Judge: Michael P. Linfield, Case: 21STCV30368, Date: 2023-04-26 Tentative Ruling

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Case Number: 21STCV30368    Hearing Date: December 18, 2023    Dept: 34

SUBJECT:        Motion for Attorneys’ Fees and Costs

Moving Party: Defendants Best Energy Solutions & Technology Corporation, George Sturges, A Transport Corporation, and Best Energy Holdings, LLC

Resp. Party:    Plaintiff California Fueling, LLC

SUBJECT:        Motion to Strike or Tax Costs

Moving Party: Plaintiff California Fueling, LLC

Resp. Party:    Defendants Best Energy Solutions & Technology Corporation, George Sturges, A Transport Corporation, and Best Energy Holdings, LLC

The Motion for Attorneys’ Fees and the Motion to Strike or Tax Costs are both GRANTED in part.

Costs are TAXED by $65,129.69. Costs are AWARDED in favor of Defendants and against Plaintiff in the total amount of $76,414.31.

BACKGROUND:

On August 17, 2021, Plaintiff California Fueling, LLC filed its Complaint against Defendants Best Energy Solutions & Technology Corporation and George Sturges on causes of action of breach of contract, fraud, and interference with prospective economic advantage.

On March 24, 2022, Plaintiff amended its Complaint to substitute Doe 1 with A Transport Corporation.

On June 14, 2022, Plaintiff amended its Complaint to substitute Doe 2 with Best Energy Holdings, LLC.

        On August 11, 2023, the Court granted judgment on the pleadings in favor of Defendants Best Energy Solutions & Technology Corporation, George Sturges, A Transport Corporation, and Best Energy Holdings, LLC (“Defendants”) and against Plaintiff regarding the second cause of action for fraud in the Complaint.

        On September 8, 2023, the Court granted judgment on the pleadings in favor of Defendants on the third cause of action for intentional interference with prospective economic advantage in the Complaint.

        From September 11, 2023 to September 15, 2023, the Court held a jury trial in this matter. The Jury found in favor of Defendants and against Plaintiff on the first cause of action for breach of contract, which was the only remaining cause of action in the Complaint.

        On October 16, 2023, the Court entered Judgment in favor of Defendants and against Plaintiff.

        On October 20, 2023, Defendants filed their Motion for Attorneys’ Fees and Costs (“Motion for Attorneys’ Fees”). In support of their Motion for Attorneys’ Fees, Defendants concurrently filed: (1) Declaration of Steven E. Bledsoe; and (2) Proposed Order.

        On November 2, 2023, Plaintiff filed its Opposition to the Motion for Attorneys’ Fees.

        On November 2, 2023, Defendants filed their Judicial Council Form MC-010, Memorandum of Costs (Summary).

        On November 8, 2023, Defendants filed their Reply regarding the Motion for Attorneys’ Fees. Defendants concurrently filed Declaration of Andrew J. Bedigian.

        On November 17, 2023, Plaintiff filed its Motion to Strike Defendants’ Memorandum of Costs, or in the Alternative, to Tax Costs (“Motion to Strike or Tax Costs”).

        On November 29, 2023, the Court granted in part the Motion for Attorneys’ Fees, awarding $908,105.45 in fees and continued the motion regarding costs.

        On December 5, 2023, Defendants filed their Opposition to the Motion to Strike or Tax Costs. Defendants concurrently filed Declaration of Andrew J. Bedigian.

        On December 11, 2023, Plaintiffs filed their Reply regarding the Motion to Strike or Tax Costs. 

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.” (Code Civ. Proc., § 1032, subd. (b).)

Prevailing parties seeking to claim costs must comply with California Rules of Court, rule 3.1700(a), and parties seeking to contest costs must comply with California Rules of Court, rule 3.1700(b).

II.       Discussion

A.      The Memorandum of Costs

Defendants claim $141,703.44 in costs, which comprise of:

(1)       $2,489.90 in filing and motion fees;

(2)       $939.61 in jury fees;

(3)       $16,074.11 in deposition costs;

(4)       $18,245.14 in court-ordered transcripts;

(5)       $13,235.05 in models, enlargements, and photocopies;

(6)       $1,434.00 in electronic filing or service fees;

(7)       $2,448.12 in hosting fees; and

(8)       $86,827.51 in “other” fees.

(MC-010.)

        Defendants note that they are actually seeking $141,544.00, as an improper cost was listed in the amount of $159.44. (Opposition to Motion to Strike or Tax Costs, p. 8, fn. 2.)

B.      The Parties’ Arguments

Defendants move the Court to award their claimed costs in this matter. (Motion for Attorneys’ Fees, p. 21:25–26; Opposition to Motion to Strike or Tax Costs, p. 16:6–7.)

Plaintiff moves to strike or tax the costs, arguing: (1) that Defendants did not follow the procedures set forth in California Rules of Court, rule 3.1700, including by timely filing a memorandum of costs; (2) that Defendants are seeking to recover costs that are not authorized by statute, excessive, and/or unreasonable; (3) the MC-010 that was filed lacks supporting documentation; (4) the courier fees are not recoverable; (5) the outside professional fees are not recoverable; (6) the travel costs and meals are not recoverable; (7) the legal research fees are not recoverable; (8) the graphics and data consultant fees are not recoverable; (9) the trial technician costs are not recoverable; (10) the printing costs are not recoverable; (11) the transcripts are not recoverable because they were not ordered by the Court; (12) the hosting fees are not recoverable because that section of the statute expired and in any case they were not ordered by the Court. (Opposition to Motion for Attorneys’ Fees, pp. 15:18–19, 16:9–12, 17:10–12; Motion to Strike or Tax Costs, pp. 6:9, 7:22, 8:1, 8:21, 9:7, 9:12, 10:17, 11:7, 11:15, 11:23.)

Defendants argue: (1) that they filed a timely memorandum of costs; (2) that their costs are reasonable and authorized by contract and statute; (3) that the memorandum of costs supports the requested cost recovery; and (4) that they have provided itemized descriptions and amounts for claimed costs. (Reply regarding Motion for Attorneys’ Fees, pp. 11:25, 12:7; Opposition to Motion to Strike or Tax Costs, pp. 5:18–19, 7:5, 8:14–15.) Defendants make specific arguments for each of the contested costs. (Opposition to Motion to Strike or Tax Costs, pp. 9–16.)

In its Reply regarding the Motion to Strike or Tax Costs, Plaintiff reiterates its prior arguments, and further argues: (1) that the videotaping of the McDuff deposition was not reasonable; and (2) that mediation costs are not recoverable because they were not ordered by the Court. (Reply regarding Motion to Strike or Tax Costs, p. 11:11, 11:22.)

C.      Timeliness of the Memorandum of Costs

1.      Legal Standard

“A 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 by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first. 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(a)(1).)

“Promptly upon entry of judgment in a contested action or special proceeding in which a prevailing party is not represented by counsel, the clerk of the court shall serve notice of entry of judgment to all parties who have appeared in the action or special proceeding and shall execute a certificate of service and place it in the court’s file in the cause.” (Code Civ. Proc., § 664.5, subd. (b).)

“In case of service by mail, . . . [s]ervice is complete at the time of the deposit, but any period of notice and any right or duty to do any act or make any response within any period or on a date certain after service of the document, which time period or date is prescribed by statute or rule of court, shall be extended five calendar days, upon service by mail, if the place of address and the place of mailing is within the State of California, . . . but the extension shall not apply to extend the time for filing notice of intention to move for new trial, notice of intention to move to vacate judgment pursuant to Section 663a, or notice of appeal. This extension applies in the absence of a specific exception provided for by this section or other statute or rule of court.” (Code Civ. Proc., § 1013, subd. (a).)

        “No statute or rule of court ‘specifically’ exempts cost memoranda from the five-day mailing extension in section 1013, subdivision (a). Moreover, section 1013, subdivision (a), specifies the items to which the extension does not apply. A memorandum of costs is not among those exceptions. Nor does rule 3.1700 specifically exempt a cost memorandum from the time extension provided by section 1013, subdivision (a). Regardless of what the Judicial Council may have had in mind when it adopted former rule 870, its intent cannot trump the plain meaning of the statute. We are not authorized to rewrite the plain language of a statute to conform to an assumed intent that does not appear from the language.” (Nevis Homes LLC v. CW Roofing, Inc. (2013) 216 Cal.App.4th 353, 357, citation omitted.)

2.      Discussion

Code of Civil Procedure section 664.5 uses the term “serve” as it relates to the clerk’s duty to provide notice of judgment. Thus, when a clerk serves notice of entry of judgment or dismissal, California Rules of Court, rule 3.1700(a)(1) applies. Further, when a clerk serves such notice by mail, Code of Civil Procedure section 1013, subdivision (a) also applies.

On October 16, 2023, the Court entered the Judgment. On October 18, 2023, the Court served its Notice of Entry of Judgment, which included a Certificate of Mailing (also dated October 18, 2023). Because the clerk served the Notice of Entry of Judgment by mail, Defendants had twenty days in which to file their Memorandum of Costs. Twenty days from October 18, 2023 was November 7, 2023.

On November 2, Defendants filed their Memorandum of Costs. Thus, the Memorandum of Costs was timely filed.

D.      Sufficiency of the Memorandum of Costs

1.      Legal Standard

“A 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 by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first. 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(a)(1).)

2.      Discussion

Here, the Memorandum of Costs has the requisite statement, pursuant to California Rules of Court, rule 3.1700(a)(1). Thus, it is sufficient, and Defendants have provided sufficient information in their filings for a proper determination on costs.

E.      The Recoverability of the Costs

1.      Legal Standard

The Court separately considers each category of contested costs, including: (1) whether they are specifically allowable or specifically prohibited; (2) whether they were incurred, whether or not paid; (3) whether they were reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation; and (4) reasonable in amount. (Code Civ. Proc., §§ 1033.5, subds. (a), (b), and (c)(1)–(3).

“Items not mentioned in this section and items assessed upon application may be allowed or denied in the court’s discretion.” (Code Civ. Proc., § 1033.5, subd. (c)(4); see also Foothill-De Anza Cmty. Coll. Dist. v. Emerich (2007) 158 Cal.App.4th 11, 30.)

2.      Discussion

a.     Courier Fees

        This Court believes that courier fees should not be awarded.  They are not required for litigation Department 34 does not require courtesy copies. The Court taxes the $2,368.68 requested for courier fees.

b.     Travel and Meal Costs

Defendants provided documentation showing that Defense Counsel travelled from the Bay Area to Los Angeles in connection with this litigation. The Court will allow those travel costs, as they appear necessary to conduct the litigation and reasonable.

However, local travel costs and meal expenses are a different matter.

“The only travel expenses authorized by section 1033.5 are those to attend depositions. (§ 1033.5, subd. (a)(3).) Routine expenses for local travel by attorneys or other firm employees are not reasonably necessary to the conduct of litigation. [A declaration must] demonstrate how any of these charges were necessary to conduct the litigation, as opposed to being merely convenient. The expenses should not have been allowed.” (Ladas v. Cal. State Auto. Ass’n (1993) 19 Cal.App.4th 761, 775–776, all statutory references are to Code of Civil Procedure.)

“The only meal expenses statutorily allowable are those for jurors while they are kept together during trial and deliberation. (§ 1033.5, subd. (a)(2).) While section 1033.5, subdivision (a)(3) allows the cost of taking and transcribing depositions and ‘travel expenses to attend depositions,’ it does not mention meals eaten while attending local depositions. Nor can meal expenses be justified as ‘necessary to the conduct of the litigation’ since attorneys have to eat, whether they are conducting litigation or not. At best, these expenses are ‘merely convenient or beneficial’ to preparation for litigation, the recovery of which is proscribed under section 1033.5, subdivision (c). They should have been stricken.” (Ladas, supra, at pp. 774–775, italics omitted, all statutory references are to Code of Civil Procedure.)

Defendants have not shown that the majority of the travel and the meal costs were necessary to the conduct of the litigation and reasonable. The Court will tax $2,235.69 of the travel costs.

c.     Legal Research Fees

        “The following items are not allowable as costs, except when expressly authorized by law: . . . (2) Investigation expenses in preparing the case for trial.” (Code Civ. Proc., § 1033.5, subd. (b)(2).)

“Section 1033.5, subdivision (b)(2) precludes recovery of investigation expenses and attorney fees are not compensable as costs in the absence of an agreement of the parties or statutory authority. (Code Civ. Proc., § 1021.) Fees for legal research, computer or otherwise, may not be recovered under section 1033.5.” (Ladas, supra, 19 Cal.App.4th at p. 776, all statutory references are to Code of Civil Procedure.)

        Defendants cite their contract with Plaintiff as the source for their right to recover legal research fees. Defendants do not cite any statutory authority. Because legal research fees are specifically prohibited by the statute and there is no other statute that specifically authorizes them, the legal research fees are not allowed. The Court strikes all of those costs.

d.     Graphics and Data Consultant Fees

        Costs for consultants to process raw data are properly awarded as discretionary cost items under Code of Civil Procedure section 1033.5, subdivision (c)(4). (El Dorado Meat Co. v. Yosemite Meat & Locker Serv., Inc. (2007) 150 Cal.App.4th 612, 618–620.)

        Here, the costs incurred to process the data to help Defendants make their case was reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation. Moreover, the Court does not have any reason to believe that the costs were not reasonable in amount.

The Court will allow all of those costs.

e.     Trial Technician Costs

        Defendants claim costs associated with a trial technician; Plaintiff oppose these costs as not recoverable and unreasonable.

        The trial technician was not an expert but rather a helper to assist with the presentation of exhibits at trial. This should be a normal cost of doing business; if Plaintiff’s law firm had a technician on staff, the salary for this trial technician would not be awarded as costs. 

The Court strikes the costs for the trial technician. 

f.      Printing Costs

        “Models, the enlargements of exhibits and photocopies of exhibits, and the electronic presentation of exhibits, including costs of rental equipment and electronic formatting, may be allowed if they were reasonably helpful to aid the trier of fact.” (Code Civ. Proc., § 1033.5, subd. (a)(13).

        “Postage, telephone, and photocopying charges, except for exhibits” are specifically not allowable as costs, except when expressly authorized by law.” (Code Civ. Proc., § 1033.5, subd. (b)(3).)

        Here, Defendants are already recovering $13,235.05 in models, enlargements, and photocopies of exhibits. While recovery of such documents that do “double duty” in the litigation is allowable, the Court is unaware of allowance for “double recovery” or why any of the “other” printing should be allowed in addition to the other $13,235.05. (El Dorado Meat Co., supra, 150 Cal.App.4th at pp. 618–620.)

The Court strikes the “other” printing costs.

g.     Transcript Costs

        “Transcripts of court proceedings ordered by the court” are specifically allowable costs, while “[t]ranscripts of court proceedings not ordered by the court” are specifically prohibited, except where expressly authorized by law. (Code Civ. Proc., § 1033.5, subds. (a)(9), (b)(5).

The Court did not order any transcripts. Defendants have not pointed to any law that specifically authorizes the recovery of these costs in absence of the Court ordering the transcripts. Thus, the transcript costs are not recoverable.

The Court strikes all of those costs. 

h.     Hosting Fees

Electronic documenting hosting fees are allowed “if a court requires or orders a party to have documents hosted by an electronic filing service provider. This paragraph shall become inoperative on January 1, 2022.” (Code Civ. Proc., § 1033.5, sub. (a)(15).)

Here, part of these costs could have been incurred when the statute was operative, as this case began before January 1, 2022. However, the Court did not order such fees, and the Court declines to exercise its discretion to allow such fees.

The Court strikes all of those costs.

i.      Deposition Fees

Plaintiff brings up the issue of the McDuff deposition costs.  (See Reply, p. 11:11-15.)  The Court finds these costs to be reasonable and will allow them.

j.      Mediation Costs

The Court did not order mediation. The Court declines to exercise its discretion to allow the mediation costs.

The Court strikes all of those costs.

III.     Conclusion

The Motion for Attorneys’ Fees and the Motion to Strike or Tax Costs are both GRANTED in part.

        Costs are TAXED by $65,129.69. Costs are AWARDED in favor of Defendants and against Plaintiff in the total amount of $76,414.31, as shown in the spreadsheet below: