Judge Teresa A. Beaudet, Case Number: BC650876, Date: 2023-10-04 Tentative Ruling

On February 16, 2017, Plaintiffs Wild Chang (“Chang”) and Kenneth Lo (“Lo”) filed the lead action against Defendants Farmers Insurance Company, Inc. (“Farmers”), Fire Insurance Exchange (“FIE”), Stacy Chern Insurance Agency (“Chern Insurance”), and Stacy Chern (“Chern”). On January 28, 2021, Chang, Lo, and Wild Chang, Jr. (“Chang, Jr.”) (collectively, “Plaintiffs”) filed the second action against Farmers, FIE, Chern, and Woolls Peer Dollinger & Scher. The two cases were subsequently consolidated, and the operative Third Amended Complaint (“TAC”) was deemed filed on July 22, 2021 in the consolidated cases.

In the TAC, Plaintiffs assert causes of action for (1) fraud, (2) tortious breach of implied covenant of good faith and fair dealing, (3) breach of contract, (4) unfair business practices, (5) professional negligence, and (6) emotional distress, arising out of an insurance coverage dispute.

Following rulings on defendants’ amended special motion to strike and demurrer to the TAC, the remaining causes of action are tortious breach of implied covenant of good faith and fair dealing, breach of contract, and unfair business practices against FIE only; and professional negligence against Chern only.

On November 30, 2022, a Judgment of Dismissal was entered in this action. The Judgment of Dismissal provides, inter alia, that “WHEREAS Defendants Fire Insurance Exchange and Stacy Chern’s (‘Defendants’) motion for terminating sanctions was heard on November 14, 2022 at 9:30 a.m., and the Court granted Defendants’ motion, striking the operative Third Amended Complaint, 1. NOW, THEREFORE, IT IS ORDERED ADJUDED AND DECREED that this matter is hereby dismissed in its entirety, and judgment is hereby entered in favor [sic] Defendants Fire Insurance Exchange and Stacy Chern and against plaintiffs Wild Chang and Kenneth Lo on all causes of action.” On December 20, 2022, FIE filed a Memorandum of Costs, seeking $16,882.00 in costs.

Plaintiffs now move to tax costs. FIE and Chern (jointly, “Defendants”) oppose.[1]

Pursuant to Code of Civil Procedure section 1032, subdivision (b), “[e]xcept as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Pursuant to Code of Civil Procedure section 1032, subdivision (a)(4), “‘[p]revailing 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.” As set forth above, on November 30, 2022, the Court entered a Judgment of Dismissal providing, inter alia, that “this matter is hereby dismissed in its entirety, and judgment is hereby entered in favor [sic] Defendants Fire Insurance Exchange and Stacy Chern and against plaintiffs Wild Chang and Kenneth Lo on all causes of action.”

“A ‘verified memorandum of costs is prima facie evidence of [the] propriety’ of the items listed on it, and the burden is on the party challenging these costs to demonstrate that they were not reasonable or necessary.” (Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1486-1487 [italics and brackets omitted].) “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. 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.” (Ladas v. California State Auto. Assn., supra, 19 Cal.App.4th at p. 774.) Costs otherwise allowable as a matter of right may be disallowed if the court determines they were not reasonably necessary, and the court has power to reduce the amount of any cost item to an amount that is reasonable. (See Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal.App.4th 238, 245 [finding that “the intent and effect of section 1033.5, subdivision (c)(2) is to authorize a trial court to disallow recovery of costs, including filing fees, when it determines the costs were incurred unnecessarily”].)

FIE seeks a total of $3,143.00 in filing and motion fees. FIE’s Memorandum of Cost (Worksheet) indicates that the filing and motion fees include, inter alia, a $500.00 filing fee for a “12/14/2018 Motion for summary judgment.” Plaintiffs assert that “Defendants’ filing fee for Motion for Summary Judgment must be denied according to the law, because the hearing has never been held.” (Mot. at p. 3:25-26.) The Court notes that Plaintiffs do not cite any legal authority to support this assertion. In the opposition, Defendants indicate that they incurred a $500.00 non-refundable reservation fee for an anticipated motion for summary judgment. (Zapf Decl., ¶ 3, Ex. B.) Defendants assert that “[r]eserving a date for a dispositive motion was a legitimate effort to defend themselves in this action initiated by Plaintiffs. Although Plaintiffs delays and discovery recalcitrance rendered the anticipated motion impractical, that does not render the initial reservation – required by the court’s rules – superfluous.” (Opp’n at p. 2:25-28.) The Court agrees that the December 14, 2018 filing fee is reasonably necessary to the conduct of the litigation (Code Civ. Proc., § 1033.5, subd. (c)(2)), and declines to tax it.

FIE also seeks a $480.00 filing fee for “6/2/2020 Motions to Compel Plaintiff to Answer Discovery and Awarding Monetary Sanctions (8 motions x $60.00).” Plaintiffs object to this fee, asserting that “[f]iling fees already included in the sanctions per court order date October 28, 2020 must be denied according to the law.” (Mot. at p. 4:2-3.) In addition, FIE seeks a $480.00 filing fee for “1/27/2021 Motions to compel further discovery responses (8 motions x $60.00).” Plaintiffs object to this fee, asserting that “[f]iling fees already included in the sanctions per court order dated February 25, 2021, February 26, March 1 and March 4, 2021, must be denied according to the law.” (Mot. at p. 4:8-9.) FIE also seeks a $60.00 filing fee for a “5/4/2022 Notice of Motion and Motion to Compel Oral Depositions of Plaintiffs Wild Chang and Ken Lo.” Plaintiffs object to this fee, asserting that “[f]iling fees already included in the sanctions per court order dated October 14, 2022 must be denied according to the law.” (Mot. at p. 4:27-28.)

In the opposition, Defendants state that “Plaintiffs argue that these filing fees were already included in the Court’s sanction orders dated October 28, 2020, February 25, 2021, and May 4, 2022. Defendants agree and not dispute that Item 1 of the Memorandum of Costs should be reduced by $1,020.” (Opp’n at p. 3:8-10.) Accordingly, the Court reduces the requested costs by $1,020.00.

FIE also seeks a total of $120.00 in filing fees for “8/17/2022 Defendants’ Motion to Dismiss Pursuant to CCP §583.310 & RJN,” and “8/22/2022 Ex Parte Application for an Order to Advance Hearing Date on Defendants Motion to Dismiss.” Plaintiffs assert that these fees should be stricken because Defendants’ motion to dismiss was denied[2], and because “Defendants themselves requested the continuance from 06-15-22 to 09-21-22 to accommodate their calendar conflict.” (Mot. at p. 4:19-20.) Defendants counter that “[t]he statute does not dictate that the prevailing party to a lawsuit may only recover costs for motions on which they prevailed. Rather, filing fees for motions reasonably made are recoverable. The fees were incurred. [Zapf Dec., ¿ 4; Ex. C].” (Opp’n at p. 3:18-20.) Indeed, pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(1), “[f]iling, motion, and jury fees” are allowable as costs. As discussed, “[a]llowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.” (Code Civ. Proc., § 1033.5, subd. (c)(2).) The Court finds that the foregoing fees are reasonably necessary, and the Court declines to tax them.

In the instant motion, Plaintiffs also reference a number of filing fees claimed by FIE for notices of rulings, notices of minute orders/Court orders, a stipulation and proposed order, and a proposed judgment, totaling $600.00. (See Mot. at p. 5:5-7:14.) Plaintiffs assert that these fees should be “denied” because “[t]here are no court fees for filing notice and stipulation.” (Mot. at p. 5:5.) Defendants counter that items allowable as costs include “[f]ees for the electronic filing or service of documents through an electronic filing service provider if a court requires or orders electronic filing or service of documents.” (Code Civ. Proc., § 1033.5, subd. (a)(14).) Defendants assert that “[a]s Plaintiffs represented themselves in pro per, Defendants were tasked with filing most of the Notices of Ruling and Notices of Orders in this litigation over five years. The filings were reasonably necessary for the conduct of this litigation. Defendants incurred costs to prepare and file these Notices, including attorneys’ fees for the drafting of all thirty Notices and $20 in attorney service fees. The $20 fee incurred per Notice is reasonable….” (Opp’n at p. 5:25-6:2.) The Court agrees that the foregoing fees are reasonably necessary to the conduct of the litigation, and declines to tax them.

FIE seeks a total of $7,500.00 in witness fees. In the motion, Plaintiffs assert that “[t]he matter was never tried, and none of the expert invoices is attached. As a general matter, expert witness fees, invoiced or not, are not recoverable.” (Mot. at p. 7:15-17.) Plaintiffs cite to Ripley v. Pappadopoulos (1994) 23 Cal.App.4th 1616, 1624, where the Court of Appeal noted that “Code of Civil Procedure section 1033.5, subdivision (b)(1), provides that the fees of experts not ordered by the court are not allowable as costs unless expressly authorized by law.”

In the opposition, Defendants cite to First Nationwide Bank v. Mt. Cascade (2000) 77 Cal.App.4th 871, 875-876, where the Court of Appeal noted that “[u]nder section 1033.5, subdivision (b)(1), of the Code of Civil Procedure parties may not recover expert witness fees as costs ‘except when expressly authorized by law.’ Such express authorization exists in instances when the expert is court appointed (Code Civ. Proc., § 1033.5, subd. (a)(8)) or when the judgment awarded is lower than a rejected settlement offer (Code Civ. Proc, § 998, subds. (c) & (d)).” (Emphasis added.) Defendants’ counsel states in her supporting declaration that “[o]n May 10, 2019, I caused for Fire, Chern Insurance and Chern to issue an offer to compromise to Plaintiff Chang, pursuant to California Code of Civil Procedure section 998, for $14,242.56 and a separate offer to compromise to Plaintiff Lo, pursuant to California Code of Civil Procedure section 998, for $14,242.56. Plaintiffs had 30 days to accept said offers. Said offers were not accepted and expired on or about June 9, 2019. True and correct copies of both these Offers are attached hereto as Exhibit A. Both offers to Compromise expired without Plaintiffs accepting them.” (Zapf Decl., ¶ 2.)

Defendants further indicate that they “hired Lola Hogan as an expert witness in this litigation, who prepared for and expected to testify at trial. Defendants incurred $7,570.00 in expert fees after the expiration of Defendants’ Offers to Compromise.” (Zapf Decl., ¶ 6, Ex. E.) Defendants assert that accordingly, “Judgment in this lawsuit has been entered in favor of Defendants and against Plaintiff Chang and Plaintiff Lo on all causes of action. Defendants are the prevailing parties. The expert fees are recoverable pursuant to Code of Civil Procedure section 998.” (Opp’n at p. 6:17-20.)

In light of the foregoing, the Court declines to tax the claimed $7,500.00 in witness fees.

FIE seeks a total of $2,525.00 in court reporter fees. As to Item 11, Plaintiffs assert that “[a]ll of Defendants’ request of $2,525 for court reporter fees are not established by statute and must be denied. Defendants provide no documentation supporting these cost items.” (Mot. at p. 7:20-23.)[3] Pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(11), items allowable as costs under Section 1032 include “Court reporter fees as established by statute.”

In the opposition, Defendants cite to Government Code section 68086, subdivision (d)(2), which provides that “if an official court reporter is not available, a party may arrange for, at the party’s expense, the presence of a certified shorthand reporter to serve as an official pro tempore reporter. At the arranging party’s request, the court shall appoint the certified shorthand reporter to be present in the courtroom and serve as the official reporter pro tempore unless there is good cause shown for the court to refuse that appointment. The fees and charges of the certified shorthand reporter shall be recoverable as taxable costs by the prevailing party as otherwise provided by law.” Defendants thus assert that they are entitled to recover their court reporter fees by statute. Plaintiffs do not appear to dispute this point in the reply. Defendants provide copies of their Court Reporter invoices, which total $2,525.00 in fees. (Zapf Decl., ¶ 7, Ex. F.)

Based on the foregoing, the Court declines to tax the claimed $2,525.00 in Court reporter fees.

FIE seeks a total of $1,571.00 in costs for “[m]odels, enlargements, and photocopies of exhibits.” Plaintiffs assert that no documentation was provided to support these requested costs and note that the matter did not go to trial.

In the opposition, Defendants assert that photocopies for trial exhibits are expressly allowed. Pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(13), items allowable as costs include “[m]odels, the enlargements of exhibits and photocopies of exhibits, and the electronic presentation of exhibits, including costs of rental equipment and electronic formatting, may be allowed if they were reasonably helpful to aid the trier of fact.”

Defendants’ counsel provides copies of “the invoice(s) showing the costs incurred printing trial exhibits/binders.” (Zapf Decl., ¶ 8, Ex. G.) Defendants assert that they “incurred $1,496.45 for the printing [sic] trial binders and exhibits,” and that the “calculation of $1,571 on the first page of the Memorandum of Costs was erroneously calculated from these two invoices.” (Opp’n at p. 7:10-11; p. 7, fn. 1.) The Court notes that the only item that appears to be highlighted on Defendant’s Exhibit G is a fee for $558.75 next to “Description: Please print exhibit 500-526 with tabs.” (Zapf Decl., ¶ 8, Ex. G.) Thus, Defendants do not appear to have substantiated the requested amount of $1,496.45 for the printing of trial binders and exhibits.

Based on the foregoing, the Court finds that it is appropriate to award $558.75 in costs for Item 12 (Models, enlargements, and photocopies of exhibits). Thus, the Court deducts $1,012.25 from the total amount requested ($1,571.00 - $1,012.25 = $558.75.)

FIE seeks a total of $2,143.00 in “[f]ees for electronic filing or service.” Plaintiffs assert that FIE does not provide documentation to support these requested fees.

Plaintiffs note that FIE seeks $35.00 in courtesy copy costs for “8/17/2022 Defendants’ Motion to Dismiss Pursuant to CCP §583.310 & RJN,” and “8/22/2022 Ex Parte Application for an Order to Advance Hearing Date on Defendants Motion to Dismiss.” Plaintiffs assert that these claimed costs should be denied because Defendants’ motion to dismiss was denied. Plaintiffs also assert that “Defendants themselves requested the continuance from 06-15-22 to 09-21-22 to accommodate their calendar conflict.” (Mot. at p. 8:26-27.) The Court notes that this argument is addressed above.

Lastly, Plaintiffs note that FIE seeks $65.00 in courtesy copy costs for “11/4/2022 Notice of Motion and Motion for Terminating Sanctions.” Plaintiffs argue in the motion that “[t]his fee must be denied…because Defendants…duplicate the same, identical ‘court filing fee’ in the judgement resulting from the order of November 14, 2022, under a created, but non-existent, item of the alleged ‘electronic filing or service fee’.” (Mot. at p. 9:8-11, emphasis omitted.) The Court finds that this argument is unclear. As to the disputed courtesy copy fees, Defendants note that they “seek the costs incurred to comply with Department 50’s rules,” and assert that the charges were thus “reasonable and necessary.” (Opp’n at p. 11:1-2.) Defendants cite to Sanford v. Rasnick (2016) 246 Cal.App.4th 1121, 1132, where the Court of Appeal noted that “[n]either subdivision (a) nor (b) of section 1033.5 states whether attorney service charges for court filings and deliveries or mediators’ fees are allowable or not. Thus, these costs fall within the ‘discretionary category,’ subdivision (c)—that is, they are allowable if in the court’s discretion they were ‘reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.’ (§ 1033.5, subd. (c)(2).).”

The Court finds that the challenged courtesy copy costs were reasonably necessary to the conduct of the litigation and declines to tax them.

Based on the foregoing, the Court denies Plaintiff’s motion to tax in part, and grants the motion in part. The Court reduces the total requested costs of $16,882.00 by $2,032.25, which equals $14,849.75.

[1]As an initial matter, Plaintiffs assert that Defendants’ opposition was untimely and should be “denied.” The opposition was filed and served on September 21, 2023, 8 court days prior to the October 4, 2023 hearing date. Pursuant to Code of Civil Procedure section 1005, subdivision (b), opposition papers must be served and filed with the court at least 9 court days before the hearing. Defendants’ counsel filed a supplemental declaration indicating that “Woolls Peer Dollinger & Scher…uses ProLaw software to calculate and manage all litigation deadlines. The hearing dates for all litigation matters handled at the firm are inputted and Prolaw calculates the corresponding deadlines based on the applicable court rules. In this case, Plaintiffs’ Motion to Tax Costs was set for October 4, 2023 and this date was inputted into ProLaw; ProLaw calculated September 21, 2023 as the opposition deadline.” (Suppl. Zapf Decl., ¶ 2.) Defendants’ counsel asserts that “[s]ince reliance on this litigation software was excusable neglect, I respectfully request the court consider Defendants’ Opposition to Plaintiffs’ Motion to Tax Costs, which was filed one day late. Plaintiffs have not cited any prejudice to this late filing and were able to timely file a reply brief in spite of the one-day delay.” (Suppl. Zapf Decl., ¶ 7.) Because Plaintiffs have submitted a substantive reply brief, the Court elects to exercise its discretion to consider the untimely opposition. (Cal. Rules of Court, rule 3.1300, subd. (d).)

[2]The Court notes that on September 12, 2022, the Court issued an Order denying Defendants’ Motion to Dismiss Pursuant to CCP § 583.310.

[3]The Court notes that as set forth above, “[i]f 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. 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.” (Ladas v. California State Auto. Assn., supra, 19 Cal.App.4th at p. 774.)

WILD CHANG, et al, Plaintiffs, vs. FARMERS INSURANCE COMPANY, et al., Defendants.	Case No.:	BC650876 c/w 21STCV03453
	Hearing Date:	October 4, 2023
	Hearing Time: 10:00 a.m. TENTATIVE RULING RE: MOTION TO TAX COSTS
AND RELATED CROSS-ACTION

Superior Court of California

County of Los Angeles

Department 50