Judge: John J. Kralik, Case: EC063851, Date: 2022-08-12 Tentative Ruling
Case Number: EC063851 Hearing Date: August 12, 2022 Dept: NCB
North
Central District
|
INDIANA LUMBERMENS
MUTUAL INSURANCE COMPANY, et al., Plaintiffs, v. abel
orozco,
et al., Defendants. AND RELATED
CROSS-COMPLAINTS |
Case No.: EC063851 Hearing
Date: August 12, 2022 [Tentative]
order RE: motion to strike and/or tax costs |
BACKGROUND
A. Allegations
In its cross-complaint,
Cross-Complainant Thee Aguila Inc. (“TAI”) alleges that Athala and Abel Orozco
own the real property located at 943 N. Hudson Ave., Pasadena CA 91104 (the “Hudson
Property”). It alleges that beginning
August 1, 2004, the Orozcos leased a commercial property from TAI at 2800 Firestone
Blvd., Southgate, California at $30,000.00 a month. TAI alleges that the Orozcos began falling
behind on lease payments and so it filed an unlawful detainer action around
August 1, 2007 (case no. VC049186). In
the unlawful detainer action, TAI obtained a default judgment for possession
against them and chose to pursue a separate action for the outstanding rents
and costs as a result of their failure to pay rent and eviction from the
Property.
TAI alleges that
the Orozcos (who owed approximately $212,620) sought to work out a plan, and
signed a Deed of Trust and Assignment of Rents secured by a second deed of
trust on the Hudson Property, signed on April 4, 2008 and recorded on April 7,
2008. As of December 1, 2010, the first
deed of trust was held by Bank of America with a principal balance of $450,000.
TAI alleges that on December 28, 2010, Cross-Defendants
Indiana Lumbermens Mutual Insurance Company, Inc. (“ILMIC”), Montana Bail
Bonds, Inc. (“MBB”), and Sal Chasmi misled Abel Orozco into signing a third
deed of trust on the Hudson Property.
TAI alleges that the Cross-Defendants foreclosed on Abel Orozco’s half
of the Property and, on January 29, 2014, wrongfully evicted the Orozcos from
the property. TAI alleges that
Cross-Defendants currently rent the Hudson Property to Gabriela Garcia and
Yvette Zavala (“Tenants”) for $2,500 per month, but have pocketed the rent
despite TAI serving a Demand to Pay Rent to Party Other than Landlord on
December 31, 2014.
TAI’s first
amended cross-complaint (“FACC”), filed November 8, 2017, alleges causes of
action against ILMIC, MBB and Sal Chasmi for: (1) conversion; (2) money had and
received; and (3) intentional interference with prospective economic
relationship.
B. Relevant Background
ILMIC and MBB dismissed
their complaint without prejudice against the Orozcos and TAI on January 10,
2019.
The
action proceeded to jury trial on the cross-complaint. On February 20, 2019, the Court signed the
Judgment as follows:
The notice of
entry of judgment was filed and served by mail on March 29, 2019.
On April 24, 2019,
the Court issued a Conditional Order for New Trial. The Court found that the jury award of
$212,000.00 to TAI was not justified by the evidence and that the amount that
should have been awarded to TAI was approximately $50,000.00. (4/24/19 Conditional Order for New Trial at pp.4-6.) The Court recognized that jury error in the
amount of damages was understandable in light of the confusing record and lack
of proper jury instructions. (Id.
at p.6.) The Court conditionally granted
ILMIC and MBB’s motion for new trial on the sole issues of damages as to TAI
and set a hearing date of July 29, 2019 for the issue of damages, unless TAI
consented to the reduction of the amount of damages within 30 days of service of
the order in which case the motion would be denied.
Abel
and Athala Orozco appealed the February 20, 2019 judgment/order. ILMIC and MBB also filed an appeal to the April
23, 2019 judgment/order. On July 29, 2021,
the Court noted that appeals had been filed and thus placed the trial
off-calendar. On November 12, 2020, the Court
of Appeal issued a Partial Remittitur.
The August 24, 2020 order stated that Abel and Athala Orozco were in
default and their May 15, 2019 appeals were dismissed. On April 28, 2021, the Court of Appeal issued
a Remittitur. The February 24, 2021
order stated that ILMIC and MBB were in default and their May 24, 2019 appeal
was dismissed.
The
matter came for a second jury trial on April 12, 14, 19, 20, and 21, 2022 on
the issue of damages. The jury reached
its verdict on April 21, 2022.
On May 9, 2022,
the Court entered judgment in favor of TAI in the amount of $247,000 (= $27,000
rent for a period of 20 month from January 1, 2015 to September 1, 2016 + $220,000
in attorney’s fees) and against ILMIC and MBB, jointly and severally. The jury founds that TAI was damaged on all 3
causes of action for conversion, money had and received, and intentional interference
with prospective economic relation. The Court
stated that TAI shall recover from ILMIC and MBB, jointly and severally, costs
in an amount to be determined by TAI’s submission of a memorandum of costs.
The notice of
entry of judgment was filed on May 11, 2022, showing that it was served by email
on May 11, 2022.
On July 18, 2022,
the Court granted ILMIC and MBB’s motion for judgment notwithstanding the verdict
on the jury award as to attorney’s fees in the amount of $220,000 but did not
disturb the jury’s finding on the remaining damages.
On August 5, 2022,
the Court entered the Amended Judgment After Jury Trial, such that judgment was
entered in favor of TAI in the amount of $27,000 and against ILMIC and MBB, and
ordered that TAI recover costs against ILMIC and MBB.
C. Motion on Calendar
On
May 24, 2022, TAI filed a Memorandum of Costs seeking:
On June 6, 2022,
ILMIC and MBB filed a motion to strike and/or tax costs as to the Memorandum of
Costs filed by TAI.
On June 20, 2022,
TAI filed an opposition brief.
On June 27, 2022,
ILMIC and MBB filed a reply brief.
DISCUSSION
ILMIC and MBB move
to strike and/or tax TAI’s costs in Items 1, 2, 11, 12, 13, 14, and 16.
a. Item 1: Filing and
Motion Fees
TAI
seeks $722.61 in costs for filing and motion fees.
ILMIC
and MBB argue that the cost of $61.65 for a memo to strike/tax costs on March
27, 2019 is unreasonable because the motion was taken off-calendar by the Court
for TAI’s lacked standing to challenge Abel Orozco’s memo of cost. They also argue that the jury fee deposit of
$164.31 is unsubstantiated.
The Court
will allow the $61.65 to be recoverable.
Even if TAI’s motion was ultimately unmeritorious, it does not mean that
TAI’s cost was unreasonable. In
addition, the jury trial fee will be permitted as TAI has provided a receipt
showing the $150 jury fee plus $14.31 for the court’s transaction and service
fees. (Opp. at Ex. 4.)
The
motion to strike/tax costs in Item 1 is denied. No reduction shall be made.
b. Item 2: Jury
Fees
CCP §1033.5(a)(1) classifies jury fees as
allowable costs under section 1032.
ILMIC and MBB move to tax this cost,
arguing that there were 3 cross-complainants (the Orozcos and TAI) and there is
no indication from TAI’s records that TAI was the only cross-complainant that
paid claimed jury fees of $1,389 during the first trial (6 days). ILMIC and MBB argue that jury fees should
only be awarded in the amount of $463 to TAI (i.e., 1/3 of $1,389.00) because
cross-complainants counsel, Guinevere M. Malley, Esq., paid the jury fees on the
Orozcos’ behalf (and not TAI’s behalf). ILMIC
and MBB also argue that during the second trial (5 days), there are no receipts
submitted to substantiate the $1,075.90 amount was charged and paid by TAI.
In opposition, TAI argues that Ms. Malley
was TAI’s personal counsel as well and she posted the jury fees of $231.50/day
for 6 days on behalf of TAI. (Opp. at
Ex. 1 [2/5/19 Invoice for Jury Trial Fees].)
The invoice from Ms. Malley is made to Henry Aguila and TAI for the
first trial. (Id.) For the second trial, the jury fees were $215.85/day
x 5 days and TAI argues that it could not have continued with the trial if it
had not paid the fees. TAI argues that
jury fee payments are public record and ILMIC can access these documents
itself. (Opp. at p.4.) However, the Court has noted on prior occasions
that TAI has a history of not paying
Ms. Malley. To the extent that TAI can substantiate that it actually paid Ms.
Malley, the Court will allow this cost. It
is the Court’s intention to make sure Ms. Malley is paid on these amounts.
As to the second trial, TAI has not provided
receipts or invoices for the fees incurred.
Nevertheless, the Court will allow these costs as they can be readily
established based on the days of trial, plus the amounts had already been paid
to the court. As such, the Court will not tax the $1,075.90 cost.
The Court will require TAI to submit a
supplemental declaration showing that it has paid the costs to Ms. Malley prior
to making its final determination on Item 2.
c. Item 11: Court
Reporter Fees
CCP §1033.5(a)(11)
classifies court reporter fees as established by statute as allowable costs
under section 1032.
According to the memorandum
of costs, TAI seeks court reporter fees of $11,550 incurred by Kristin Hicks
(first trial), $3,600 incurred by Jody Johnston (second trial), and $265 for an
April 12 hearing.
With respect to
the first trial, ILMIC and MBB argue that there is no receipt to substantiate
the court reporter costs or that TAI paid for them as opposed to the other
Cross-Complainants. They also argue that
they prevailed against Abel Orozco, and so the reporter fees should be borne by
Mr. Orozco. With the opposition brief, TAI provides invoices for the court
reporter fees incurred with the first trial.
(Opp. at Ex. 3.) TAI argues that
the fees were paid by Mr. Aguila. The invoices
add up to $11,550.
The Court will allow
TAI to recover the full amount of the costs provided it can show that TAI
actually paid these amounts.
Next, ILMIC and
MBB argue that there are no receipts to support the costs for the second trial.
In opposition, TAI provides one invoice for $2,700 for court reporting services
for April 19, 20, and 21, 2022. (Opp. at
Ex. 5.) No additional documents are
provided to show that additional court reporter fees were incurred, which TAI
claimed was $3,600
Finally, ILMIC and
MBB argue that there is no support for the costs associated with the April 12,
2019 hearing. TAI has not provided a receipt showing that it incurred $265 in
court reporter fees for this cost. As such, it will also be reduced by $265.
The Court will require TAI to submit a
supplemental declaration showing that it has paid these costs to the court
reporters.
d.
Item 12: Models, enlargements, and photocopies of exhibits
An allowable cost under CCP §1033.5(a)(13)
includes: “[m]odels, the enlargements of exhibits and photocopies of exhibits,
and the electronic presentation of exhibits, including costs of rental
equipment and electronic formatting, may be allowed if they were reasonably
helpful to aid the trier of fact.”
According to the
memorandum of costs, TAI seeks costs associated with the first trial in the
amount of $1,440 and the costs associated with the second trial in the amount
of $200.
ILMIC and MBB move to tax this cost,
arguing there is no documentation that TAI incurred the total $1,440.00, as to
the cost being shared together by the three cross-complainants. They also argue that the fees are excessive
because only one exhibit book with 600 pages was produced and that 6 copies of
this book would come out to approximately $540 (or 3,600 pages x 15 cents a
page).
In opposition, TAI provides the invoice
from Ms. Malley to Henry Aguila and TAI showing the cost for the assembly and
production of 10 exhibits books, which included: (1) 10 3” binders at $6 a unit,
or $60 total; (2) 3.5 clear label dividers at $35 a unit, or $130 total; (3) 10
black/white and color copies of exhibits at $100 a unit, or $1,000 total; and (4)
the labor associated at $250. (Opp. at
Ex. 2.)
As TAI has substantiated the costs for the
first trial with Ms. Malley’s invoice, the Court will the recovery of costs
provided TAI can show that it actually paid Ms. Malley these amounts. Although the invoice is directed at TAI, the Court
cannot ascertain whether the costs were completely and totally incurred and
paid by TAI, or whether the costs sought by TAI reflects the apportioned costs
between TAI and the Orozcos as these cross-complainants were represented by the
same counsel, Guinevere M. Malley, Esq.
TAI has not substantiated its $200 cost
for the second trial. As such, these
costs will be taxed.
The Court will require TAI to submit a supplemental
declaration showing that it has paid these costs to counsel.
e.
Item 13: Interpreter Fees
CCP §1033.5(a)(3)(B) states that an
allowable cost is the fees of a certified or registered interpreter for a deposition
of a party or witness who does not proficiently speak or understand the English
language. Also, subsection (a)(12)
states that an allowable cost includes: “[c]ourt interpreter fees for a
qualified court interpreter authorized by the court for an indigent person
represented by a qualified legal services project, as defined in Section 6213
of the Business and Professions Code, or a pro bono attorney, as defined in
Section 8030.4 of the Business and Professions Code.”
ILMIC and MBB move to tax TAI’s claimed interpreter costs of
$2,235 for fees of a certified or registered interpreter for the deposition of
the Orozcos, arguing that TAI never took the depositions of the Orozcos and
thereby the interpreter fees were not incurred against them by TAI.
In opposition, TAI provides the invoice by Ms. Malley that shows
that interpreting costs amounted to $2,235 and were billed to Henry Aguila and
TAI. (Opp. at Ex. 1.) Again, the Court is not aware whether TAI actually
paid these amounts to Ms. Malley.
Further, TAI does not address ILMIC and MBB’s arguments that they did
not take the depositions of the Orozcos and thereby they should not be on the
hook for the interpreter fees. The real
question though is whether it was reasonable for TAI to take the depositions.
The Court will require TAI to submit a
supplemental declaration showing that it has paid these costs to counsel.
f.
Item
14: Fees
for Electronic Filing or Service
Although ILMIC/MBB argue that they are
seeking to strike/tax the costs in Item 14, they do not address Item 14 in
their moving papers. As such, no reduction
to these costs will be made.
g.
Item 16: Other
TAI seeks $842.92 under Item 16’s “Other”
category. The memorandum of costs shows
that TAI is seeking these costs for: (1) $180 for attorney service re filing an
opposition to the motion for summary judgment (11/21/18) and motions in limine
(12/17 and 12/31/18); (2) $180 for attorney service re courtesy delivery (3/28,
4/19, 4/1); (3) $218 for CourtCall (2/4/19 and 7/28/20); (4) $18 for court
document and certified copy; and (5) $246.92 in travel expenses (mileage).
The Court will disallow the costs
for the “Other” category. TAI has not provided
invoices or receipts showing the amounts billed and paid for each of the
aforementioned categories. Next, while
the costs are arguably “reasonably necessary to the conduct of the litigation,”
TAI has failed to show that the costs were not merely convenient or beneficial
to its preparation. (See CCP § 1033.5(c).)
In addition, costs such as attorney service
could have been reduced or avoided by using less costly means of service, such
as a courier service. Finally, costs
associated with counsel’s travel will not be allowed.
Thus, the
motion to tax costs is granted in the amount of $842.92, such that TAI shall recover
$0 from ILMIC and MBB for Item 14 Other.
CONCLUSION
AND ORDER
The Court continues
Cross-Defendants ILMIC and MBB’s motion to tax Cross-Complainant Thee Aguila
Inc.’s costs to September 2, 2022 at 8:30 a.m.
TAI is ordered to provide a supplemental declaration with exhibits
showing that it has paid its then-counsel Guinevere M. Malley, Esq. the amounts
sought in its memorandum of costs; further arguments are not permitted. TAI’s supplemental declaration shall be filed
and served by August 22, 2022. No further
briefing shall be permitted by the parties.
Cross-Defendants are ordered to provide
notice of this order.