Judge: Nathan Vu, Case: 2019-01108310, Date: 2022-10-17 Tentative Ruling
Please Note: The hearing on this matter has been changed to 8:30 A.M.
Motion to Strike or Tax Costs
Plaintiff Broker Solutions, Inc. dba New American Funding’s Motion to Strike or Tax Costs is GRANTED in part and DENIED in part.
The Court STRIKES or TAXES Defendant Abraham Pina’s Memorandum of Costs by a total of $46,003.97 such that Defendant Abraham Pina’s total cost recovery shall be $942.56.
Plaintiff Broker Plaintiff Broker Solutions, Inc. dba New American Funding’s moves to strike or tax the costs requested by Defendant Abraham Pina.
Seeking Costs and Striking or Taxing Costs
The right to recover costs of suit is determined entirely by statute. (See Civil Proc. Code, § 1032 et seq.) Generally, the “prevailing party” is entitled as a matter of right to recover costs of suit in any action or proceeding. (See Civil Proc. Code, § 1032, subd. (b); Santisas v. Goodin (1998) 17 Cal.4th 599, 606.) While the trial court has discretion to decide whether a cost item was reasonably necessary, the trial court does not have discretion to award a cost item that is not statutorily authorized. (Ladas v. California State Auto. Ass’n (1993) 19 Cal.App.4th 761, 774.)
To recover their costs, the prevailing party must file and serve 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.” (Rules of Ct. R. 3.1700, subd. (a).)
It is undisputed that Defendant Pina is the prevailing party and filed and served a timely memorandum of costs.
The nonprevailing party then has 15 days after service of the memorandum of costs to file a motion to strike a cost altogether, or to tax the cost and reduce it. (Rules of Ct. R. 3.1700, subd. (b).)
On a motion to strike or tax costs, if the items on their face appear to be proper charges, the verified memorandum of costs is prima facie evidence of their propriety and the burden is on the party seeking to strike or tax costs to show they were not reasonable or necessary. (Ladas v. California State Auto. Ass’n, supra, 19 Cal.App.4th at p. 774.) On the other hand, items that are properly objected to are put in issue and the burden of proof is on the party claiming them as costs. (Ibid.)
There is also no dispute that Plaintiff filed a timely motion to strike or tax costs.
Apportionment of Costs
Plaintiff argues that the costs should be reduced or taxes because the law requires that they be apportioned between defendants pursuant to Fennessy vs. DeLeuw-Cather Corp. (1990) 218 Cal.App.3d 1192.)
Defendant Pina, on the other hand, contends that he is entitled to the full amount of costs sought under Kramer v. Ferguson (1964) 230 Cal.App.2d 237.)
In Fennessy vs. DeLeuw-Cather Corp., the court of appeal held that a prevailing party, who incurs costs jointly with one or more other parties who remain in the litigation, may recover during the pendency of the litigation only those costs that were actually incurred by that prevailing party or on its behalf. (Fennessy vs. DeLeuw-Cather Corp., supra, 218 Cal.App.3d at pp. 1196.)
The Fennessy court distinguished Kramer v. Ferguson:
[I]n Kramer the costs were awarded after the conclusion of trial. Thus, there was no chance of additional successful defendants subsequently seeking costs from plaintiffs who already had paid for some of those costs. In comparison, [prevailing defendant] Gerulat was awarded costs following summary judgment; if any of the five remaining defendants ultimately prevail they too may seek reimbursement for some costs already awarded to Gerulat. In that event the other prevailing defendants presumably would be left to an action against Gerulat to divide the costs he received. Because this possible result unnecessarily increases the likelihood of additional litigation, we have concluded that where a prevailing party incurs costs jointly with one or more parties who remain in the litigation, during the pendency of the litigation that party may recover only costs actually incurred by a party or in its behalf in prosecuting or defending the case.
(Id. at p. 1196.)
Here, like in Fennessy, Defendant Pina prevailed “during the pendency of the litigation” and the claims against the other defendants have not been resolved. Thus, there is still a chance of additional successful defendants subsequently seeking costs from Plaintiff.
Defendant Pina and some of the remaining defendants were jointly represented during the pendency of some of this action. The court must apply the rule of Charton v. Harkey (2016) 247 Cal.App.4th 730:
A prevailing party who is represented by the same counsel as a nonprevailing party may only recover those costs the prevailing party incurred and were reasonably necessary to the prevailing party's conduct of the litigation, not the other jointly represented parties’ conduct of the litigation. . . . Whether to award costs that were incurred by both the prevailing party and the nonprevailing party, and were reasonably necessary to the conduct of the litigation for both the prevailing and nonprevailing party, is left to the trial court's sound discretion based on the totality of the circumstances.
(Id. at p. 744, emphasis added.)
In allocating costs between jointly represented parties, the trial court may not make an across-the-board reduction based simply on the number of jointly represented parties. (Id. at pp. 744-745.) In order to consider the necessity or reasonableness of the costs as required by section 1033.5(c), “the court must examine the reason each cost was incurred, whether the cost was reasonably necessary to the conduct of the litigation on behalf of the prevailing party, and the reasonableness of the cost.” (Id. at p. 745.)
Thus, while the court may not arbitrarily reduce Defendant Pina’s requested costs by 89% simply because he was 1 of 9 jointly represented defendants, the court can allocate any claimed costs between Defendant Pina and the other defendants based on the reason for the costs, the necessity of the costs to Defendant Pina and the other defendants, and the reasonableness of the cost.
Item 1 (Filing and Motion Fees)
Items 1.(b) through (h), (i), and (k) should be allocated between all nine jointly represented defendants as requested by Plaintiff. These costs were incurred equally for all the jointly represented defendants and were necessary for all of the jointly represented defendants. There is no better manner to allocate these costs. The total amount claimed for these items was $238.20. Defendant Pina’s allocated total is therefore $26.47.
With respect to Item 1.(h), Plaintiff claims no such document was filed on 09/09/2020. However, there was a notice of lodging of proposed order re: appointment of discovery referee filed on behalf of the nine jointly represented defendants.
Items 1.(n), (o), (p) and (q) were incurred equally for Defendant Pina and Defendant Fernandez and were necessary for both of them. There is not better manner to allocate these costs than half for each defendant. The total claimed was $242 and Defendant Pina’s allocated share is $121.
Items 1. (j), (l), (m), (r), (s), and (t) should be stricken in full as they do not appear to be reasonable or necessary. The total amount claimed of $206.95 is stricken.
Items 1.(a), (u), and (v) appear to be legitimate costs and are permitted. Plaintiff’s request to strike or tax these costs is denied.
Thus, Item 1 is reduced from $1,173.85 to $634.17.
Item 12 (Court Reporter Fees)
Defendant Pina claims $2,570.50 for court reporter fees. Plaintiff challenges the full amount sought. It is not clear what these costs are for as Plaintiff voluntarily dismissed Defendant Pina and no trial or evidentiary hearing was held prior to the dismissal.
Plaintiff fails to explain or justify these costs in either the Memorandum of Costs or the Opposition and supporting declaration. The Fink Declaration filed in support of the Opposition merely states, “The court reporter fees include the costs of transcripts prepared by the court reporters.” (See, Fink Decl., ¶ 15.) No further information is provided. The court reporter fees are stricken.
Item 14 (Fees for Electronic Filing or Service of Documents).
Defendant Pina seeks $206.03 for fees incurred for electronic filing or service for the Peremptory Challenge (ROA #27) and Case Management Statement (ROA #44). However, these documents were filed by the nine jointly represented defendants and were equally necessary for all of them. Therefore, there is no better manner to allocate the costs than to apportion a 1/9 share to Defendant Pina in the amount of $22.89.
Item 16 (Other)
Finally, Defendant claims $42,996.15 in “other” costs, including $30,483.48 for hosting electronic documents, $12,062.50 for ADR Services, Inc., and $450.17 in other misc. costs such as CourtCall, copying, and parking.
Hosting Electronic Documents
Plaintiff seeks to strike the entire amount requested for hosting electronic documents on the grounds that the Court did not require or order that documents be hosted by an electronic filing service provider. Defendant Pina contends these fees are allowable pursuant to Civil Procedure Code section 1033.5(a)(15) and the “catch all provision” of section 1033.5(c)(4) “as being analogous to the cost of hosting electronic documents.” Defendant Pina contends that compliance the stipulated order, attached to the Opposition as Exhibit M, would not have been possible without e-discovery service providers.
Civil Procedure Code section 1033.5(a)(15) states “[f]ees for the hosting of electronic documents” are recoverable “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.”
A review of Exhibit M shows that the signed order is silent as to documents being hosted by an electronic filing service provider. Thus, there is no Court order and subsection (a)(15) does not apply. The Court declines to exercise its discretion pursuant to subsection (c)(4) for such a large cost when there is no indication the court ordered it. The fees for hosting electronic documents are stricken from Item 16.
ADR Services, Inc.
Plaintiff seeks to strike the entire amount requested for ADR Services, Inc. because discovery referee fees are not an allowable cost. In support, Plaintiff cites Baker-Hoey v. Lockheed Martin Corp. (2003) 111 Cal.App.4th 592.
Defendant contends that this cost is akin to special master fee or expert witness fees and should be permitted pursuant to Winston Square Homeowner’s Assn. v. Centex W. (1989) 213 Cal.App.3d 282.
In Baker-Hoey v. Lockheed Martin Corp., the trial court signed an order court for reference to a discovery referee and specifically stated that the parties each pay one-half of the discovery referee’s fees. (Baker-Hoey v. Lockheed Martin Corp., supra, 111 Cal.App.4th at pp. 602-603.) The prevailing party then moved for recovery of these fees as costs and the trial court exercised its discretion and denied the recovery of the discovery referee fees. (Id. at pp. 595-596.)
The court of appeal in Baker-Hoey considered Winston Square Homeowner’s Assn. v. Centex W. and determined that “that case merely held that [special master] costs were analogous to expert witness fees, not that they were expert witness fees within the meaning of section 1033.5, subdivision (a)(8).” (Id. at p. 604, emphasis original.) Thus, Baker-Hoey held that the fees of a special master can properly be awarded as costs under the broad discretion of the trial court under subdivision (c)(4). (Id. at pp. 604-605.) In such a case, the costs must be “reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation” and must be “reasonable in amount.” (Id. at p. 605; see Civil Proc. Code, § 1033.5, subd. (c)(2) & (c)(3).)
The court of appeal in Baker-Hoey concluded that the trial court did not abuse its discretion as the subject litigation was complex and the trial court was in the best position to decide whether the fees charged by the discovery referee should be allowed.
The trial court may have found that the discovery referee's fees should be divided equally because they were not reasonably necessary to the conduct of the depositions, or because the parties were equally responsible for the conditions which led to the need for such close supervision of the deposition process. Or, as the trial court indicated at the beginning of its discussion, it may have applied an overriding reasonableness standard on a case-by-case and cost-by-cost basis under section 1033.5, subdivision (c)(3).
(Id. at p. 605.)
In this case, the parties presented a stipulation by which “Plaintiff and Defendants shall each pay one-half of the referee’s fees.” (Opp’n, Exh. M, ¶ 14.) Judge Lewis agreed that this was merited and signed the order putting the stipulation into effect. In light of the determination by the parties and Judge Lewis that apportioning the discovery referee’s fees in this way was reasonable and supported by the circumstances, the court declines to exercise its discretion to order a different apportionment under Section 1033.5(c)(4). The ADR Services, Inc. fees are stricken.
Miscellaneous Costs
Lastly, Plaintiff challenges $164.67 in costs for CourtCall, parking and photocopying, contained in Items 16.(a)-(e), (i), (j), (n) and (s). These costs do not appear to be recoverable under Section 1033.5 and Defendant Pina fails to address these costs. Therefore, the above items are stricken.
Thus, Item 16 should be reduced from $42,996.15 to $285.50.
Plaintiff shall give notice of this ruling.