Hrg 8/16/18 Motion Tax CostsMotionCal. Super. - 6th Dist.June 24, 201610 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nicholas H. Van Parys, Esq. SBN 242234 NORDIC STAR 960 South Westlake Blvd Suite 209 Westlake Village, California 91361 Telephone: (213) 403-1800 Facsimile: (805) 366-0724 nvanparys@vanparyslaw.com Attorney for Plaintiff SAN JOSE NEUROSPINE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA -- OLD COURTHOUSE SAN JOSE NEUROSPINE, CASE NO.: 16CV296868 Hon. Judge Paul Bernal Plaintiff, Dept. 22 vs. NOTICE OF MOTION AND MOTION TO TAX MEMORANDUM OF COSTS; CALIFORNIA PHYSICIANS' SERVICE; DyeRATION OF NICHOLAS H. VAN HIGHMARK; DOES 1 to 20 inclusive, Date: August 16, 2018 Defendants, Time: 8:30 a.m. Dept. 22 SAC Filed: February 8, 2017 Trial Date: June 4, 2018 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: NOTICE IS HEREBY GIVEN that on August 16, 2018, at 8:30 a.m. or as soon thereafter as the matter can be heard in Department 22 of the above-entitled Court, Plaintiff San Jose Neurospine (“Plaintiff”) will move the Court for an order to tax the Memorandum of Costs served by California Physicians’ Service dba Blue Shield of California (“Blue Shield” or “Defendant”) on June 29, 2018. This motion to tax costs is made pursuant to California Code of Civil Procedure sections 998 and 1033.5, and Rules of Court, Rule 3.1700(b). Defendants seek to tax the costs in the amount of $262,538.00 on the grounds that Blue Shield is seeking costs that are unreasonable, unnecessary, or otherwise prohibited by law as to the following items: a. Item 1: Filing and motion fees in the amount of $1,585 as duplicative of costs in item 13. 1 Motion to Tax Costs 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . Item 4e: Deposition costs in the amount of $4,897.93 as Plaintiff paid for and provided a copy of the Defendant’s witness’ deposition transcripts per stipulation and hotel expenses are not recoverable because counsel would have to sleep somewhere anyway and airfare because Blue Shield had local counsel in San Francisco. Item 8b: Expert fees of $170,547.75 in their entirety as excessive, unreasonable, and unnecessary to the trier of fact. Because the jury found Plaintiff had not met their burden of proof, therefore none of the costs “were reasonably helpful to aid the trier of fact.” § 1033.5(13). Blue Shield’s section 998 offer of $15,000 had no reasonable prospect of acceptance and was a token offer made the same day the expert began work to recover those fees at no real risk to Defendant. . Item 11: Trial Exhibits of $653.16: photocopying charges of exhibits is expressly disallowed by statute. Item 12: Trial Court reporter and videographer fees of $27,137.15 in their entirety as they were not used at trial, ordered by the court, helpful to the trier of fact, or state who the video was “regarding.” The identity is not disclosed and therefore possibly duplicative of videographer fees in item 4e. Item 13: Miscellaneous Travel Expenses for Trial and Pre-Trial Hearings should be taxed in the amount of $22,651.62. While a prevailing party may recover travel expenses to attend depositions under section 1033.5(a)(3)(C), defendants describe their mileage-related, meal, and lodging expenses as related to attending mediations, going home, the office, hearings, Starbucks, Wholefoods, and three suites at TownePlace for three attorneys. . Item 13: Miscellaneous Messenger Costs. There is no statutory basis to recover messenger costs or federal express. These costs should be taxed in the amount of $8,466.14. There is no statutory basis to recover such expenses. Further, Code of Civil Procedure section 1033.5(b) expressly states that “Postage, telephone, and photocopying charges” are not recoverable. . Item 13: Mediation costs of $1,570.00 for Judicate West. Item 13: Trial Presentation Expenses of $22,711.41 as being “state of the art,” unnecessary to the trier of fact, and excessive. 2 Motion to Tax Costs 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 j. Item 13: Copy/Printer Rental for use during trial of $2,317.64 as being “state of the art,” unnecessary to the trier of fact, and excessive. In hotel copier and printer rental did not help the trier of fact and is excessive. This motion is based upon this notice, the attached memorandum of points and authorities, the Declaration of Nicholas H. Van Parys, the records, pleadings and files of the Court herein, and all other matters presented to the Court at the time of the hearing. DATED: July 15, 2018 VAN PARYS LAW NICHOLAS H. VAN PARYS Attorney for Plaintiff SAN JOSE NEUROSPINE 3 Motion to Tax Costs 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Table of Contents I. INTRODUCTION .....ooiiiiiiiieetientietetceterasete st estates be sate sate st ese eae es tessa sae e sees ae enee 1 IL. ARGUMENTLotieeeteeteae ea teehee sate tenet eae es be eute sees seen anes 1 A. Legal Standard .............oooiiiiiie eeeeeeeeseese esate este eenaae ea 1 B. The Court should tax or strike Blue Shield’s expert fees in their entirety because their 998 offer was not made in 200d faith. .........cc.eiiiiiiiiiiii eee 2 C. The Court should tax or strike Blue Shield’s costs because they were not necessary to the conduct of the litigation. The costs are disallowed by statute. ..........cccceeeviiiiiiiiiiiiiinieeeeeees 4 I. Number 1: filing and MOON EES .....ccovuuiiiiiieiiiie eeeeeeeee eee eee 5 2. NUMDET 4€: AEPOSILION COSS.ccuuvriiitiiiiiieeitieeitte este ert ee et ee eit ee eit ee suites sabe ee ssbeeesabeee sabe eessbeesssnes 5 i. The travel, air fare, hotel lodging, travel to and from the hotel expenses charged by Blue Shield’s counsel for attending the depositions should be reduced. .........ccccceeviiiniinniinniinnieennn. 6 ii. The deposition costs for depositions conducted by Plaintiff and hotel stay should be stricken from the COST DILL. ..uiiiiiiii eeeeectseeeese sreeeereeee eee naee ea 6 3. NUMDET 8D: EXPEIT FEES... ceiutiiiiiiiiitie ectseee sees saeeeeabee esa e esate essere esas 7 1. The deposition costs for fees paid to Plaintiff’s experts should be stricken from the cost bill. . 8 Number 11: trial €XRIDITS ..c...oouiiiiiiieeececeeeeeres 9 Number 12: COUTt TEPOTLET FEES .....eeruriiriieiiiie eeeeterseeeeesessa e esate ee saae eas 9 Number 13: Miscellaneous Travel Expenses for Trial and Pre-Trial Hearings .........c...c......... 10 i. Blue Shield Is Not Entitled To Recover Meal Reimbursement, Starbucks, Wholefoods, Hotel Stay Of Over $12,423.45, Travel Home, Car Rental, Or Its Other Miscellaneous Costs Without Proving They Were Necessary To The Litigation. ...........cooveeiiiieiiiieiiiiecieseen 10 ii. Attorney / Client Lodging Costs Are Not Recoverable .........c..ccooeeviiiiiiniiinniiniciieceenen. 11 iii. Plaintiffs’ Alleged Costs For Attorney Mileage, Taxis, And Parking Are Not Recoverable 11 7. Number 13: Miscellaneous Messenger COSES.......ccouiieirireiiieeiiieeitee nieces siie ees ee siie ee sareens 12 1. Fees For Electronic Filing or Service of Documents Are Not A Recoverable Cost ................ 12 ii. Federal Express and Golden State Overnight Charges Are Not Recoverable....................... 12 III. CONCLUSION ....ooiiitiiieiteeectsceteraeect ee sate sabe ee estes sree sabe eae e snes snes eure ease ennnees 13 i Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Table of Authorities Cases Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475 ...ccooiiriiieiiceeee ee3,4 Bach v. County ofButte, 215 Cal. App. 3d 294, 308 (1989) ....c.eereiriieeieeiienerteececesses 6 Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699 ......cccceevviiimniiiniinieeeiee 2 Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44 .....cocoiiiiiiiiiiieeeeceieee 8 Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 73 ...cooiiiiiiiiiieieeeeeeeieee 6 Jones v. Dumrichob (1998) 63 Cal.App.4th 1258,1262......c...oiiiiiieiieeeeeee2 Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761 .....ccccevviiiiiiiiiiiieeeeeeee 6,11 McGarity v. Dept. of Transportation (1992) 8 Cal.App.4th 677 ....ccccuveveiiiiiiiiiiiieeeeeeeeeeee 8 Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal.App.4th 238 .....cccceevviiiiniiiinieinieeeiee 5 Pineda v. Los Angeles Turf Club, Inc. (1980) 112 Cal.App.3d 53.....ooiiiiiiiieeeeeeeeeeeeeeee 3 Ripley v. Puppadoppoulos (1994) 23 Cal.App.4th 1616......ccc.cooiiiiiiiiiiiieeeeeeeeeee 13 Seever v. Copley Press, Inc. (2000) 141 Cal.App.4th 1550 ........coiiiiiiiiiiiiie ee9 Stearman v. Centex Homes (2000) 78 Cal.App.4th 611, 624 ......ccociiiiiiiiiiieeeeeee 8 The People ex rel Bill Lockyer v. Freemont General Corp. (2001) 89 Cal.App.4th 1260, 1271 ............. 3 Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 130 ......ccccoviiiiniiinniiinnieennn 2 Statutes California Code of Civil Procedure SECtion QO.........cooovimieiieiieiiieiiiiieee eee ettereee ee eevee ees 1,3,14 California Rules of Court, RULE 3.1700.........coutuioeieieeeeeeeeteeters sees eee seas eres sees sessananes 5 Code of Civil Procedure, SECTION 1033.5...ciertoeeeeeeee eset teats esse ease seas essaeeses passim Treatises 7 Witkin, Cal. Procedure (5th Ed. 2008) Judgment, § 127, p. 661 .....cccoeoviiiiiiiiiiiieieeeeeeeee ee 12 ii Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION On March 16, 2018, Defendant served Plaintiff with an Offer to Compromise pursuant to California Code of Civil Procedure section 998 in the amount of $15,000. San Jose Neurospine did not accept the offer and failed to achieve a more favorable result at trial. A jury of twelve persons was empaneled and after receiving the evidence, the jury returned its verdict and found Plaintiff had not met their burden of proof of fair market value. The court entered judgment on June 21, 2018. Defendant timely filed and served their Memorandum of Costs on June 29, 2018. San Jose Neurospine provide emergency medical services the total charges were $260,729.00. Blue Shield paid a total of $37,318.37. The only question before this Court is whether the costs claimed by Blue Shield should be awarded. Blue Shield’s claimed costs stem primarily from a statutory offer to compromise that was not made in goodfaith. Awarding costs pursuant to Code of Civil Procedure section 998 is discretionary. This Court’s exercise of that discretion depends on the existence of a goodfaith offer-that is, an offer as to which there is a reasonable basis for believing it will be accepted. No one could expect Plaintiff to have simply accepted the $15,000 offer here. Plaintiff's demand for settlement was Many of Blue Shield’s other claimed costs are unsupported, too. Those costs are either disallowed by statute, not necessary, excessive, and/or undocumented. For example, meals and trips to Starbucks and Wholefoods, SUV car rentals, lodging and travel for an unknown attorney, travel for Blue Shield’s general counsel, in-hotel copy and printer rental, videographer, Federal Express expenses, photocopy charges, travel to and from home and the hotel, and one expert fee over $138,000.00. II. ARGUMENT A. Legal Standard The only permissibly reimbursable costs are those enumerated under Code of Civil Procedure, section 1033.5, subdivision (a). All costs for which a party is expressly allowed recovery under subsection(a), and all costs that a party is otherwise awarded in the court’s discretion under subsection 1 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (c), must be “reasonably necessary to the conduct of the litigation rather than merely convenient or beneficialto its preparation” and “reasonable in amount.” Id. at § 1033.5(c), subs.(2)-(3). If a cost is specifically allowable under Section 1033.5(a), the party challenging the costs has the burden of showing that the costs sought are not reasonable or necessary. However, if any costs are objected to, 1.e., costs not enumerated in subsection (a), then the burden of proof lies with the requesting party to demonstrate that the costs were necessary and reasonable. Ladas v. Cal. State Auto Ass’n, 19 Cal. App. 4" 761, 774 (1993). Furthermore, “a court has no discretion to award costs not statutorily authorized.” ld. B. The Court should tax or strike Blue Shield’s expert fees in their entirety because their 998 offer was not made in good faith. Only a goodfaith offer to compromise can trigger the discretionary cost-shifting permitted by section 998. “The purpose of section 998 is to encourage the settlement of litigation withouttrial. [Citation.] To effectuate the purpose of the statute, a section 998 offer must be made in good faith to be valid. [Citation.] Good faith requires that the pretrial offer of settlement be ‘realistically reasonable under the circumstances of the particular case ...” [Citation.] The offer ‘must carry with it some reasonable prospect of acceptance.” Jones v. Dumrichob (1998) 63 Cal.App.4th 1258,1262. Whetherthe offeris reasonable “depends upon the information available to the parties as of the date the offer was served.” Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 130. Reasonableness generally “is measured, first, by determining whether the offer represents a reasonable prediction of the amount of money,if any, defendant would have to pay plaintiff following a trial, discounted by an appropriate factor for receipt of money by plaintiff before trial, all premised upon information that was known or reasonably should have been known to the defendant,” and “[i]f an experienced attorney or judge, standing in defendant’s shoes, would place the prediction within a range of reasonably possible results, the prediction is reasonable.” Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699. “If the offer is found reasonable by the first test, it must then satisfy a second test: whether [defendants] information was known or reasonably should have been known to [plaintiff]. This second test 1s necessary because the section 998 mechanism works only where the offeree has reason to know 2 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the offer is a reasonable one. If the offeree has no reason to know the offer is reasonable, then the offeree cannot be expected to accept the offer.” Elrod v. Oregon Cummins Diesel, Inc., supra, 195 Cal.App.3d at p. 699. In this case, plaintiff had no reason to believe a 998 offer of $15,000 was reasonable or in good faith. There is no dispute that “a good faith requirement must be read into section 998 in order to effectuate the purpose of the statute.” Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1483. “Goodfaith ... requires that the settlement offer be ‘realistically reasonable under the circumstances of the particular case.’” Ibid. “[A] party having no expectation that his offer will be accepted ‘will not be allowed to benefitfrom a no-risk offer madefor the sole purpose of later recovering large expert witness fees.”” Ibid., quoting Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1263. For example, Pineda v. Los Angeles Turf Club, Inc. (1980) 112 Cal.App.3d 53, the family of a jockey who was killed at a race track brought a wrongful death action against the race track and the manufacturer of an allegedly defective helmet the jockey was wearing when killed. Plaintiffs sought damages of $10,000,000. McHal, the manufacturer, served a section 998 offer of compromise of $2,500, which plaintiffs rejected. After a defense verdict, McHal sought to recover its costs as a result ofthe rejected offer of compromise. Thetrial court granted plaintiffs’ motion to tax costs. The denial was affirmed on appeal. The Court of Appeal stated, “Under the circumstances ofthis case the trial court had ample reason to find that the offer was not reasonable. Although McHal’s liability was tenuous indeed, having in mind the enormous exposure the trial court could find that McHal had no expectation thatits offer would be accepted. From this it follows that the sole purpose of the offer was to make McHaleligible for the recovery of large expert witness fees at no real risk.” Id. at p. 63. In this case, Blue Shield served their section 998 “token offer” the same day their economist expert began work. This shows Blue Shield made the offer with the intent to recoverits expert witness fees at no realrisk to Defendant. In evaluating whether an offer is reasonable, courts have looked to: (1) the purpose of Section 998, (2) whether, at the time of the offer, there was any reasonable possibility that the defendant would not prevail, and (3) the amount of the offer given the circumstances of the case. The 3 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Lockyer v. Freemont General Corp. (2001) 89 Cal.App.4th 1260, 1271; Wear v. Calderon (1981) 121 Cal.App.3d 818, 821; Pineda v. Los Angeles Turf Club, Inc. (1980) 112 Cal.App.3d 53, 62-3. In Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 693, the Court held that a 998 offer must carry with it some reasonable prospect of acceptance at the time it was made to support a recovery of expert costs. If an offer is unreasonable at the time it is made, any subsequent punishment of the offeree for non-acceptance does not further the purpose of Section 998 because the offeree would not have acted differently at the time of the offer despite the threat of later punishment. In that situation, later punishment of the offeree provides a windfall to the offeror and does not promote settlement. Elrod, supra, at 699. In this case, from the very beginning, it was undisputed that as a result of Defendants’ failure to pay a reasonable rate and comply with California law, Plaintiff was not properly reimbursed for his emergency services. As a result, to date, Plaintiff has incurred $233,410.63 in unpaid medical bills. In March of 2018, that is, three months prior to Defendants’ expert opining the reasonable value of services was $16,449, Defendants’ 998 offer to compromise was served. At the time Plaintiff's demand for settlement was $155,000.00. Defendant’s 998 offer was not made in good faith even if their expert’s opinion is to be believed. At the time the 998 offers were made, they did not carry some reasonable prospect of acceptance as required by case law, and as such, they were unreasonable and were made in bad faith. Elrod, supra. Given Plaintiff’s demand, Defendant had no reasonable expectation that their offer will be accepted, and as such, shall “ not be allowed to benefitfrom a no-risk offer madefor the sole purpose of later recovering large expert witness fees.”” Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1483, quoting Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1263. As Blue Shield’s offer was not made in good faith and was not realistic under the circumstances,this court should exercise its discretion to deny all section 998 cost-shifting amounts, and, in particular, for one expert over $133,000.00 in their entirety. C. The Court should tax or strike Blue Shield’s costs because they were not necessary to the conduct of the litigation. The costs are disallowed by statute. 4 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The costs awardable to a prevailing party do not simply consist of any expenditure paid by a party in association with litigation. A review of Blue Shield’s cost bill reveals they are overreaching on the costs which they seek to recover-most are sought without any legal basis. Pursuant to California Rules of Court, Rule 3.1700(b)(2), Plaintiff hereby lists the objected-to costs in the same order, and by the same number, as they appear in Defendant’s memorandum of costs. 1. Number 1: filing and motion fees Blue Shield seeksfiling and motion fees associated with two motions for summary judgment, a judgment on the pleadings, and an ex parte application in the amount of $1,585.00. Although minor in amounts, these fees are a prime example of Blue Shield’s overreaching. The ex parte application Blue Shield did file in this matter, was ultimately never heard by the court and was unnecessary to the litigation. Although motion fees are allowable as costs under § 1033.5(a)(1), “the intent and effect of section 1033.5, subdivision (¢)(2) is to authorize a trial court to disallow recovery of costs, including filing fees, when it determines the costs were incurred unnecessarily.” Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal.App.4th 238, 245. Blue Shield should not recover the costs of filing an ex parte application that was never heard as clearly unnecessary to the litigation. Finally, these costs are duplicated in number 13. Therefore item number 1 should be taxed in the amount of $1,585.00. 2. Number 4e: deposition costs Blue Shield’s memorandum contains no details or supporting documentation concerning its claimed $16,625.75 in deposition costs, and there is thus no basis to determine whether these costs were reasonably necessary. The statute only authorizes an award of costs for the “taking, videotaping, and transcribing necessary depositions.” Cal. Civ. Proc. Code § 1033.5(a)(3); Gorman v. Tassajara Dev. Corp., 178 Cal. App. 4" 44, 71-72 (2009). Although the statute “contemplates recovery of travel costs incurred by counsel to attend depositions,” it does not “provide for recovery of local travel expenses by attorneys and other firm employees unrelated to attending depositions ... nor does it allow recovery for ‘meals eaten while attending local depositions.”Id. at 72 (quoting Ladas, 19 Cal. App. 4% 5 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 at 774). Moreover, travel costs for each deposition should be limited to reasonable expenses for one attorney to travel from San Francisco to the locations of any non-local depositions. If the items on a costs memorandum “are properly objected to,” as they are here, then “they are put in issue and the burden of proof is on the party claiming them as costs.” Ladas, 19 Cal. App. 4™ at 774. Accordingly, Blue Shield must submit complete documentation, including bills, invoices, statements, and receipts, in response to the instant motion. Bach v. County ofButte, 215 Cal. App. 3d 294, 308 (1989). i. The travel, air fare, hotel lodging, travel to and from the hotel expenses charged by Blue Shield’s counsel for attending the depositions should be reduced. A court may not award costs that are not statutorily authorized. See Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774. The only permitted travel expense is “travel expenses to attend deposition.” § 1033.5(a)(3). Costs, such as meals and travel unrelated to attending depositions are not recoverable. Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 73. Yet here, Blue Shield’s counsel seek costs for attending the deposition of Blue Shield, which was conducted at their own office. Travel, which is unrelated to the deposition, such as travel from one’s home to their office would occur regardless of whether or not there was a deposition. Furthermore, travel home at the end of the day would similarly occur regardless of whether or not there was a deposition. Finally, airfare to the depositions was unnecessary as Blue Shield’s counsel has local offices in the city were the depositions were held. Accordingly, this cost should be stricken in the amount of $2,240.74. ii. The deposition costs for depositions conducted by Plaintiff and hotel stay should be stricken from the cost bill. Included within the list of costs permitted under § 1033.5, are the cost incurred in “[t]aking, video recording, and transcribing necessary depositions including an original and one copy of those taken by the claimant.” Code Civ. Proc. § 1033.5(a)(3). Here, Blue Shield seeks to recover the costs associated with the following depositions noticed and conducted by counsel for Plaintiff and the following hotel expenses: 6 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 oe 4/17/2017 U.S. Legal Support, Inc. (CA Reporting); INVOICE#: 110034148; DATE: 04/17/2017 - 1 Certified Copy of Transcript regarding "Stan Hornbacher" on 3/30/17 $516.10 e 5/8/2018 John Fogarty INVOICE#: 2508930705231545 - Lodging, 05/08/18, Attend PMK deposition and ex parte hearing, 05/08/2018 - 05/09/2018, Cupertino Hotel $510.45 e 5/22/2018 John Fogarty INVOICE#: 2513608405251545 - Lodging, 05/22/18, Attend depositions of S. Hornbacher and B. Deal, 05/22/2018 -05/23/2018, Hotel De Anza $442.41 e 5/23/2018 Barkley Court Reporters, Inc. (file 5021; INVOICE#: 520504; DATE: 05/23/2018 - 1 Certified Copy of Transcript regarding "Stan Hornbacher" on 5/22/18 $889.50 e 5/29/2018 Barkley Court Reporters, Inc. (file 5021; INVOICE#: 520677; DATE: 05/29/2018 - 1 Certified Copy of Transcript regarding "Bruce Deal" on 5/23/18 $298.73 These depositions and hotel stays were not necessary to Blue Shield’s case and were not incurred by them. First, no expense was incurred by Blue Shield for their own deposition transcript since the original transcript was paid for by Plaintiff and by stipulation was provided to Blue Shield’s counsel’s office. Secondly, Defendant’s counsel would have to pay for a hotel anyway or their local office could attend the deposition. Accordingly, these claimed deposition expenses, for hotel stays, are not recoverable and should be taxed in the amount of $2,657.19. 3. Number 8b: expert fees Blue Shield claims expert fees in the amount of $170,547.75. These costs are not permitted under § 1033.5(b)(1), since none were court ordered or were helpfulto the trier of fact because the jury found Plaintiff had not met their burden of proof. Nor should they be awarded pursuant to section 998. As discussed, the provisions of section 998 are discretionary and require a goodfaith offer which the opposing party has a reasonable opportunity to evaluate based on reasonable knowledge of the facts of the case. Moreover, section 998 affords the court the discretion to award to plaintiff “a reasonable sum to cover costs of the services of expert witnesses” which are “actually incurred and reasonably necessary.” Code Civ. Proc. § 998(d). Finally, the expert fees were not reasonably necessary to aid the trier of fact. Further, section 998 is clear that “costs for services of expert witnesses for trial... shall not exceed those specific under Section 68092.5 of the Government Code.” Code of Civ. Proc. § 998(i).) In 7 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 turn, Government Code section 68092.5 states that the fees charged must be a “reasonable and customary hourly or daily fee for the actual time consumed. See Gov. Code, § 68092.5(b)(2). Here, the expert fees for which Blue Shield seeks recovery are extremely excessive and not documented for the Court to make a proper determination of their reasonableness. For example, Blue Shield seeks $138,747.75 for Bruce Deal’s services, $122,150.25 of which is for only two months. We have no way of knowing however one would anticipate the bulk of an experts’ fees would be for research and preparing the expert report which was received in the beginning of May 2018. It is perplexing how an expert can charge $122,150.25 for May and April when the expert report was finalized in the middle of May. In addition, his services were not reasonably necessary for the conduct ofthe litigation. Further, Blue Shield fails to provide any sort of invoicing or other means of confirming what the reasonable and customary fee would be for the time actually consumed by their experts. Without any way for Plaintiff or the Court to determine the amount of the fees which were reasonable and necessary, Plaintiff respectfully requests the entire amount be taxed. i. The deposition costs for fees paid to Plaintiff’s experts should be stricken from the cost bill. Blue Shield claims deposition costs which include the fees of plaintiff’s expert witnesses in the amount of $11,800. Section 1033.5 permits for the recovery of costs that are reasonably necessary for taking witness depositions. California case law has repeatedly held that such costs do not include expert fees paid at depositions, unless the witnesses were ordered by the court. See, e.g., McGarity v. Dept. of Transportation (1992) 8 Cal.App.4th 677, 686 [“recovery of expert witness fees is precluded by the plain language of Code of Civil Procedure section 1033.5, subdivision (b)(1)”’; held, subsection(b)(1), which bars fees for non-court ordered experts, applies to subsection (a)(3), which identifies the costs that are recoverable vis-a-vis depositions]; Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 74 [“Absent evidence or even an argumentthat these defense experts were ordered by the court, plaintiffs were not entitled to recover their deposition fees”]. Nor does section 998 afford an avenue for recovery of such fees: “[S]ection 998 gives the court discretion to order a [plaintiff] to pay ‘a reasonable sum to cover costs of the services of [defendants] 8 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 expert witnesses’ if the [plaintiff] rejects [defendant’s] statutory offer to compromise and fails to obtain a more favorable judgmentat trial.” Stearman v. Centex Homes (2000) 78 Cal.App.4th 611, 624, [section 998, subd. (d) only applies to Defendant’s experts; section does cover fees a defendant may incur in deposing plaintiff's experts]. Since Blue Shield has not shown that the experts for whom they claim fees were ordered by the Court, they cannot recover those fees. Thus, even if the Court determines Blue Shield’s statutory offer to compromise was valid and effective, their claimed expert costs should still be taxed in the entire amount. 4. Number 11: trial exhibits Expenses for models and blowups of exhibits and photocopies of exhibits “may be allowed if they were reasonably helpful to aid the trier of fact.” § 1033.5(13). The language used in § 1033.5(13) demonstrates that recovery of such costs is discretionary and not mandatory. As with all permissible costs, expenses for models and blowups must have been incurred and must be “reasonably necessary to the conduct of litigation rather than merely convenient or beneficialto its preparation.” § 1033.5(c)(1), (2). And,costs for exhibits not used at trial are not recoverable since they could not have assisted the trier of fact. Seever v. Copley Press, Inc. (2006) 141 Cal.App.4th 1550, 1557. Here, Blue Shield claims $1,355.16 for trial exhibits and photocopies. Photocopies are expressly disallowed by statute and the blow ups during closing argument did not aid the trier of fact because the trier of fact found plaintiff had not met their burden. While their exhibit list consisted of 22 total exhibits, they did not offer all of the documents contained in the exhibit list at trial, nor did their exhibit list include any demonstrative models or exhibits, and finally the exhibit list was a joint exhibit list. Therefore these costs for copies were not helpfulto the trier of fact. This Court should thus reduce the amount sought fortrial exhibits in the amount of $1,355.16. 5. Number 12: court reporter fees Blue Shield seeks $27,137.15 in videographer fees incurred before trial. Video depositions were not used at trial and were therefore not reasonably helpfulto the trier of fact. Section 1033.5(b)(5) bars recovery of transcript fees unless ordered by the court. The fees sought for transcripts as well as attendance by the court reporter therefore are not proper as they were voluntarily incurred. In fact, Blue Shield tacitly admits that the transcript fees were not court-ordered as they did not file these costs under 9 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 number 9, “Court-ordered transcripts.” The videographer, transcript fees and reporter fees must be stricken as not ordered by the court or reasonably necessary for the trier of fact. 6. Number 13: Miscellaneous Travel Expenses for Trial and Pre-Trial Hearings Blue Shield does not provide any detail about the nature of the $22,651.62 in costs and only provides a brief summary of the costs included in this category. Thus,it is impossible for the Court or San Jose Neurospine to determine what amount of costs were incurred for each category identified, why the costs should be awarded in the Court’s discretion, or whether the costs were reasonable in amount. The Court should tax the “miscellaneous travel expenses” costs in full. For example, General Counsel of Blue Shield’s travelto the trial was not helpful for the trier of fact or necessary, an attorney named leshia Black likewise never appeared in the case and her role is unknown. Also for example, costs for an SUV were unnecessary and not helpful to the trier of fact, as was travel to and from the hotel or to and from home. i. Blue Shield Is Not Entitled To Recover Meal Reimbursement, Starbucks, Wholefoods, Hotel Stay Of Over $12,423.45, Travel Home, Car Rental, Or Its Other Miscellaneous Costs Without Proving They Were Necessary To The Litigation. On number13 to its Memorandum of Costs, Blue Shield attempts to grossly inflate its costs in unnecessary travel, lodging and meal expenses. It lumps together costs for parking, travel and meals. It grossly inflates its costs here by what Courts have found to be necessary for the conduct oflitigation. Previous courts have ruled expenses for attorney’s meals are not “reasonably necessary” as attorneys have to eat whether they are in litigation or not. See Ladas v. California State Auto. Assn’n, 19 Cal. App 41 761, 774 (1993). For example, Blue Shield seeks reimbursement of dinner. Blue Shield also requests costs for meals and lodging for three separate attorneys (John Fogarty, Michael Zorkin, Ieshia BLack) when only a customary one would be required. Additionally, Plaintiff cannot retain counsel outside of San Francisco and then claim costs for their travel to litigation and lodging in San Francisco. Manatt, Phelps and Phillips has local counsel in San Francisco and could have retained any other local counsel, thus these travel costs can hardly be deemed “necessary” for the litigation. Without breaking down these costs further, Blue Shield cannot recover for these costs without specifying what was for 10 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 meals and what was not. Therefore, these costs must be disallowed. For example, Blue Shield requests reimbursement for five trips to Wholefood, Starbucks, lunch, dinner, taxis, lodging, and travel home for three different attorneys. All total, the following are the unallowable costs listed in number 13. ii. Attorney / Client Lodging Costs Are Not Recoverable Item 13 and 4e of plaintiffs’ memorandum of costs, specifically Attachment 13 and 4e for “Lodging,” “Dinner,” and “Meals” seeks recovery of $16,812.63. Approximately $15,246.02 of that amount is for lodging for attorneys during Trial. The remaining balance of approximately $1,566.61 is for meals generally. However, none of those expenses are statutory authorized and thus, those expenses are not recoverable. Under the Code, only travel expenses to attend depositions are recoverable. Civ. Proc. Code § 1033.5(a)(3). Travel expenses, including meals and lodging expenses,to attend trial are not recoverable. Id.; see also Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774 [noting that the only travel expenses authorized by section 1033.5 are those to attend depositions. Attorney meal expenses, and travel and lodging expenses for trial, are not recoverable.] Plaintiffs’ memorandum of costs seeks recovery of $16,812.63 for lodging for attorneysto attend trial, which are not recoverable. (Id.) In lightof the foregoing, defendants request that the Court reduce Item 13 miscellaneous travel of plaintiffs’ memorandum of costs by $16,812.63. iii. Plaintiffs’ Alleged Costs For Attorney Mileage, Taxis, And Parking Are Not Recoverable Items 13 of plaintiffs’ memorandum of costs seeks for “Mileage” and “Parking.” The only travel related costs, such as “mileage,” potentially recoverable under the Code are for “travel expenses to attend depositions” under Code of Civil Procedure section 1033.5(a)(3)(C). If plaintiffs alleged costs for “Attorney Mileage and Parking” or “Attorney Parking” under Attachment 13 are travel expenses in connection to the depositions, they are arguably recoverable. However, here they are not as they are listed for mediation, attending court, ex parte hearings, going “home” or to the “office.” In light of the foregoing, defendants request that the Court reduce Item 13 of plaintiffs’ memorandum of costs by $144.00. 11 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7. Number 13: Miscellaneous Messenger Costs Messenger Service to attorney's residence, hotel, courthouse of $8,466.14: Messenger fees are recoverable only if they are “related to trial preparation” (Ladas, 19 Cal.App.4th at p. 777, emphasis added), and must be reasonable and necessary (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 132; Code Civ. Proc., § 1033.5(c)(2)) and reasonable in amount (Code Civ. Proc., § 1033.5(c)(3)). Plaintiff has not provided any evidence that these charges were reasonably necessary and related to trial preparation. Likewise, service of process costs is only recoverable if reasonably necessary. See Nelson v. Anderson, 72 Cal. App. 4th 111, 132 (1999). Again, Blue Shield has failed to provide any information concerning its request for $8,466.14 in service of process costs and there is thus, nothing from the face of Blue Shield’s Costs Memorandum suggesting that such costs were reasonably necessary. Blue Shield must submit supporting documentation to establish the reasonableness of these costs. Bach, 215 Cal. App. 3d at 308. In addition to establishing the reasonableness of service costs, a party must detail how any documents were served to allow the court to determine from the face of their cost bill whether items are proper. Id.; 7 Witkin, Cal. Procedure (5th Ed. 2008) Judgment, § 127, p. 661. i. Fees For Electronic Filing or Service of Documents Are Not A Recoverable Cost In item number 1, Blue Shield claims costs of $435 for filing and service fees and in item number 13, Blue Shield appears to double bill for the same item for $435. Blue Shield does this again through-out the Memorandum of Costs: all of the costs in item 1 are repeated again in item number 13 under “messenger costs.” For example, two motions for summary judgment are billed four different times. Therefore, item number 13 should be taxed in the amount of $1,585.00. Additionally, recoverable costs include “[fees for the electronic filing or service of documents through an electronic filing service provider if a court requires or orders electronic filing or service of documents.” Code of Civil Procedure section 1033.5(a)(14). None of these costs were ordered by the court. ii. Federal Express and Golden State Overnight Charges Are Not Recoverable 12 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Item 13 ofplaintiffs’ memorandum of costs seeks $254.14 in unrecoverable costs for “Federal Express” and “Golden State Overnight.” Code of Civil Procedure section 1033.5(b) provides that the “following items are not allowable as costs, except when expressly authorized by law: ... (2) Investigation expenses in preparing the case for trial. (3) Postage, telephone, and photocopying charges, except for exhibits.” The “expenses of copying documents, Federal Express and postage charges, and telecopy/fax charges” are “expressly disallowed as costs unless expressly permitted by law.” Ripley v. Puppadoppoulos (1994) 23 Cal.App.4th 1616, 1628. Further, photocopying and Federal Express costs are not recoverable under § 1033.5(b)(3). These types of expenses do not aid the trier of fact. In light of the foregoing, defendants request that the Court reduce Item 13 of plaintiffs’ memorandum of costs by $254.14. III. CONCLUSION Based on the foregoing, Defendants respectfully request that the Court tax Blue Shield’s costs as set forth herein and, if not, each of the separate and severable items identified above. DATED: July 15, 2018 VAN PARYS LAW NICHOLAS H. VAN PARYS Attorney for Plaintiff SAN JOSE NEUROSPINE 13 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF NICHOLAS H. VAN PARYS, ESQ. I, Nicholas H. Van Parys, declare as follows: 1. I am an attorney licensed to practice law in the State of California and am the attorney of record for Plaintiff and make this declaration in support of Plaintiff's Motion to Tax Memorandum of Costs and have personal knowledge of the foregoing matters, and if called upon to testify, I could and would testify competently to the truth of the matters set forth in this Declaration. 2. On March 16, 2018, Defendant served Plaintiff with an Offer to Compromise pursuant to California Code of Civil Procedure section 998 in the amount of $15,000. San Jose Neurospine did not accept the offer and failed to achieve a more favorable result at trial. 3. A jury of twelve persons was empaneled and after receiving the evidence, the jury returned its verdict and found Plaintiff had not met their burden of proof of fair market value. The court entered judgment on June 21, 2018. Defendant timely filed and served their Memorandum of Costs on June 29, 2018. 4. San Jose Neurospine provide emergency medical services the total charges were $260,729.00. Blue Shield paid a total of $37,318.37. 5. At the time of Defendant’s section 998 offer of $15,000, (1) Plaintiff's demand for settlement was $155,000.00 and (2) Blue Shield’s economist expert began work on the case. Defendant’s 998 offer was a token offer made to recover excessive expert witness fees at no realrisk to Defendant. 6. After a search in the geographical area, typical costs for an economist in the marketplace is $15,000 to $25,0000. 7. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this Declaration was executed on July 15, 2018 at Westlake Village, California. Nicholas H. Van Parys, Esq. 14 Opposition to Motion to Bifurcate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE Case #: 16CV296868 STATE OF CALIFORNIA, COUNTY OF SANTA CLARA I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 960 S. Westlake Blvd Ste 209 Westlake Village CA 91361. On the below date, I served the enclosed documents: NOTICE OF MOTION AND MOTION TO TAX MEMORANDUM OF COSTS; DECLARATION OF NICHOLAS H. VAN PARYS BY ELECTRONIC SERVICE:I caused said document(s) to be transmitted electronically pursuant to Rule 2.260 of the California Rules of Court and no error was reported by the machine. BY TRANSMITTING VIA FACSIMILE the document(s) listed above to the fax number(s) set forth below on this date. x__ BY FIRST CLASS MAIL postage thereon fully prepaid in the United States mail at Los Angeles, California addressed as set forth on Service List (please see next page). BY PERSONALLY DELIVERING the document(s) listed above to the person(s) at the address(es) set forth below. John Fogarty, Esq. Manatt, Phelps & Phillips, LLP 11355 W. Olympic Blvd Los Angeles, CA 90064 D (310) 312-4165 F (310) 312-4224 Defendant CALIFORNIA PHYSICIAN SERVICE I am "readily familiar" with firm's practice of collection and processing correspondence for mailing. In the ordinary course of business, it is deposited with U.S. postal service on the same day as set forth herein. I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than 1 day after date of deposit for mailing in affidavit. Executed on July 15, 2018 at Westlake Village, California. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Nicholas H. Van Parys 15 Opposition to Motion to Bifurcate
