Opinion
A151656 A152068
01-23-2020
ALBERT LEE, Plaintiff and Appellant, v. BUDI HARJONO, et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco County Super. Ct. No. CGC-14-543175)
Albert Lee's car was hit by a minivan driven by Budi Harjono. Lee—an attorney—filed a complaint against Harjono and his wife (collectively, defendants). Lee rejected defendants' Code of Civil Procedure section 998 offers (998 offers), and a jury determined Harjono was not negligent. The court awarded expert costs under section 998, and imposed sanctions pursuant to former section 128.5.
Undesignated statutory references are to the Code of Civil Procedure.
Both parties appeal. We reverse the section 998 award and remand for the trial court to recalculate the amount of costs to which defendants are entitled, and to explain the calculation. We also reverse the former section 128.5 award because we conclude the 2017 amendment to section 128.5 applies, and that the order is invalid under the amended version of the statute.
We deny Lee's motion to strike portions of defendants' appendix. We also deny Lee's motion to strike portions of defendants' brief, but disregard portions of the brief that do not contain record citations and that refer to an unpublished case. We grant Lee's unopposed motion for judicial notice of legislative history for the 2017 amendments to section 128.5. --------
FACTUAL AND PROCEDURAL BACKGROUND
On a rainy Saturday afternoon in late 2012, Harjono was driving home from church, where he had been volunteering. Harjono was behind Lee's car, traveling about 15 miles per hour. As Lee slowed to a stop, a car hit Harjono from behind. Harjono braked, but rear-ended Lee's car. Both vehicles were damaged. In recorded interviews, Harjono said a car hit him from behind and pushed him into Lee's car. Harjono's insurer paid Lee's property damage. Lee's out of pocket medical expenses were approximately $1,900.
The Lawsuit
In December 2014, Lee filed a lawsuit against defendants alleging claims for negligence and unfair competition. Lee amended the complaint three times in response to defendants' demurrers to the unfair competition claim. Defendants made three 998 offers. Lee rejected them, and the case proceeded to trial, where Lee represented himself. Before opening statements, Lee dismissed the unfair competition claim. At trial, Lee limited his damages claims.
Lee testified, describing the accident, the damage to his car, and his medical expenses. He produced no wage claim evidence. Lee presented expert testimony on the valuation of Japanese vehicles. The expert—a car dealer—offered to purchase Lee's 2003 Toyota Corolla, which had fabric seats, manual windows, and 95,000 miles, for $11,500. The expert, however, acknowledged a similar car with leather seats, power windows, and 47,000 miles was worth only $10,000. The expert witness was Lee's friend and client.
Harjono testified he was driving his wife's minivan on a freeway on-ramp, traveling about 10 to 15 miles per hour behind Lee's car. As he slowed and braked, a car hit the minivan from behind, just as Lee came to a stop. Harjono continued braking, but the push from the car "decreased [his] stopping distance," and he rear-ended Lee's car. The minivan's rear bumper was damaged.
Verdict, Judgment, and Posttrial Motions
After deliberating for approximately an hour and a half, the jury found defendants were not negligent. The court entered judgment for defendants. The court denied Lee's motions to vacate the judgment, for new trial, and for judgment notwithstanding the verdict. In July 2017, the court awarded defendants expert costs (§ 998) and sanctioned Lee (former § 128.5).
DISCUSSION
I.
Substantial Evidence
Lee contends insufficient evidence supports the verdict, but he does not discuss the substantial evidence standard of review, which "requires us to view 'the record in a light most favorable to the verdict, resolving all conflicts in the evidence and drawing all reasonable inferences in favor of the verdict.' " (Minnegren v. Nozar (2016) 4 Cal.App.5th 500, 510.) "Failure to acknowledge the proper scope of review is a concession of a lack of merit." (Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 465.) Lee does not describe the trial testimony through the prism of substantial evidence; instead, he recites evidence favorable to him, and ignores the ample evidence supporting the verdict. This technique is not persuasive. "[F]act-specific arguments which ignore the substantial evidence standard of review are not appropriate." (Angela S. v. Superior Court (1995) 36 Cal.App.4th 758, 762.)
Ordinary negligence "consists of a failure to exercise the degree of care in a given situation that a reasonable person under similar circumstances would employ to protect others from harm." (City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 753-754.) Harjono testified the minivan was unexpectedly hit from behind just as Lee's car stopped. Harjono was traveling at a safe speed and was watching the road; he braked but could not avoid hitting Lee's car. Harjono's testimony was (1) consistent with recorded interviews, which were admitted into evidence; and (2) corroborated by physical evidence showing damage to the minivan's rear bumper. Substantial evidence supports the jury's finding that Harjono was not negligent. (Minnegren v. Nozar, supra, 4 Cal.App.5th at pp. 509-510.)
II.
Sudden Emergency Instruction
Next, Lee claims the court erred by instructing the jury on the sudden emergency doctrine. That doctrine, also referred to as the imminent peril doctrine, shields a defendant from negligence liability. It applies where " 'an unexpected physical danger is presented so suddenly as to deprive the driver of his power of using reasonable judgment.' " (Shiver v. Laramee (2018) 24 Cal.App.5th 395, 399.) The instruction "should not be given unless at least two courses of action are available to the party after the danger is perceived." (Anderson v. Latimer (1985) 166 Cal.App.3d 667, 675.) Additionally, the instruction does not apply where the " 'party's negligence causes or contributes to the creation of the perilous situation.' " (Shiver, at p. 399.)
Over Lee's objection, the court instructed the jury: "[Harjono] claims that he was not negligent because he acted with reasonable care in an emergency situation. [Harjono] was not negligent if he proves all of the following: [¶] 1. That there was a sudden and unexpected emergency situation in which someone was in actual or apparent danger of immediate injury; [¶] 2. That [Harjono] did not cause the emergency; and [¶] 3. That [Harjono] acted as a reasonably careful person would have acted in similar circumstances, even if it appears later that a different course of action would have been safer."
"Parties have the 'right to have the jury instructed as to the law applicable to all their theories of the case which were supported by the pleadings and the evidence.' " (Maxwell v. Powers (1994) 22 Cal.App.4th 1596, 1607.) Where, as here, a party claims the instruction was improperly given, we view the evidence in the light most favorable to the verdict (Freeze v. Lost Isle Partners (2002) 96 Cal.App.4th 45, 53), and look to whether there was substantial evidence that would permit a reasonable jury to conclude the instruction was warranted. (See Damele v. Mack Trucks, Inc. (1990) 219 Cal.App.3d 29, 37.)
Substantial evidence supports the sudden emergency instruction. As recited above, a car hit the minivan just as Lee's car came to a stop. Harjono braked, but there was not "enough distance" and he rear-ended Lee's car. The evidence supports a reasonable inference that when Harjono was hit, he had two choices: he could have braked harder, or swerved to avoid hitting Lee's car. (Grinstead v. Krushkhov (1964) 228 Cal.App.2d 793, 797 [instruction proper where defendant could have avoided collision by swerving in a different direction].) In addition, Harjono did not negligently cause or contribute to the emergency situation. Rather, the combination of the two events—being hit from behind just as Lee stopped—created the emergency. (Damele v. Mack Trucks, Inc., supra, 219 Cal.App.3d at p. 37; Grinstead, at p. 797.) The court properly instructed the jury on sudden emergency. The instruction did not, as Lee claims, lower the standard of care.
Assuming for the sake of argument Harjono's conduct caused or contributed to the emergency situation, delivering the "instruction would have been harmless error. The instruction permitted the jury to apply the imminent peril doctrine, but did not require that it do so. The instruction indicates on its face that the doctrine applies only to those who did not cause or contribute to the imminent peril. If the question were as clear as [Lee] claims it is, then it follows that the jury would have found the doctrine inapplicable. In these circumstances, it is not reasonably probable that the jury would have reached a different verdict had the trial court not given the instruction." (Damele v. Mack Trucks, Inc., supra, 219 Cal.App.3d at p. 37.)
We disregard Lee's contention that the court erred by failing to instruct the jury on apportionment of responsibility, because Lee did not request the instruction at trial, and because his complaint is not set out under a distinct heading in his opening brief. (Dinslage v. City and County of San Francisco (2016) 5 Cal.App.5th 368, 377-378, fn. 3.)
III.
Section 998 Costs
Both parties challenge the order awarding costs pursuant to section 998.
A. Background
Defendants retained orthopedic surgeon David Atkin, M.D., to opine on Lee's alleged physical injuries and his damages claim. Dr. Atkin prepared several written reports, conducted an independent medical exam, gave expert deposition testimony, and prepared to testify at trial. At trial, Lee withdrew his claim for future damages, and Dr. Atkin did not testify.
After the court entered judgment, defendants sought expert costs itemized in exhibit L: (1) a June 2, 2016 invoice for $1,400 (examination and report); (2) a November 18, 2016 invoice for $3,300 (record review and supplemental report); (3) a January 5, 2017 bill for $4,850 (to secure trial testimony); and (4) a January 25, 2017 invoice for $6,366 (deposition and trial preparation). Defendants argued Dr. Atkin's hourly rate and billings were reasonable and that he was a necessary witness. Lee opposed the motion, challenging defendants' entitlement to, and the amount of, expert costs.
At a hearing, defendants acknowledged they could not recover $1,400 in expert costs incurred before Lee rejected the first 998 offer, and requested a total of $14,516 in expert costs. The parties discussed the validity of the 998 offers, and the reasonableness of certain costs, including the $4,850 charge to secure Dr. Atkin's trial testimony. The court indicated it was inclined to grant the motion but "in what amount, I don't know." The court characterized the "mass of paperwork" on the motion as a "zoo." After the hearing, the parties filed supplemental briefing on numerous topics, ranging from the applicability of a Government Code provision to whether expert costs could be awarded, and in what amount.
In a written order, the court determined the 998 offers were reasonable and made in good faith, and that it would consider "costs from the first offer through the third offer." The court "granted" the motion. It awarded defendants their "reasonable expert fees in (Defendants' ex. L)" but included $1,400 in costs incurred before the first 998 offer, declined to award costs listed in the January 5, 2017 bill, and awarded only $700 of the $6,366 costs listed in the January 25, 2017 invoice (which the court mistakenly labeled the January 5, 2017 invoice). The order does not explain the basis for the ruling.
B. The Section 998 Award Must Be Vacated, and the Amount of Costs Recalculated and Explained
"Section 998 authorizes a prevailing party to recover its costs from a losing party who rejected a reasonable, good faith offer to compromise. . . . [R]ecoverable costs must have been 'actually incurred and reasonably necessary' to the preparation of the case." (LAOSD Asbestos Cases (2018) 25 Cal.App.5th 1116, 1126.) We review a section 998 award for abuse of discretion. (LAOSD, at p. 1126.) The party challenging the award must show "the trial court exercised its discretion in an 'arbitrary, capricious or patently absurd manner.' " (Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1482.) There are, however, "limits to the scope of our deference[.] 'When the record is unclear whether the trial court's award . . . is consistent with the applicable legal principles, we may reverse the award and remand the case to the trial court for further consideration and amplification of its reasoning. [Citations.]' . . . 'A trial court's award of attorney fees must be able to be rationalized to be affirmed on appeal.' " (Donahue v. Donahue (2010) 182 Cal.App.4th 259, 269.)
Lee does not dispute defendants' entitlement to expert costs. Instead, he claims the court erroneously included $1,400 in costs incurred before defendants' first 998 offer. Harjono agrees. The parties are correct. Defendants may not recover $1,400 in expert costs itemized in the June 2, 2016 invoice because those costs were incurred before defendants made the first 998 offer. (Toste v. CalPortland Construction (2016) 245 Cal.App.4th 362, 375.)
Harjono contends the amount of the award is incorrect for an additional reason. According to Harjono, the court granted the motion, and indicated its intention to award the reasonable expert costs itemized in exhibit L, but inexplicably declined to award $4,850 in costs listed in the January 5, 2017 bill, and awarded only $700 of the $6,366 in costs listed in the January 25, 2017 invoice (which the court misdated).
We agree. "[D]espite close study of the record, including the motion and opposition, we are unable to surmise a reasonable explanation" for the amount awarded. (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 53.) We cannot discern a rationale for the court's decision to grant the motion and to award all of the costs listed in two invoices, but to exclude the costs on the January 5, 2017 bill, and to award only a fraction of the $6,366 costs on the January 25, 2017 invoice. For unexplained reasons, the court awarded $700 in pretrial preparation costs on the January 25, 2017 invoice (when Dr. Atkin did not testify at trial), but excluded deposition preparation costs (when Dr. Atkin did give deposition testimony). "When a trial court makes an award that is inscrutable to the parties involved in the case, and there is no apparent reasonable basis for the award in the record, the award itself is evidence that it resulted from an arbitrary determination." (Id. at p. 101; Ramos v. Countrywide Home Loans, Inc. (2000) 82 Cal.App.4th 615, 624 [ruling, which gave virtually no explanation for fees and costs award, was "subject to question regarding the factual basis of the exercise of discretion"].)
We cannot, as Lee suggests, infer the court determined certain costs were unreasonable. We have carefully reviewed the moving and opposition papers, the hearing transcript, and the written order, and are unable to discern whether the court "adopted or rejected any particular arguments by the parties" regarding the amount of expert costs. (Gorman v. Tassajara Development Corp., supra, 178 Cal.App.4th at pp. 101-102, fn. 36.) We remand for the court to recalculate the section 998 costs to which defendants are entitled, and to explain the calculation. (Donahue v. Donahue, supra, 182 Cal.App.4th at p. 269.) We express no opinion on the reasonableness or necessity of the claimed costs.
IV.
Section 128.5 Sanctions
Both parties challenge the order sanctioning Lee pursuant to former section 128.5.
A. Background
After the court entered judgment, defendants sought $31,809 in sanctions pursuant to former section 128.5, based on Lee's bad faith prosecution of a frivolous unfair competition claim. Lee opposed the motion. In a July 2017 written order, the court sanctioned Lee $3,070 pursuant to former section 128.5.
The court determined Lee's actions were frivolous under the objective standard articulated in San Diegans for Open Government v. City of San Diego (2016) 247 Cal.App.4th 1306 (San Diegans). The court observed there was no evidence Harjono "was conducting business at the time of the incident" or "employing a business practice of 'lying' about accidents in order to keep a clean driving record." The court also determined Lee intended to harass defendants because he provided "very little discovery to support his claims . . . . His amendments to his complaint in the face of sustained demurrers were not based on facts but conjecture through allegations on information and belief. . . . His actions were to obstruct the defense's actions seeking to defend the case not to assert his claims by facts supporting them."
B. Statutory Framework
The original version of section 128.5, which authorized sanctions for certain bad faith actions or tactics, was enacted in 1981 (Stats. 1981, ch. 762, § 1, p. 2968.) The Legislature amended the statute in 1994. As amended, section 128.5 " 'applied only to proceedings initiated on or before December 31, 1994.' " (In re Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 132 (Taeb).) "Simultaneously with that 1994 amendment, the Legislature enacted section 128.7, which provides a sanctions mechanism applicable in cases filed on or after January 1, 1995." (CPF Vaseo Associates, LLC v. Gray (2018) 29 Cal.App.5th 997, 1002, fn. 2.)
"Section 128.5 was 'revived in 2014 by Assembly Bill No. 2494 . . . effective January 1, 2015.' " (Taeb, supra, 39 Cal.App.5th at p. 133.) In San Diegans, supra, 247 Cal.App.4th 1306, the appellate court held Assembly Bill No. 2494 applied to any action pending as of January 1, 2015. San Diegans used an objective standard to determine whether the challenged conduct was sanctionable, and held the statute did not have a safe harbor provision. (Id. at pp. 1311, 1314-1318.)
On August 7, 2017—a week after the trial court imposed sanctions—the Legislature enacted " 'urgency legislation' " to overrule San Diegans, and to " 'clarify the previous legislative intent.' " (Taeb, supra, 39 Cal.App.5th at p. 134.) As relevant here, the amendment did three things. First, it clarified that section 128.5 applied to cases filed on January 1, 2015 or later. (§ 128.5, subd. (i).) Second, the amendment made a " 'technical correction' " to the statute, to " 'clarify that sanctions . . . under Section 128.5 must [be] made in subjective bad faith—like it has always been interpreted.' " (Taeb, at p. 134.) Third, the amendment expressly incorporated a safe harbor provision. (Id. at p. 128, fn. 2.) After the 2017 amendment, "no vestige remains of the holdings in San Diegans" concerning section 128.5. (Taeb, at p. 128.)
C. Because the Amended Statute Applies, the Sanctions Order Must be Reversed
Relying on the 2017 amendment, Lee argues the sanctions order must be reversed because: (1) section 128.5 does not apply to his case, which was filed before January 1, 2015; (2) defendants did not serve a safe harbor notice; and (3) the court applied an objective standard, not a subjective one, to determine whether his conduct was sanctionable. "We apply a de novo standard of review to determine whether an amended statute applies to conduct that predates its enactment." (Scott v. City of San Diego (2019) 38 Cal.App.5th 228, 235 (Scott).)
The general rule is "statutes do not operate retroactively 'unless the Legislature plainly intended them to do so.' [Citations.] Nonetheless, '[a] statute that merely clarifies, rather than changes, existing law is properly applied to transactions predating its enactment.' [Citation.] 'Such a statute "may be applied to transactions predating its enactment without being considered retroactive" because it "is merely a statement of what the law has always been." ' [Citations.] [¶] In determining whether a statute changed or clarified existing law, the degree of consideration courts provide to a Legislature's statement of its intent depends on what actions courts have previously taken in interpreting the law, and whether the law was interpreted by the high court or intermediate appellate courts. When the California Supreme Court has ' "finally and definitively" interpret[ed] a statute, the Legislature does not have the power to then state that a later amendment merely declared existing law.' [Citation.] But 'if the courts have not yet finally and conclusively interpreted a statute and are in the process of doing so, a declaration of a later Legislature as to what an earlier Legislature intended is entitled to consideration.' " (Scott, supra, 38 Cal.App.5th at pp. 236-237, italics added.)
Applying these principles, we conclude the 2017 amendment clarified, rather than changed, existing law. The legislative history demonstrates the Legislature intended the amendment to clarify the statute. Expressions of the Legislature's intent support our conclusion that the amended statute "was designed to clarify, rather than change, existing law." (Scott, supra, 38 Cal.App.5th at p. 239.) Several intermediate appellate courts have concluded the 2017 amendment clarified " ' "the intent behind the enactment of [Assembly Bill No.] 2494." ' " (CPF Vaseo Associates, LLC v. Gray, supra, 29 Cal.App.5th at p. 1004.)
We conclude the amendment is "clarifying" for an additional reason. If " 'the Legislature acts promptly to correct a perceived problem with a judicial construction of a statute, the courts generally give the Legislature's action its intended effect.' " (Scott, supra, 38 Cal.App.5th at p. 239.) Here, the Legislature amended section 128.5 to abrogate San Diegans, and to correct the confusion created by that case. "Given the sequence of events surrounding the Legislature's amendment, the fact that ' " 'the amendment was adopted soon after the controversy arose concerning the proper interpretation of the statute' " ' means ' " 'it is logical to regard the amendment as a legislative interpretation of the original act—a formal change—rebutting the presumption of substantial change.' " ' " (Scott, at p. 240, fn. omitted.)
In urging us to conclude the amendment does not apply, defendants cite a single case: McClung v. Employment Development Dept. (2004) 34 Cal.4th 467. There, the California Supreme Court interpreted a statute in a prior case. Later, the Legislature amended the statute and adopted a position directly contrary to the Supreme Court's interpretation. McClung concluded "that although 'the Legislature may amend the statute to say something different' after the Supreme Court definitively and finally interpreted the statute, 'if it does so, it changes the law; it does not merely state what the law always was.' " (Scott, supra, 38 Cal.App.5th at p. 241.) McClung is inapposite because the Legislature did not amend section 128.5 to adopt a position contrary to the Supreme Court's interpretation.
Because the 2017 amendment clarified, rather than changed, existing law, the amended statute applies "to transactions predating its enactment." (Carter v. California Dept. of Veterans Affairs (2006) 38 Cal.4th 914, 922.) Defendants make no attempt to justify the validity of the order under the amended version of section 128.5. (See CPF Vaseo Associates, LLC v. Gray, supra, 29 Cal.App.5th at p. 1005.) Because the sanctions order must be reversed, we do not reach defendants' challenge to the amount of sanctions.
DISPOSITION
The judgment is affirmed. The trial court is directed to vacate the portion of the July 26, 2017 order awarding section 998 costs, to recalculate the amount of costs to which defendants are entitled, and to explain its calculation. The court is further directed to vacate the portion of the July 26, 2017 order awarding sanctions pursuant to former section 128.5. Each party is to bear its own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
/s/_________
Jones, P. J. WE CONCUR: /s/_________
Simons, J. /s/_________
Burns, J.