Nicole Nagel, et al. v. Tracy A. Westen, et al.
Case No: 15CV01178
Hearing Date: Mon Aug 19, 2019 9:30

Nature of Proceedings: Motion: Strike/Tax Memo of Costs filed by Defts Tracy A. Westen and Linda Lawson; Strike/Tax Memorandum filed by Derek Westen and Westen Family Group LL; Strike/Tax Memorandum of Costs filed by Peter K. Westen; Motion Withdraw as Attorney

Nicole Nagel, et al., v. Tracy A. Westen, et al., #15CV01178, Judge Sterne

Hearing Date: August 19, 2019

Matter:

1. Motion to be Relieved as Counsel

2. Motion to Strike/Tax Memorandum of Costs Filed by Derek Westen and Westen Family Group, LLC

3. Motion to Strike/Tax Memorandum of Costs Filed by Peter K. Westen

4. Motion to Strike/Tax Memorandum of Costs Filed by Tracy A. Westen and Linda Lawson

Attorneys:

For Plaintiffs: Paul J. Laurin, et al. (Barnes & Thornburg – Los Angeles); Jeffrey B. Valle, et al (Valle Makoff, LLP – Los Angeles)

For Defendants Tracy Westen and Linda Lawson: Ian M. Guthrie (Schley, Look & Guthrie)

For Defendants Westen Family Group and Derek Westen.: Scott B. Campbell, et al. (Rogers, Sheffield & Campbell)

For Defendant Peter Westen: R. Chris Kroes, et al. (McCarthy & Kroes)

Tentative Ruling:

1. The court denies the motion of law firm of Barnes & Thornburg, through its lawyers Paul J. Laurin, Matthew B. O’Hanlon, and Jonathan Boustani, to be relieved as counsel for plaintiffs Nicole Nagel and ESY Investments, LLC.

2. The court grants, in part, plaintiffs Nicole Nagel and ESY Investments, LLC’s motion to strike or tax costs in defendants Derek Westen and Westen Family Group, LLC’s memorandum of costs. The court orders taxed a total of $42,539.75 in costs, leaving $89,373.58 in allowable costs.

3. The court grants, in part, plaintiffs Nicole Nagel and ESY Investments, LLC’s motion to strike or tax costs in defendant Peter K. Westen’s memorandum of costs. The court orders taxed a total of $32,171.19 in costs, leaving $23,773.55 in allowable costs.

4. The court grants, in part, plaintiffs Nicole Nagel and ESY Investments, LLC’s motion to strike or tax costs in defendants Tracy Westen and Linda Lawson’s memorandum of costs. The court orders taxed a total of $10,714.56 in costs, leaving $5,999.36 in allowable costs.

Background: After years of litigation, the court entered an order dismissing the entire action on July 9, 2019.

Motion to be Relieved as Counsel for Plaintiffs: The law firm of Barnes & Thornburg (“B&T”), through its lawyers Paul J. Laurin, Matthew B. O’Hanlon, and Jonathan Boustani, move to be relieved a counsel for plaintiffs Nicole Nagel and ESY Investments, LLC. They say withdrawal is permitted by California Rules of Professional Conduct 3-700(c) (codified as Rule 1.16(b) as of November 1, 2018) and plaintiffs will remain represented by the Valle Makoff firm.

Plaintiffs oppose the motion. Plaintiffs ask that the court order B&T to continue to represent plaintiffs through the conclusion of post-dismissal motions, including the present motions to tax/strike costs, and defendants’ proposed (but as yet not filed) motions for attorney fees. Plaintiffs indicate B&T’s long representation makes their assistance necessary. Plaintiffs say they will pay B&T for any services to be rendered.

B&T says it has facilitated an orderly transition to new counsel and will continue to do so. B&T says plaintiffs’ proposal of paying for further services “impermissibly invites the Court to supervise the attorney-client relationship in a way that is neither proper nor practical.” But the “proposal” to pay for services no more involves the court in the attorney-client relationship than the original agreement to pay for services did. If plaintiffs do not pay or otherwise breach the retainer agreement, B&T can withdraw for that reason. Rule of Prof’l Conduct 1.16(b)(5).

B&T has not stated any ground for mandatory (Rule of Prof’l Conduct 1.16(a)) or permissive (Rule of Prof’l Conduct 1.16(b)) withdrawal from representing plaintiffs. The court is cognizant that B&T cannot disclose any communications with its clients. But B&T can state the ground for withdrawal in general terms. It appears that plaintiffs only want B&T to represent them through post-trial motions. After that, the parties should be able to agree to substitute out B&T as counsel.

The court denies the motion.

Motion to Strike/Tax Costs filed by Defendants Derek Westen and Westen Family Group, LLC: On July 9, 2019, defendants Derek Westen and Westen Family Group, LLC (collectively “WFG”) filed a memorandum of costs in the amount of $131,913.33. Plaintiffs move to strike and/or tax costs. WFG opposes the motion.

A. Standards for Costs and Motions to Strike/Tax Costs: There are three motions to strike/tax costs on calendar. This discussion of applicable law is applicable to all three and will not be repeated for the other two motions.

CCP § 1033.5(a) identifies cost items that are allowable under section 1032; CCP § 1033.5(b) identifies items that are not allowable; and CCP § 1033.5(c)(4) provides that “[i]tems not mentioned in this section … may be allowed or denied in the court’s discretion.” “Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation” and “shall be reasonable in amount.” CCP § 1033.5(c)(2) & (3). “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. [Citation] Whether a cost item was reasonably necessary to the litigation presents a question of fact for the trial court….” Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774 (“Ladas”). “Initial verification will suffice to establish the reasonable necessity of the costs claimed. There is no requirement that copies of bills, invoices, statements, or any other such documents be attached to the memorandum. Only if the costs have been put in issue via a motion to tax costs must supporting documentation be submitted.” Jones v. Dumrichob, 63 Cal.App.4th 1258, 1267 (1998).

Notwithstanding the above language in Ladas, “the mere filing of a motion to tax costs may be a ‘proper objection’ to an item, the necessity of which appears doubtful, or which does not appear to be proper on its face. [Citation] However, ‘[i]f the items appear to be proper charges the verified memorandum is prima facie evidence that the costs, expenses and services therein listed were necessarily incurred by the defendant [citations], and the burden of showing that an item is not properly chargeable or is unreasonable is upon the [objecting party].’ [citations].” Nelson v. Anderson, 72 Cal.App.4th 111, 131 (1999). “[I]t is not enough for the losing party to attack submitted costs by arguing that he thinks the costs were not necessary or reasonable. Rather, the losing party has the burden to present evidence and prove that the claimed costs are not recoverable.” Seever v. Copley Press, Inc., 141 Cal.App.4th 1550, 1557 (2006) (“Seever”).

B. Filing and Motion Fees:

1. $90 vs. $60: Plaintiffs object to several filing fees because they are $90 rather than $60. But plaintiffs ignore the additional $30 required for a court reporter.

2. First Appearance Fees: Plaintiffs object to the responsive pleading and first appearance fee of $1,505.50 because the first appearance fee for two defendants is $870. WFG acknowledges that the figure should be lower. However, WFG states that three defendants, including Peter Westen, were jointly represented and so the law firm representing all three paid all three $435 filing fees = $1,305. WFG says that, since the first pleading was a motion, $60 should be added to that figure. The court has looked at the initial pleading for WFG and Peter Westen—an anti-SLAPP motion. On its face, it says the filing fee is $1,305, so no additional $60 was paid.

WFG cites no authority for filing a memorandum of costs for itself and some of Peter Westen’s costs, when he also filed a memorandum of costs. Costs are allowable, if incurred, whether or not paid. CCP § 1033.5(c)(1). WFG did not incur Peter Westen’s filing fee. CRC 3.1700(a) provides that a party claiming costs must submit a memorandum verified by the party or the attorney. There is no provision for an attorney verifying a memorandum on behalf of a party that attorney does not represent.

In addition to being unauthorized, WFG’s approach puts a burden on plaintiffs and the court to go back and forth between the two memoranda to discern what part of WFG’s memorandum is on behalf of two defendants and what part is on behalf of three defendants.

Still, it is clear that Peter Westen is not claiming a separate appearance fee. It would elevate form over substance not to allow his first appearance fee, which is a clearly allowable cost under the statute.

The first appearance fee paid upon filing the anti-SLAPP motion for three defendants was $1,305, not $1,505.50. The court will tax $205.50.

3. Withdrawn Motion: In a footnote, plaintiffs argue that WFG should not recover the filing fee for the special motion to strike that it withdrew on July 20, 2015. This was a subsequent anti-SLAPP motion filed on June 15, 2015, for which WFG paid a $90 filing fee. WFG does not address this cost in its opposition. There is no explanation why WFG withdrew the motion just over a month after filing it. This amount does not appear to be reasonably necessary to the conduct of the litigation. The court will tax $90.

4. Out of State Depositions: $120 was properly incurred for four out-of-state depositions. $337 was incurred for filing in Texas to have subpoenas issued there pursuant to the California commissions.

5. Reduction for Peter Westen’s Share of Costs: During the time WFG and Peter Westen were represented by a single law firm, that firm filed motions on behalf of all three defendants. The court will not reduce WFG’s claim to the entire filing fee where Peter has not also claimed it. This is because the same fee is charged whether it is on behalf of one, two, or three defendants. So, each defendant incurred each motion fee, though the court will not allow a duplicate recovery. Counsel for WFG has stated under penalty of perjury that they coordinated cost claims with Peter so there is no duplication.

6. Conclusion re: Filing Fees: The court will tax $295.50.

C. Jury Fees: The $467.10 for nonrefundable jury deposits consists of $150 each for three defendants and e-filing fees. (Peter Westen is not claiming a jury fee.)

In the motion, plaintiffs state that the jury fee payable pursuant to the fee schedule is $150, so the court should tax $317.10. WFG has established that it paid $467.10.

In the reply, plaintiffs argue that the amount is not reasonably necessary because CCP § 631(b) provides that only one party on each side need pay the jury deposit. CCP § 631(f)(5) provides that failure to pay the deposit is not a waiver if another party on the same side of the case has paid. This is an ambush argument since it is raised for the first time on reply. “Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.” Varjabedian v. City of Madera, 20 Cal.3d 285, 295 n11 (1977). That case involved a reply filed on appeal but the principle applies equally here.

The court will not tax any of the jury deposit.

D. Deposition Costs: The costs of transcripts and videotapes of Nicole Nagel’s depositions, both as a person most knowledgeable and as an individual, were noticed by different parties—WFG and Peter Westen—and each party was entitled to recover the cost of its own transcripts and videotapes. The court will not tax these costs.

E. Expert Witness Fees: WFG seeks $25,530 in expert witness fees pursuant to CCP § 998(c)(1), which provides:

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. In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.

Plaintiffs do not dispute that there was a qualifying CCP § 998 offer. Rather, they contend that some of the costs sought were pre-offer and WFG has not shown the amounts were not reasonably necessary to preparation or trial.

The date of the CCP § 998 offer was July 27, 2018. WFG has presented evidence that all the fees sought for Peter Spero, Kevin Henry, and Edward Gartenberg were incurred after that date.

Plaintiffs argue that WFG has failed to make a showing that the fees were reasonable in amount or reasonably necessary. But expert fees are proper charges and the burden of showing that an item is not properly chargeable or is unreasonable is upon plaintiffs as the objecting party.

In a footnote, plaintiffs say that the court should strike the $5,400 in fees for Peter Spero because he was retained to provide testimony duplicative of defendants’ other experts, David Cook and Peter Susi. Plaintiffs provide no details or evidence in support of this conclusory assertion. Each defendant was entitled to retain its own expert. Cook was employed by Peter Westen and Susi was employed by Tracy Westen and Linda Lawson.

WFG submits an August 7, 2018 check its counsel wrote to Anthony E. Reading, Ph.D., in the amount of $700. (There is a separate amount for the transcript of Reading’s deposition under deposition costs.) Plaintiffs say that this is their expert and CCP § 998(c)(1) only provides for WFG to recover costs of their own experts. Actually, § 998 provides for recovery of “costs of the services of expert witnesses.” It does not say whose experts.

However, the invoice for this charge indicates it is for Reading’s deposition attendance on July 20, 2018, which was before the CCP § 998 offer. The amount was incurred before the offer and, therefore, is not recoverable as a post-offer expense. The court will tax $700 of the expert witness fees.

F. Photocopying of Trial Exhibits: WFG seeks $27,839.08 for costs of exhibits. Plaintiffs ask the court to tax this cost because the exhibits were not used at trial because there was no trial.

Costs are allowed for “[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.” CCP § 1033.5(a)(13).

It may be that trial exhibits can be determined reasonably necessary if made “for a trial which was never held because plaintiff dismissed the action on the day of trial.” Applegate v. St. Francis Lutheran Church, 23 Cal.App.4th 361, 364 (1994). That court allowed the recovery of costs of the exhibits under CCP § 1033.5(c)(4). But, in Seever, the court disagreed with the Applegate court’s conclusion that only those costs items expressly prohibited by CCP § 1033.5(b) are outside the scope of the discretionary authority in § 1033.5(c)(4). The Seever court held that the discretionary authority under subsection (c)(4) is more limited, allowing only costs not mentioned in § 1033.5. Seever, 141 Cal.App.4th at 1558-1559. Copies are mentioned in § 1033.5(a)(13) and are limited to those “photocopies of exhibits … if they were reasonably helpful to aid the trier of fact.” The Seever court adds a further limitation to subsection (a)(13) by stating that it refers to exhibits “at trial.” That subsection to does not refer to “trial,” only the “trier of fact.”

Seever is persuasive. CCP § 1033.5(c)(4) gives the trial court discretion to award additional costs only for “[i]tems not mentioned in this section.” Subdivision (a)(13) mentions costs for exhibits. The trial court has no discretion to award such costs under subdivision (c)(4).

A year after Seever was decided, Benach v. County of Los Angeles, 149 Cal.App.4th 836, 856-857 (2007), held that costs for exhibits not used at trial were properly awarded under the discretionary authority of section 1033.5, subdivision (c)(4). Without mentioning either Applegate or Seever, the court stated: “Although the Department did not use the majority of its exhibits at trial, nothing indicates it could have anticipated that they would not be used. An experienced trial judge would recognize that it would be inequitable to deny as allowable costs exhibits any prudent counsel would prepare in advance of trial. Id., at p. 856.

But an award of costs is not simply a matter of equity. It requires an interpretation of section 1033.5. Seever has the most reasonable interpretation. This interpretation finds support in Ladas: “the present case was dismissed before trial following the trial court’s granting of defendant’s motion to exclude all evidence plaintiffs proffered to prove their claims, the items should have been disallowed in their entirety. Ladas, 19 Cal.App.4th at 764. (The circumstance in Ladas is very similar to the circumstances of this case where the case was dismissed after the court’s ruling on jury instructions on the eve of trial.)

The court will tax $27,839.08.

G. Other Costs: WFG seeks costs not expressly provided for in CCP § 1033.5(a).

1. Attorney Service for Filing Documents in Los Angeles Superior Court: Plaintiffs object to this $218.70 cost because there is no reference to what this is for and no reason why any filings could not have been filed in a less expensive manner, such as faxing or e-filing. Plaintiffs need express no other facts in support of this challenge to a cost. In this day and age, use of an attorney service when matters can be e-filed is antiquated and unnecessary. The court will tax $218.70.

2. Attorney Services for Personal Service of Documents on Plaintiff’s Counsel: Plaintiffs seek to tax this cost of $955 because there is no explanation of what it is for and there is no explanation of why WFG could not have used a less expensive manner of service. Similar to the above, it is incumbent on WFG to support the necessity of personal service on counsel when there are cheaper means of serving. The court will tax $955.

3. Discovery Referee Fees: WFG seeks $22,690 for what it paid the court-appointed discovery referee. Plaintiffs do not argue this was not reasonably necessary to the conduct of the litigation. Plaintiffs argue that the amount requested is inconsistent with the allocation in the court’s order appointing the referee.

The court determined a discovery referee was reasonably necessary. The court ordered that the referee charge no more than $60,000 and ordered an allocation of referee fees if the dispute he was deciding involved all parties—1/3 to Derek Westen, Peter Westen, and WFG; 1/3 to Tracy Westen and Linda Lawson; and 1/3 to plaintiffs. But, if the dispute involved only two parties, the fees would be split between them. Plaintiffs contend that WFG is limited to 2/3 of the 1/3 allocated to Derek, Peter, and WFG. But plaintiffs have not provided evidence of the amount of fees attributable to disputes among all parties and the amount applicable to disputes involving less than all parties.

The amounts sought for discovery referee fees by all defendants do not exceed half the maximum the referee could charge. There is no evidence that the amounts sought are not the amounts WFG actually paid. The court will not tax this cost.

4. Online E-Discovery/Document Management Database: WFG seeks $12,531.47 in costs for this service. Plaintiffs argue this is not allowable as a discretionary cost, relying on Science Applications International Corp. v. Superior Court, 39 Cal.App.4th 1095, 1104 (1995), in which the court held that a document control and database charge and “laser disks and graphics communication system” costs were not allowable. The court reasoned that allowing costs for “a high-powered way of retrieving documents” would be the equivalent of allowing paralegal costs, which could not be awarded where attorney fees are not available. The court did allow costs for “graphic exhibit boards-board-sized trial exhibits” and a CHP video used at trial. Id.

That case has come under some criticism. “Almost 20 years have passed since Science Applications was decided, during which time the use of technology in the courtroom has become commonplace (including a technician to monitor the equipment and quickly resolve any glitches), and technology costs have dramatically declined.” Bender v. County of Los Angeles, 217 Cal.App.4th 968, 991 (2013). In Bender, the court addressed costs for courtroom presentations, including a PowerPoint presentation and “Videotaped Deposition Synchronizing.” Id. at 990. The court reasoned: “In a witness credibility case such as this, it would be inconceivable for plaintiff’s counsel to forego the use of technology to display the videotapes of plaintiff’s interviews after his beating, in the patrol car and at the sheriff’s station, and key parts of other witnesses’ depositions.” Id. at 991.

The Bender and Science Applications cases can be reconciled. Both permit allowance of costs for trial presentation technology, though the court in Science Applications limited the recovery for that technology. But WFG cites no case allowing the cost of discovery and document management technology. The court will tax this cost of $12,531.47.

H. Order: The court grants, in part, plaintiffs Nicole Nagel and ESY Investments, LLC’s motion to strike or tax costs in defendants Derek Westen and Westen Family Group, LLC’s memorandum of costs. The court orders taxed a total of $42,539.75 in costs, leaving $89,373.58 in allowable costs.

Motion to Strike/Tax Costs in Memorandum of Costs Filed by Defendant Peter K. Westen: Defendant Peter K. Westen filed a memorandum of costs seeking $55,944.74. Plaintiffs move to tax these costs.

A. Deposition Costs: Plaintiffs argue that Peter’s costs related to Nicole Nagel’s deposition duplicate the costs of WFG. For reasons discussed above, each party is entitled to recover the cost of its own transcripts and videotapes of depositions. The court will not tax these costs.

B. Expert Witness Fees: Plaintiffs object to the $28,681.90 in expert witness fees under CCP § 998.

Plaintiffs again object to certain expert witness fees as having been incurred prior to the CCP § 998 offer. Specifically, plaintiffs point out that David Cook was deposed prior to the offer. Peter does not address this issue. Cook billed for 12.63 hours at $630/hour. Since Peter does not address the timing of Cook’s billings, the court treats the objection as conceded.

Plaintiffs say they do not know the timing of services rendered by the other two experts. He has put this at issue and Peter has not responded. Since only pre-offer expert costs are allowable, Peter has the burden of providing some evidence of when the experts rendered their services. Since he has failed to do so, the court will tax these costs totaling $28,681.90

B. Photocopying of Trial Exhibits: Peter seeks $3,206.29 for photocopying exhibits and preparing binders that were not used as there was no trial. The court has discussed this issue at length with respect to WFG’s costs. The court will tax this amount.

C. Other Costs: Peter seeks costs not expressly provided for in CCP § 1033.5(a).

1. Attorney Service Fees for Personal Service of Documents on Plaintiffs’ Counsel: For reasons discussed above, the court will tax this cost of $283.

2. Discovery Referee Fees: Peter seeks $5,720 in discovery referee fees. Plaintiffs challenge the allocation of these fees but not the fact that Peter incurred them. The court has discussed the allocation issue above. The court will not tax this cost.

D. Order: The court grants, in part, plaintiffs Nicole Nagel and ESY Investments, LLC’s motion to strike or tax costs in defendant Peter K. Westen’s memorandum of costs. The court orders taxed a total of $32,171.19 in costs, leaving $23,773.55 in allowable costs.

Motion to Strike/Tax Costs in Memorandum of Costs Filed by Defendants Tracy Westen and Linda Lawson: Defendants Tracy Westen and Linda Lawson filed a memorandum of costs seeking $16,713.92 (the court added up the costs as these defendants did not provide a total in the memorandum). Plaintiffs move to tax these costs.

A. Photocopies of Exhibits: For reasons discussed above, the court will tax this cost of $1,294.56.

B. Expert Witness Fees: Defendants included $12,225 in expert witness fees in their memorandum of costs. Defendants concede that they sought expert witness fees that pre-dated the CCP § 998 offer. The post-offer fees are $2,805. The court will allow this amount as each defendant is entittled to choose its own expert. The invoices provided support the award of this amount. The court will tax $9,420.

C. Order: The court grants, in part, plaintiffs Nicole Nagel and ESY Investments, LLC’s motion to strike or tax costs in defendants Tracy Westen and Linda Lawson’s memorandum of costs. The court orders taxed a total of $10,714.56 in costs, leaving $5,999.36 in allowable costs.