Judge: Loren G. Freestone, Case: 37-2017-00020561-CU-DF-CTL, Date: 2024-05-31 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - May 30, 2024

05/31/2024  10:30:00 AM  C-64 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Loren G. Freestone

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Civil - Unlimited  Defamation Motion Hearing (Civil) 37-2017-00020561-CU-DF-CTL COMMODITY TRUCKING ACQUISITION LLC VS. THOMAS AYLOTT [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING Plaintiff Commodity Trucking Acquisition LLC's motion to strike or tax Defendants Daniel Gilleon and the Gilleon Law Firm APC's costs is GRANTED IN PART and DENIED IN PART.

'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).) Certain costs are expressly allowed, certain costs are expressly disallowed, and costs that are neither expressly allowed nor expressly disallowed may be 'allowed or denied in the court's discretion.' (See Code Civ. Proc., § 1033.5, subds. (a)–(b), (c)(4).) All costs awarded, whether expressly permitted or awardable in the court's discretion must be 'reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation' and be 'reasonable in amount.' (Id. at subds. (c)(2)–(3).) 'The losing party may dispute any or all the items in the prevailing party's memorandum of costs by filing a motion to strike or tax costs. (Cal Rules of Court, rule 3.1700(b).) If items on a memorandum of costs appear to be proper charges on their face, those items are prima facie evidence that the costs, expenses, and services are proper and necessarily incurred. The burden then shifts to the objecting party to show them to be unnecessary or unreasonable.' (Doe v. Los Angeles County Dept. of Children & Family Services (2019) 37 Cal.App.5th 675, 693.) However, if a cost does not appear to be proper on its face or if the necessity of the cost 'appears doubtful,' the burden is on the party opposing the motion to strike. (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131.) Expert Fees Commodity moves to tax $7,902.15 in expert witness fees.

Fees of expert witnesses not ordered by the court are typically not recoverable. (Code Civ. Proc., § 1033.5, subd. (b)(1).) However, when a plaintiff fails to beat a defendant's offer to compromise under Code of Civil Procedure section 998, the defendant may recover such costs in the discretion of the court.

(Id. at § 998, subd. (c)(1).) Commodity argues that even though Gilleon made a Section 998 offer, it was not in good faith. As such, Commodity contends that it should not be liable for the expert fees.

'Where the offeror obtains a judgment more favorable than its offer, the judgment constitutes prima facie Calendar No.: Event ID:  TENTATIVE RULINGS

3109212  38 CASE NUMBER: CASE TITLE:  COMMODITY TRUCKING ACQUISITION LLC VS. THOMAS  37-2017-00020561-CU-DF-CTL evidence showing the offer was reasonable and the offeror is eligible for costs as specified in section 998.' (Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1484.) In that scenario, the burden is on the offeree to prove that the section 998 offer was unreasonable and made in bad faith. (See id. at pp 1484–1486 [plaintiff failed to establish that prevailing defendant's section 998 offer for $10,000 and waiver of costs was unreasonable and in bad faith, even though the plaintiff had hundreds of thousands of dollars in costs and was seeking two million dollars in damages, where parties had conducted significant discovery and evidence indicated that plaintiff's chances of prevailing were slim].) Here, on December 20, 2023, Gilleon served a Section 998 offer for $7,501 with a waiver of costs. On March 6, 2024, judgment was entered in favor of Gilleon, and Commodity took nothing under its complaint. The judgment is prima facie evidence that the offer was reasonable.

Gilleon also submits evidence that the offer was informed by five years of litigation and discovery, and as of the date of the offer, he evaluated Commodity's damages as 'virtually zero and purely speculative.' Gilleon notes that Commodity did not designate an outside economic expert and instead relied on its own CFO/CEO (John Sullivan) as a non-retained expert. Sullivan was deposed before the section 998 offer was made. Sullivan's deposition testimony discredited Commodity's theories of economic damages and he was unable to name any customers that the company lost, nor name any truck drivers who quit because of Gilleon's statements. Gilleon also submits evidence that other truck drivers, its dispatcher, and its project manager all supported his position that his statements were substantially true (as the jury later found).

Commodity argues the section 998 offer was unreasonable because the monetary amount would not have even covered its costs. Commodity did not present any evidence of its costs as of the date of the offer, and in any event, the amount of the offeree's costs is not dispositive. (Adams, supra, 199 Cal.App.4th at pp. 1484–1486.) Moreover, the cost waiver gave the section 998 offer additional value.

If Commodity had accepted the section 998 offer, 'it would have eliminated [its] exposure to the very costs which are the subject of this [motion].' (Ibid.) Commodity also argues that the offer was unreasonable because it was seeking $1.5 million in lost profits. The amount of damages sought is also not dispositive. (Ibid.) Moreover, Commodity's evidence on this point is a declaration from Sullivan that it submitted in opposition to Gilleon's motion for summary judgment. Commodity does not dispute that declaration was undercut by Sullivan's subsequent deposition testimony. (See ibid.) Commodity further argues that the offer was unreasonable because it had successfully overcome Gilleon's anti-SLAPP motion and motion for summary judgment. Although Gilleon was unable to establish that Commodity's claims failed as a matter of law, there was sufficient evidence against Commodity on the issues of liability and damages for Gilleon to value the case as he did, and for Commodity to have predicted the outcome at trial. (See Najah v. Scottsdale Ins. Co. (2014) 230 Cal.App.4th 125, 144–145.) 'Whether a section 998 offer was reasonable and made in good faith is left to the sound discretion of the trial court.' (Adams, supra, 199 Cal.App.4th at p. 1484.) Based on the evidence presented, the court finds that Commodity failed to meet its burden of showing that the section 998 offer was unreasonable and in bad faith.

Commodity also argues that there is no evidence that the expert fees are reasonable, noting that Gilleon did not submit invoices or provide details of the work performed. 'But a verified memorandum of costs is prima facie evidence of the propriety of the items listed on it, and the burden is on the party challenging these costs to demonstrate that they were not reasonable or necessary.' (Bender v. County of Los Angeles (2013) 217 Cal.App.4th 968, 989; accord Adams, supra, 199 Cal.App.4th at pp. 1486–1487; Rojas v. HSBC Card Services Inc. (2023) 93 Cal.App.5th 860, 896–897 & fn. 23.) Here, the memorandum of costs states that the expert fees were paid to Heather Xitco for work performed between December 20, 2023 and February 13, 2024. The memorandum indicates that Xitco was Calendar No.: Event ID:  TENTATIVE RULINGS

3109212  38 CASE NUMBER: CASE TITLE:  COMMODITY TRUCKING ACQUISITION LLC VS. THOMAS  37-2017-00020561-CU-DF-CTL deposed. The exhibit list from trial indicates that Xitco performed an analysis of Commodity's financial statement. And the record reflects that Xitco testified at trial. $7,902.15 appears reasonable for this work, and Commodity did not submit any evidence showing otherwise.

For the reasons set forth above, the motion to tax the expert fees is denied.

Court Reporter Fees at Trial Commodity moves to tax $13,484.68 in court reporting costs for trial.

Court reporter fees are a type of cost that is expressly allowed. (Code Civ. Proc., § 1033.5, subd.

(a)(11).) Commodity argues that even though such costs are typically recoverable, the parties agreed to split the costs equally.

Where 'the parties agree to share costs during litigation, the courts will enforce those agreements as written.' (Anthony v.Xiaobin Li (2020) 47 Cal.App.5th 816, 824.) 'If the parties want[] to allow recovery of the apportioned fee by the prevailing party as an item of costs, they [are] free to spell this out in their agreement, but such a provision will not be read into the agreement.' (Ibid.) Here, counsel for Gilleon sent the following email a few days before trial started: 'The parties have agreed to share the expense of a court reporter. Plaintiff will pay half and defense will pay half. The court reporter will be arranged by attorney Jim Mitchell. Preferably, the court reporter will be Aptus, but if they are not available, Mr. Mitchell will arrange for the court reporter.' In response, counsel for Commodity replied: 'Agreed.' Gilleon acknowledges that $13,484.68 is the total amount of the court reporter fees, and that Commodity has/will be paying half of that amount, and therefore he has reduced his request to $6,742.34 (i.e., his one-half share). But the parties' agreement does not include any terms entitling the prevailing party to recover any portion of the court reporting costs the parties agreed to split. Gilleon must bear his share of the court reporter costs.

For the reasons set forth above, the motion to tax the reporter fees for trial is granted.

Court Reporter Fees for Anti-SLAPP and Summary Judgment Hearings Commodity moves to tax $750 for court reporting fees for the anti-SLAPP motion and summary judgment motion.

Again, court reporter fees are a type of cost that is expressly allowed. (Code Civ. Proc., § 1033.5, subd.

(a)(11).) Commodity argues that Gilleon did not provide the reporters' names, nor provide evidence establishing the actual cost of the reporter and the reasonableness of these fees.

The memorandum of costs does not include the name of the specific reporter, but it does identify the reporting agency as SDCRC. The names of the reporters are also reflected on the minute orders from those hearings (Lauren Ramseyer CSR# 14004 and Leyla Jones CSR# 12750). Although no bills were submitted, the minute orders confirm the matters were reported, and the cost memorandum and declaration in opposition to this motion both affirm that SDCRC charged a total of $750 for the two hearings. This amount appears proper on its face, and the burden is therefore on Commodity to prove that the amount is unreasonable. (See Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, Calendar No.: Event ID:  TENTATIVE RULINGS

3109212  38 CASE NUMBER: CASE TITLE:  COMMODITY TRUCKING ACQUISITION LLC VS. THOMAS  37-2017-00020561-CU-DF-CTL 858; see also Bender, supra, 217 Cal.App.4th at p. 989.) Commodity failed to provide any such evidence.

For the first time in reply, Commodity argues that the fees are unreasonable because the statutory fixed fee for official court reporters is $55/day. (See Gov. Code, § 69948, subd. (a).) Commodity waived this argument by failing to raise it in its moving papers. (See Maleti v. Wickers (2022) 82 Cal.App.5th 181, 227–228.) In any event, Government Code section 69948 and its cap only apply to 'official superior court reporters.' (See Gamage v. Medical Board (1998) 60 Cal.App.4th 936, 938.) When a party is required to arrange for a private reporter to serve as an official pro tempore reporter, that reporter's fee is a recoverable expense. (Gov. Code, § 68086, subds. (d)(2); Cal. Rules of Court, rule 2.956(c)(1); see, e.g., Vargas v. Gallizzi (2023) 96 Cal.App.5th 362, 36 [court appropriately awarded reporter's daily rate of $1,390, in addition to real-time transcription fees].) For the reasons set forth above, the motion to tax the reporter fees for the anti-SLAPP and summary judgment hearings is denied.

Service of Process Commodity moves to tax $1,273.50 in service of process costs.

Service of process fees are a type of cost that is expressly allowed. (Code Civ. Proc., § 1033.5, subd.

(a)(4).) Commodity argues that Gilleon did not establish how the subpoenas were served, and therefore the memorandum of costs is not prima facie evidence.

The amount recoverable for service of process depends on whether service was made 'by a public officer, registered process server, or other means.' (Id. at subd. (a)(4)(A)–(D).) Thus, to constitute prima facie evidence of a proper cost, the cost bill must specify how subpoenas were served. (See Nelson, supra, 72 Cal.App.4th at p. 132.) Here, however, the memorandum of costs does specify how the deposition and trial subpoenas were served. Each cost is under the heading 'Registered process.' Thus, the amount recoverable is 'the amount actually incurred in effecting service.' (Code Civ. Proc., § 1033.5, subd. (a)(4)(B).) The burden is therefore on Commodity to show that the costs claimed were unreasonable or unnecessary. (See Doe v. Los Angeles County Dept. of Children & Family Services (2019) 37 Cal.App.5th 675, 694; Los Alamitos Unified School Dist. v. Howard Contracting Inc. (2014) 229 Cal.App.4th 1222, 1232.) Commodity failed to provide any such evidence.

For the reasons set forth above, the motion to tax the service of process costs is denied.

Electronic Service/Filing Commodity moves to tax $403.80 for electronic service of documents. Gilleon clarifies in opposition that the costs were actually for electronic filing through One Legal.

As of January 1, 2017, electronic filing and service fees through an electronic filing service provider are a type of cost that is expressly allowed if required or ordered by the court. (Code Civ. Proc., § 1033.5, subd. (a)(14).) Commodity argues electronic filing and service was not ordered by the court.

As of January 2022, the San Diego Superior Court Local Rules have required electronic filing and service of documents when parties are represented. (Super. Ct. San Diego County, Local Rules, rule 2.1.4) This case was filed in June 2017. As such, a large portion of this case predates the mandatory Calendar No.: Event ID:  TENTATIVE RULINGS

3109212  38 CASE NUMBER: CASE TITLE:  COMMODITY TRUCKING ACQUISITION LLC VS. THOMAS  37-2017-00020561-CU-DF-CTL e-filing requirement.

However, as early as January 2015, electronic filing was encouraged in all imaged cases. (See Presiding Department Order No. 010915, ¶ 4.) Thus, as to those costs that predated the local rule, they were reasonably necessary to the litigation and properly awarded in the discretion of the court. (Code Civ. Proc., § 1033.5, subd. (c)(4).) Commodity also argues that there is insufficient evidence to support these costs. But Gilleon submits a declaration confirming that these costs were incurred. Given the number of filings in this case, the total costs requested appears proper. The burden is therefore on Commodity to prove that such costs were not incurred or were unreasonable or unnecessary. (See Rozanova v. Uribe (2021) 68 Cal.App.5th 392, 399, 406.) Commodity failed to provide any such evidence.

For the reasons set forth above, the motion to tax the electronic service/filing costs is denied.

Reporter's Transcripts for Witness Interviews Commodity moves to tax $1,010.50 for reporter's transcripts for witness interviews.

Transcripts of court proceedings are expressly allowed when ordered by the court, and expressly disallowed when not ordered by the court. (Code Civ. Proc., § 1033.5, subds. (a)(9), (b)(5).) A deposition transcript is also a type of cost that is expressly allowed. (Id. at subd. (a)(3)(A).) Commodity argues that the cost of these transcripts is not recoverable because they were not ordered by the court, nor were they for depositions.

As noted, the costs were for reporter's transcripts of witness interviews. They were not for court proceedings, nor were they for depositions. As such, this type of cost is neither expressly allowed nor expressly disallowed, and it may be awarded in the discretion of the court. (See Code Civ. Proc., §1033.5, subd. (c)(4).) Gilleon submits evidence that the four witnessed interviewed were all former dump truck drivers for Commodity, and all of the were subpoenaed as witnesses for trial. Two of drivers ultimately appeared at trial and two did not (one of whom had died). Gilleon submits evidence that the interviewed were transcribed by a court reported 'for possible use at trial if a witness gave testimony inconsistent with their interview.' (See Seibert v. City of San Jose (2016) 247 Cal.App.4th 1027, 1053–1065 [court erred by refusing to consider transcript of interview of one of plaintiff's co-workers by defendant's investigator].) Commodity does not submit any evidence showing that such transcription was unreasonable.

Commodity argues that two of the transcripts were not produced during discovery. There is no evidence as to what was requested in discovery and what was produced in discovery.

For the reasons set forth above, the motion to tax the cost for the reporter's transcripts for witness interviews is denied.

Reporter's Transcript for Anti-SLAPP Hearing Commodity moves to tax $90.75 for the reporter transcript for the hearing on the anti-SLAPP motion.

Transcripts of court proceedings not ordered by the court are expressly disallowed. (Code Civ. Proc., § 1033.5, subd. (b)(5).) Commodity argues that transcript of the hearing on the anti-SLAPP motion was not ordered by the court and therefore is not recoverable.

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3109212  38 CASE NUMBER: CASE TITLE:  COMMODITY TRUCKING ACQUISITION LLC VS. THOMAS  37-2017-00020561-CU-DF-CTL Gilleon asserts that the transcription 'was necessary for the appeal.' The transcript may have been a recoverable cost on appeal (see Cal. Rules of Court, rule 8.278(d)(1)(B)) to the extent it was timely claimed (see id. at rule 8.278(c)(a)), but Gilleon lost the appeal and was not awarded any such costs.

For the reasons set forth above, the motion to tax the transcript for the hearing on the anti-SLAPP motion is granted.

Deliveries to Court Commodity moves to tax $335 for deliveries to the court.

Messenger fees are neither expressly allowed nor expressly disallowed. (See Code Civ. Proc., § 1033.5.) Such costs may instead be allowed in the discretion of the court, when reasonably necessary to the litigation. (See Sanford v. Rasnick (2016) 246 Cal.App.4th 1121, 1132–1133.) Commodity argues there Gilleon did not provide any details showing that these messenger fees were reasonably necessary and reasonable in amount.

Courts have routinely upheld awards of messenger fees as reasonably necessary. (See, e.g., Doe, supra, 37 Cal.App.5th at p. 696; Benach, supra, 149 Cal.App.4th 836, 857–858; Foothill-De Anza Community College Dist. v. Emerich (2007) 158 Cal.App.4th 11, 30; Ladas v. California State Auto Assn. (1993) 19 Cal.App.4th 761, 776.) The only case Commodity cites where a trial court, in its discretion, decided not to award messenger fees was Nelson, supra, 72 Cal.App.4th 111. The reason the trial court in Nelson found the messenger fees to be 'of doubtful necessity and unreasonable on their face,' and therefore placed the burden on the prevailing party to show such costs were reasonably necessary, was in 'view of the size of the very large firm representing' the prevailing party. (Id. at p. 132.) The 'very large firm' in Nelson was Gibson, Dunn, & Crutcher.

Gilleon submits evidence that the messenger fees were related to the multiple motions and ex parte applications in this case. Commodity did not submit any evidence show such fees were unreasonable or unnecessary in the context of this litigation. The court finds the costs to have been reasonably necessary to the litigation.

For the reasons set forth above, the motion to tax the costs for deliveries to the court is denied.

Conclusion The motion to tax is granted in part and denied in part.

Costs are taxed in the amount of $13,575.43. Gilleon is awarded a total of $24,677.92 in costs.

The clerk is directed to interlineate the cost award on the judgment.

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