David Gerrity vs Crusader Insurance Company et al
Case No: 16CV01141
Hearing Date: Wed Jul 24, 2019 9:30

Nature of Proceedings: Motion to Strike/Tax Costs

TENTATIVE RULING:

For the reasons set forth herein, the motion of plaintiff David Gerrity to strike or to tax costs is granted in part and denied in part. The motion is granted to disallow $243.60 from category 4 of the memorandum of costs (deposition costs), to disallow $1,445.00 from category 11 (court reporter fees as established by statute), and to disallow $6,025.23 from category 16 (other). In all other respects, the motion is denied. Correcting an arithmetic error in the total stated in the memorandum of costs, the court fixes the amount of costs awarded in favor of defendants and against plaintiff in the total amount of $52,505.15.

Background:

On May 15, 2019, the court entered its judgment in favor of defendants Crusader Insurance Company and Unico American Corporation and against plaintiff David Gerrity.

On May 29, 2019, defendants filed their memorandum of costs claiming costs in the total amount of $60,228.98.

On June 17, 2019, Gerrity filed his motion to strike and to tax costs. The motion is opposed by defendants. The particular items of costs at issue and arguments of the parties are discussed below.

Analysis:

“Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” (Code Civ. Proc., § 1032, subd. (b).) There is no dispute that defendants are the prevailing parties for purposes of an award of costs.

A claim of costs is challenged by a motion to strike or to tax costs. (See Rules of Court, rule 3.1700(b).) “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 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. [Citations.] Whether a cost item was reasonably necessary to the litigation presents a question of fact for the trial court …. [Citation.] However, because the right to costs is governed strictly by statute [citation] a court has no discretion to award costs not statutorily authorized.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.)

Taking the issues in the order the costs appear in the memorandum of costs, the first item of costs challenged by Gerrity is the deposition costs relating to travel (Memorandum No. 4). With respect to the $243.60 item for airfare to Seattle, defendants concede this was included in error and withdraws the request. With respect to the $138 difference between standard fare and business fare for travel by train, Gerrity asserts that these costs were unnecessary; defendants assert that these were reasonably necessary and less expensive than the cost of driving. (LeBeau decl., ¶ 3.)

“The following items are allowable as costs under Section 1032: [¶] … [¶] (C) Travel expenses to attend depositions.” (Code Civ. Proc., § 1033.5, subd. (a)(3)(C).) “An award of costs shall be subject to the following:

“(1) Costs are allowable if incurred, whether or not paid.

“(2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.

“(3) Allowable costs shall be reasonable in amount.” (Code Civ. Proc., § 1033.5, subd. (c)(1)-(3).)

Gerrity argues that business class seats are a luxury and not “reasonably necessary.” The court finds that business class train tickets are reasonably necessary under the circumstances. First, as defendants point out, train travel was economical in ultimately reducing the out-of-pocket costs that would have reasonably been charged as a taxable cost to Gerrity. Therefore, travel by train is itself reasonable. Although business class train tickets provide added comfort (which may have been merely convenient or beneficial), with train travel a business class ticket is necessary to guaranty a seat. (LeBeau decl., ¶ 3.) Had guaranteed seats not been available, counsel could reasonably have chosen to take a different means of transportation. Under the circumstances here, business class train travel was reasonably necessary. The motion to tax these costs will be denied.

The second item of costs challenged by Gerrity is service of process costs (Memorandum No. 5). The memorandum of costs contains the summary sheet without the worksheet attachment, but including attached supporting documents. The total amount claimed for this item is $766.20. The attached supporting documents show service of deposition subpoenas on “PMK @ N.K. Andersen & Associates” for $86.50, David Cleghorn Fainer, Jr., Esq., for $86.50, “PMK @ A.S. Gillespie & Associates, Inc. c/o Wendy L. Slavkin” for $86.50, Mareike Schmidt, Esq., for $86.50, and “PMK @ Brewer & Williams [Architect] & Designer” for $86.50, for Craig Chatfelter, Chatfelter Appraisal for $86.75, and service of deposition subpoenas for records on City of Santa Barbara for $54.25, Gordon Brewer, RRM Design Group for $47.25, and American Riviera Bank for $145.45, for a total of $766.20.

Gerrity asserts that these items are improper because the manner of service is not identified. “Whether and in what amount the expenses for service of process are allowed depends upon who served the process and what amount is allowed to a public officer in this state for such a service. [Citation.] Since [claiming party’s] memorandum of costs does not state how the subpoenas were served, it cannot be determined from the face of the cost bill whether the items are proper. The verified cost bill was therefore insufficient, [and the claiming party] had the burden to establish the necessity and reasonableness of the service costs ….” (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 132.)

Here, the documentation identifies on its face that these are charges for service of subpoenas. Absent consent by the party to be served, service of subpoenas are required to be by personal service. (Code Civ. Proc., § 2020.220, subds. (b), (c).) The documentation is sufficient to establish the necessity and reasonableness of the service costs. (See also LeBeau decl., ¶ 7.) Gerrity has not shown that the service or cost was not necessary or reasonable. These amounts will be allowed as requested.

The third item of costs challenged by Gerrity is the costs for witness fees (Memorandum No. 8). The total amount claimed for this item is $26,599.31. This amount consists in part of ordinary witness fees and in part of expert witness fees. With respect to the ordinary witness fees, Gerrity argues that the items identified in the memorandum attachments as “custodian fee” or “fees advanced” are not sufficiently specific to identify these amounts as witness fees. In opposition, defendants argue that these fees are the witness fees required for deposition subpoenas. The court agrees that these are plainly witness fees and are on their face reasonable. The motion to tax these costs will be denied.

With respect to expert witness fees, in his motion, Gerrity argues that these fees are improper because expert witness fees are not permitted unless ordered by the court. “The following items are not allowable as costs, except when expressly authorized by law: [¶] (1) Fees of experts not ordered by the court.” (Code Civ. Proc., § 1033.5, subd. (b)(1).) In opposition, defendants argue that these fees are expressly permitted by law because of the cost-shifting provisions of Code of Civil Procedure section 998:

“The costs allowed under Sections 1031 and 1032 shall be withheld or augmented as provided in this section.” (Code Civ. Proc., § 998, subd. (a).)

“Not less than 10 days prior to commencement of trial …, any party may serve an offer in writing upon any other party to the action to allow judgment to be taken … in accordance with the terms and conditions stated at that time.” (Code Civ. Proc., § 998, subd. (b).)

“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 postoffer 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.” (Code Civ. Proc., § 998, subd. (c)(1).)

Defendants provide evidence that defendants served a section 998 offer on Gerrity on August 22, 2018, offering $20,000 in exchange for a dismissal. (LeBeau decl., ¶ 5 & exhibit A.) The offer was not accepted by Gerrity and defendants ultimately obtained a judgment in their favor. (LeBeau decl., ¶ 5.) In reply, Gerrity acknowledges the offer and the failure of Gerrity to obtain a more favorable judgment. (Reply, p. 2.) Gerrity does not challenge the effectiveness of the section 998 offer to permit the award of expert fees (Reply, p. 2), but Gerrity argues that the amounts claimed include pre-offer fees and are otherwise unreasonable. The court finds that it is appropriate under the circumstances here to exercise its discretion to award expert witness fees.

The items cited by Gerrity as occurring prior to the August 22, 2018 offer are those items on pages 61 to 63 of the memorandum attachments. Those invoices, while representing items occurring before August 22, 2018, are for ordinary, not expert fees. As discussed above, those fees are awardable without resort to section 998. The motion to tax those fees will be denied. The invoices attached relating to expert fees all occurred after August 22, 2018.

Gerrity next argues that the amounts billed by Cannon & Associates, i.e., attorney Tony Cannon, are for an unreasonable hourly rate for attorneys in this area. “The costs for services of expert witnesses for trial under subdivisions (c) and (d) shall not exceed those specified in Section 68092.5 of the Government Code.” (Code Civ. Proc., § 998, subd. (h).) “A party requiring testimony before any court, tribunal, or arbiter in any civil action or proceeding from any expert witness … shall pay the reasonable and customary hourly or daily fee for the actual time consumed in the examination of that witness by any party attending the action or proceeding.” (Gov. Code, § 68092.5, subd. (a).) “The reference to Government Code section 68092.5 in section 998, subdivision (h) is interpreted to mean that any fees charged for trial time must not exceed the expert’s normal rate. Costs recoverable under section 998, subdivision (c) expressly include ‘a reasonable sum to cover costs of the services of expert witnesses, … reasonably necessary in either, or both, the preparation or trial of the case by the defendant.’ ” (Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, 123, emphasis omitted.)

There is no evidence presented that the amount charged by Cannon exceeds his usual rate. The amount of Cannon’s rate is reasonable under all of the circumstances here. The court will not tax the expert witness fees of witness Cannon.

Gerrity objects to the amounts billed by National Construction & Architecture, i.e., expert Clay Mitchel, because it includes charges for travel and wait time at the Santa Barbara Courthouse and for travel time between Los Angeles and Santa Barbara. The time for Mitchel is billed by actual hours spent at an hourly rate rather than a daily rate. The amounts charged to make himself available to testify in the Santa Barbara Courthouse are not unreasonable for this expert witness. The court will not tax the expert witness fess of witness Mitchel.

Gerrity finally objects to the amount billed by William Catanese, plaintiff’s expert witness, who ultimately did not testify at trial. Gerrity concedes that section 998 authorizes the costs to depose the opposing party’s witness in trial, but asserts that there is no evidence presented that it was reasonably necessary to do so. The reasonable necessity is evident from both the fact that Gerrity designated Catanese as an expert and the fact that the court addressed this testimony in a motion in limine. The deposition of the proposed expert witness was reasonably necessary to prepare for trial in the event that Catanese would have testified.

The court denies the motion to tax witness fees and exercises its discretion to award expert witness fees as claimed in the memorandum of costs.

The fourth item of costs challenged by Gerrity is the costs for court reporter fees (Memorandum No. 11). These fees include court reporter fees of $1,335.00 (=$667.50 + $267.00 + $400.50) for court reporting services (Memorandum, attachment, pp. 84-89) and $1,445.00 for transcripts. Gerrity does not challenge the fees for court reporting services, but challenges the fees for transcripts as improper and not reasonably necessary.

“The following items are not allowable as costs, except when expressly authorized by law: [¶] … [¶] (5) Transcripts of court proceedings not ordered by the court.” (Code Civ. Proc., § 1033.5, subd. (b)(5).) These transcripts were not ordered by the court and hence are not authorized or allowable. The court grants the motion to tax these costs for transcripts.

The fifth item of costs challenged by Gerrity is the costs for models, enlargements, and photocopies of exhibits (Memorandum No. 12). The total amount claimed for this category is $3,572.96, of which Gerrity challenges the copying costs of $2,242.35, the cost of binders of $202.50, the cost of tabs of $203.00, and the cost of covers of $15.00. Gerrity argues that these were not reasonably necessary or reasonably helpful to aid the trier of fact.

“The following items are allowable as costs under Section 1032: [¶] … [¶] (13) Models, 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.” (Code Civ. Proc., § 1033.5, subd. (a)(13).)

The exhibit costs represent the sets of exhibits used at trial. (LeBeau decl., ¶ 8.) The court finds that the cost of copying, together with the incidental costs of binding and separately identifying the exhibits, collectively were both reasonably necessary and reasonably helpful to aid the trier of fact. The motion to tax these items will be denied.

The sixth item of costs challenged by Gerrity is the costs for electronic filing (Memorandum No. 14). “The following items are allowable as costs under Section 1032: [¶] … [¶] (14) Fees 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).) The fees under this category are identified either in invoices of Janney & Janney Legal Support Service or in invoices of One Legal. (Memorandum, attachment, exhibit 14.) Gerrity does not challenge the charges in the invoices of One Legal. (Motion, p. 5.)

The Santa Barbara County Superior Court required (and continues to require) electronic filing of documents as of January 1, 2016. (Santa Barbara County Superior Court Local Rules, rule 1012.) Although the invoices do not generally distinguish between these charges, there are two separate components to these charges that are governed by different provisions of section 1033.5. Section 1033.5, subdivision (a)(14) refers to fees for the electronic filing through an electronic service provider. “A court may contract with one or more electronic filing service providers to furnish and maintain an electronic filing system for the court.” (Cal. Rules of Court, rule 2.255(a)(1).) “If the court contracts with an electronic filing service provider, it may require electronic filers to transmit the documents to the provider.” (Cal. Rules of Court, rule 2.255(a)(2).) “The court’s contract with an electronic filing service provider may: [¶] (A) Allow the provider to charge electronic filers a reasonable fee in addition to the court’s filing fee.” (Cal. Rules of Court, rule 2.255(b)(1)(A).) It appears to the court that the fees allowed under section 1033.5, subdivision (a)(14), are those fees charged pursuant to rule 2.255(b)(1)(A), which fees are necessitated by fact of filing electronically.

One part of the fee that is represented in the invoices is for the reasonable fee charged pursuant to rule 2.255(a)(1). However, it also appears to the court that some part of the fee represents additional services provided by Janney and Janney in connection with the filing. That portion of the fees claimed in excess of the rule 2.255(a)(1) reasonable fee is analogous to messenger fees to deliver documents to court, which costs are awardable in the court’s discretion rather than as of right. (See Ladas v. California State Auto. Assn., supra,19 Cal.App.4th at p. 776; Code Civ. Proc., § 1033.5, subd. (c)(4).)

The court evaluates the reasonableness of these fees in the context of the time when they were incurred. E-filing began with this court in January 2016 and was, throughout California, a new and sometimes challenging process. The Janney and Janney fees were incurred between June 2016 and June 2017. The less costly fees from One Legal are from May 2018 and later. When e-filing was new, it was reasonable to obtain a greater level of service to ensure timely and accurate e-filing. Now that e-filing has become routine, more is required to show that obtaining a greater than basic level of service is reasonable. To the extent that some portion of the fees identified in the Janney and Janney invoices reflects fees in excess of the rule 2.255(a)(1) reasonable fees, the court finds that, when incurred, those fees were reasonably necessary and will be awarded in the court’s discretion. The motion to tax these fees will therefore be denied.

The seventh item of costs challenged by Gerrity is the costs for travel for trial (Memorandum No. 16). Travel costs for trial, as contrasted with travel costs for depositions, are neither awardable as of right nor prohibited. (Code Civ. Proc., § 1033.5, subds. (a), (b).) “Items not mentioned in this section and items assessed upon application may be allowed or denied in the court’s discretion.” (Code Civ. Proc., § 1033.5, subd. (c)(4).) The travel expenses are largely necessitated by the fact that defendants’ counsel reside in San Diego and trial was here in Santa Barbara. (LeBeau decl., ¶ 9.) The predominant issue is not whether defendants’ counsel was reasonably frugal in the specifics of the travel expenses (which they appear to have been), but whether it is appropriate to transfer the cost of such expenses to plaintiff solely based upon defendants’ choice of non-local trial counsel. The court is not persuaded from the limited evidence presented in this motion that incurring travel expenses by virtue of employment of non-local trial counsel here was reasonably necessary rather than merely convenient. (See Ladas v. California State Auto. Assn., supra, 19 Cal.App.4th at pp. 775-776.) The court does not exercise its discretion to award these costs. The court will therefore grant the motion to tax these travel costs.

Gerrity also challenges the travel costs of having the primary claims adjuster who handled the underlying claim, Diane Litts, travel from Seattle, Washington to attend trial. (LeBeau decl., ¶ 9.) Defendants paid for this travel in exchange for Litts voluntarily agreeing to testify. (Ibid.) As with the other travel expenses claimed, these expenses are neither awardable as of right nor prohibited and so are within the court’s discretion. The personal attendance of Litts was certainly convenient to the parties and to the court, but the evidence presented does not show that the personal attendance of Litts was reasonably necessary. Out-of-state witnesses may testify by deposition, including by video deposition. (Code Civ. Proc., § 2025.620, subd. (c)(1).) The court does not exercise its discretion to award these costs. Accordingly, the court will grant the motion to tax these travel costs.

Finally, the court notes that the total as listed in the memorandum of costs contains a mathematical error. The total is actually $60,218.98 rather than the stated $60,228.98. Correcting for this error and deducting the amount disallowed as discussed above, the court will fix awardable costs at $52,505.15