Opinion
NOT TO BE PUBLISHED
San Mateo County Super. Ct. Nos. CIV 435733 & 438390
Ruvolo, P.J.
Appellant Donald Smith (Mr. Smith) sold his auto parts business to respondent Kohlweiss, Inc. (Kohlweiss). The sale agreement included a covenant not to compete. The trial court found that Mr. Smith had breached the covenant, and granted respondent rescission. Mr. Smith contends that: (1) the covenant was an invalid restraint of trade, and the trial court’s statement of decision on that issue is inadequate; (2) in any event, he did not breach the covenant; and (3) Kohlweiss should not have been awarded costs in Mr. Smith’s own action against Kohlweiss. We reject all of these contentions, and affirm the judgment.
FACTS AND PROCEDURAL HISTORY
In summarizing the facts underlying this appeal, we state the facts in the manner most favorable to Kohlweiss, as the prevailing party below, and resolve all evidentiary conflicts in its favor. (See Kotler v. Alma Lodge (1998) 63 Cal.App.4th 1381, 1383, fn. 1.) Mr. Smith formerly owned and operated a company called High Performance Distributors (HPD), which sold high performance auto parts. Part of the business included acting as a “broker” for auto parts. Kohlweiss is a wholesale distributor of standard auto parts, which also operates a retail business at one location.
The normal distribution chain in the auto parts business is from manufacturer to distributor to retailer. When acting as a broker, however, a distributor identifies parts that are in the possession of a third party, not the manufacturer, and arranges their sale to a retailer. Often, brokered parts have been repurchased in bulk from retailers who no longer wished to stock them. They are sometimes “distressed” (i.e., damaged, or in damaged packaging) or obsolete.
In March 2003, Mr. Smith agreed to sell the assets of HPD’s business to Kohlweiss for $950,000. The assets sold included HPD’s name, goodwill, telephone numbers, customer lists, and certain inventory. The sale agreement included a covenant not to compete, with certain limited exceptions. Kohlweiss viewed its purchase of HPD as an opportunity to expand its business into the high performance segment of the auto parts market.
Escrow did not close as scheduled on the original sale, but on April 1, 2003, Kohlweiss nonetheless took over HPD’s business, and moved into the lower floor of its premises at 1755 Mission Road in South San Francisco (the Mission Road space). In connection with the sale, Mr. Smith changed his company’s name to DCS Consulting, Inc. (DCS).
DCS was also named as a defendant in the trial court, and is an appellant in this appeal. For clarity we will refer to Mr. Smith and DCS collectively as Mr. Smith, in the singular.
Soon after moving into the Mission Road space, Kohlweiss’s principal, Frank Kohlweiss (Mr. Kohlweiss) began to believe that Mr. Smith had made misrepresentations about HPD’s past sales volume. The parties had a falling out, and in May 2003, Mr. Smith filed suit for breach of contract.
The parties then agreed to mediate their dispute. As a result of the mediation, the parties agreed to modify the original contract in several respects, including lowering the sale price to $700,000; adding further specified exceptions to the covenant not to compete, but eliminating the geographical limitation on its scope; and requiring Kohlweiss to relocate the business from the Mission Road space, rather than continuing to lease it as originally contemplated. Kohlweiss agreed to vacate the Mission Road space by September 1, 2003. Escrow closed on the transaction under the revised contract on or about August 7, 2003.
An addendum to the sale agreement added in connection with the mediation stated that Mr. Smith could sell his existing inventory of a certain brand of shock absorbers, but not to existing or past customers of HPD or Kohlweiss, and that Smith agreed “not to sell auto parts through [any] company, person or firm. The only exception is that [Mr. Smith] can continue to sell to Diablo Motors of Australia.” Mr. Kohlweiss explained at trial that he did not wish to deal with Diablo Motors in Australia because Mr. Smith had been structuring his transactions with them so as to minimize the payment of customs duties, and Mr. Kohlweiss did not wish to engage in this practice, even though Mr. Smith characterized it as perfectly legal.
On November 19, 2003, Mr. Smith filed a lawsuit (the Smith action) against Kohlweiss and Mr. Kohlweiss seeking damages in excess of $25,000, thus qualifying the suit as an unlimited jurisdiction action under Code of Civil Procedure section 85, subdivision (a). The complaint in the Smith action alleged that Kohlweiss had failed to vacate the Mission Road space on September 1, 2003; had wrongfully ordered the utilities turned off; and, in the course of moving out of the Mission Road space, had mishandled or converted Mr. Smith’s property and damaged the building. It also alleged that Kohlweiss had made a late installment payment on the sale price in November 2003, but had not paid the $150 late fee. The complaint sought damages “in excess of $25,000” and punitive damages, in addition to the unpaid late fee.
At trial, in support of his claims in the Smith action, Mr. Smith testified that Kohlweiss had vacated the Mission Road space on September 2, 2003, which was the Sunday of Labor Day weekend, rather than on the agreed date of September 1, 2003. Mr. Smith also testified that when Kohlweiss moved out, a number of items of personal property that belonged to Mr. Smith, as well as some invoices, were taken from the premises. In addition, he averred that Kohlweiss owed him reimbursement for a business tax license and utility bills at the location, and that during the moving process, Kohlweiss had damaged a space heater and a large roll-up door.
Mr. Smith was unable to produce receipts or other evidence of value for some of the items that were allegedly taken, however, and as to some of the items, the value estimates he gave at trial were contradicted by his earlier deposition testimony. He also admitted that the roll-up door was still functional, and that a candy machine Kohlweiss was alleged to have wrongfully taken had in fact been a gift from him to Mr. Kohlweiss. The damages to which Mr. Smith testified, even accepting his unsupported estimates of value, did not approach $25,000.
As further evidence of damage to the building, Mr. Smith complained that Kohlweiss had failed to remove wood paneling it had installed, and that the screws fastening the paneling to the walls were working out, causing holes which allowed water to enter the building. Mr. Smith admitted, however, that when the paneling was first installed, he said it looked good, and did not express any disapproval. Also, Kohlweiss introduced evidence that Mr. Smith did not voice any objection to having the paneling left behind when Kohlweiss moved out, and Mr. Kohlweiss explained that he did not consider himself obligated to remove the paneling because he considered it an improvement, rather than an item of damage to the building that needed to be repaired.
With respect to the late payment allegation in the Smith action, the parties’ agreement provided that the installment payments were “due on the first day of each . . . month” and “late if not paid by [the] seventh day of each month . . . .” Mr. Smith testified that he was at his office over the weekend of Friday, November 7 through Sunday, November 9, 2003, and that the check for the payment due on November 1, 2003, was not there when he left on Sunday, but appeared in the mail slot sometime before he arrived the next day. Mr. Kohlweiss testified, however, that he had delivered the November 2003 payment by putting it through Mr. Smith’s mail slot on the Friday evening of that weekend.
At trial, Mr. Smith also contended that Kohlweiss was in breach of contract because it had not paid the monthly payments in full. Mr. Kohlweiss acknowledged that due to an error on the part of his accounts payable person in misreading $12,077.59 as $12,077.54, his monthly payments for the purchase of HPD had been five cents short from December 2003 on. He noted, however, that neither Mr. Smith nor the latter’s counsel had informed him of the shortfall prior to the litigation.
While the Smith action was pending, on April 1, 2004, Kohlweiss filed a separate lawsuit (the Kohlweiss action) against Mr. Smith. The complaint in the Kohlweiss action alleged that Mr. Smith had breached the covenant not to compete, and sought rescission of the sale agreement. The Smith action and the Kohlweiss action were tried to the court as one consolidated case starting on September 19, 2005.
The Kohlweiss complaint originally also sought damages and an injunction, but prior to trial, Kohlweiss voluntarily dismissed all of its causes of action except the one seeking equitable rescission, and the parties agreed that both the Kohlweiss and Smith actions would be tried without a jury.
In his testimony on the issues raised by the Kohlweiss action, Mr. Smith admitted selling, or attempting to sell, significant quantities of automobile parts, worth tens of thousands of dollars, after escrow closed on the sale of HPD to Kohlweiss, including sales to customers that were on the customer list included in the sale. He contended, however, that they all either came within the specific exceptions to the covenant that were incorporated in the sale agreement; were covered by other oral side agreements; or else were brokered parts, his handling of which was known to and approved by Kohlweiss.
Despite this contention, Mr. Smith acknowledged that the parties’ written agreement, as amended in writing following the mediation and in one respect thereafter, was intended to constitute their entire agreement, and that none of the written documents comprising the agreement mentioned an exception allowing him to engage in the business of brokering parts. He also admitted, in deposition testimony that was read into the record at trial, that he understood the noncompetition clause to mean that “once [Kohlweiss] took over I didn’t want to be in the auto parts business anymore,” and that after April 1, 2003, “I would no longer be buying parts for inventory to continue to sell.”
In response to this evidence, Mr. Smith’s counsel argued that brokering parts did not constitute buying them for inventory.
Mr. Kohlweiss acknowledged that he had consented to Mr. Smith arranging one brokered parts transaction in April 2003, just after the sale of HPD was scheduled to close, but he denied that the covenant not to compete generally permitted Mr. Smith to sell brokered parts. He also testified that he did not enter into any oral side agreements permitting Mr. Smith to sell parts other than as specifically listed in the modified sale agreement. He averred that brokered parts deals were “part of the business [that he was] in and the same business that [Mr. Smith was] in,” and that he did not draw a distinction between the business he was buying and the brokering aspect of Mr. Smith’s enterprise. Mr. Kohlweiss explained that the brokering deals were part of the business he wanted to buy from Mr. Smith, and that Mr. Smith told him that he was selling him the brokering aspect of the business as part of the transaction.
The accountant who prepared the financial statements and tax returns for HPD from the inception of its operations until Kohlweiss purchased the business, including the records given to Kohlweiss prior to the sale, testified that Mr. Smith never told him that he had a “side business” that should be kept separate in HPD’s financial records. HPD’s former office manager also indicated that as far as she was aware, Mr. Smith had no side business that was separate from HPD.
With respect to HPD’s back orders and special orders, Mr. Smith and Mr. Kohlweiss agreed that Mr. Smith would retain orders from prior to April 1, 2003, and anything after that would be Kohlweiss’s responsibility. Mr. Kohlweiss testified that when he found out in late May 2003 that Mr. Smith was still selling back-ordered parts to customers, he requested that Mr. Smith refrain from doing so. After that, he testified that he was not aware until August 2003, after the conclusion of the mediation, that Mr. Smith was still buying and selling auto parts.
At the conclusion of the trial, on September 23, 2005, the trial court announced its tentative decision in both actions orally on the record. The court then filed a statement of decision on December 19, 2005, which adopted Kohlweiss’s proposed statement of decision with some modifications, and supplemented it with an order filed December 20, 2005 (December 20 order).
In the Smith action, the trial court orally found that the evidence “was . . . so palpably unsupportive of the claimed damages as to affect the validity of [Mr. Smith’s] testimony about any aspect of these numerous transactions between the parties,” and that Mr. Smith’s testimony was “blatantly untrue, and even false, unworthy of belief.” The court concluded that all of the allegations in the complaint as to Kohlweiss’s alleged misappropriation of, and damage to, Mr. Smith’s property were untrue, with the sole exception of items worth $179.50 which “were not accounted for in testimony.” Accordingly, the court indicated that it would render judgment in favor of Mr. Smith in the amount of $179.50, but would nonetheless award costs in the action to Kohlweiss under Code of Civil Procedure section 1033, subdivision (a), because the Smith action should have been filed as a limited jurisdiction or small claims court case.
In the statement of decision, the court modified this to state merely that Mr. Smith’s testimony on these claims was “unworthy of belief.”
In the Kohlweiss action, the court found that Mr. Smith had breached the covenant not to compete by selling brokered parts and soliciting customers. In its oral tentative decision, the court indicated that it was inclined to order rescission of the contract, but solicited further briefing on whether that remedy was available under the facts, and whether the covenant not to compete was void as an unlawful restraint on trade. In the statement of decision and December 20 order, the court resolved these issues by ruling that the covenant not to compete was enforceable, and that rescission was an appropriate remedy for its breach. On December 19, 2005, the court entered a judgment in accord with the statement of decision, but retained jurisdiction to determine the amount of attorney fees and costs to be awarded to Kohlweiss.
On January 3, 2006, Mr. Smith filed a notice of intention to move for a new trial, with supporting papers filed on January 13, 2006. On February 28, 2006, the court entered an order denying Mr. Smith’s motion. On March 2, 2006, the court entered an additional order (the March 2 order) declining to grant a new trial, adding explanations for its rejection of Mr. Smith’s contentions.
On March 1, 2006, the court filed a modified judgment, consistent with the March 2 order. In the Smith action, the modified judgment awarded damages to Mr. Smith in the amount of $179.50, but awarded costs to Kohlweiss rather than Mr. Smith under Code of Civil Procedure section 1033, subdivision (a). In the Kohlweiss action, the modified judgment declared the sale agreement rescinded; ordered Mr. Smith to refund the consideration paid for the sale, plus interest; and ordered Kohlweiss to return specified inventory and other HPD assets to Mr. Smith, with a credit to be offset against the refunded sale price for inventory items no longer available, and to cease using the HPD name. Kohlweiss’s obligations were conditioned on Mr. Smith’s payment of the sums awarded to Kohlweiss by the modified judgment. The court also awarded Kohlweiss attorney fees in the amount of $77,500, plus interest from December 22, 2005, and costs incurred in the Kohlweiss action.
On April 6, 2006, Mr. Smith filed a timely notice of appeal.
An earlier notice of appeal had been filed on February 17, 2006, from the original judgment, and the “costs awarded thereon.” That notice was premature, in light of the trial court’s subsequent modification of the judgment, and we treat the notice filed on April 6, 2006, as operative.
DISCUSSION
A. Validity of Covenant Not to Compete
Mr. Smith argues that the covenant not to compete included in the sale agreement is void on its face as an unlawful business restraint, given the absence of any evidence in this case that the covenant was necessary to protect trade secrets. As authority for this argument, Mr. Smith relies on Moss, Adams & Co. v. Shilling (1986) 179 Cal.App.3d 124 (Moss). As pointed out in Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514, 1527 (Morlife), however, Moss involved causes of action that arose before California adopted the Uniform Trade Secrets Act (UTSA), Civil Code sections 3426 et seq., and therefore is no longer good law on the question of what constitutes misappropriation of a trade secret.
Moreover, Moss, supra, 179 Cal.App.3d 124 involved competition by employees who had allegedly used their former employer’s customer list in setting up their own competing business, and is therefore factually distinguishable. “Covenants [not to compete] arising out of the sale of a business are more liberally enforced than those arising out of the employer-employee relationship.” (Monogram Industries, Inc. v. Sar Industries, Inc. (1976) 64 Cal.App.3d 692, 697 (Monogram).) As Mr. Smith’s brief implicitly recognizes, a covenant not to compete is valid and enforceable if it is agreed to by the seller of a business in connection with the sale that includes the business’s goodwill. (See Bus. & Prof. Code, § 16601.) The reason is that “[i]n the case of the sale of the goodwill of a business it is ‘unfair’ for the seller to engage in competition which diminishes the value of the asset he sold. In order to protect the buyer from that type of ‘unfair’ competition, a covenant not to compete will be enforced to the extent that it is reasonable and necessary in terms of time, activity and territory to protect the buyer’s interest.” (Monogram, at p. 698.)
Factually, the present case is somewhat similar to Fleming v. Ray-Suzuki, Inc. (1990) 225 Cal.App.3d 574 (Fleming). In that case, a corporation that operated both a local retail tennis shop and a worldwide mail-order tennis business sold only the mail-order part of the business to a third party. In connection with the sale, the seller agreed not to compete in the mail-order business in the United States. Nonetheless, the seller continued to sell tennis equipment on a mail-order basis, starting with limited items, and then, some two years after the sale, expanding to a broader product line, including many of the same items sold by the original business. The seller’s action for breach of contract and unfair competition was tried to a jury, which found in favor of the buyer. The trial court then entered an injunction prohibiting the seller from “ ‘competing in the ‘mail order’ business of selling tennis products in the United States.’ ” (Id. at p. 584.)
On appeal, the seller argued that the covenant not to compete was invalid under Business and Professions Code section 16601 because the business had not been sold in its entirety. The court of appeal rejected this argument, holding the covenant enforceable because the seller had sold all or substantially all of the assets of the mail-order business, even though it had retained the retail business. The court also rejected the seller’s argument that the covenant not to compete was invalid as geographically unlimited, because its scope was limited to the United States. Finally, the court upheld the injunction, rejecting the seller’s argument that it was broader in scope than the covenant not to compete. (Fleming, supra, 225 Cal.App.3d at pp. 583-584.)
Thus, in Fleming, supra, 225 Cal.App.3d 574, the business seller’s covenant not to compete was upheld as valid despite the seller’s retention of a portion of the business, and the seller was held to have violated that covenant by going beyond the scope of a limited exception specified in the sale agreement. The same result is appropriate here, based on the trial court’s findings and the substantial evidence in the record.
Mr. Smith also contends that in this case, the covenant not to compete is invalid because it did not define the scope of the business being sold. We disagree. The fact that the parties have a dispute about a contract’s interpretation does not render it unenforceable. (Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 623 [under California law, a contract is enforceable if it is sufficiently definite that a court can ascertain the parties’ obligations thereunder and determine whether those obligations have been performed or breached]; see also Holmes v. Lerner (1999) 74 Cal.App.4th 442, 457 [terms of a contract are reasonably certain if they provide a basis for determining the existence of breach and for giving an appropriate remedy]; Civ. Code, §§ 1596, 1598.) Here, the trial judge considered both the written contract and disputed parol evidence, and interpreted the parties’ agreement to prohibit the sale of brokered parts. This conclusion is both supported by substantial evidence and consistent with the applicable law, and we will not disturb it on appeal. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165-1166 [when parol evidence is in conflict and credibility issues must be resolved, trial court’s reasonable construction of ambiguous contract provision will be upheld if supported by substantial evidence].)
B. Breach of Covenant Not to Compete
In the alternative, Mr. Smith argues that even if the covenant was enforceable, the trial court erred in finding that he breached it. In response, Kohlweiss complains that Mr. Smith has waived this issue by failing to provide this court with the entire trial transcript, and by failing to include in his opening brief a complete, balanced summary of the evidence adduced at trial.
“ ‘The rule is well established that a reviewing court must presume that the record contains evidence to support every finding of fact, and an appellant who contends that some particular finding is not supported is required to set forth in his brief a summary of the material evidence upon that issue. Unless this is done, the error assigned is deemed to be waived. [Citation.] It is incumbent upon appellants to state fully, with transcript references, the evidence which is claimed to be insufficient to support the findings.’ ” (In re Marriage of Fink (1979) 25 Cal.3d 877, 887; accord, e.g., Road Sprinkler Fitters Local Union No. 669 v. G & G Fire Sprinklers, Inc. (2002) 102 Cal.App.4th 765, 781-782; Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.)
It is true that the record originally filed with this court did not include the transcript of Mr. Smith’s testimony on the first day of trial, September 19, 2003 (the September 19 trial transcript). However, Mr. Smith did designate the entire trial transcript in his notice requesting the superior court clerk to prepare the record, specifically including the trial proceedings on September 19, 2003. Despite this request, the September 19 trial transcript appears to have been overlooked by the clerk’s office. Thus, in fairness, the omission of the September 19 trial transcript from the appellate record cannot be held against Mr. Smith.
On September 19, 2005, the Smith and Kohlweiss actions were called and sent out for trial in one department of the San Mateo Superior Court (evidently the master calendar department), and then the trial began in a different department. The proceedings in the two departments were reported by different court reporters. When asked by Kohlweiss’s appellate counsel to supplement the record with the September 19 trial transcript, the superior court clerk originally forwarded to this court a duplicate copy of the transcript of the proceedings in the master calendar department, which had already been included in the original record. After the completion of briefing, the clerk of this court obtained a copy of the missing September 19 trial transcript. We have reviewed it in connection with the preparation of this opinion.
Mr. Smith’s opening brief includes a statement of facts supported by citations to the record, but Kohlweiss is correct in pointing out that it does not amount to a balanced and complete summary of the evidence adduced at trial. Nonetheless, its deficiencies are not as pronounced as those involved in the typical case in which a substantial evidence issue has been deemed waived due to inadequate briefing. (See, e.g., Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1245-1247 [appellant waived insufficient evidence claims by submitting briefs “devoid of citations to the reporter’s transcript” and containing only a “one-sided” summary of facts].) Accordingly, we will exercise our discretion to reach the merits of the substantial evidence issue.
The substantial evidence test was summarized as follows by our Supreme Court in Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559: “ ‘In reviewing the evidence on . . . appeal all conflicts must be resolved in favor of the [prevailing party], and all legitimate and reasonable inferences indulged in to uphold the [finding] if possible. It is an elementary, but often overlooked principle of law, that when a [finding] is attacked as being unsupported, the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the [finding]. When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court.’ ” (Id. at p. 571, quoting Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429.) To put it another way, “[w]hen a judgment is attacked for insufficiency of the evidence, the appellate court must review the whole record in the light most favorable to the judgment below to determine whether it discloses substantial evidence—that is, evidence which is reasonable, credible, and of solid value—such that some reasonable trier of fact could find that the judgment and each essential element thereof was established by the appropriate burden of proof.” (Rivard v. Board of Pension Commissioners (1985) 164 Cal.App.3d 405, 414.) The effect of this standard is that to prevail under the substantial evidence standard of review, an appellant must demonstrate that the record does not contain evidence from which a reasonable trier of fact could derive the findings the appellant seeks to overturn. (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1632-1633.)
The testimony of a single credible witness is sufficient to constitute substantial evidence, even if that witness is a party to the action. (Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1075; In re Marriage of Mix (1975) 14 Cal.3d 604, 614.) In short, “[a] judgment will not be reversed based on an evaluation of the strength of the opposing evidence or the relative weakness of supporting evidence when compared to opposing evidence. It can be reversed based only on the absence or insubstantiality of supporting evidence, as determined from a review of all related evidence in the record.” (Rivard v. Board of Pension Commissioners, supra, 164 Cal.App.3d at p. 413, italics and fn. omitted.)
In the present case, as our summary of the trial evidence makes clear, there was ample evidence justifying the trial court in finding that Mr. Smith breached the covenant not to compete. Mr. Smith admitted being involved in the auto parts business after he sold HPD’s assets to Kohlweiss and signed the covenant not to compete. The trial court rejected, on the basis of a finding of lack of credibility, Mr. Smith’s protestations that his activities in this regard were limited to what was permitted by the parties’ agreement. Accordingly, given the standard of review under the substantial evidence test, we can find no basis to overturn the trial court’s judgment in this regard.
C. Award of Costs to Kohlweiss in Smith Action
As noted above, the trial judge determined that the Smith action should have been brought in small claims or in a limited jurisdiction court, rather than as a general jurisdiction superior court case, because there was no reasonable basis for the allegation that Kohlweiss was liable for damages in excess of $25,000. Accordingly, even though the judge entered a judgment in favor of Mr. Smith in the amount of $179.50, he also awarded Kohlweiss costs in the Smith action under Code of Civil Procedure section 1033, subdivision (a).
Mr. Smith contends that because he was the prevailing party in the Smith action, there was no legal basis for the award of costs to Kohlweiss. In support of this argument, Mr. Smith cites Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284, for the proposition that “ ‘[T]he successful party is never required to pay the costs incurred by the unsuccessful party.’ ” (Allen v. Smith (2002) 94 Cal.App.4th 1270, disapproved on another ground by San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 315; italics added.)
In Allen v. Smith, supra, 94 Cal.App.4th 1270, the appellate court reversed a judgment for the defendants, holding that the plaintiff’s motion for summary judgment should have been granted. In so doing, the court ordered that on remand, the trial court should also vacate the post-judgment order awarding costs and attorney fees to the defendants, even though the plaintiff had not separately appealed from that order, reasoning that “ ‘[a]n order awarding costs falls with a reversal of the judgment on which it is based.’ ” (Id. at p. 1284.)
While we have no quarrel with the latter proposition, the Allen v. Smith court’s broad generalization about the bar on awarding costs against a successful party, on which Mr. Smith relies, is dictum to the extent that it purports to govern cases arising in other procedural postures. For example, a plaintiff who rejects an offer under Code of Civil Procedure section 998 and then recovers a judgment in a lesser amount may be required to pay a portion of the defendant’s costs incurred after the offer was made. (Code Civ. Proc., § 998, subd. (c)(1).)
As Kohlweiss concedes, the reported cases under Code of Civil Procedure section 1033, subdivision (a), all involve the denial of costs to a plaintiff who recovers a limited jurisdiction amount after filing a general jurisdiction case, rather than the award of costs against such a plaintiff. Nonetheless, the statutory language broadly permits the trial court to exercise its discretion in determining costs in such a case, and our review is limited to determining whether the trial court abused that discretion. (Steele v. Jensen Instrument Co. (1997) 59 Cal.App.4th 326, 331.) Given the circumstances relied on by the trial court, we find no abuse of discretion here.
“Costs or any portion of claimed costs shall be as determined by the court in its discretion in a case other than a limited civil case in accordance with Section 1034 where the prevailing party recovers a judgment that could have been rendered in a limited civil case.” (Code Civ. Proc., § 1033, subd. (a), italics added.)
DISPOSITION
The judgment is affirmed. Kohlweiss is awarded its costs on appeal.
We concur: Reardon, J. Rivera, J.