Case Number: GC050205    Hearing Date: July 18, 2014    Dept: NCB

17. GC050205
KEITH CHUANG, et al v. ALBERT CHANG et al
Motion to Tax Costs

This matter proceeded to trial and was resolved when the Court granted the Defendants’ motion for non-suit. The Defendants filed a memorandum of costs on May 21, 2014.

This hearing concerns the Plaintiffs’ motions to tax costs from the memorandum of costs filed by the Defendants.

An initial issue is that the Defendants object to the motion on the grounds that the Plaintiffs’ motion is untimely. Under CRC rule 3.1700, a party must serve and filed a motion to tax costs filed 15 days after service of the cost memorandum, with five days added if the memorandum of costs was served by mail. A review of the Court file reveals that the Defendants served their memorandum of costs by mail on May 21, 2014. The Plaintiffs had until June 10, 2014 to file and serve their motion to tax costs.
The Plaintiffs filed their motion to tax costs on June 10, 2014. The motion is accompanied by a proof of service indicating that the motion was served on June 9, 2014. The proof of service includes the correct address for the Defendants’ attorneys.
The Defendants argue that the proof of service is unreliable because they did not receive the papers in the mail. Evidence Code section 641 creates a presumption of service, if there is a valid proof of service. This presumption can be rebutted with sufficient facts in declarations stating that service was never accomplished. Bonzer v. City of Huntington Park (1993) 20 Cal. App. 4th 1474, 1479-1480. The evidence needed to rebut the presumption that a letter was received is the following:

1) a declaration from the person who ordinarily receives the mail that includes facts describing the procedures for receipt of mail and stating that the document was not received;
2) a declaration including facts showing that a search was made for the document and that it was not found.
Bonzer, 20 Cal. App. 4th at 1479-1480. (finding that the presumption was rebutted by evidence in six declarations, including one from the recipient of all mail for office, in which the individuals said they had not received the document and that they had not found the document after making a search).

The Defendants’ objection lacks such evidence. There is no declaration from the person who ordinarily receives mail at the firm of the Defendants. Although the Defendants’ attorney, Jerid Maybaum, states in his declaration that the motion was not received by June 15, 2014, he does not identify the procedures for receipt of mail, he does not state that he is the person who ordinarily receives the mail, and he does not state that the anyone made a search of the office for the motion.
Accordingly, the Defendants have not rebutted the presumption created by Evidence Code section 641 that the document was mailed and received and there are no grounds to deny the motion for lack of timely service.

The Plaintiffs request that the Court tax amounts from items 1, 5, 8, 11, and 13. If the items on a verified cost bill appear to be proper charges, they are prima facie evidence that the costs, expenses and services therein listed were necessarily incurred. Rappenecker v. Sea-Land Serv., Inc. (1979) 93 Cal. App. 3d 256, 266. A party seeking to tax costs must provide evidence to rebut this prima facie showing. Jones v. Dumrichob (1998) 63 Cal. App. 4th 1258, 1266. Mere statements unsupported by facts are insufficient to rebut the prima facie showing that costs were necessarily incurred. Id.

1. Item 1, Filing Fees
The Plaintiffs argue that the filing fees of $1,388.33 for the initial demurrer and motion to strike are unreasonable. This argument is not persuasive because the fee of $1,388.33 was not a fee for the filing of a motion, but was the first appearance fee for the Defendants. In their opposition, the Defendants provide a copy of the amount charged by the Court in exhibit 1. This fee is based on the first appearance fee of $435 charged for each Defendant to appear and the costs to send the papers by facsimile to the Court. Since the Defendants are seeking to recover the fees charged by the Court, the costs were necessarily incurred.
The Plaintiffs also argue that the fees for the demurrer and the motion to strike directed at the First Amended Complaint are unreasonable. The Defendants offer facts to demonstrate that the filing fee of $92.25 to file each motion was based on the $60 fee for each motion plus the fees to deliver the papers by facsimile. The Defendants provide a copy of the amount charged by the Court in exhibit 2 to their opposition. Since the Defendants are seeking to recover the fees charged by the Court, the costs were necessary incurred.
Accordingly, the Court denies the request to tax any amount from item 1.

2. Item 5, Service of Process
The Plaintiffs argue that the fees incurred for rush service are improper. The Defendants provide a copy of the bill in exhibit 3 to their opposition and offer facts in the declaration of their counsel, Jane Randolph, to explain that the rush fees were incurred because the Plaintiffs kept changing the trial date and because the Plaintiffs advised the Defendants that Ms. Peng was planning to be out of the country when the trial was set to commence. This indicates that it was reasonably necessary for the Defendants to incur the rush fees to subpoena these two witnesses.
Accordingly, the Court denies the request to tax the costs from item 5.
to serve trial subpoenas on Richard Herendeen and David Elstad.

3. Item 8, Expert Witness Fees
The Plaintiff requests that the Court tax the full amount of $55,722.50 from item 8.
The Defendants seek these costs based on their offer to compromise under CCP section 998 for $165,000 (a copy of the offer is attached as exhibit A to the declaration of Plaintiffs’ attorney, Russell Frandsen). The Plaintiffs did not accept this offer and the case proceeded to trial. Since the Court granted a nonsuit in favor of the Defendants, the Plaintiffs did not obtain a more favorable judgment than the $165,000 offer to settle.
An offer to compromise under CCP section 998 is effective to shift liability for costs only where the offer was properly allocated as to multiple offerees and was made in a manner allowing individual offerees to accept or reject it. Menees v. Andrews (2004) 122 Cal. App. 4th 1540, 1544. An offer which provides it must be accepted by all plaintiffs is fundamentally unfair to the plaintiff who believes the offer is reasonable as to her and wants to accept it. Id. Such a conditional offer frustrates the chances of settlement, which is the whole purpose behind section 998. Id. Furthermore, it allows defendants to make settlement offers they know will not be accepted in order to put themselves in the position to recover costs under the penalty provisions of the statute. Id.
The application of “bright line rules” in determining the validity and enforceability of section 998 offers serves the interests the statute is designed to promote, i.e., the settlement of disputes. Id. at 1546. This requires that section 998 offers be separately prepared and served on individual plaintiffs, allowing each individual the opportunity to accept individually. Id.
In the pending case, the Defendants’ offer was expressly conditioned on all the Plaintiffs accepting the offer. On page 3, at line 1, the offer to compromise under CCP section 998 states “This offer is not effective unless all Plaintiffs accept”. Since the Defendants did not make an offer to compromise in a manner that allowed each, separate Plaintiff to accept, the Defendants’ offer to compromise was not effective to shift liability for costs under CCP section 998.
Therefore, the Court taxes the entire amount of $55,722.50 from item 8.

4. Item 11, Models, Blowups, and Photocopies of Exhibits
The Plaintiffs argue that the costs in item 11 should be stricken because the Defendants did not use their exhibits at trial because the Court granted the Defendants’ motion for nonsuit.
CCP section 1033.5(a)(12) models and blowups of exhibits and photocopies of exhibits may be allowed if they were reasonably helpful to aid the trier of fact (italics added). In Ladas v. California State Auto. Assn. (1993) 19 Cal. App. 4th 761, the case was dismissed before trial. The Court found that the defendant failed to qualify for recovery of exhibits costs because its exhibits were not used to aid the trier of fact. Id. at 775.
In the pending case, the Defendants’ attorney, Jane Randolph, states in paragraph 20 that the Defendants referred to a number of exhibits during the cross-examination of Keith Chuang, Albert Chang, and William Lai and during the direct/cross-examination of Sandy Peng and Tiffany Huang. Since the Defendants prepared and then used their exhibits to aid the trier of fact, the Defendants may recover these costs.
Accordingly, the Court denies the request to tax any amount from item 11.

d. Item 13, Other
The Plaintiffs argue that the Court Reporter Fees should be taxed from item 13. The Defendants’ attorney states that the court reporter services were used because court reporter services are no longer provided by the Court.
Under CRC rule 2.956(c), when the services of an official court reporter are not available for trial, a party may arrange for the presence of a court reporter and the expense may be recoverable as part of the costs. Here, the Court did not provide court reporter services for the trial and the Defendants may recover these expenses as part of their costs.
Accordingly, the Court denies the request to tax any amount from item 13.

In summary, the Court orders that $55,722.50 from item 8 in the Defendants’ memorandum of Costs is hereby taxed.