Opinion
A152090
09-25-2018
YOLANDA OWENS, Plaintiff and Appellant, v. MICHAEL BYNUM, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. RG11587929)
Plaintiff Yolanda Owens appeals an order awarding $8,148.47 in costs to defendant Michael Bynum following entry of judgement in his favor. She contends the court erred by awarding costs without a showing by Bynum that he was personally liable to pay those costs. Alternatively, she contends the court failed to properly apportion the costs between Bynum and two nonprevailing defendants. We find no error and shall affirm the order.
Factual and Procedural Background
In June 2010, Owens suffered loss from a fire at property she owned in Desert Springs, California. In July 2011, Owens filed a complaint alleging causes of action for breach of contract and breach of the covenant of good faith and fair dealing against her homeowners' insurer, Fidelity National Insurance Company (Fidelity), causes of action for fraud and intentional infliction of emotional distress against Bynum, the independent adjuster employed by the insurer to investigate plaintiff's fire loss, and a conspiracy cause of action against both Fidelity and Bynum.
In March 2012, the causes of action for fraud and conspiracy were dismissed by plaintiff after the court sustained Bynum's demurrer.
Later amendments added causes of action for negligence and negligent misrepresentation against Fidelity's sales agent, FNT Insurance Services (FNT).
On October 31, 2016, the court granted a motion for summary adjudication of the cause of action for intentional infliction of emotional distress against Bynum. The motion for summary adjudication of the causes of action against Fidelity and FNT was denied. In March 2017, plaintiff settled her remaining claims against Fidelity and FNT.
Bynum filed a memorandum seeking $14,678.47 in costs. Bynum's counsel submitted a declaration detailing the costs incurred in representing Bynum, which concludes "Our firm jointly represented Bynum and Bynum's codefendants, Fidelity and FNT. By his memorandum of costs, Bynum has not claimed all of the costs incurred by all of the codefendants in this action, but only those costs that were incurred for expenses necessary to Bynum's defense."
Plaintiff filed a motion to tax costs. She argued Bynum had no right to recover costs under Code of Civil Procedure section 1033.5 because Fidelity indemnified Bynum for his costs and is "the true party that incurred costs," and because Fidelity waived its right to seek costs when it entered into a settlement agreement with plaintiff. Alternatively, she requested the court tax the cost bill in order to fairly apportion costs between Bynum and settling defendants.
All statutory references are to the Code of Civil Procedure.
Under the terms of the agreement, Fidelity and FNT agreed to bear their own costs of suit.
The court issued an order granting in part and denying in part plaintiff's motion to tax costs. The court rejected plaintiff's argument that Bynum had not incurred costs within the meaning of section 1033.5 but agreed that part of the claimed costs should be allocated to the settling defendants. Accordingly, the court struck $6,530 in costs from the amount requested. In an amended judgment, the court found in favor of Bynum and awarded him $8,148.47 in costs.
The judgment also ordered plaintiff to pay $3,000 in attorney fees to Bynum, which plaintiff does not contest on appeal.
Plaintiff timely filed a notice of appeal.
Discussion
The recovery of costs is purely statutory. (Davis v. KGO-T.V., Inc. (1998) 17 Cal.4th 436, 439, disapproved on other grounds in Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 107.) Under section 1032, subdivision (b), the prevailing party in litigation is entitled to recover enumerated costs as a matter of right. (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1333.) The pertinent limitations on statutorily allowable costs are that they must be "incurred," they must be "reasonably necessary to the conduct of the litigation" and they must be "reasonable in amount." (§ 1033.5 subd. (c).)
Section 1033.5, subdivision (c) reads in relevant part, "An award of costs shall be subject to the following: [¶] (1) Costs are allowable if incurred, whether or not paid. [¶] (2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation. [¶] (3) Allowable costs shall be reasonable in amount."
Plaintiff contends the court erred in concluding Bynum incurred any costs in the litigation. She argues, "[T]o obtain a costs award consistent with [section 1033.5, subdivision (c)(1)], Bynum was required to offer proof that he was liable for the claimed costs. He offered no such evidence. [¶] In fact, the truth is almost certainly to the contrary—Bynum was never liable for a dollar in costs from the moment this litigation commenced. The record suggests, and Ms. Owens expressly asserted below, that Bynum was Fidelity's agent in the insurance claim, that the insurer hired his lawyer (who represented all defendants), and that Fidelity was at all times liable for all costs. Bynum never contradicted that assertion, or proved otherwise." (Fn. omitted.)
There is no requirement under section 1033.5, subdivision (c)(1) that " 'a party claiming costs must have personally incurred the obligations enumerated in the memorandum.' " (Litt v. Eisenhower Medical Center (2015) 237 Cal.App.4th 1217, 1222, quoting Ceranski v. Muensch (1943) 60 Cal.App.2d 751, 754 [discussing former §§ 1032, 1033]; see also Skistimas v. Old World Owners Assn. (2005) 127 Cal.App.4th 948, 952 [Section 998, which provides for expert witness fees "actually incurred," "contains no requirement that any particular person must have incurred the expert witness fees, just that the fees must have been actually incurred."].) The declaration submitted by Bynum's counsel verified that the claimed costs were incurred for work performed in defense of the claims against Bynum. The fact that Fidelity may have agreed to pay those costs on Bynum's behalf does not defeat his right to recover costs.
Plaintiff's reliance on Fennessy v. Deleuw-Cather Corp. (1990) 218 Cal.App.3d 1192 is misplaced. In that case six defendants moved for summary judgment but only one prevailed. That defendant sought costs while the litigation remained pending against the other defendants. The court held that, in order to avoid the "likelihood of additional litigation, . . . where a prevailing party incurs costs jointly with one or more parties who remain in the litigation, during the pendency of the litigation that party may recover only costs actually incurred by a party or in its behalf in prosecuting or defending the case." (Id. at p. 1196; see also Jonkey v. Carignan Construction Co. (2006) 139 Cal.App.4th 20, 26 [Another reason for allowing a party who prevails prior to the end of the case to recover only its own costs of suit when costs are claimed during the pendency of the case is that the party from whom such costs would be recovered could otherwise be forced to pay the costs of a party who ultimately does not prevail.].) Here, Bynum waited until the litigation was resolved against all defendants to seek costs. Thus, there is no danger that plaintiff will be asked to pay costs for which one of the defendants had already been paid or costs properly apportioned to a nonprevailing party. Moreover, the Fennessy court did not hold that a prevailing defendant must prove that he is personally liable for the costs incurred. Rather, the prevailing defendant is entitled to recover costs "actually incurred by a party or in its behalf in prosecuting or defending the case." (Fennessy, p. 1196, italics added.)
For this reason, the court did not abuse its discretion in denying plaintiff's request to conduct discovery on "whether Bynum was liable for any of the costs he claimed."
Consistent with this rule, the trial court here undertook a careful review of the claimed costs, taxing those it concluded were properly apportioned to the settling defendants. As the court states in its order: " '[A]ll costs awarded to a prevailing party must be incurred by that party, must be "reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation," and must be reasonable in amount.' [Citation.] 'When a prevailing party has incurred costs jointly with one or more other parties who are not prevailing parties for purposes of an award of costs, the judge must apportion the costs between the parties [based on the reason the costs were incurred and whether they were reasonably necessary to the conduct of the litigation by the jointly represented party who prevailed].' [Citation.] 'A prevailing party who is represented by the same counsel as a nonprevailing party may only recover those costs the prevailing party incurred and were reasonably necessary to the prevailing party's conduct of the litigation, not the other jointly represented parties' conduct of the litigation.' [Citation.] Although the court is not to make an 'across the board' reduction based on the number of defendants, 'the court must examine the reason each cost was incurred, whether the cost was reasonably necessary to the conduct of the litigation on behalf of the prevailing party, and the reasonableness of the cost.' [Citation.] [¶] With these principles in mind, the court addresses the specific costs challenged in the motion. [¶] Item 1: Filing and Motion Fees [¶] The court strikes $720.00 of the $1,695.00 sought in item 1 of the cost memo. This includes the following: $60 re ex parte application to stay; $30 of the filing fee re ex parte application for referee; $250 of the first summary judgment fee; $60 re motion to stay; $30 of the ex parte to continue trial; $250 of the second summary judgment fee; $40 of the ex parte to continue MSA hearing. [¶] Item 4: Deposition Costs [¶] The court strikes $5,700.00 of the$12,084.79 in deposition costs listed in item 4 of the cost memo. This includes the following: $1,100 of the costs for plaintiff's deposition; $3,200 of the costs sought for volumes l, 2 and 3 of the Dawson deposition; and $1,400 of the $2,200 referee fee for the Dawson deposition. The court notes that, as to the latter, the court's order appointing referee, filed 12/5/12, does not state that 'Fidelity' was to incur referee fees but instead that the court 'will subsequently determine how the referee's fees will be paid.' [¶] Item 5: Service of process [¶] The court strikes $110 of the$898.68 listed in item 5 of the cost memo, for a portion of the process fees re Kevin Dawson."
Plaintiff agrees the lower court properly set out the rules relating to apportionment but contends it "then ignored them in awarding costs." She argues, "With the exception of Bynum's appearance/demurrer fee, and his portion of the filing fees for the jointly-filed summary judgment motions, every cost awarded was necessary to the conduct of the litigation by Fidelity and FNT, and thus should not have been part of the costs award." She argues further, "although the Court struck about half of the claimed costs, it never confronted the central problem with the costs bill—i.e., that all but a small fraction of the claimed costs were equally necessary to the conduct of the litigation by nonprevailing, jointly-represented defendants Fidelity and FNT, and thus were not awardable to Bynum." (Italics added.)
Plaintiff's argument is premised on a misunderstanding of the rule for apportionment. The governing principle permits recovery for costs that were "reasonably necessary to the prevailing party's conduct of the litigation, not the other jointly represented parties' conduct of the litigation." (Charton v. Harkey (2016) 247 Cal.App.4th 730, 744.) She incorrectly suggests that costs are recoverable only if they were incurred solely for the benefit of the prevailing defendant. That is not the rule.
There was no abuse of discretion in the trial court's careful apportionment of costs. (Gibson v. Bobroff (1996) 49 Cal.App.4th 1202, 1209 ["Whether a cost is 'reasonably necessary to the conduct of the litigation' is a question of fact for the trial court, whose decision will be reviewed for abuse of discretion."].)
Disposition
The order awarding costs is affirmed. Bynum shall recover his costs on appeal.
/s/_________
Pollak, J. We concur: /s/_________
Siggins, P.J. /s/_________
Ross, J.
Judge of the San Francisco Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. --------