Judge Richard J. Burdge, Case Number: 19STCV46474, Date: 2023-08-11 Tentative Ruling

Plaintiff IRAJ YAZDANPANAH moved for an order to strike, or in the alternative tax, costs claimed by Defendant Diane Merrick. A jury trial in this auto accident case rendered in a defense verdict. Defendant Diane Merrick’s Memorandum of Costs seeks to recover $102,019.48 in costs. In general, Plaintiff moves on the claims that:

As the prevailing parties, Defendant is entitled to costs as provided in Code of Civil Procedure section 1033.5. Defendant contends she made a valid settlement offer under section 998 that was rejected by Plaintiff, thus entitling her to expert costs incurred after the offer.

The court reviewed the papers filed in favor of the motion and those in opposition to the motion and submitted a tentative ruling on July 28 that requested further evidence about the expert fees stated in the Memorandum of Costs. Defendant submitted a supplemental opposition to the motion with such evidence. The court now tentatively rules follows:

Plaintiff argues that the court entered judgment on April 24, 2023 and mail served it that same day. Defendant only filed and served the Memorandum of Costs on May 25, 2023--30 days after service of the notice of entry of judgment. Under California Rules of Court, rule 3.1700(a)(1), "[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." On those facts and according to the Rule, the cost bill is untimely.

Defendant does not dispute the dates for service of notice of entry of judgment and the filing of her cost bill. However, she contends the stamp on the outside of the envelope that was served “suggests” that it was processed by the US Postal Service on May 17, 2023. Counsel for defendant received the Notice of Entry of Judgement on May 24, 2023. (Declaration of Lorin D. Snyder, para. 3). In addition, counsel provided a copy of an email from Plaintiff’s counsel stating that as of May 26, 2023, he had not received the Notice either. (Snyder Decl. ¶4)

Under California Rules of Court, rule 3.1700(a)(3) “the court may extend the time for serving and filing the cost memorandum or the notice of a motion to strike or tax costs for a period not to exceed 30 days.” Under the circumstances due to the delay in the processing or delivery of the Notice, the court exercises its discretion to extend the time for serving and filing the cost memorandum for 30 days.

Plaintiff contends that Defendant’s statutory offer here was conditioned on: “Plaintiff agrees to satisfy all liens arising from Plaintiff’s claims at issue in this lawsuit. Plaintiff further agrees that the settlement check may list as payees all known lienholders, other than those who have executed a written lien waiver that has been delivered to Defendant’s attorney.” Plaintiff further contends that:

“Here, a list of all the “payees” that Defendant intended on putting on the settlement was never disclosed nor was the list of any lien holders that “executed a written lien waiver that has been delivered to Defendant’s attorney.” Defendant’s offer was impermissibly conditioned on adding as payees a list of unenumerated and unexplained list of lienholders- only excluding those that have directly waived such liens to Defendant. There is no disclosure of any lienholders that have waived any liens by executing a waiver that was delivered to Defendant. The ambiguity and irrational conditions placed on the offer provides no basis for awarding any costs against Plaintiff. Without knowing which lienholders have waived their liens directly to Defendant and which lienholders Defendant intends on adding to the settlement draft, Plaintiff cannot make a determination of the value of her. [sic] Without any specific information delineated in the Cal. Code Civ. Proc. § 998 offer, it would then require both the Plaintiff and this “court to engage in wild speculation bordering on psychic prediction.” (Valentino v. Eilliot Sav-On Gas, Inc (1988) 201 Cal.App.3d 692, 699.) Accordingly, Plaintiff could not reasonably accept the offer and the entirety of the costs claimed under Section 998 should be stricken.” (Mot. at 6:5-18.)

Plaintiff’s argument that the provision relating to the liens is a condition that prevents the offer from being valid is largely based on Sanford v. Rasnick (2016) 246 Cal.App.4th 1121. Mot. at 5: 22-27.) In that case, the court evaluated a 998 offer that required the plaintiff to enter into a settlement agreement and general release. The court noted that the requirement for a release did not invalidate the 998 offer, but the requirement for a settlement agreement did. It stated that Defendants “have cited no case, and we have found none, holding that a valid section 998 offer can include a settlement agreement, let alone one undescribed and unexplained.” (Sanford v. Rasnick (2016) 246 Cal.App.4th 1121, 1130.) Because the plaintiffs, had no idea of what terms were to be included in the release, which made it “essentially certain that had [plaintiff] accepted their offer, the parties would have wound up in a disagreement over what terms could be included in the settlement agreement.” (Id.) Moreover, the court would be powerless to adjudicate enforcement of the agreement. (Id. at 1132.)

The requirement in this 998 offer is different. It requires Plaintiff to pay all liens. There should be no dispute over what liens have been perfected. Defendant is permitted to add those lienholders as payees on the settlement check, protecting Defendant for liability related to paying a settlement without satisfying the liens. If Defendant has received lien releases, those lienholders will not be named as payees, and Plaintiff will not need to deal with them. The term is clear and there is an ability to judicially enforce it. Accordingly, Sanford does not stand for the proposition that the term makes the offer invalid.

Plaintiff claims that because Defendant has not included invoices, Plaintiff cannot determine the reasonableness of the costs and fees sought. Plaintiff contends certain claimed costs were unnecessary, e.g., subpoenas for witnesses not testifying at trial and fees for experts that did not testify (Mot. 6:21-27.)

Defendant’s opposition contained some invoices and billing records. It was not organized in any helpful way for evaluation. Many of the bills were for expert services before the 998 Offer. Some of the subpoenaed witnesses did not testify at deposition or at trial. Defendant’s supplemental opposition breaks down the charges for each expert and includes the experts’ statements for work performed.

If items on their face appear to be proper charges, Defendant’s 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. (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1266.) Based on the supplemental opposition and attached declaration, the expert fees after the 998 offer, are as follows: