Judge: Jon R. Takasugi, Case: 21STCV27879, Date: 2023-04-11 Tentative Ruling

Case Number: 21STCV27879    Hearing Date: April 11, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant motion to tax Item 16 of Plaintiff’s memorandum of costs is GRANTED.

On July 29, 2021, Plaintiff Creditors Adjustment Bureau, Inc. brought this commercial collections case against Defendant Cermak Ochoa. Typecraft, Inc. and Defendant entered into a contract for goods and services. Typecraft then assigned its rights to monies due to Plaintiff.

On October 11, 2022, the Court granted Plaintiff’s motion for summary judgment, but ruled that attorneys fees, if warranted, should be determined by a separate motion. On December 20, 2022, Plaintiff filed its memorandum of costs. Item 16 listed $10,205.94 in collection costs.

Defendant now moves to tax Item 16 from Plaintiff’s costs.

Legal Standard

“Any notice of motion to strike or to tax costs must be served and filed 15 days after service of the cost memorandum.” (Cal. R. Ct., rule 3.1700(b)(1).) “Unless objection is made to the entire cost memorandum, the motion to strike or tax costs must refer to each item objected to by the same number and appear in the same order as the corresponding cost item claimed on the memorandum of costs and must state why the item is objectionable.” (Cal. R. Ct., rule 3.1700(b)(2).)

“The following items are allowable as costs under Section 1032:

…

(16) Any other item that is required to be awarded to the prevailing party pursuant to statute as an incident to prevailing in the action at trial or on appeal.” (Code Civ. Proc. § 1033.5(a).)

“An award of costs shall be subject to the following:

(1) Costs are allowable if incurred, whether or not paid.

(2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.

(3) Allowable costs shall be reasonable in amount.

(4) Items not mentioned in this section and items assessed upon application may be allowed or denied in the court’s discretion.” (Code Civ. Proc. § 1033.5(c).)

Discussion

            Defendant brings this motion to tax costs, arguing Item 16 of Plaintiff’s Memorandum of Costs is effectively an attorney’s fee and not an allowable cost. Defendant emphasizes that, in granting summary judgment, the Court found Plaintiff needed to file a separate motion to recover attorneys fees. Defendant also argues that even if the underlying contract allowed for Typecraft, Inc. to recover collection costs, Typecraft was not a party to this litigation and Plaintiff has not offered evidence that the fee was actually incurred.

            In opposition, Plaintiff points to Section 1033.5, subdivision (c)(4) which grants the Court the authority to allow costs not explicitly listed in subdivision (a). Plaintiff offers a copy of the underlying contract between Typecraft and Defendant, which includes a provision stating that Defendant would be liable for collection costs incurred. Finally, Plaintiff argues that under the principles of assignment Typecraft does not need to be a party to this litigation and Section 1033.5, subdivision (b)(1), allows for the recovery of costs whether or not they were paid.

            In light of its finding at summary judgment that Plaintiff must bring a separate motion to recover attorneys fees, the Court finds that Item 16 is not recoverable as a cost. Section 1033.5, subdivision (b)(1), allows for the recovery of costs whether or not they were paid. But it still requires that the costs were actually incurred. This is in line with the next requirement that allowable costs be reasonably necessary to the conduct of the litigation…” (Code Civ. Proc. § 1033.5(c)(2).)

Here, Plaintiff offers no evidence that the $10,205.94 listed in Item 16 was incurred during this litigation. Plaintiff offers a copy of the underlying contract which states: “If payment is not made, the customer is liable for all collection costs incurred.” (Opposition, Ex. 1, ¶ 19.) Plaintiff also offers a declaration from its Vice President who states 33.5% is the standard rate for collections on commercial accounts in litigation. (Matz Decl., ¶ 5.) However, Plaintiff does not offer any evidence that the $10,205.94 was actually incurred. To that extend, all Plaintiff has done is list the total amount on Item 16 of its Memorandum of Costs.

The 33.5% collection fee acts like a contingent attorneys fee. As such, it is subject to the Court’s finding that “any attorney fees award, if warranted, must be separately briefed to allow the Court to assess whether or not attorney fees are recoverable, and, if so, the reasonableness of the requested award.” (Summary Judgment Order, 10/11/22.) Pursuant Section 1033.5, subdivision (c)(5), this must be brought by noticed motion whereby the burden will be on Plaintiff to prove the amount is recoverable.

Plaintiff’s motion to tax costs is GRANTED

It is so ordered.

Dated: April     , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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