Judge: Joseph Lipner, Case: 21STCV05404, Date: 2023-09-12 Tentative Ruling
Case Number: 21STCV05404 Hearing Date: April 16, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
B&S VENTURES, INC., et al., Plaintiffs, v. AMGUARD INSURANCE COMPANY, et al., Defendants. |
Case No:
21STCV05404 Hearing Date: April 16, 2023 Calendar Number: 1 |
The Court DENIES Pithawalla’s motion to strike.
The Court GRANTS Pithawalla’s motion to tax costs.
The Court awards AmGuard costs in the amount of $921.05.
Plaintiff B&S Ventures Inc. (“BSV”) is a Wingstop
franchisee that owns and operates several Wingstop restaurants, including one
located at 1685 Pacific Coast Highway, Unit D, Harbor City, CA 90710 (“Harbor
City Store”). (Additional Material Fact (“AMF”) 1, 3.) Pithawalla is the
president and sole owner of BSV. (AMF 4.)
BSV is the named insured under AmGuard policy number
BSBP959456 (the “Policy”) with effective dates of December 16, 2018 to December
16, 2019. (Undisputed Material Fact (“UMF”) 5.) BSV’s members and partners and
their spouses are also insureds. (Response to Undisputed Material Fact (“RUMF”)
5.) The Harbor City Store was an insured location. (UMF 6.) The Policy provides
coverage for business income loss for actual loss sustained up to 12 months and
for an additional 30 days after damaged property is repaired and operations are
resumed. (RUMF 7.)
On September 12, 2019, a car ran into the Harbor City Store
and caused extensive damage to Plaintiffs’ storefront and the interior of the
store. Plaintiff provided AmGuard with timely notice of a claim under the
Policy with respect to the incident.
AmGuard provided compensation under the claim, but the
parties dispute whether AmGuard fully satisfied its obligations to cover repair
costs and business interruption costs under the Policy.
Plaintiffs filed this action against AmGuard and Carmen
Martinez (collectively, “Defendants”) on February 10, 2021, alleging (1) breach
of contract re: BSV; (2) breach of contract re: Pithawalla; (3) breach of the
implied covenant of good faith and fair dealing re: B&S; (4) breach of the
implied covenant of good faith and fair dealing re: Pithawalla; and (5)
negligence. The first four causes of action were raised against AmGuard, and
the fifth, for negligence, was raised against Martinez.
On January 24, 2024, the Court entered a judgment against
Pithawalla pursuant to its previous granting of AmGuard’s motion for summary
adjudication against Pithawalla and determining, over Pithawalla’s objection
that AmGuard may recover costs from Pithawalla according to proof. In granting
summary judgment, the Court found that Pithawalla lacked standing to assert his
claims against AmGuard because he was not an insured and did not have an
ownership interest in the affect property other than his ownership interest in
BSV
AmGuard filed a Memorandum of Costs against Pithawalla on
February 20, 2024.
Pithawalla moved to strike or tax AmGuard’s Memorandum of
Costs on March 6, 2024. AmGuard filed an opposition and Pithawalla filed a
reply.
“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., § 1032, subd. (b).) (Emphasis added.)
A prevailing party is defined as “[1] the party with a net
monetary recovery, [2] a defendant in whose favor dismissal is entered, [3] a
defendant where neither plaintiff nor defendant obtains any relief, and [4] a
defendant as against those plaintiffs who do not recover any relief against
that defendant.” (Code Civ. Proc., § 1032, subd. (a).) “[T]he trial court has no discretion to
deny prevailing party status to a litigant who falls within one of the four
statutory categories in the first [sentence] of the provision. As rewritten [in
1986], section 1032 now declares that costs are available as a ‘matter of
right’ when the prevailing party is within one of the four categories
designated by statute.” (Charton v. Harkey (2016) 247 Cal.App.4th 730,
738 [internal quotations and citations omitted].)
“A prevailing party who claims costs must serve and file a
memorandum of costs within 15 days after the date of mailing of the¿notice of
entry of judgment…The memorandum of costs must be verified by a statement of
the party, attorney, or agent that to the best of his or her knowledge the
items of cost are correct and were necessarily incurred in the case.”¿(Cal.
Rules of Court, rule 3.1700.)
The losing party may contest the costs that a prevailing
party seeks. (CCP §1034(a).) The challenging party has the burden of
demonstrating that those costs are unreasonable or unnecessary. (Adams v.
Ford Motor Co.,¿(2011) 199 Cal. App. 4th 1475, 1486; 612¿South LLC v.
Laconic Limited Partnership, (2010) 184 Cal. App. 4th 1270,
1285.)
Code of Civil Procedure section 1033.5 sets forth the costs
recoverable by the prevailing party. (Code Civ. Proc., § 1033.5.) “Allowable
costs shall be reasonably necessary to the conduct of the litigation rather
than merely convenient or beneficial to its preparation.” (Code Civ.
Proc., §1033.5(c)(2); Perko’s Enterprises, Inc. v. RRNS Enterprises (l992)
4 Cal.App.4th 238, 244.) A “properly verified memorandum of costs is
considered prima facie evidence that the costs listed in the memorandum were
necessarily incurred.” (Bach v. County of Butte (1989) 215
Cal.App.3d 294, 308; see also Hadley v. Krepel (1985) 167 Cal.App.3d
677, 682.) The memorandum of costs need not contain invoices, billings, or
statements. (Bach, at p. 308.) (See also Cal. Rules of
Court, Rule 3.1700(a)(1) [only verification required].)
“Documentation must be submitted only when a party
dissatisfied with the costs claimed in the memorandum challenges them by filing
a motion to tax costs.” (Bach v. County of Butte, supra, at p.
308.) This puts the burden on the party seeking to tax costs to show that
they were not reasonable or necessary. (Ladas v. California State
Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-74.) If items are
properly objected to, they are put in issue and the burden of proof is on the
party claiming them as costs. (Id.) “Defendant's mere statements in the points
and authorities accompanying its notice of motion to strike cost bill and the
declaration of its counsel are insufficient to rebut the prima facie
showing.” (Rappenecker v. Sea-Land Service, Inc. (1979) 93
Cal.App.3d 256, 266.)
AmGuard seeks the recovery of $4,844.73 in costs, comprised
of $555.23 in filing and motion fees and $4,289.50 in deposition costs for the
deposition of Pithawalla and the public adjuster retained by Pithawalla and BVS.
Pithawalla argued that the Court determined that Pithawalla
has an identical claim against AmGuard as BVS, and that AmGuard therefore
cannot recover costs against Pithawalla because it has not yet prevailed
against BVS. This argument incorrectly states the Court’s opinion. The Court
held that Pithawalla did not have his own legal interest in the subject
property because that property was owned by BVS and Pithawalla’s ownership
interest in BVS did not establish ownership of BVS’s property in the absence of
veil piercing.
Pithawalla is correct, however, in arguing that AmGuard may
only recover the costs reasonably attributable to him, as opposed to
BVS. (Ducoing Management, Inc. v. Superior Court (2015) 234 Cal.App.4th
306, 316 [reversing award of fee to defendant prevailing over one plaintiff
which had originally been awarded, in the same amount, to the defendant
prevailing over both plaintiffs prior to appellate court’s reversal].)
AmGuard argues that it would have incurred the filing fee
for the motion for summary adjudication even if it had only filed it against
Pithawalla. However, the reverse is also true – even if Pithawalla had never
sued AmGuard, AmGuard’s unsuccessful motion for summary adjudication against
BVS would have cost it the same fee. Thus, the Court awards AmGuard $277.62, roughly
one half of the filing fee.
AmGuard deposed Pithawalla once, in his capacities both as
an individual Plaintiff and as BSV’s person most knowledgeable. (Downey Decl. ¶
8.) AmGuard submitted substantial evidence from Pithawalla’s deposition on
issues relating directly to AmGuard’s liability to BSV in addition to
Pithawalla’s own ability to recover. (See AmGuard’s Exhibit List 4 in Support
of Motion for Summary Adjudication, Ex. 39, 40.) In fact, the vast majority of
the excerpts that AmGuard submitted did not pertain to Pithawalla’s standing,
but to AmGuard’s claims. This is substantial evidence that the deposition costs
for Pithawalla are not primarily attributable to him has a plaintiff.
There is evidence that the deposition costs for Michael Rubin,
BVS’s adjuster, were also primarily attributable to BVS. AmGuard submitted only
a slim portion of the deposition in support of its motion, albeit in support of
its arguments against Pithawalla. However, the length of the overall transcript
and the exhibits attached to it, which include invoices, inventories, and
records of BVS’s money spent, indicate that the primary purpose of the
deposition was to evaluate BVS’s claims against AmGuard, which are still being
litigated.
The Court’s concerns with each of the deposition costs
remain especially salient given the amount of paper devoted in the summary
adjudication motion to BVS’s surviving claims as opposed to Pithawalla’s
standing. AmGuard spent a mere page and a half, out of roughly 28 pages,
arguing the issue of Pithawalla’s standing. Roughly 11 of the 91 facts in
AmGuard’s separate statement pertained to Pithawalla’s standing.
The Court awards AmGuard $643.43 in deposition costs, which
is roughly 15 percent of the requested costs.