Judge: Laura A. Seigle, Case: BC698965, Date: 2023-03-28 Tentative Ruling

Case Number: BC698965    Hearing Date: March 28, 2023    Dept: 15

[TENTATIVE] ORDER RE MOTION TO TAX COSTS

            Plaintiff Willie McNeal made an offer to compromise pursuant to Code of Civil Procedure section 998 in the amount of $778,000 with each party to bear its own costs.  (Barley Decl., Ex. 8).  Defendant Whittaker, Clark & Daniels, Inc. rejected the offer.  At trial, Plaintiff obtained a compensatory award of $448,761 and a punitive award of $3,000,000.  The parties signed a stipulation agreeing that Plaintiffs’ costs of $365,000 would be added to the judgment.  The Court of Appeal reversed the punitive award and directed the court to vacate the judgment enter a new judgment according to the Court of Appeal’s decision.  The court entered a judgment in the amount of $448,761.10.

            Plaintiff then filed a cost memorandum seeking $497,58.80 in costs.  Defendant filed this motion to tax costs, specifically $127,086.58 in expert fees and $134,261.40 in prejudgment interest.  Defendant argues Plaintiff failed to obtain a judgment more favorable than his section 998 offer and therefore is not entitled to the expert fees and prejudgment interest.  Plaintiff argues that to determine whether a defendant failed to obtain a more favorable judgment than the 998 offer, expert costs are added to the amount of the judgment.  Defendant argues they are not added.

            “If an offer made by a plaintiff is not accepted and defendant fails to obtain a more favorable judgment . . ., the court . . . in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses . . . in addition to plaintiff’s costs.”  (Code Civ. Proc., § 998, subd. (d).)  “To determine under section 998, subdivision (d) whether a defendant fails to obtain a more favorable judgment than a section 998, subdivision (d) offer to compromise which includes a waiver of costs, the amount of the judgment is deemed to be the amount of the damages plus the amount of costs allowed under section 1033.5, subdivision (a).”  (Wickware v. Tanner (1997) 53 Cal.App.4th 570, 575.)  Code of Civil Procedure section 1033.5, subdivision (a) lists the items allowable as costs under section 1032, including “[f]ees of expert witnesses ordered by the court.” 

Because the court did not order any expert in this case, and because section 1033.5, subdivision (a) does not list fees of experts not ordered by the court as an allowed cost, the amount of expert fees is not added to the amount of the judgment to determine whether Defendant failed to obtain a more favorable judgment.  Adding the allowed costs of $235,810.82 ($487,158.80 minus $127,086.58 minus $134,261.40) to the judgment of $448,761.10 equals $684,571.92.  That is less than Plaintiff’s $778,000 section 998 offer.  Therefore, Defendant did not fail to obtain a more favorable judgment than the section 998 offer.  That means the expert fees and prejudgment interest are not allowed as costs.

Plaintiff also argues that the parties stipulated to $365,000 in costs and therefore Defendant must pay that agreed-to amount.  The stipulation states the parties agreed that $365,000 “shall be entered on the May 4, 2021 Judgment on Jury Verdicts.”  (Barley Decl., Ex. 7.)  However, the Court of Appeal vacated that judgment.  The stipulation does not state the parties agreed that $365,000 in costs would be added to the new judgment the court entered after the Court of Appeal vacated the May 4, 2021 judgment.

The motion to tax costs is GRANTED.  The $127,086.58 in expert fees and minus 134,261.40 in prejudgment interest are disallowed.

The moving party is to give notice.