Judge Randolph M. Hammock, Case 20STCV44701 2023-05-04 Tentative Ruling

Plaintiff Nidhi Chawla brings this action against Defendants Anamika Joneja, Sanjiv Joneja, Leading Rental, and Expert Associates, Inc. Plaintiff sues personally and derivatively as a 50% Shareholder of Leading Rental, alleging wrongful acts by Defendants in their management of Leading Rental. The FAC asserted causes of action for (1) breach of fiduciary duty (derivative), (2) conversion (derivative), (3) breach of fiduciary duty, (4) conversion, (5) fraud, (6) violation of Corp. Code § 1601, (7) violation of Corp. Code § 1602, and (8) accounting.

On October 14, 2022, Defendants Anamika Joneja and Sanjiv Joneja filed a Cross-Complaint against Defendant Expert Associates, Inc., for (1) contribution, (2) indemnity, and (3) declaratory relief.

On November 16, 2022, Plaintiff filed a request for dismissal of the third, fourth, fifth, sixth, and seventh causes of action, leaving only the derivative causes of action and the accounting cause of action. On January 10, 2023, the parties stipulated to dismiss the remaining derivative claims.

In general, the prevailing party is entitled as a matter of right to recover costs for suit in any action or proceeding. (Code Civ. Proc., §1032(b); Santisas v. Goodin (1998) 17 Cal.4th 599, 606; Scott Co. Of Calif. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108.) With regard to the definition of “prevailing party”, section 1032(a)(4) provides that:

“‘Prevailing party” includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the “prevailing party” shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.”

Allowable costs under Code of Civil Procedure section 1033.5 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. An item not specifically allowable under section 1033.5(a) nor prohibited under subdivision (b) may nevertheless be recoverable in the discretion of the court if they meet the above requirements (i.e., reasonably necessary and reasonable in amount). (Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-774.) In determining litigation success, Courts should “respect substance rather than form” and consider “the unique facts and circumstances of each case.” (Marina Pacifica Homeowners Assn. v. S. California Fin. Corp. (2018) 20 Cal. App. 5th 191, 206.) When the items on the verified cost bill appear to be proper, the burden of proof is on the contesting party. (Fennessy v. Deleuw-Cather Corp. (1990) 218 Cal. App. 3d 1192.)

Defendant Leading Rental filed a Memorandum of Costs on January 12, 2023, seeking $1,670.49 in costs. This reflects $959.96 in filing and motion fees (Memorandum ¶ 1), and $710.53 in fees for electronic filing or service. (Memorandum ¶ 14).

Plaintiff Nidhi Chawla filed a motion to tax costs on January 31, 2023. Plaintiff apparently concedes that Defendant is a “prevailing party” by nature of the dismissal entered in its favor. (See § 1032(a)(4).) But Plaintiff contends, without authority, that no costs should be recovered by Leading Rental because it was a “nominal defendant” who “never should have appeared in this action.” (Motion 2: 6-7.)

Under CCP section 1032, an award of costs to a prevailing party is mandatory except where “expressly provided by statute.” (Code Civ. Proc., § 1032, subd. (b) [“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”]; see Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198, 57 Cal.Rptr.2d 227 [trial court has no discretion to deny statutory costs to prevailing party under section 1032].) Plaintiff has failed to identify any statutory authority exempting nominal defendants, and this court declines to do so. (See Great Western Bank v. Converse Consultants, Inc. (1997) 58 Cal.App.4th 609, 614, 68 Cal.Rptr.2d 224 [“A court should be cautious in engrafting exceptions onto the clear language of Code Civil Procedure section 1032”].)

Defendants Sanjiv and Anamika Joneja filed an Amended Memorandum of Costs on January 12, 2023, seeking $4,318.11 in costs. This reflects $2,474.81 in filing and motion fees (Memorandum ¶ 1), $309.00 in fees for electronic filing or service (id. ¶ 14), $157.50 in jury fees (id. ¶ 2), and $1,376.80 in deposition costs. (Id. ¶ 4.)

Plaintiff Nidhi Chawla filed a motion to tax costs on January 31, 2023. Again, Plaintiff concedes that Defendants are a “prevailing party” by nature of the dismissal entered in their favor. (See § 1032(a)(4).)

Plaintiff contends the filing and motion fees sought are duplicative or unreasonable. However, a review of the cost bill and Defendant’s exhibits in support of its opposition do not clearly reflect duplicative entries.

Plaintiff also contends Defendants should not recover fees for the summary judgment motion that was never filed. Although the motion was never filed, fees incurred in reserving (and later rescheduling) a hearing date for same were reasonably necessary to the conduct of litigation at the time it occurred. There is no evidence it was unreasonable for Defendant’s to anticipate a summary judgment motion.

Next, Plaintiff contends Defendants should not recover fees on their motion to compel further responses to Defendants’ request for production of documents because it was denied. (See August 29, 2023, Minute Order.) However, Plaintiff cites no authority stating that unsuccessful motions are not recoverable as costs. Moreover, the court denied the motion because Plaintiff represented that all documents in her possession, custody and/or control had been or would be produced, and hence, there was no reason to compel a further response. However, the motion was made in good faith and was reasonably necessary to the conduct of litigation. Costs associated are therefore recoverable.

Plaintiff also contends fees incurred with Defendants’ motion to compel Plaintiff’s deposition should not be recovered. At the time of that motion, the case had not yet settled, and there was apparently some reasonable question as to if and when it would. In the meantime, Defendants reasonably filed that motion in an attempt to preserve their rights to depose Plaintiff. Although the motion became moot by virtue of the dismissal, filing it was reasonably necessary and therefore recoverable.

Finally, Plaintiff contends deposition fees related to Plaintiff’s nonappearance should not be recovered because Plaintiff’s counsel notified Defendants that he was unavailable on the date “unilaterally” selected by Defendants. (Gentino Decl.) But a party has the unilateral right to notice the deposition date of a deponent. And while it is certainly a professional courtesy to confirm availability with opposing counsel beforehand, the failure to do so does not demonstrate that the deposition was unreasonable under the circumstances. Accordingly, costs incurred with the deposition are recoverable.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.