)
This court has previously
addressed the subject of receiver-cost allocation, with particular reference to
allocation against Braithwaite. In an order of March 10, 2022, discussing the
receiver’s motion to sell the property and be paid therefrom, the court stated:
The court
notes as an initial matter that Guest previously brought a motion seeking to
obtain a sale of the property, which this court denied on November 15, 2018. on
April 27, 2020, this court ordered Braithwaite responsible for the payment of
the receiver’s fees, based on his failure to account for the existence of a
five-year, submarket lease of the property to his sister, to which the receiver
and parties objected as fraudulent. The lease was twice determined to be
fraudulent, first in this court’s ruling of September 16, 2020, then by a jury
in an unlawful detainer action, 20STUD03869, Alsbrook v. Braithwaite, in
a verdict rendered on December 2, 2021.This court on August 5, 2021, also
adjudicated Braithwaite’s claim to the property, and found no triable issues of
fact as to whether his interest in same was obtained by duress. Thus Guest is
now the only party that possesses an interest in the property that constitutes
the receivership estate.
The court’s
decision in this matter is governed by a number of equitable considerations.
First, the appointment and employment of a receiver in this matter were
overwhelmingly necessitated by the misconduct of Braithwaite in this case.
Braithwaite procured his interest in the property by placing Guest in a
position of duress and fear for her safety, and the predominant task of the
receiver in this matter has been to secure possession of the property against
the fraudulent possession of Braithwaite’s sister. The great preponderance of
fees and expenses here sought is thus directly attributable to Braithwaite.
Another
consideration is the purpose for which the receiver was employed. The receiver
was appointed at Guest’s motion, and over Braithwaite’s objections. The
receiver took action to preserve the parties’ interests in the property, which
by dint of this court’s order of August 5, 2021, is exclusively the interest of
Guest. She has thus derived the chief benefit of the receiver’s appointment.
(3/10/2022 Order.) But
while these considerations favored allowing the receiver to recoup costs
directly from the sale of the property, the court also allowed for the
possibility that Guest could recoup these costs from Braithwaite under Code of
Civil Procedure § 1033.5. (Ibid.)
The above considerations
favor reapportionment of the receiver’s costs to Braithwaite, as it was his bad
faith misconduct that occasioned the appointment of the receiver in this
matter, and which caused these costs to be incurred. Braithwaite’s actions with
respect to the property were done with “wrongful purpose” — not as “a bona fide
effort to preserve the property,” but to deprive the property of any beneficial
use pending his litigation with Guest. (See Sunbelt, supra, 8
Cal.App.5th at p. 929.) These facts are similar to those of Maggiora
v. Palo Alto Inn, Inc. (1967) 249 Cal.App.2d 706, where the court allowed a
landlord who sought a receiver to recoup the costs thereof from the commercial
tenant whose property was subject to the receivership, based on the fact that
the tenant had threatened to shut down his business and go into bankruptcy “to
secure a bargaining advantage over plaintiffs and induce them to modify the
provisions of the lease.” (Id. at p. 709.) The court stated, “There is
no question that under the facts here presented, the compensation and expenses
of the receiver and the related attorney fees were properly chargeable to
defendant.” (Id. at p. 713.) The costs here are similarly chargeable.
This analysis is not
meaningfully changed by the fact that Braithwaite no longer has any interest in
the subject property. Braithwaite lacks an interest in the property, not by
choice, but because his claim to the property was adjudicated against him in
this action. In Sunbelt, the
court recognized that a plaintiff who sought the appointment of a receiver over
property that they claimed an interest in, only to have that interest
adjudicated away, could have the costs of that receivership imposed upon them, rather
than the party who derived no benefit from the receiver. (Sunbelt, supra,
8 Cal.App.5th at p. 929.) The situation here is analogous. Until the
order granting Guest’s motion for summary adjudication, and for much of the
receiver’s appointment, Braithwaite claimed an ownership interest in the
property that was generally assumed to be valid. That assumption is what
allowed him to take the actions that both required the appointment of the
receiver; that provoked the protracted and costly efforts to recover the
property; and which ensured that the primary goal of the receivership —
obtaining rental income sufficient to pay property expenses — was never
realized. The costs of the receivership over the property that Braithwaite
claimed are thus equitably apportioned against him.
The motion to tax costs of
the receiver is therefore DENIED.