ENCINAL CREST, LTD VS ANNE HOFFMAN, ET AL.,

Tentative Rulings

Case Number: SC125253    Hearing Date: July 16, 2020    Dept: O

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SUBJECT: MOTION TO TAX COSTS IN EXCESS OF COSTS ON APPEAL AND TAXING COSTS

MOVING PARTY: Defendants Paul and Anne Hoffman

RESP. PARTY: Plaintiff/X-Defendant Encinal Crest, Ltd., a Cayman Islands Exempt Corp

TENTATIVE RULING

Defendants do not object to Items 1(i), 12 and 14 itemized in the worksheet. Defendants’ Motion to Tax Costs is DENIED as to Items 1(i) (notice of proposed statement on appeal-1(i) on worksheet for $89.25), 11 ($1,671 court reporter fees -12 on worksheet) and 14 (121.70 electronic filing fees). The balance of cost sought lack merit. The motion to tax costs, therefore is GRANTED as to all other Items. The total costs to be awarded Plaintiff is $1,882.

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. See Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-774. Whether a cost item was “reasonably necessary” to the litigation presents a question of fact for the trial court and is reviewed for abuse of discretion. Id. at 774.

There is also no requirement that supporting documentation, such as receipts, be submitted with the memo of costs. See Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1267. The only identifiable requirement for a memo of costs is that it set forth the costs claimed and be verified. See CRC 3.1700(a)(1).

Plaintiff argues the fees and cost listed on the memo of costs are properly recoverable as appellate costs. Defendants argue the costs are not properly recoverable as appellate costs, because they were incurred pre-judgment and not in connection with the appeal.

The memorandum of costs is improper for recovery of appellate costs. Plaintiff filed a memo of costs on 9-30-19 on an MC-010 Judicial Council Form, which is intended for recovery of prejudgment costs under CCP §1032 and 1033.5. Plaintiff was required to file the mandatory APP-013 Judicial Council Form to recover costs incurred on appeal. Plaintiff’s failure to use APP-013 would be sufficient grounds to strike the entire 9-30-19 Memo of Costs. However, Defendants do not object to Items 1(i), 12 and 14.

In addition, the categories of recoverable costs on appeal are much narrower than recoverable prejudgment costs. CRC Rule 8.278 allows the party prevailing on appeal to recover costs incurred on appeal: (A) Filing fees; (B) The amount the party paid for any portion of the record, whether an original or a copy or both. The cost to copy parts of a prior record under rule 8.147(b)(2) is not recoverable unless the Court of Appeal ordered the copying; (C) The cost to produce additional evidence on appeal; (D) The costs to notarize, serve, mail, and file the record, briefs, and other papers; (E) The cost to print and reproduce any brief, including any petition for rehearing or review, answer, or reply; (F) The cost to procure a surety bond, including the premium, the cost to obtain a letter of credit as collateral, and the fees and net interest expenses incurred to borrow funds to provide security for the bond or to obtain a letter of credit, unless the trial court determines the bond was unnecessary; and (G) The fees and net interest expenses incurred to borrow funds to deposit with the superior court in lieu of a bond or undertaking, unless the trial court determines the deposit was unnecessary.

Because Plaintiff failed to use mandatory form APP-013, the Court cannot determine from the face of the MC-010 form whether the listed costs fall within any of the categories of recoverable appellate costs. Examining the worksheet, Plaintiff clearly included costs that are not recoverable under CRC Rule 8.278, such as Items 1(a)-(h) and (j)-(q) for filing fees incurred at the trial court level.

Plaintiff also included $32,020 in witness fees, claiming they were necessary to defend against the Defendants’ appeals. However, “witness fees” are not among the recoverable costs on appeal, and there is no evidence establishing that the expert witness fees qualify as “cost[s] to produce additional evidence on appeal.”

Third, Plaintiff does not claim that they are entitled to seek prejudgment costs, nor may Plaintiff now seek such costs. The deadline to seek prejudgment costs has expired. The costs memorandum must be served and filed within the earlier of: (1) 15 days after the clerk's service of notice of entry of judgment or dismissal; or (2) 15 days after any party's service of such notice; or (3) 180 days after entry of judgment. CRC 3.1700(a)(1). Plaintiff served a Notice of Entry of Judgment on 5-24-18 by mail. Any memo of costs seeking recovery of prejudgment costs was due within 20 days or by 6-14-18. The memo of costs was not served until 9-30-19.

Fourth, Plaintiff is not entitled to costs as a matter of right under CCP §1032. The judgment entered on 5-24-18 did not include monetary relief and consisted of reformation of a deed. Where other than monetary relief is recovered “and in situations other than as specified,” the “prevailing party” is determined by the court and the award of costs is discretionary. CCP §1032(a)(4)(“court may allow costs or not”); Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1142 (plaintiff’s entitlement to costs was matter of trial court’s discretion, not a matter of right, where defendant prevailed on its declaratory relief claim and net damages recovered by plaintiff would be reduced in light of appellate court findings); Lincoln v. Schurgin (1995) 39 Cal.App.4th 100, 104–105 (when plaintiff wins net monetary recovery but defendant prevails in its cross-action for declaratory relief, case presents circumstance not otherwise specified; in that case, determination of prevailing party is matter within court's discretion). Thus, in order to recover costs, Plaintiff had the burden of persuading the Court to exercise its discretion in favor of awarding Plaintiff its costs in their entirety. Plaintiff fails to carry that burden, arguing instead that all costs relate to the appeal and that Defendants unnecessarily inflated costs with frivolous litigation tactics.

Finally, if the Court disregarded the defective use of the MC-010 form to recover appellate costs, Plaintiff would be entitled to recover those costs that are clearly labelled appellate costs on Plaintiff’s worksheet. The remittitur clearly states that Plaintiff as respondent was entitled to recover its costs on appeal. See Remittitur filed on 8-19-19. Defendants do not object to those clearly labelled appellate costs and court reporter fees for transcripts filed with the appeal at Defendants’ request. Thus, Plaintiff’s recoverable costs would be limited to Items 1(i), 12(a)-(b) and Item 14.