Case Number: EC057574    Hearing Date: July 18, 2014    Dept: NCD

TENTATIVE RULING (7-18-14)
#1
EC 057574
UNGO v. IMPERIAL CAPITAL BANK

Plaintiffs’ Motion to Tax and Strike Costs

TENTATIVE:

Motion to tax costs is GRANTED in part and DENIED in part as follows.
The court finds that defendants were the prevailing parties in this action entitled to costs under CCP section 1032(a).

1.) Motion to tax Item 8 – Witness Fees – is GRANTED.
Defendants have failed to establish that expert witness fees are recoverable as they have failed to establish that a valid CCP § 998 offer governs, a certain 3-7-13 998 offer having been withdrawn.

Costs claimed of $19,845 are reduced to -0-.

2.) Motion to tax Item 11—Models, blowups and photocopies of exhibits—is GRANTED in part.
The court finds that the invoices paid to Technical Reliance for blowups and exhibits for trial, in the sums of $2,312.50 and $1,875.00, are proper charges, but defendants have failed to meet their burden of establishing that the remaining charges are allowable.

Costs claimed of $23,530 are reduced to $4,187.50.

3.) Motion to tax Item 12—Court Reporter Fees —is DENIED.
These appear to have been reasonably and necessarily incurred.

Costs claimed of $5,076.70 are awarded in full.

4.) Motion to tax Item 13—Other—is GRANTED.
Costs claimed for jury consultant fees are disallowed.

Costs claimed of $10,483.13 are reduced to -0-

Total costs awarded= $22,801.79.

ANALYSIS:
Substantive
Under CCP Section 1032, a prevailing party in an action is entitled to allowable costs. Under CCP § 1033.5(c)(2), allowable costs “shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.” Subdivision (3) requires: “Allowable costs shall be reasonable in amount.”

Where a cost item does not appear proper and necessary on its face, the burden of proof is on the claimant to show the cost is appropriate. Murphy v. F.D. Cornell Co., (1930) 110 Cal. App. 452, 454. If the items appear to be proper charges, the burden is on the party seeking to tax costs to show they were not reasonable or necessary. Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761. Where items are properly objected to as not reasonable or necessary, however, they are put in issue and the burden of proof is on the party claiming them as costs. Id. The trial court’s determination on a motion to tax or strike costs will be reversed only for an abuse of discretion. Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, 121.

Item 8—Witness Fees
The cost memorandum does not seek any ordinary witness fees, but seeks the sum of $19,845 for “Expert fees (per Code of Civil Procedure section 998).”

It is not disputed here that plaintiffs were served on March 7, 2013 with an offer under CCP section 998 of $10,000, failed to accept the offer, and failed to obtain a more favorable result at trial. [See Ex. B].

Plaintiffs argue here that the offer was not valid because it was withdrawn prior to the requisite statutory period. [See Buchanan Decl., para. 3a]. The argument is that the offer itself, by its own terms, was expressly withdrawn if not accepted within ten days. Under CCP § 998(b)(2), “If the offer is not accepted prior to trial or arbitration or within 30 days after it is made, whichever occurs first, it shall be deemed withdrawn, and cannot be given in evidence upon the trial or arbitration.” Here, since the offer did not remain open until thirty days after it was made, it appears that the offer was in fact not a valid offer.

It is generally held that in interpreting section 998, the burden is on the offering party to demonstrate that the offer is a valid one under section 998. Barella v. Exchange Bank (2000) 84 Cal.App.4th 793, 799. “The corollary to this rule is that a section 998 offer must be strictly construed in favor of the party sought to be subjected to its operation.” Id.

Defendants have failed to meet their burden of showing that the offer permitted the required term for acceptance, and was not in fact prematurely withdrawn.

In addition, although not argued in the papers, the Section 998 offer appears to be invalid on its face because it was addressed to three different plaintiffs jointly. [See Ex. B].

It has long been recognized in California as a general rule, that “only an offer made to a single plaintiff, without need for allocation or acceptance by other plaintiffs, qualifies as a valid offer under section 998.” Meissner v. Paulson (1989) 212 Cal.App.3d 785, 791.

Subsequent case law bases analysis of the application of this rule on the following rationales:
1) Where there is no allocation this makes it “impossible to say any one plaintiff received a less favorable result than he would have under the offer.” Meissner, at 790.

2) Where a joint offer is made, such that neither party can accept without the consent of the other, this places an unfair burden on offerees to second guess joint offers, and potentially places an offeree who wishes to accept at the mercy of an obstinate offeree who does not. See Vick v. Dacorsi (2003, 2nd Dist.) 110 Cal.App.4th 206, 210-211.

In addition, it is generally recognized that the “the legislative purpose of section 998 is generally better served by ‘bright line rules’ that can be applied to these statutory settlement offers– at least with respect to the application of contractual principles in determining the validity and enforceability of a settlement agreement.” Barella, at 799. This is recognized to best serve the interests that statute is designed to promote– the settlement of disputes. See Peterson v. John Crane (2007) 154 Cal.App.4th 498, 512.

Here, since the offer is directed to three different plaintiffs, without allocating how much of the $10,000 offer was to be paid to each, the offer is invalid. There is accordingly no basis for an award of expert witness fees and this item is stricken in its entirety.

Item 11– Models, blowups, and photocopies of exhibits
CCP 1033.5(a)(13) provides “Models and blowups of exhibits and photocopies of exhibits may be allowed if they were reasonably helpful to the trier of fact.”

The cost memorandum seeks $23,530 for blowups and exhibits for trial. The worksheet specifies five sums paid to Technical Reliance for blowups and exhibits for trial and “trial projector and blowups/exhibits.”

Plaintiffs argue that the code does not permit costs of trial presentation equipment, services or personnel, but only for the four inch binders with documentary exhibits which were presented to the jury, and also argues that the costs are not sufficiently itemized to determine if they constitute recoverable costs.

This does appear to be a situation where defendants are attempting to recover for at least items which the court may determine were not “reasonably necessary to the conduct of the litigation,” but were rather “merely convenient or beneficial to its preparation.” Plaintiffs rely on Science Applications International Corp. v. Superior Court (1995) 39 Cal.App.4th 1095, in which the court of appeal issued a writ of mandate directing the trial court to vacate its ruling granting a party litigation expenses for a document control database and a laser disk and graphic communication system, and deny an award of those costs, on the ground the costs were incurred for the convenience of counsel and were not reasonably necessary to the litigation, even though counsel’s presentation might have been enhanced thereby.
Here, the court finds that the presentation aids for which a recovery of costs is sought here were not necessary pursuant to the criteria set forth in the Science Applications case, and in effect, were more in the nature of effective ways of presenting evidence to the jury or in the nature of providing organizational convenience for defendants or employing technology to accomplish what could have been accomplished through more conventional methods. As the showing is now presented, it appears that the first two entries of expenses paid to Technical Reliance, for “blowups and exhibits for trial” for $2,312.50 and $1,875, are proper on their face, but the remaining three charges including “trial projector” do not, shifting the burden to defendants to justify the costs. The Court finds that respondents have failed to justify the remaining costs pursuant to the governing standard set forth in the Science Application case.

Item 12– Court Reporter Fees
Under CCP section 1033(a)(11), allowable costs include “Court reporter fees as established by statute.” Under subsection (a) (9), allowable costs include “transcripts of court proceedings ordered by the court.” Under subdivision (b), items not allowable as costs include, “(5) Transcripts of court proceedings not ordered by the court.”

Here, the fees are sought in the sum of $5,826.70, including reporter fees for hearings and trial transcripts.

Under CRC Rule 2.956(c):
“If the services of an official court reporter are not available for a hearing or trial in a civil case, a party may arrange for the presence of a certified shorthand reporter to serve as an official pro tempore reporter. It is that party’s responsibility to pay the reporter’s fee for attendance at the proceedings, but the expense may be recoverable as part of the costs, as provided by law.”

The recoverable costs for a reporter retained by a party therefore appear to be the fee “for attendance at the proceedings,” to serve as official reporter, not the statutory fees for official court reporters, which are no longer available. The charges set forth in the memorandum appear appropriate, and the motion is denied in that regard.

Item 13—Other—Jury Consultant Fees
These costs are sought under CCP §1033.5(a)(13), which provides that allowable costs include:
“Any other item that is required to be awarded to the prevailing party pursuant to statute as an incident to prevailing in the action at trial or on appeal.”

CCP§ 1033.5(c)(4) provides that “items not mentioned in this section and items assessed upon application may be allowed or denied in the court’s discretion.”

As pointed out in the moving papers, however, these costs, for jury consultant fees, are expressly excluded in CCP § 1033.5 (b), which states,
(b) The following items are not allowable as costs, except when expressly authorized by law:…

(4) Costs in investigation of jurors or in preparation for voir dire.”

These costs therefore appear improper and are stricken.