Judge: Michael P. Linfield, Case: 20STCV42627, Date: 2022-08-31 Tentative Ruling

Case Number: 20STCV42627    Hearing Date: August 31, 2022    Dept: 34

SUBJECT:         Motion to Strike and/or Tax Costs

Moving Party:  Plaintiff 226 Central, LLC

Resp. Party:    Defendants Subway Real Estate, LLC, Ajay Beri, and Rita Beri

        Plaintiff 226 Central LLC’s Motion to Strike or Tax Costs is DENIED.  Defendants are awarded their requested $8,499.07 in fees.

BACKGROUND:

        Plaintiff 226 Central, LLC commenced this action on November 6, 2020 against Defendants Subway Real Estate, LLC, Ajay Beri, and Rita Beri. After a two-day bench trial, the Court found in favor of Plaintiff. (Minute Order dated June 1, 2022, p. 1.) However, given that the Court only found in favor of Plaintiff to the same extent that Defendants had long-before offered to settle, the Court determined when awarding fees that Defendants were the prevailing party in this litigation. (Minute Order dated July 19, 2022, p. 6.)

        Defendants filed their Memorandum of Costs on July 19, 2022. Their listed costs include: (1) $1,365.00 in filing and motion fees; (2) $4,959.20 in deposition costs; (3) $1,300.00 in witness fees; (4) $75,386.25 in attorney fees; (5) $289.17 in fees for electronic filing or service; and (6) $585.70 in “other” costs. (The other costs are for binder and mediation fees.) Excluding the attorney fees, which were already awarded on July 19, 2022, the costs total $8,499.07.

        Plaintiff filed its Motion to Strike and/or Tax Costs on August 5, 2022. Plaintiff requests that the Court strike in their entirety or, alternatively, tax: (1) the deposition costs; (2) the expert fees; (3) the attorney fees; and (4) the binder and mediation fees. Plaintiff argues in favor of its request: (1) that Defendants do not have standing to recover costs because a final award has not been issued (Mot., pp. 3­–4); (2) that Defendants cannot recover costs because Plaintiff has not yet filed and serve its motion for attorney’s fees, and thus it cannot yet be ascertained who is the prevailing party (Id., p. 4); and (3) the disputed costs must be stricken or taxed because they are unreasonable and/or unnecessary. (Id., pp. 4–5.)

        Defendants filed their Opposition on August 16, 2022. Defendants argue: (1) that they are entitled to costs as the prevailing party, having been so ruled on July 19, 2022 and on August 16, 2022; and (2) that their costs are recoverable, and specifically that their expert witness fees are recoverable under CCP § 998(c)(1) and that the binder and exhibit fees are recoverable under CCP § 1033.5(a)(13). (Opp’n, pp. 1–2.)

ANALYSIS:

I.           Legal Standard

“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.” (CCP § 1032(b).) 

        After judgment is entered, the prevailing party “who claims costs must serve and file a memorandum of costs within 15 days after the date of service of the notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first.” (Cal. Rules of Court, rule 3.1700(a).) “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 this case.” (Id.) 

        In turn, the losing party may file a motion to strike or tax costs. (Cal. Rules of Court, rule 3.1700(b).) Procedurally, “[a]ny notice of motion to strike or to tax costs must be served and filed 15 days after service of the cost memorandum.” (Id.) 

Even where parties are unsuccessful as to certain matters, prevailing parties as defined by statute (Code of Civil Procedure section 1032) are entitled to recover all costs reasonably incurred, and proof that parties were unsuccessful on particular items is not tantamount to a demonstration that such costs were unreasonably incurred. (Michell v. Olick (1996) 49 Cal.App.4th 1194, 1200.)

During the hearing, “the verified memorandum of costs is prima facie evidence of their propriety, and the burden is on the party seeking to tax costs to show they were not reasonable or necessary.” (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131.) “This procedure provides an orderly and efficient way of placing disputed costs at issue on a line item basis.” (612 South LLC v. Laconic Ltd. Partnership (2010) 184 Cal.App.4th 1270, 1285.)

“[T]he mere filing of a motion to tax costs may be a “proper objection” to an item, the necessity of which appears doubtful, or which does not appear to be proper on its face. [Citation.] However, “[i]f the items appear to be proper charges the verified memorandum is prima facie evidence that the costs, expenses and services therein listed were necessarily incurred by the defendant [citations], and the burden of showing that an item is not properly chargeable or is unreasonable is upon the [objecting party].” [Citations.]

The court’s first determination, therefore, is whether the statute expressly allows the particular item, and whether it appears proper on its face. [Citation.] If so, the burden is on the objecting party to show them to be unnecessary or unreasonable. [Citation.]” (Nelson, supra, 72 Cal.App.4th at p. 131.)

If the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs. (Ladas v. California State Auto Assn. (1993) 19 Cal.App.4th 761, 774.) “There is no requirement that copies of bills, invoices, statements, or any other such documents be attached to the memorandum. Supporting documentation must be submitted only if costs have been put in issue by a motion to tax costs.” (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1267.)

Code of Civil Procedure section 1033.5 sets forth various categories of recoverable costs.  Some of the costs include filing, motion, and jury fees (Section 1033.5(a)(1)) and service of process by a public officer, registered process server, or other means (Section 1033.5(a)(4)). However, allowable costs shall be reasonably necessary to the conduct of litigation rather than merely convenient or beneficial to its preparation. (Code Civ. Proc., § 1033.5(c)(2).) Section 1033.5 also explains that if an item is not mentioned in this section, these items may be allowed or denied in the court’s discretion. (Code of Civ. Proc., § 1033.5(c)(4).) 

II.         Discussion

Here, Defendants are the prevailing party and are entitled to recover their costs.

Plaintiff argues that “no decision by the Court has been issued as to whether the Plaintiff is the ‘prevailing party.’”  (Motion, p. 3:23-24.)  That is incorrect.  The Court has previously determined that Defendants are the prevailing party. (Minute Order, 7/19/22, p. 6.)  The Court noted at that time that , “[t]his litigation was a waste of time. . . Plaintiff spent 1½ years of litigation – and untold scores of thousands of dollars in attorneys fees – and gained absolutely nothing.” (Minute Order, 7/19/22, p. 5.) Regarding the specific fees listed in Defendants’ Memorandum of Costs, the Court finds that all of them are necessary and reasonable.

However, the Court notes that the attorney fees listed in the Memorandum of Costs have already been granted and of course shall not be granted a second time.

III.      Conclusion

        Plaintiff 226 Central LLC’s Motion to Strike or Tax Costs is DENIED.  Defendants are awarded their requested $8,499.07 in fees as indicated below: