Judge Jill Feeney, Case 19STCV41274 2022-12-20 Tentative Ruling

This is an action for negligence and premises liability arising from a trip and fall incident which took place in October 2019. Plaintiff Stacey Babbitt filed her Complaint against Defendants Teri Hertz, Lisa Dick, and Caronlynn Properties, LLC. on November 15, 2019.

Plaintiff moves to strike, or in the alternative, tax the Memorandum of Costs. Plaintiff argues that Defendants’ request for payment of service of process was not necessary for litigation. Additionally, Plaintiff argues that Defendants’ request for costs was prohibited because their 998 settlement offer (1) was conditioned on the execution of a release of all claims, (2) the offer was token or nominal, and (3) the offer was conditioned upon the execution of a release of all claims which is impossible to quantify.

Defendants argue Plaintiff failed to meet the burden of showing costs were not reasonable or necessary. Defendants concede that the service fees were mistakenly listed as $476.95 when the actual cost was $210.75. According to Defendants, Plaintiff failed to show that the fees were unreasonable and unnecessary. Defendants also argue that the condition requiring the execution of a release of all claims is not prohibited, nor was the condition impossible to quantify.

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. (Code Civ. Proc. section 1032, subd. (b).) Under CCP section 1033.5, subd. (c)(2), allowable costs “shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.” Subdivision (3) requires: “Allowable costs shall be reasonable in amount.” There is no requirement that copies of bills, invoices, statements, or any other such documents be attached to the memorandum. Only if the costs have been put in issue via a motion to tax costs must supporting documentation be submitted. (Bach v. County of Butte (1989) 215 Cal.App.3d 294, 308.)

Where a cost item does not appear proper and necessary on its face, the burden of proof is on the claimant to show the cost is appropriate. (Murphy v. F.D. Cornell Co. (1930) 110 Cal. App. 452, 454.) If the items appear to be proper charges, the burden is on the party seeking to tax costs to show they were not reasonable or necessary. (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761.) Where items are properly objected to as not reasonable or necessary, however, they are put in issue and the burden of proof is on the party claiming them as costs. (Id.) The trial court’s determination on a motion to tax or strike costs will be reversed only for an abuse of discretion. (Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, 121.)

"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." (Code Civ. Proc., section 998, subd. (d).)

998 offers must be made in good faith, and “[a] token or nominal offer made with no reasonable prospect of acceptance will not pass the good faith test.” (Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513, 1528.) However, “[w]hen a party obtains a judgment more favorable than its pretrial offer, [the offer] is presumed to have been reasonable and the opposing party bears the burden of showing otherwise.” (Ibid.) The pretrial offer of settlement required under section 998 must be realistically reasonable under the circumstances of the particular case. (See Pineda v. Los Angeles Turf Club, Inc. (1980) 112 Cal.App.3d 53, 63.) Whether a 998 offer is reasonable also depends on whether the adverse party knows, or reasonably should know, the information that makes the offer reasonable. (Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699.)

Plaintiff first argues that Defendants’ request for service fees was improper because service of process was not necessary for litigation. Plaintiff provides no legal authority supporting this argument and merely opines that service fees are not necessary for litigation.

As the prevailing parties in this action, defendants are entitled as a matter of right to recover costs under Code Civ. Proc. section 1032, subd. (b). Fees for service of process are explicitly allowable. (Code Civ. Proc., section 1033.5(a)(4).) Defendants concede that they mistakenly entered the cost of service as $476.90 when the actual cost was $210.75. (Opposition, p.4.) Because Defendants mistakenly entered the wrong amount, Defendants’ request for service fees is reduced to $210.75.

Plaintiff also argues that Defendants’ request for costs was prohibited because it was conditioned on the execution of a Release of All Claims which renders the offer invalid.

Although a 998 offer must be unconditional, a defendant may properly condition an offer on the plaintiff’s dismissal of the defendant from the case and execution of a general release discharging the defendant from all claims set forth in the complaint. (Toste v. CalPortland Construction (2016) 245 Cal.App.4th 362, 374 (citing Goodstein v. Bank of San Pedro,27 Cal.App.4th 899, 907.).)

Here, Defendants’ 998 offer was conditioned on the execution of a “Release of All Claims” and Plaintiff filing a Request for Dismissal with prejudice. (Motion, Exh. 2.) The Release specified that “PLAINTIFF will cause his/her/its attorneys to dismiss his/her/its complaint with prejudice as against DEFENDANTS in the matter of Stacey Babbitt v. Teri Hertz, et al., Los Angeles Superior Court Case No. 19STCV41274.” (Id.) The release discharges Defendants from all claims set forth in the complaint and does not encompass any other claims outside of this litigation. This condition is not prohibited.

Plaintiff cites Chen v. Interinsurance Exchange of the Automobile Club (2008) 164 Cal.App.4th 117, 122, arguing that such conditional 998 offers are prohibited. However, Chen involved a 998 offer that encompassed all claims, including claims in a separate action. Here, Defendants’ Release was properly limited to this matter alone. Plaintiff’s argument is thus without merit.

A token or nominal offer is an offer made with no reasonable prospect of being accepted by the plaintiff. (Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513, 1528.) An offer is presumed to have been reasonable when a party obtains a judgment more favorable than its pretrial offer. (Id.) A modest settlement offer may be in good faith if it is believed the defendant has a significant likelihood of prevailing at trial. (Id at 1529.)

Here, Defendants offered $500 in exchange for Plaintiff dismissing Defendants from this action and executing a general release. (Motion, Exh. 2.) Defendants’ 998 offer is presumed to be reasonable because they prevailed on their summary judgment motion and thus owe nothing to Plaintiff. It is Plaintiff’s burden to prove that the offer was nominal. Plaintiff merely cites Westinghouse Broadcasting Co., Inc. (1994) 25 CA4th 102, 116 in support of her argument. Plaintiff does not explain why there was no reasonable prospect that Plaintiff could have accepted the offer, nor does she provide evidence that Defendants did not make the offer in good faith. Plaintiff fails to meet her burden of proof.