Judge: James L. Crandall, Case: 20-1151890, Date: 2022-11-18 Tentative Ruling
Motion to Strike or Tax Costs
Defendant Caitlin Ann Fitzpatrick’s motion to tax costs in plaintiff William Miller’s memorandum of costs is granted in part and denied in part. The motion is granted as to deposition costs in the amount of $876.20 and service of process costs in the amount of $155; otherwise, the motion is denied.
Plaintiff’s costs are thus taxed in the total amount of $1,031.20. Plaintiff will recover costs of $20,163.36.
The prevailing party in any civil action is entitled to recover costs as a matter of right. Code Civ. Proc. §1032. To claim those, the prevailing party must file and serve a memorandum of costs within 15 days from the date the clerk (or any party) mails out notice of dismissal or entry of judgment. CRC 3.1700; Daniels v. Robbins (2010) 182 Cal. App. 4th 204, 228. The memorandum must include a supporting declaration affirming that the costs were reasonable and necessarily incurred. CRC 3.1700(a)(1). No proposed judgment is required in order to perfect the memo of costs. Fries v. Rite Aid Corp. (2009) 173 Cal. App. 4th 182, 185.
If the items in the cost bill appear on their face to be proper (by comparing the cost bill to the list of recoverable costs in CCP §1033.5), the verified memorandum of costs is prima facie evidence of their propriety. The burden then rests with the party seeking to tax costs to show they were improper, unreasonable, or unnecessary. Benach v. County of Los Angeles (2007) 149 Cal. App. 4th 836, 856. If the party seeking to tax costs makes a proper objection to an item in the cost bill (as determined after the trial court reviews the submissions), the burden then shifts back to the party claiming them as costs. Acosta v. SI Corp. (2005) 129 Cal. App. 4th 1370, 1380. The propriety of costs is a question of fact to be determined by the trial court. Jones v. Dumrichob (1998) 63 Cal. App. 4th 1258, 1266. An order denying a motion to tax costs, in whole or in part, means that the moving party must pay the costs allowed. Krikorian Premiere Theatres, LLC v. Westminster Central, LLC (2011) 193 Cal. App. 4th 1075, 1084.
A “prevailing party” includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief and a defendant as against those plaintiffs who do not recover any relief against that defendant. Code Civ. Proc. § 1032(a)(4).
But a 998 offer that was greater than the ultimate net recovery, shifts this result:
“As a general rule, the prevailing party in a civil lawsuit is entitled to recover its costs. (Code Civ. Proc., § 1032.) However, section 998 establishes a procedure for shifting the costs upon a party's refusal to settle. If the party who prevailed at trial obtained a judgment less favorable than a pretrial settlement offer submitted by the other party, then the prevailing party may not recover its own postoffer costs and, moreover, must pay its opponent's postoffer costs, including, potentially, expert witness costs. (§ 998, subd. (c)(1).)” (Barella, supra, 84 Cal.App.4th at p. 798, 101 Cal.Rptr.2d 167.)
Ignacio v. Caracciolo (2016) 2 Cal. App. 5th 81, 86.
The offer must be sufficiently specific to permit the recipient to evaluate it in a meaningful manner and to make a reasonable decision whether to accept or reject it. Auburn Woods I Homeowners Ass'n v State Farm Gen. Ins. Co. (2020) 56 Cal.App.5th 717, 725; Anthony v Li (2020) 47 Cal.App.5th 816, 821.. See also Cal. Judges Benchbook Civ. Proc. Before Trial § 5.30.
An offer under C.C.P. 998 is unenforceable if its terms and conditions make it so difficult to place a value on the offer that the court is unable to determine whether the judgment is more or less favorable than the offer. In Valentino v. Elliott Sav-On Gas (1988) 201 Cal.App.3d 692, the court reversed a cost award in favor of defendant, holding that the offer, which required plaintiff to release defendant, its attorneys, and its insurance carrier from all claims and causes of action arising from her personal injury claim, “introduced an imponderable which makes it impractical if not impossible to accurately and fairly evaluate the offer.” Id. at 699. See also Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899, 907 (distinguishing Valentino; offer requiring execution of “general release” to effect “full settlement of this action” could not reasonably be construed to apply to other litigation).
In addition, to effectuate the purpose of encouraging settlements, courts have created a nonstatutory “good faith” exception for awarding costs to a prevailing party under Code Civ. Proc. §998 if it appears that the offer, when made, had “no reasonable prospect” of being accepted by a reasonable offeree similarly situated. Bates v. Presbyterian Intercommunity Hospital (2012) 204 Cal. App. 4th 210, 220; Burch v. CHOC Thrift Stores, Inc. (2003) 109 Cal. App. 4th 537, 548. Good faith in turn requires that the settlement offer be realistically reasonable under the circumstances of the particular case and carry with it some reasonable prospect of acceptance. A party having no reasonable belief that his offer might be accepted will not be allowed to benefit from a no-risk offer made for the sole purpose of later recovering large expert witness fees. Adams v. Ford Motor Co. (2011) 199 Cal. App. 4th 1475, 1483-85. The burden rests with the offeree to show that the offer was made in bad faith and for an improper purpose. Jones v. Dumrichob (1998) 63 Cal. App. 4th 1258, 1262.
Generally, “reasonableness . . . is measured, first, by determining whether the offer represents a reasonable prediction of the amount of money, if any, (the offeror) would have to pay (the offeree) following a trial, discounted by an appropriate factor for receipt of money by (the offeree) before trial . . .” Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal. App. 3d 692, 699. The good faith of a defendant’s 998 offer cannot be measured by the plaintiff’s subjective belief in the value of her case. Essex Ins. Co. v. Heck (2010 186 Cal. App. 4th 15131530.
Here, Defendant points to her 998 offer to argue that she is not liable for costs Plaintiff incurred after that offer was made: $1,558.74 of the jury fees claimed, all of the court reporter fees claimed and all of the models, etc. costs claimed.
Plaintiff contends that Defendant’s 998 offer does not operate to shift costs – that is, change who was the prevailing party -- because it was not made in good faith and was not reasonable as Defendant was without income or assets and her lawyers insisted she was judgment proof. [Scott Decl., Exs. 3-5 and ¶ 7.] Plaintiff also contends that Defendant’s 998 offer was for $50,000, not $100,000, because that is all she offered to pay (and she is judgment proof). Finally, Plaintiff also contends that the 998 offer was ambiguous.
No case law was cited or located discussing the reasonableness or good faith of a 998 offer in terms of the defendant’s ability to pay or whether she was judgment proof. A defendant’s inability to pay applies equally to a judgment after trial as it does to an offer of judgment. The fact that she cannot pay a judgment of $100,000 – whether it is obtained by 998 offer or by trial – does not inherently make a defendant’s offer in bad faith.
The court does find, however, that Defendant’s 998 offer was ambiguous. It begins with an offer of judgment in the amount of $100,000, but then goes on to offer payment of $50,000. What does this mean? One reasonable inference is that Defendant is really just offering to settle for $50,000. And what is the purpose of offering a judgment of $100,000 that is not fully backed by an offer to pay? Is it an effort to make the offer look better than it really is?
Whatever was intended, Plaintiff’s attorney was left with an offer that was impossible to assess the value of with any certainty.
For this reason, the court finds Defendant’s 998 offer was ambiguous and invalid. The 998 offer does not, therefore, shift the result as to who was the prevailing party and is not a basis to tax Plaintiff’s costs.
Specific Costs
Item 2 - Jury Fees of $ 1,708.74
Defendant seeks to tax $1,558.74 of the requested amount on the ground that that amount was incurred after she made her 998 offer.
For the reasons discussed above, Defendant’s 998 offer did not shift the designation of prevailing party or cost recovery. The motion to tax is denied as to these costs.
Item 4 - Deposition Costs of $ 6,549.50
Defendant seeks to tax $876.20 of the requested deposition costs because they are associated with the deposition of Barry Pierce, who Defendant asserts in her brief was not pertinent to the case against Defendant but to the other defendant(s) who prevailed against Plaintiff. In the opposition brief, Plaintiff maintains that the deposition of Pierce, the owner of corporate defendant Pierce Coastal Restaurants, Inc., was necessary discovery as to all defendants. Neither Plaintiff nor Defendant provide any details, facts, or evidence on this point.
In the face of Defendant’s objection, it was Plaintiff’s burden of proof to establish the reasonableness of the costs sought. Acosta v. SI Corp. (2005) 129 Cal. App. 4th 1370, 1380. And Plaintiff has not established that in fact Pierce’s deposition was reasonable as to Plaintiff’s claims against Defendant, as opposed to the unsuccessful negligence claim against Pierce Coastal Restaurants, Inc.
The motion to tax is granted as to these costs.
Item 5 - Service of Process costs of $ 292.00
Defendant seeks to tax $ 155 of the requested amount on the ground that amount was incurred in connection with other defendant(s) rather than Defendant Fitzpatrick. Presumably Defendant is referring to service of process on Pierce Coastal Restaurants, Inc. ($124) and BeachFire Bar and Grill ($31). [ROA #284 at Worksheet, page 2 of 4, item 5.]
Again, though, Defendant provides no discussion or evidence beyond the worksheet. Plaintiff’s response here is the same as for deposition costs.
For the same reasons as discussed in connection with deposition costs, the motion to tax is granted as to these costs.
Item 11- Court Reporter Fees of $11,835.22
Defendant seeks to tax the entire requested amount on the ground that is was incurred after she made her 998 offer.
For the reasons discussed above, Defendant’s 998 offer was not valid and is not a basis to deny Plaintiff recovery of costs as prevailing party. The motion to tax is denied as to these costs.
Item 12- Models, etc. in the amount of $139.95
Defendant seeks to tax the entire requested amount on the ground that is was incurred after she made her 998 offer.
For the reasons discussed above, the motion is denied as to these costs.
Moving party to give notice