Judge: Mark H. Epstein, Case: 19SMCV02200, Date: 2024-12-10 Tentative Ruling

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Case Number: 19SMCV02200    Hearing Date: December 10, 2024    Dept: I

The court has before it a motion to tax costs by plaintiff and a motion for fees by the defense.  The motion to tax costs is GRANTED IN PART AND DENIED IN PART.  The motion for fees is DENIED. 

This arises from a suit by a tenant against a landlord.  The suit alleged habitability issues concerning mold as well as a retaliation cause of action in which the tenant alleged that the landlord attempted to raise the rent because the tenant had complained of the mold.  The case went to trial earlier this year and a jury returned a verdict in defendant’s favor on September 12, 2024.  Defendants submitted a cost bill and brought a motion for fees.  Plaintiff filed a motion to tax costs.

The court turns first to the motion to tax costs.  By far the largest aspect of the motion is defendants’ claim for expert fees.  Defendants submitted an offer under CCP section 998, which plaintiff rejected.  The verdict in defendants’ favor obviously means that the offer of judgment was better than the actual recovery.  The expert fees sought are $138,042.60.  Plaintiff argues that the court should tax those costs because: (1) the 998 offer was not in good faith; and (2) the court should, in its discretion, strike the costs as being over-stated.  The offer was made only three months after suit was filed and was apparently for $25,000.  Plaintiff, whose demand was substantially higher, says that this was too early in the case to allow plaintiff to determine reasonably whether the offer ought to be accepted or not.  Normally, that would be a compelling argument.  Three months into a case is very early, and well before significant discovery is typically done that would allow a party the reasonable opportunity to know, one way or the other, whether the offer is appropriate and thereby evaluate the offer meaningfully.  (MacQuiddy v. Mercedes-Benz USA, LLC (2015) 233 Cal.App.4th 1036.)  Defendant does not dispute the general proposition, but contends that this is an unusual case.  By the time suit was brought here, plaintiff had already retained an expert to inspect her home—that was in March 2019, which was a year before the 998 offer was made.  Further, there was a second report.  Both reports showed that there were no elevated mold levels in the apartment.  In addition, none of plaintiff’s medical doctors had told her that her respiratory issues were due to mold.  Plaintiff had also sought a rent reduction with the Santa Monica Rent Control Board on the basis of the mold, but the request was denied on the merits because there was no evidence of active water leaks or dangerous levels of mold.  According to the defense, given all of those facts—which predated the 998 offer—plaintiff had plenty of information that she could use to evaluate the offer. 

To resolve the issue of good faith, the court asks first whether the offer was within the range of reasonably possible results at trial in light of the information that the offeror knew and second whether the offeror knew that the offeree had sufficient information to assess whether the offer was reasonable.  (Glassman v. Safeco Ins. Co. of America (2023) 90 Cal.App.5th 1281.)  The court must answer both questions in the affirmative.  The problem here was not really a battle of experts.  The report plaintiff had in hand at the time suit was filed (which she had commissioned) indicated no elevated levels of mold in the apartment.  And the Santa Monica Rent Control Board is not known for being overly favorable to landlords yet found no evidence of dangerous levels of mold.  That finding was also something that should have given plaintiff pause.  Plaintiff’s major argument at trial—and one supported by a medical expert—was that the fact that plaintiff saw mold and got better when she left the apartment and worse when she stayed there was enough to establish the habitability issue.  Maybe—the court did let the issue go to the jury.  But the fact that it is a jury question is not the same as saying that plaintiff did not have information enough to evaluate the offer.  Thus, while in the normal case the court would find the argument that the offer came too soon as compelling, the unusual facts here cause the court to believe that the offer was in good faith.

As to the amount of the fees, plaintiff contends that defendants must establish that the fees sought are reasonable.  But a verified memorandum of costs is prima facie evidence of reasonableness; it is plaintiff that must rebut the presumption.  As to Daly, plaintiff contends that he was only at the property once and only for a few hours, yet he supposedly did 73.3 hours of work.  The problem is that the court believes that Daly, as an expert, did more than spend a few hours at the property.  The expert analysis takes time as well.  The court will not speculate that the time spent is too large.  The same reasoning applies to Drs. Corren and Naraghi.  Plaintiff claims that they spent too long or did not appear at trial.  But that is not the test.  The question is not how much time was spent at trial; the question is how much time was spent.  The court does not see the time as excessive.  It is true that Dr. Naraghi did not appear at trial, but that was because plaintiff did not press her pulmonary injury claim.  The work done before that became clear is recoverable.  The court has reviewed the various hourly rates, and they are reasonable.  In short, the court agrees that the 998 offer was valid and that the fees are reasonable.  The court will exercise its discretion to award the fees under section 998.  The motion in this regard is DENIED.

Plaintiff contends that the court reporter fees are excessive.  The court disagrees to a point, but also agrees in part.  As the court understands it, defendants seek primarily the reporter’s fees, but they also seek some fees for transcripts.  However, defendants are not seeking any double recovery for any fees that plaintiff actually paid (or at least that is how the court reads the request).  As such, the court believes that the reporter’s fees are appropriate in terms of retaining the court reporter.  But it appears that the parties agreed to split the court reporter fees.  The court will hold the parties to their agreement, whatever it was.  What the court needs to see is the agreement itself.  If the agreement was simply to split the fees, then that would suggest that the parties agreed not to seek it as a court cost.  But if it was merely an agreement as to who would advance the fees, then the fees remain a recoverable cost.  The court would like the parties to provide the actual agreement so the court can see it.  If there is no written agreement, the court will ask whether each party paid in advance—which would suggest that the deal was merely as to who would advance the fees—or whether the parties just got billed from time to time, which would indicate an agreement simply to divide the fees.  Until the court sees that, it is hard to rule on whether this recoverable cost has been waived.  As to the fees sought that pertain to transcripts rather than the court reporter fees, the court agrees that they are not recoverable as of right.  The transcripts might well be needed for appeal, but they were not needed for trial.  Therefore, to that extent the motion is GRANTED

Finally, as to the exhibit binders, the court understands that not all of the documents were used, but that is not the test.  The binders are essentially documents of preclusion.  If the exhibit is not in the binder, it might well be excluded.  It is therefore appropriate and common for the parties to include exhibits in the binders that might not wind up being used at trial.  But again, there is an issue as to whether there was an agreement to split the cost of the binders.  As with the court reporter fees, the court will look at the agreement itself.

With that the court turns to the fee motion.  Defendants do not seek contractual fees.  There is no fee provision in the lease that would entitle the defense to a recovery here.  Rather, what is sought is a recovery under Civil Code section 1942.5.  It states that in a retaliatory eviction case, the prevailing party is entitled to fees if sought at the start of the case.  The problem with the request is that it is over-reaching.  A bit of background.  After plaintiff complained of the mold and concluded that the mold had not been sufficiently remediated, she moved in with her brother.  Defendants, who lived in the building, saw that her car had not been parked in its spot for a period of time.  Accordingly, and not having heard from plaintiff specifically as to what was going on, defendants served plaintiff with a notice of intent to seek a rent adjustment due to non-occupancy.  The theory was that if plaintiff had moved out, defendants were entitled to raise the rent under Santa Monica’s rent control law.  The response was a letter stating that plaintiff still lived in the unit (to put it nicely).  Upon receipt of that information, defendants took no further action, meaning that no actual petition with the Rent Control Board was ever filed.  Plaintiff asserts that defendants’ action as just described was a retaliatory eviction.  That question went to the jury, which found in defendants’ favor. 

According to defendants, all of the facts in the case are so intertwined that any work done on anything pertained to the retaliation cause of action.  This court disagrees.  The court has overseen this case since it was filed back in 2020.  There have been discovery skirmishes having nothing to do with that cause of action.  The issues in the retaliation cause of action are largely discrete from the habitability claims.  One deals essentially with defendants’ motive in taking an action; the other deals with whether the apartment was safe or not.  While the court cannot quite say that the retaliation claim is hermetically sealed from the rest of the case, the court believes it is discrete.  It took up only a little bit of the trial, and the evidence going to it was relatively discrete.  The court believes the same is true of the pre-trial work.  In short, it is not really credible that one can say that all of the work done pertained in whole or even in part to the retaliation claim.  Had there been any effort at all to apportion the work—even as an alternative request—the court would likely have considered a reduced fee limited to the recoverable aspects of the case.  But defendants, who are the masters of their motion, chose an all or nothing approach.  Because the court cannot award all, and because the needle is not even anywhere near the half-way mark, the result must be nothing.  Accordingly, the motion for fees is DENIED.