Judge: Robert S. Draper, Case: 20STCV27865, Date: 2022-12-20 Tentative Ruling

Case Number: 20STCV27865    Hearing Date: December 20, 2022    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Defendant Solari Enterprises, Inc.’s Motion to Tax Costs is DENIED.

FACTUAL BACKGROUND

This is an action for violation of the Investigative Consumer Reporting Agencies Act (“ICRAA”). The Complaint alleges as follows.

Defendant Solari Enterprises, Inc. (“Solari”) owns and operates the Courson Arts Colony Apartments (the “Subject Property”) located at 931 and 939 E. Avenue Q12, Palmdale, California. (Compl. ¶ 9.) Plaintiffs Sheila Gregory, Mykel McGee and Kevin Crane (“Plaintiffs”) applied to be tenants at the Subject property. (Compl. ¶¶ 6-8.)

Solari requested and procured investigative consumer reports on Plaintiff without providing proper disclosures and obtaining proper authorizations contrary to the ICRAA. (Compl. ¶ 15.)

PROCEDURAL HISTORY 

On July 23, 2020, Plaintiffs filed the Complaint asserting four causes of action:

1.    Violations of the ICRAA;

2.    Unfair Business Practices;

3.    Invasion of Privacy; and,

4.    Declaratory Relief.

On August 27, 2020, Solari filed an Answer.

On September 11, 2020, Plaintiffs named The Screening Pros, LLC as Doe 1.

On January 29, 2021, Plaintiffs named CAC East as Doe 2.

On April 6, 2021, Plaintiffs named Costar Group, Inc. as Doe 3.

On April 7, 2021, Plaintiffs filed a Motion for Summary Adjudication as to the First Cause of Action for Violations of the ICRAA.

On April 29, 2021, Plaintiffs dismissed The Screening Pros.

On July 26, 2021, Plaintiffs dismissed Costar.

On November 4, 2021, the Court granted Plaintiffs’ Motion for Summary Judgment and awarded each Plaintiff $10,000 in statutory damages.

On April 15, 2022, following a jury trial, the jury found Solari not liable on Plaintiffs’ Third Cause of Action for Invasion of Privacy. Plaintiffs dismissed as moot the other two causes of action.

On September 13, 2022, the Court entered judgment.

On September 26, 2022, Plaintiffs filed the Memorandum of Costs.

On October 17, 2022, Solari filed the instant Motion to Tax Costs.

On December 7, 2022, Plaintiffs filed an Opposition.

On December 13, 2022, Solari filed a Reply.

DISCUSSION 

I.                REQUEST FOR JUDICIAL NOTICE

The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) 

Evidence Code Section 452 provides that judicial notice may be taken for facts and propositions that are “not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Cal. Evid. Code § 452(h).) Further, “a court may take judicial notice of [recorded documents and] the fact of a document's recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document's legally operative language, assuming there is no genuine dispute regarding the document's authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.” (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 745-755.) 

Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning. (Fremont Indem. Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113-14 (citations and internal quotations omitted).) In addition, judges “consider matters shown in exhibits attached to the complaint and incorporated by reference.”  (Performance Plastering v. Richmond American Homes of California, Inc. (2007) 153 Cal.App.4th 659, 665.)  However, “[w]hen judicial notice is taken of a document . . . the truthfulness and proper interpretation of the document are disputable.” (Aquila, Inc. v. Sup. Ct. (2007) 148 Cal.App.4th 556, 569 (quoting StorMedia Inc. v. Sup. Ct. (1999) 20 Cal.4th 449, 457 n. 9).)

The party requesting judicial notice must (a) give each adverse party sufficient notice of the request to enable the adverse party to prepare to meet the request and (b) provide the court with sufficient information to enable it to take judicial notice of the matter. (Cal. Evid. Code § 453.)

Here, Solari requests judicial notice of the following:

1.    Request for Dismissal filed by Plaintiff in this action as to defendant The Screening Pros, LLC. (Ex. A.)

2.    Request for Dismissal filed by Plaintiff in this action as to defendant Costar Group, LLC. (Ex. B.)

3.    Amended Judgment filed in this action. (Ex. F.)

Solari’s Requests for Judicial Notice numbers 1-3 are GRANTED.

II.              MOTION TO TAX COSTS

Solari moves to tax costs from Plaintiffs’ Memorandum of Costs.

First, Solari contends that Plaintiffs are not the prevailing party, and therefore are not entitled to recover costs.

A prevailing party in entitled to recover costs, including attorneys’ fees, as a matter of right. (See Code Civ. Proc., §§ 1032(a)(4), 1032(b), 1033.5.) A “prevailing party” includes the party who obtains a “net monetary relief.” (Code Civ. Proc. § 1032(a)(4).)

Solari makes three arguments for why Plaintiffs are not the prevailing parties.

1.    Offset Against Settling Defendants the Screening Pros, LLC, and Costar Group LLC

First, Solari argues that the Court cannot determine whether Plaintiff is the prevailing party as to Solari, as Plaintiffs have not released the terms of their settlement agreements with Defendants the Screening Pros, LLC and Costar Group LLC. Solari contends that, depending on the terms of settlement between Costar, Screening Pros, and Plaintiffs, Solari may be entitled to an offset that entirely sets off the $10,000 judgment for each Plaintiff.

Code of Civil Procedure section 877 states, in pertinent part, as follows:

Where a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect: 

a.    It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it, whichever is the greater. 

b.    It shall discharge the party to whom it is given from all liability for any contribution to any other parties. 

Under¿Code of Civil Procedure¿section¿877,¿a defendant that is jointly liable¿for a plaintiff’s economic damages¿is entitled¿to a set-off credit¿“based on any portion of the pre-verdict settlements properly attributable to the claims for economic damages resolved at trial. [Citation.]”  (Pfiefer v. John Crane, Inc.¿(2013) 220 Cal.App.4th 1270, 1318; see also Espinoza v. Machonga¿(1992) 9 Cal.App.4th 268, 276 the “portion of the settlement attributable to noneconomic damages is not subject to set-off.”) 

Here, Solari contends that it may be due to a set-off that minimizes or negates its award to Plaintiffs. Solari notes that both Costar and Screening Pros were dismissed before trial. (RFJN Exs. A-B.) Solari states that when it attempted to obtain the subject settlement agreements from Settling Defendants’ Counsel, Settling Defendants’ Counsel stated that he was unable to provide Solari with that information due to a confidentiality provision in the settlement. (Kulikov Decl. ¶ 3.) Solari urges the Court to order Plaintiffs to provide the subject Settlement Agreements to determine if Solari is owed a set-off.

In Opposition, Plaintiffs’ Counsel states that Plaintiffs settled with the Settling Defendants for no award. (Murphy Decl. ¶ 6.) Plaintiffs settled based on Settling Defendants’ agreement to waive any costs for Plaintiffs dismissing them with prejudice. (Ibid.) Plaintiffs’ Counsel indicates that he has informed Solari of this fact. (Ibid.)

Plaintiffs’ Counsel has repeatedly told Solari and the Court, under oath, that Plaintiffs settled with Costar and Screening Pros based only on their agreement to waive costs. Although this answer may not satisfy Solari, the Court is confident that Plaintiffs’ Counsel would not repeatedly lie to this Court, under oath, and will not request Plaintiffs to violate a confidentiality provision to prove it.

Accordingly, Solari is not a prevailing party due to a set off from the Settling Defendants.

2.    The Jurisdictional Limit

Next, Solari argues that pursuant to Code of Civil Procedure section 1033(a), the Court has discretion to deny Plaintiffs’ costs as Plaintiffs’ award did not meet this Court’s jurisdictional amount of $25,000.

However, as Plaintiffs note on Reply, all three Plaintiffs were awarded $10,000, meaning that the total award was $30,000, exceeding the jurisdictional limit of this Court.

Accordingly, the Court does not have discretion to deny Plaintiffs’ costs.

3.    Section 998

Finally, Solari argues that it is the prevailing party as it prevailed on the Invasion of Privacy Cause of Action at trial, and as it extended to Plaintiffs a section 998 settlement offer that exceeded Plaintiffs’ eventual award.

Solari notes that on June 21, 2021, Solari extended 998 settlement offers to each Plaintiff in the amount of $10,001, exclusive of reasonable attorneys’ fees and costs. (Kulikov Decl. ¶ 3; Exs. C, D, E.) Solari contends that it has since incurred costs and attorney fees exceeding $40,000, and therefore it is the prevailing party in this matter.

Section 998 provides, in relevant part: “If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant's costs from the time of the offer.” (Code Civ. Proc., § 998(c)(1).)  

In Opposition, Plaintiffs argue that Plaintiffs did obtain a more favorable judgment, as Solari’s 998 offer did not actually include attorneys’ fees and costs, while the Court’s judgment does. Plaintiffs note that under the 998 offer, Solari refused to concede liability to the ICRAA violation, and argues a plaintiff is not statutorily entitled to attorney fees under ICRAA unless there exists a finding of liability.

The 998 offer states that Solari agreed to settle “For the total sum of TEN THOUSAND AND ONE DOLLARS AND NO CENTS ($10,001.00), exclusive of reasonable attorney’s fees and costs. . .” (Murphy Decl. Ex. 2 at p. 1.) The 998 offer then states that “Plaintiff and her counsel’s right to recover reasonable attorney’s fees and costs shall be subject to a separately negotiated settlement amount, or a Motion for Fees and Costs brought pursuant to Civil Code section 1750.50(a)(2)[1], or other applicable statute if no additional settlement agreement can be reached, with any agreed or awarded amounts being in addition to, and not part of, the amount directly and specifically offered to Plaintiff herein.” (Id. at p. 2.)

Plaintiffs primarily rely on two cases to support this position.

First, Plaintiffs cite to Doran v. North State Grocery, Inc. (2006) 137 Cal.App. 484. In Doran, plaintiff settled a claim with defendant brought under the Unruh Act. The trial court granted plaintiff attorney fees as the prevailing party. On appeal, the Doran Court reversed, noting that the Unruh Act required a finding of liability to entitle the prevailing party to attorney fees. As the 998 offer was silent on the issue of liability, the Doran Court found that plaintiff was not due attorney fees as the prevailing party. (Doran at p. 491.)

Second, Plaintiffs cite to Linton v. County of Contra Costa (2019) 31 Cal.App.5^th 628. In Linton, the 998 offer explicitly provided for attorney fees “as allowed by law.” (Linton at p. 632-33.) The trial court found that the Plaintiff could not recover attorney fees because the 998 offer did not concede liability, and the Unruh Act required a finding of liability. (Ibid.)

Plaintiffs contend that Linton is on point, and as the subject 998 offer did not concede liability, and as attorney fees and costs were “subject to a separately negotiated settlement amount, or a Motion for Fees and Costs brought pursuant to Civil Code section 17[86].50(a)(2), or other applicable statute if no additional settlement agreement can be reached,” the 998 offer did not include attorney fees.

In Opposition, Solari distinguishes the instant situation from Doran and Linton for two reasons. First, Solari contends that Doran and Linton were both brought under Unruh, which requires a finding of liability, whereas ICRAA does not. However, section 1786.50(a)(2) of ICRAA explicitly states that a plaintiff may collect attorney fees and costs “[i]n the case of any successful action to enforce any liability under this chapter. . .” Accordingly, attorneys’ fees and costs are subject to a finding of liability under ICRAA, as under Unruh.

Second, Solari argues that, though Plaintiffs may not have had a statutory right to collect costs and attorney fees under ICRAA, there existed a contractual right to costs and attorney fees pursuant to the 998 offer.

However, as in Linton, Plaintiffs’ “right to recover reasonable attorney’s fees and costs [were] subject to a separately negotiated settlement amount, or a Motion for Fees and costs brought pursuant to civil Code section 17[86].50(a)(2). . .” (emphasis added.)

Under the 998 offer, Plaintiffs’ right to collect attorney fees were subject to a statute that explicitly requires a finding of liability to entitle Plaintiffs to attorney fees. Accordingly, Linton is directly on point, and the 998 offer did not entitle Plaintiffs to attorneys’ fees.

Plaintiffs are the prevailing party and are entitled to costs.

Finally, the Court notes that Solari moves to strike several costs from the memorandum of costs, as they occurred after the 998 offer. However, as addressed above, Plaintiffs’ judgment exceeded that 998 offer as it included attorneys’ fees and costs. Solari’s argument is unavailing.

Solari’s Motion to Tax Costs is DENIED.

DATED:  December 20, 2022        

___________________________

Hon. Robert S. Draper 

Judge of the Superior Court