Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. 1-05-CV039792
Premo, J.
This appeal arises out of an internecine dispute involving, among other matters, the allegedly improper approval of an increase in membership dues for the Santa Clara County Correctional Peace Officers’ Association, Inc. (CPOA), and the allegedly improper removal of CPOA’s duly elected treasurer, Edward J. Meyers. Appellants filed a complaint in the Santa Clara County Superior Court against various CPOA officers and members of its board of directors, as well as CPOA’s attorney, and the matter was ordered to arbitration as required by the CPOA bylaws.
The appellants are Meyers, Shelley A. Kimber, Sean Allen, Robert Gibson, Stanley Graham and Marcin Gruszecki, on behalf of themselves and all others similarly situated, and CPOA, both as a plaintiff by and through Meyers and as a real party in interest (hereafter collectively appellants).
Appellants dismissed their claims against CPOA’s attorney, David Clisham, with prejudice and he is not a party to this appeal. The remaining respondents are Everett Fitzgerald, as an individual and dba Interpol Protective Services, William J. Calabrese, James Jessop, Mildred Evans, Brian Minnich, Salvador Jacquez, Antonio Richardson, Jeff Colar, and Rick Handel (hereafter collectively respondents).
This appeal is taken from an order denying appellants’ motion to tax costs of $5,218.60. Appellants argue that, under Code of Civil Procedure section 1293.2, the trial court could only have awarded costs incurred in association with confirming the arbitration award, rather than all costs incurred in the underlying litigation. Appellants also contend that the memorandum of costs was untimely. We find that respondents’ memorandum of costs was timely, but agree that the trial court erred in allowing costs other than those incurred in arbitration-related judicial proceedings. Accordingly, we shall reverse and remand.
Unless otherwise specified, all statutory references are to the Code of Civil Procedure.
I. Factual and Procedural Background
The record on appeal consists of separate appendixes prepared by appellants and respondents under California Rules of Court, rule 8.124.
According to appellants’ complaint, respondents, among other things, improperly removed Meyers from his position as CPOA treasurer in January 2005 and, in February 2005, improperly approved an increase in CPOA’s membership dues. Respondents petitioned to compel arbitration of appellants’ claims, pursuant to CPOA bylaw No. 903. Respondents also filed a demurrer, a motion to strike, a motion to disqualify appellants’ counsel, and a motion to require appellants to post a bond. Appellants filed a motion seeking to disqualify respondents’ counsel.
The trial court granted the petition to compel arbitration and stayed further proceedings pending the outcome of the arbitration. The trial court also referred appellants’ and respondents’ cross-motions to disqualify counsel to the arbitrator for decision.
The parties held a conference call with the arbitrator on October 6, 2005, during which call the arbitrator suggested that counsel for appellants and counsel for respondents voluntarily recuse themselves. In mid-October 2005, appellants’ attorney voluntarily withdrew and was replaced by different counsel. Following a hearing on November 16, 2005, regarding certain jurisdictional issues, the arbitrator directed that the CPOA be joined as a party to the arbitration, determined that she had jurisdiction to decide the issue of disqualifying the parties’ attorneys, but ultimately denied appellants’ motion to recuse respondents’ counsel.
In December 2006, appellants filed a motion in the trial court seeking to disqualify the arbitrator, on the grounds of bias, and to require CPOA to pay appellants’ legal fees. Respondents opposed the motion, and filed a separate petition to set an arbitration completion date. On March 1, 2007, the trial court denied appellants’ motion in its entirety and granted respondents’ petition, ordering that the arbitration be completed no later than August 31, 2007.
On or about May 14, 2007, appellants wrote a letter to the arbitrator, advising that the arbitration was “terminated” because their claims had been rendered moot by various actions undertaken by respondents. On May 22, 2007, appellants voluntarily dismissed their complaint without prejudice.
Respondents moved to vacate the dismissal without prejudice and for entry of an order of dismissal with prejudice, on the grounds that trial had “commenced” within the meaning of section 581, subdivision (e) because the trial court and the arbitrator had made certain rulings in the case. The trial court denied respondents’ motion on July 30, 2007, expressly finding that “[n]either the rulings of this Court nor those of the Arbitrator constituted the commencement of trial.”
On July 23, 2007, the arbitrator, in a written decision, rejected appellants’ contention that the arbitration was “terminated,” and dismissed their claims with prejudice. On October 3, 2007, the trial court granted respondents’ verified petition to confirm the arbitrator’s decisions, entered judgment in respondents’ favor and awarded costs pursuant to section 1293.2. On October 18, 2007, respondents filed a memorandum of costs, totaling $5,218.60, consisting of $2,983.60 in filing and motion fees and $2,235 in registered process server charges.
Appellants moved to tax costs, arguing that respondents’ memorandum of costs was both untimely and excessive, in that respondents were only entitled to recover the costs they incurred in filing a motion to confirm the arbitration award, i.e., the sum of $40. On December 27, 2007, the trial court denied the motion to tax costs. This appeal followed.
We requested supplemental briefing from the parties addressing the jurisdictional effect of appellants’ May 22, 2007 request for dismissal without prejudice in light of Cardiff Equities, Inc. v. Superior Court (2008) 166 Cal.App.4th 1541 (Cardiff) and Gogri v. Jack in the Box, Inc. (2008) 166 Cal.App.4th 255.
II. DISCUSSION
A. The memorandum of costs was timely
We first address appellants’ contention that respondents’ memorandum of costs was not timely filed since it was filed more than 15 days after appellants’ voluntary dismissal without prejudice. Since Cardiff suggests that a voluntary dismissal deprives both the trial court and an arbitrator of further jurisdiction, the resolution of this question would be dispositive of this appeal.
A plaintiff has a statutory right to voluntarily dismiss, with or without prejudice, all or any part of an action before the “actual commencement of trial.” (§ 581, subds. (b)(1), (c).) Upon a party’s proper exercise of its right to a voluntary dismissal, “a trial court would thereafter lack jurisdiction to enter further orders in the dismissed action.” (Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 784 (Wells).) An exception is made, however, for the limited purpose of awarding costs and statutory attorney fees. (Shapell Industries, Inc. v. Superior Court (2005) 132 Cal.App.4th 1101, 1108.)
Section 581 provides in relevant part: “(b) An action may be dismissed in any of the following instances: [¶] (1) With or without prejudice, upon written request of the plaintiff to the clerk, filed with papers in the case, or by oral or written request to the court at any time before the actual commencement of trial, upon payment of the costs, if any. [¶]... [¶] (c) A plaintiff may dismiss his or her complaint, or any cause of action asserted in it, in its entirety, or as to any defendant or defendants, with or without prejudice prior to the actual commencement of trial.” (Italics added.)
Appellants’ supplemental letter brief argues that once they voluntarily dismissed their civil action, any further orders by the trial court, such as the order confirming the arbitrator’s decisions, were void for lack of jurisdiction. As a result, the time for respondents to file their memorandum of costs began to run when the voluntary dismissal was filed (May 22, 2007), rather than when the trial court confirmed the arbitrator’s decisions (October 3, 2007). Alternatively, appellants contend that, even if the order confirming the arbitrator’s decisions is not void, the trial court nonetheless lacked jurisdiction over the remainder of the case and therefore could not have awarded costs incurred by respondents in the civil litigation.
In their supplemental brief, respondents contend that the trial court and the arbitrator retained jurisdiction over the case because appellants’ request for dismissal was “not in good faith.” Respondents point out that a plaintiff’s right to dismiss under section 581 may be trumped where the dismissal is taken for tactical reasons. According to respondents this is just such a case since appellants, “[a]fter experiencing an adverse ruling on the jurisdictional issues... before the Arbitrator[,]... refused to participate in the process, moved to disqualify and replace the arbitrator [sic], opposed setting a completion date, attempted to walk away from the court ordered arbitration on their claims, and filed a request for dismissal when faced with a court ordered completion date for the arbitration.”
“Section 581’s purpose in cutting off the plaintiff’s absolute right to dismissal upon commencement of trial is to avoid abuse by plaintiffs who, when led to suppose a decision would be adverse, would prevent such decision by dismissing without prejudice and refiling, thus subjecting the defendant and the courts to wasteful proceedings and continuous litigation.” (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 909, citing Wells, supra, 29 Cal.3d at pp. 785-786.)
In Cardiff, after the plaintiff’s first complaint against multiple defendants was ordered to arbitration pursuant to the terms of a partnership agreement and further proceedings were stayed pending the outcome of that arbitration, the plaintiff sought an order lifting the stay and for permission to file an amended pleading which purportedly asserted only nonarbitrable claims. (Cardiff, supra, 166 Cal.App.4th at pp. 1545-1546.) The motion to lift the stay was granted and a hearing was set on the motion for leave to amend. (Id. at p. 1546.) Before that hearing took place, the plaintiff filed a request to dismiss the operative complaint without prejudice and took its motion to amend off calendar. The plaintiff subsequently filed a second, separate complaint naming only one of the original defendants, utilizing the proposed amended complaint it had proffered in the first action. (Ibid.) The trial court stayed the second action on the grounds that the matter had already been ordered to arbitration, finding that the plaintiff’s dismissal of the first action “ ‘doesn’t affect the underlying order compelling arbitration.’ ” (Id. at p. 1547.) The Court of Appeal reversed, finding that the order compelling arbitration did not deprive the plaintiff of the right to dismiss the first action, since “it was undisputed that no ‘trial’ had commenced and no dispositive motion had been ruled upon prior to [plaintiff]’s voluntary dismissal of Case No. 1.” (Id. at p. 1550.)
With respect to the order compelling arbitration of the first complaint, the Court of Appeal found that those arbitration proceedings were abated by plaintiff’s voluntary dismissal, since a “court cannot force a litigant to pursue claims it chooses to abandon.” (Cardiff, supra, 106 Cal.App.4th at p. 1552.) However, “if [plaintiff] later decides to file another action to pursue any claim under the Partnership Agreement it will necessarily have to do so in arbitration consistent with the trial court’s order.” (Id. at p. 1552, fn. 7, italics added.)
The dissent in Cardiff expressed concern that the majority opinion undermines the public policy in favor of arbitration by sanctioning the plaintiff’s evasion of the order compelling arbitration. “What the majority ignores, however, is the well-established principle that only trial courts, not litigants, may vacate prior court orders. [Citations.] Unless an order compelling arbitration is set aside by the trial court, the parties are bound to resolve their dispute in the arbitral forum.” (Cardiff, supra, 106 Cal.App.4th at pp. 1556-1557 (dis. opn. of Ashmann-Gerst, J.).)
In this case, after appellants filed their complaint, the trial court ordered the matter to contractual arbitration pursuant to the CPOA bylaws. Then, before “trial” commenced or any dispositive motions were decided, appellants voluntarily dismissed their complaint. Under the holding of Cardiff, appellants’ voluntary dismissal ended the case, depriving both the trial court and the arbitrator of any further jurisdiction in the matter, other than to perhaps award costs and attorney fees. If that were so, respondents’ memorandum of costs, filed on October 18, 2007, would be untimely as it was not filed within 15 days of appellants’ voluntary dismissal, filed on May 22, 2007. (Cal. Rules of Court, rule 3.1700(a)(1).)
We respectfully disagree with the majority opinion in Cardiff and decline to follow it. A contractual arbitration has “a life of its own outside the judicial system.” (Byerly v. Sale (1988) 204 Cal.App.3d 1312, 1316.) After granting respondents’ petition to compel arbitration, the trial court retained jurisdiction to confirm, correct or vacate any resulting arbitration award. (§ 1285 et seq.; Byerly v. Sale, supra, at p. 1315.) “Once a court grants the petition to compel arbitration and stays the action at law, the action at law sits in the twilight zone of abatement with the trial court retaining merely a vestigial jurisdiction over matters submitted to arbitration.” (Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1796.) As a result, in spite of appellants’ voluntary dismissal of its complaint and their attempt to unilaterally end the arbitration proceedings, the arbitrator had jurisdiction to proceed with the arbitration and issue a decision dismissing appellants’ claims with prejudice, and the trial court thus had jurisdiction to both confirm the arbitrator’s decisions as well as award costs to respondents under section 1293.2. Respondents’ memorandum of costs, filed within 15 days of the trial court’s October 3, 2007 order, was timely.
B. Allowable costs under section 1293.2
Having determined that the memorandum of costs was timely, we now examine exactly what costs are recoverable under section 1293.2. Section 1293.2 provides that “[t]he court shall award costs upon any judicial proceeding under this title as provided in Chapter 6 (commencing with Section 1021) of Title 14 of Part 2 of this code.” Appellants argue that allowable costs under section 1293.2 are limited to “costs incurred in superior court to enforce an arbitration award.” (Austin v. Allstate Ins. Co. (1993) 16 Cal.App.4th 1812, 1815-1816 (Austin).) Consequently, respondents may only recover the costs of filing their petition to confirm the arbitrator’s decisions. Respondents take a broader view and contend that, because appellants deliberately ignored the CPOA bylaws and sought to bypass arbitration, they are entitled to recover all the filing fees and process service charges incurred in this case.
Respondents indicate in their opening brief that the “costs incurred... and itemized in the work sheet filed with their Memorandum of Costs consisted solely of filing fees and registered process server charges to file and serve responses, objections and related papers, all of which except for those related to Respondents’ Petition to Confirm Arbitrator Andres’ decisions would not have been necessary had Appellants used the administrative remedy in CPOA By-Law Section 903.” (Italics added.)
We apply settled rules to construe the language of a statute. Our fundamental task is to ascertain the intent of the lawmakers. (In re Harris (1993) 5 Cal.4th 813, 844.) If there is no ambiguity in the language of the statute, then the plain meaning of the language governs. (Day v. City of Fontana (2001) 25 Cal.4th 268, 272.) If the statutory language permits more than one reasonable interpretation, we may consider various extrinsic aids, including examination of the evils to be remedied and the legislative scheme encompassing the statute in question. (Ibid.; People v. Garrett (2001) 92 Cal.App.4th 1417, 1422.) We select the interpretation that comports most closely with the apparent intent of the Legislature, with a view toward promoting, rather than defeating, the general purpose of the statute and avoiding an interpretation that would lead to absurd consequences. (People v. Walker (2002) 29 Cal.4th 577, 581; People v. Connor (2004) 115 Cal.App.4th 669, 678.)
We find that the plain language of the statute is not ambiguous, and is not as limited as appellants claim. The phrase “any judicial proceeding under this title” must encompass more than just postarbitration petitions to confirm, correct or vacate an award as appellants contend. If that were the case, then the statute would simply specify that such postarbitration petitions were the only “judicial proceedings” for which costs could be awarded. Instead, the statute directs the court to award costs for any judicial proceeding under the title.
Though the term “judicial proceeding” is not specifically defined within the title, section 1290 provides that “[a] proceeding under this title in the courts of this State is commenced by filing a petition.” A “proceeding... in the courts of this State” is, in other words, a judicial proceeding. Consequently, any petition filed under title 9 would qualify as a “judicial proceeding under this title” for purposes of awarding costs pursuant to section 1293.2. For example, a “petition to compel arbitration under section 1281.2 is a judicial proceeding covered by [section 1293.2].” (Otay River Constructors v. San Diego Expressway (2008) 158 Cal.App.4th 796, 805.)
The cases cited by appellants which suggest that recoverable costs under section 1293.2 are limited to costs incurred in enforcing an arbitration award are distinguishable. In Austin, the parties voluntarily arbitrated the appellant’s underinsured motorist coverage and no petition to compel arbitration was filed. (Austin, supra, 16 Cal.App.4th at p. 1814.) After the arbitration was concluded, the appellant sought judicial confirmation of the award in her favor. (Ibid.) Accordingly, the appellant’s petition to confirm the award was the only “judicial proceeding” in the case, and the costs incurred in connection with that petition were thus the only costs recoverable under section 1293.2.
Pilimai v. Farmers Ins. Exchange Co. (2006) 39 Cal.4th 133 is inapposite because that case addressed whether or not the cost-shifting provisions of section 998 applied to uninsured motorist arbitrations, and did not involve an award of costs under section 1293.2.
Corona v. Amherst Partners (2003) 107 Cal.App.4th 701 decided whether or not a party, after failing to request that an arbitrator decide his entitlement to an award of attorney fees, could seek an award of attorney fees and costs incurred in the arbitration from the trial court instead. The appellate court did not undertake an analysis of section 1293.2 though, since the trial court had denied the plaintiff’s request for fees and costs “incurred in the arbitration in the judicial proceedings.” (Corona v. Amherst Partners, supra, at p. 707.) After noting, almost in passing, that “[a] court must award costs in a judicial proceeding to confirm, correct or vacate an arbitration award,” the court remanded the matter for a “determination of the defendants’ challenge to the propriety of certain of the fees and costs requested [under section 1293.2].” (Ibid.)
By the same token, section 1293.2 is not as broad as respondents claim, such that it encompasses all costs incurred in the proceedings below. Section 1293.2 covers costs “upon any judicial proceeding under this title.” (Italics added.) Respondents’ interpretation ignores the phrase “under this title.” When construing a statute, it is well-settled that “[a] construction making some words surplusage is to be avoided.” (Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1387.) The phrase “under this title” qualifies the preceding phrase “judicial proceeding.” Accordingly, only costs incurred in judicial proceedings related to an ancillary arbitration, such as petitions to compel arbitration, petitions to confirm arbitration awards, etc., may be awarded under section 1293.2.
In this case, the judicial proceedings relating to the arbitration included, at a minimum, the following: (1) respondents’ petition to compel arbitration (§ 1281.2); (2) appellants’ “motion” to disqualify the arbitrator (§ 1281.91); (3) respondents’ petition to set an arbitration completion date (§ 1283.8); and (4) respondents’ petition to confirm the arbitrator’s decisions (§ 1285). The costs incurred by respondents in connection with these proceedings are recoverable under section 1293.2.
This was, in actuality, a petition to disqualify the arbitrator, a proceeding which is expressly authorized by section 1281.91. Though this proceeding was initiated by appellants, respondents would be entitled to recover the costs incurred in opposing the petition.
“In ruling upon a motion to tax costs, the trial court’s first determination is whether the statute expressly allows the particular item and whether it appears proper on its face. ‘If so, the burden is on the objecting party to show [the costs] to be unnecessary or unreasonable.’ [Citation.] Where costs are not expressly allowed by the statute, the burden is on the party claiming the costs to show that the charges were reasonable and necessary. [Citation.] ‘Whether a cost item was reasonably necessary to the litigation presents a question of fact for the trial court and its decision is reviewed for abuse of discretion.’ ” (Foothill-De Anza Community College Dist. v. Emerich (2007) 158 Cal.App.4th 11, 29-30.) In this case, since we have determined that section 1293.2 only allows recovery of costs incurred in judicial proceedings related to the arbitration, the trial court should have granted appellants’ motion to tax costs and deducted the costs incurred in the nonarbitration proceedings.
Unfortunately, from this record, we have no way of determining the proper amount of awardable costs, nor can we see how the trial court could have calculated those costs even had it properly interpreted section 1293.2 and limited respondents’ costs to those incurred in the arbitration-related judicial proceedings. Though the amount of recoverable costs in this case is certainly more than the $40 claimed by appellants, it is also something less than the $5,218.60 awarded by the trial court, as that figure apparently includes costs incurred in connection with other trial court proceedings, such as respondents’ demurrer, motion to strike and motion to disqualify appellants’ counsel. Respondents’ memorandum of costs provides only the barest amount of information relative to the costs claimed. For example, under the heading “Filing and motion fees,” respondents list 10 items, six of which are labeled simply “Notice of Motion and Motion,” with no other identifying information, such as the type of “motion” filed or the date on which it was filed. Of the remaining four items, only two, “First Paper on Behalf of 9 Defendants” and “Stipulation to Dissolve TRO” provide titles which would permit appellants and the trial court to correlate them to specific proceedings below.
Respondents’ claimed costs for service of process are similarly vague, as they simply identify the person served and the amount incurred, without any mention of a date or identifying what documents were being served.
Since respondents are entitled to some, but not all, of the costs awarded, the appropriate remedy is to remand the matter to the trial court, with directions to vacate its order denying appellants’ motion to tax costs and enter a new order striking respondents’ memorandum of costs, with leave to file an amended memorandum of costs. The amended memorandum of costs should be limited to costs incurred in any judicial proceedings related to the arbitration. Once the amended memorandum of costs is filed, appellants may, in their discretion, renew their motion to tax costs.
III. DISPOSITION
The order denying appellants’ motion to tax costs is vacated. The trial court is directed to enter a new order striking respondents’ memorandum of costs with leave to file an amended memorandum of costs limited to the costs incurred in judicial proceedings related to the arbitration and allowing appellants to, in their discretion, renew their motion to tax costs.
The parties are to bear their own costs and attorney fees on appeal.
WE CONCUR: Rushing, P.J., Elia, J.