Judge: Stephen P. Pfahler, Case: 19CHCV00768, Date: 2023-02-27 Tentative Ruling

Case Number: 19CHCV00768    Hearing Date: February 27, 2023    Dept: F49

Dept. F-49

Date: 2-27-23

Case #19CHCV00768

Trial Date: N/A

TAX COSTS

MOVING PARTY: Defendant, Malcom Kirakosian

RESPONDING PARTY: Plaintiff, K.G. Mullen, Inc.

RELIEF REQUESTED

Motion for Attorney Fees

SUMMARY OF ACTION

On September 24, 2019, Plaintiff K.G Mullen, Inc. filed a complaint against Malcolm Kirakosian for Breach of Contract, Foreclosure of Mechanic’s Lien, Quantum Meruit and Valebant, Account Stated, and Open Book Account. On February 24, 2020, Malcolm Kirakosian filed a cross-complaint against K.G. McMullen for Breach of Contract, Negligence, and Disgorgement of Construction Funds.

On January 5, 2022, the court issued a statement of decision. The statement finds in favor of Plaintiff on the breach of contract, foreclosure of mechanic’s lien, and quantum meruit and valebant causes of action, but found in favor of defendant on the common count causes of action. On the cross-complaint, the court found in favor of Cross-Defendant. The court awarded $39,685.45 in damages to Plaintiff, plus prejudgment interest.

On May 26, 2022, the court awarded $16,750 in attorney fees. The court entered judgment on June 1, 2022, including the awarded attorney fees, plus costs.

RULING: Granted.

An appeal was filed and dismissed prior to the filing of the instant motion to tax. The appeal was reinstated following the filing of the motion to tax. The appeal in no way precludes the hearing on the motion, even with the final judgment relied upon under challenge. (Hennessy v. Superior Court of California in and for City and County of San Francisco (1924) 194 Cal. 368, 372-373.)

Defendant Malcom Kirakosian moves to tax costs. Defendant moves to tax costs on grounds that item 16 lacks statutory support. Plaintiff in opposition maintains the propriety of filing two memoranda of costs, and the right to recover all costs. The court electronic filing system shows no reply on file at the time of the tentative ruling publication cutoff.

The motion comes after the August 2, 2022, motion to tax, whereby the court found the motion moot, due to the lack of a filed memorandum of costs. The filing system now shows a memorandum of costs filed on August 1, 2022. Plaintiff filed a second memorandum of costs on October 18, 2022. Defendant filed a notice of entry of judgment regarding the June 1, 2022 entered judgment on October 27, 2022. Given the filing of two memoranda of costs within 180 days of the June 1, 2022, judgment, the court deems the memoranda timely filed.

“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.” (Cal. Rules of Court, rule 3.1700(a).)

The proof of service on the August 1, 2022, filed memorandum indicates service on April 21, 2022, which significantly predates the filing date. Plaintiff acknowledges the disparity, but contends service was still complete, thereby rendering the memorandum of costs valid. The proof of service apparently relates to a previously served memorandum of costs, which was not filed at or near the time of the service date, yet prompted the April 28, 2022, motion to tax costs. Defendant denies valid service of the memorandum of costs as the basis for rejection of the August 1, 2022, filed memorandum of costs.

Plaintiff next acknowledges an error in the proof of service on the October 18, 2022, filed memorandum of costs, and filed an “amended proof of service” on November 4, 2022. Defendant offers no challenge to this item.

Plaintiff seeks to recover costs on both memoranda of costs. The second memorandum of costs now only seeks $10,720.48 versus the $26,964.23 sought in the August 1, 2022 filed memorandum.

Plaintiff acknowledges the “unusual” nature of the request. Other than self-serving conclusions, the opposition offers no legal support for the ability to recover on an improperly served memorandum of costs, or cumulative memoranda of costs. The court therefore declines to consider the August 1, 2022 filed memorandum of costs given the invalid proof of service. (Cal. Rules of Court, rule 3.1700(a); Code Civ. Proc., §§ 1013, subd. (a), 1013a.)

Even if the court deemed the initial memorandum of costs properly served, the court finds no legal basis of support for the right to recover on two memoranda of costs in the form of recovery of cumulative amounts on the same item (e.g. line 16). The court assumes the second memorandum of costs with differing amounts constitutes a superseding amount. The court declines to address unmade and unsupported arguments on behalf of Plaintiff. Plaintiff may not recover costs on the August 1, 2022 filed memorandum of costs. The motion is therefore granted as to the August 1, 2022, filed memorandum of costs.

On the latest filed memorandum of costs, the instant motion was filed on November 1, 2022, which is less than 15 days from October 18, 2022, filed AND served memorandum of costs. The motion is therefore timely as to the later filed and acknowledged operative memorandum of costs.

Defendant challenges item 16 on grounds that the memorandum of costs lacks an itemized list of the sought after costs. Code of Civil Procedure section 1033.5 sets forth the costs recoverable by the prevailing party. To recover a cost, it must be reasonably necessary to the litigation and reasonable in amount. (Perko’s Enterprises, Inc. v. RRNS Enterprises (l992) 4 Cal.App.4th 238, 244.) If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. (Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-74.)  On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs. (Id.)

Costs not expressly permitted under Code of Civil Procedure section 1033.5 subdivision (a), but not expressly denied under Code of Civil Procedure section 1033.5, subdivision (b), may be recovered in a court’s discretion. (Science Applications International Corporation v. Superior Court (1995) 39 Cal.App.4th 1095, 1103.)  In reviewing a motion to tax costs, a guiding principle is that all costs must be “reasonably necessary to the litigation” and “reasonable in need and amount.” (Acosta v. SI Corporation (2005) 129 Cal.App.4th 1370, 1380.)  If an item of cost is expressly allowed by statute and if items appear on their face to be proper, the verified memorandum of costs is prima facie evidence of their propriety, shifting the burden of proof to the objecting party to show that the items were unnecessary or unreasonable. (Ibid.; Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131-132.)  “Only after such costs are challenged by a motion to tax do the parties need to justify their claims by submitting documentation of the costs they have incurred.” (Bach v. County of Butte (1989) 215 Cal.App.3d 294, 308.)

Courts have discretion to disallow costs that were unreasonably incurred. (Michell v. Olick (1996) 49 Cal.App.4th 1194, 1201.)  Cost awards are reviewed under an abuse of discretion standard.  (El Dorado Meat Co. v. Yosemite Meat and Locker Service, Inc. (2007) 150 Cal.App.4th 612, 616; Gibson v. Bobroff (1996) 49 Cal.App.4th 1202, 1209.)

Item 16: Other, $10,720.48

The item apparently arises from a prejudgment interest calculation based on a 10% rate from August 9, 2019, through April 21, 2022 on a total amount of $39,685.45.

Neither party actually addresses the attachment to the memorandum of costs, and the court assumes said balance represents the entire disputed amount with no other items sought. The court also shows a filed notice of partial acknowledgment of satisfaction of judgment for payment of $58,769.91. This amount exceeds the judgment and attorney fees, which total $56,435.46 ($39,685.45 in damages to Plaintiff, plus $16,750 in attorney fees). The court declines to determine the accuracy or credits applicable.

The court nevertheless grants the motion to tax, since the collection of prejudgment interest is not handled as a cost item. (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 830 [“It is well established that prejudgment interest is not a cost, but an element of damages”].) The judgment provided for recovery of prejudgment interest itself. (Civ. Code, § 3287; Cal. Rules of Court, rule 3.1802.) The motion is therefore granted as to motion to strike the second memorandum of costs.

In summary, the motion is GRANTED as to both the August 1, 2022, and October 18, 2022, filed memoranda of costs.

Defendant to give notice.