Case Number: BC490805    Hearing Date: July 09, 2014    Dept: 34

Moving Party: Plaintiffs Sa Young Hong, Jung Ho Hong, and Sang Pil Nam (“plaintiffs”)

Resp. Party: Defendants John A. Tkach and the Law Offices of John A. Tkach (“defendants” or “Tkach”)

Plaintiffs’ motion to strike or tax costs is DENIED.

BACKGROUND:

Plaintiffs commenced this action on 8/22/12. Plaintiffs filed a second amended complaint on 9/22/13 against defendants for: (1) breach of fiduciary duty; (2) actual and constructive fraud; (3) securities fraud; (4) violation of Corporations Code section 25504.1; (5) violation of Bus. & Prof. Code sections 17200 and 17500; (6) accounting; (7) inspection of books and records; (8) elder abuse; (9) IIED; (10) malpractice; (11) breach of fiduciary duty; and (12) breach of contract. The action pertains to privately held stock in defendant Interpols Network Inc., of which plaintiffs are minority shareholders. Plaintiffs assert that the defendants, officers, directors, and controlling shareholders of Interpols, breached their fiduciary duties to plaintiffs. The first, second, third, fourth, fifth, sixth, seventh, eighth and ninth causes of action are alleged against the Interpols defendants. The tenth, eleventh, and twelfth causes of action are alleged against the Tkach defendants.

On 5/1/14, the Court sustained the Tkach defendants’ demurrer to the tenth, eleventh, and twelfth causes of action, without leave to amend. On 6/4/14, the Court entered judgment for Tkach and against plaintiffs. The Court ordered that plaintiffs shall take nothing and that defendants shall recover allowable costs.

On 5/14/14, defendants submitted a memorandum of costs.

ANALYSIS:
There is no dispute that Defendant Tkach is the prevailing party.

Under California Code of Civil Procedure, section 1032, subd. (b), “Except as otherwise provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” A prevailing party is entitled to recover costs as a matter of right under statute. (Davis v. KGO T.V., Inc. (1998) 17 Cal.4th 436, 439.) If the “prevailing party” requirements of California Code of Civil Procedure section 1032, subd. (b) are met, the trial court has no discretion to order each party to bear its own costs of suit. (Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198.)

During the hearing on the Motion to Tax Costs, “the 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.” (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131.) “This procedure provides an orderly and efficient way of placing disputed costs at issue on a line item basis.” (612 South LLC v. Laconic Ltd. Partnership (2010) 184 Cal.App.4th 1270, 1285.)

[T]he 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.]

The court’s first determination, therefore, is whether the statute expressly allows the particular item, and whether it appears proper on its face. [Citation.] If so, the burden is on the objecting party to show them to be unnecessary or unreasonable. [Citation.]

(Nelson, 72 Cal.App.4th at p. 131.)

Therefore, if the Court determines the costs are allowable and proper on their face, the burden is on plaintiff to show they are unreasonable or not necessary. Where the award of costs is discretionary, the burden is on defendant to establish that the costs were reasonable and necessary.

Plaintiffs move to strike or tax item number 4 in defendants’ memorandum of costs, which seeks $8,242.40 for deposition costs. Deposition costs are recoverable under Code of Civil Procedure section 1033.5(a)(3).

To the extent that plaintiffs are arguing that defendants should not have taken the deposition prior to the hearing on their demurrer, this argument is not well taken. “The right to discovery generally does not depend on the status of the pleadings, i.e., the case need not be ‘at issue.’” (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2011) ¶ 8:58 [italics in original]; see also Budget Finance Plan v. Superior Court (1973) 34 Cal.App.3d 794, 797.) Plaintiffs provide no authority which holds that a party may not recover costs incurred for discovery prior to the determination on a demurrer.

The Court is aware that plaintiff’s deposition was taken only 2 weeks before the demurrer was heard. Nonetheless, Plaintiffs commenced this action 18 months previously, on 8/22/12. Plaintiffs chose to include defendant Tkach; defendant had no option but to respond. On the same day that the demurrer was granted, the court set trial for December 2014. Plaintiffs have not met their burden to show that the taking of the deposition in April was unreasonable.

Plaintiffs also assert that the majority of the time spent during the deposition was for the benefit of the other defendants in this action. (See, e.g., Reply, p. 2:13-24.) If this were true, this argument might be persuasive. But Plaintiffs provide absolutely no evidence to support this assertion. Plaintiffs have not submitted transcripts from the deposition or a declaration as to the scope of the deposition. Therefore, the Court rejects this objection.

Lastly, plaintiffs state that Tkach has not justified the need to videotape the deposition. Videotaping a deposition is not such a new technology that it needs justification. At the time the deposition was taken, Tkach had not idea whether or not it or plaintiff would ultimately bear the cost of the deposition. Plaintiffs – who bear the burden of showing that the costs should be taxed – have not met that burden.

Accordingly, plaintiffs’ motion to tax is DENIED.