Opposition Objections

Cal. Super. - 6th Dist.November 5, 2018

10 11 12 l3 l4 15 l6 l7 18 .19 20 21 22 23 24 25 26 27 28 Electronically Filed KENNETH R. VAN VLECK (SBN 168313) by SUPEV'" cw” °f CA, GCA LAW PARTNERS LLP - County 0f Santa Clara, 2570 w. EL CAMINO REAL, SUITE 400 on 11/7/2019 2:51 PM MOUNTAIN VIEW, CA 94040 Reviewed By: F. Miller Case #1 8CV337760 Phone: 650-428-3900 Envelope; 3524390Email Address Kvanvleck@gcalaw.com Attorney for CJ INVESTMENT SERVICES, INC; MADHU SRIDHAR; and SRIDHAR EQUITIES, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA PHUNG KIM NGUYEN N0. 18CV337760 Plaintiff, MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF VS. MADHU SRIDHAR, SRIDHAR EQUITIES, INC. and CJ MADHU SRIDHAR; CJ INVESTMENT INVESTMENT SERVICES, INC.’S SERVICES, INC.; XCHANGE OPPOSITION TO PLAINTIFF SOLUTIONS, INC.; SRIDHAR EQUITIES PHUNG KIM NGUYEN’S MOTION INC.; and DOES 1 through 20, inclusive, TO TAX COSTS Defendants. Filed: NovemberS, 201 8 Trial: Not Set Date: December 17, 2019 Time: 9:00 am. Dept: 2 Judge: Honorable Mark Pierce I. INTRODUCTION Plaintiff Phung Nguyen sued Defendants Madhu Sridhar, Sridhar Equities, Inc., and CJ Investment Services, Inc. asserting numerous non-contract claims arising under a commercial note and deed of trust. This Court sustained demurrer to the First Amended Complaint. Nguyen dismissed the action; defendants are the prevailing parties entitled to recover costs as a matter of law. The motion should be denied in whole, and plaintiff ordered to pay costs of $7,876.62. MPA ISO OPPOSITION TO MOTION TO TAX COSTS -- Case N0. 18CV337760 - 1 10 11 l2 13 l4 15 l6 1'7 18 19 2O 21 22 23- 24 25 26 2'7 28 II. FACTUAL BACKGROUND A. Allegations in the First Amended Complaint. Plaintiff alleged she was misled in the purchase of a commercial property at 826 N. Winchester Blvd. San Jose, California (the “Property”). She sfied for Breach of Fiduciary Duty and Conspiracy t0 Breach Fiduciary Duty; Constructive Fraud; Fraud (Misrepresentation); Declaratory Relief; Promissory Estoppel; Specific Performance [but not 0f the Note 0r the Deed of Trust]; Unfair Business Practices; Breach of Implied Covenant 0f Good Faith arid Fair Dealing; Breach 0f Implied Contract; Quiet Title; Wrongful Foreclosure and t0 Set Aside Foreclosure Sale and for Cancellation 0f Trustee’s Deed, Deed of Trust, and Note; and Unj ust Enrichment. B. Sustention of Demurrer and Dismissal. Defendants Madhu Sridhar, Sridhar Equities, Inc., and CJ Investment Services, Inc. demurred t0 Plaintiff’s complaint. Rather than oppose that demurrer, Plaintiff filed the First Amended Complaint (“PAC”), changing little. (Declaration of Kenneth R. Van Vleck, 1] 3.) Defendants demurred t0 the FAC. This Court sustained the demurrer, giving Plaintiff 10 days leave to amend. Within that 10-day window, Plaintiff dismissed the action without prejudice. (Van Vleck Decl., 11 4.) The Defendants are the prevailing parties as a matter of law. III. ‘ LEGAL ARGUMENT A. Standard for Motion t0 Tax Costs. California Rule of Court 3.1700 governs a motion to tax costs. Only those items objected t0 are put in issue. Costs not challenged are deemed awarded. .“If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable 0r necessary.” (Ladas v. California State Auto. Assn (1993) 19 Cal.App.4th 761 , 774-76.) Here, Plaintiff apparently challenges item 16 in the memorandum of costs in the amount of $6,040.72. But the Declaration of Nicholas H. Van Parys cites only one Westlaw charge (2/28/2019 for $4,592.89.) (Van Parys Declaration, paragraph 4.) No other portion of item 16 is specifically challenged, and, not being challenged, must be awarded by this Court. Even assuming the Court looked beyond the Van Parys Declaration to the undefined references in the points and authorities citing to Federal Express charges and Westlaw charges, they do not add up MPA ISO OPPOSITION TO MOTION TO TAX COSTS -- Case No. I8CV337760 - 2 10 ll 12 13 14 15 16 l7 18 l9 20 21 22 23 24 25 26 27 28 to the total 0f $6,040.72 challenged by Plaintiff. The motion is impermissibly vague and fails to meet the standard of putting these costs at issue. B. The Requested Costs are Reasonable and Necessarv and Should be Awarded. Assuming the Court were t0 consider items not identified in the Van Parys Declaration, Plaintiff’ s points and authorities mention only Federal Express charges and Westlaw charges, both 0f which were reasonably incurred and necessary in this litigation. 1. Use 0fFederal Express was Necessary to the Litigation and Required by Law. Federal Express charges are neither expressly approved nor prohibited under Code Civ. Proc. § 1033.5. In subdivision (b) dealing with disallowed costs, there is a prohibition against awarding ordinary postage. But Federal Express charges for delivery of opposition or reply t0 motions are not ordinary postage and therefore fall within this Court’s discretion t0 approve or disallow. But here, there is an express provision in the Attorney’s Fees clause in the Secured Note allowing for recovery 0f air freight charges. 4. ATTORNEYS FEES Should the indebtedness evidenced by this Note be coilected at law or in equity or in bankruptcy, receivership, or any other court proceeding (whether at the trial or appellate level), or should this Note be piace l'n the hands of attorneys for collection upon default, Holder wiil have the right to be paid back by Borrower for all of Its costs and expenses in enforcing the Note to the extgnt not prohibited, bv applicabte lgyg. Those expenses Include, for example, reasonable attorneys' fees. As used herein, "reasonable attorneys' fees" shall mean the fees and expenses of counsei to HoIder, which mav include, without Eimitation, printing, duplicating and other expenses, a_ir freight chargeg, and fees bilied for law clerks, paralegals. librarians and others not admitted to the bar but performing services under the supervisioh of an attorney and ail such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is brought with respect to the matter for which said fees and expenses were incurred. (Van Vleck Decl., para. 9, emphasis added.) By law papers filed related to a motion before the court must be delivered t0 opposing counsel in a manner designed t0 ensure delivery the next business day. Thus, the Federal Express charges were necessary to the conduct 0f this litigation, and the Court should allow the costs. Notwithstanding any other provision 0f this section, all papers opposing a motion and all reply papers shall be served by personal delivery, facsimile transmission, express mail, or other means consistent With Sections 1010, 101 1, 1012, and 1013, m reasonably calculated t0 ensure deliveyx t0 the other parg or garties not later than the close 0f the nleXt business dav after the time the opposing papers 0r reply papers, as applicable, are fi ed. (Code Civ. Proc. § 1005 (c), emphasis added.) MPA ISO OPPOSITION TO MOTION TO TAX COSTS -- Case N0. 18CV337760 - 3 10 ll 12 13 l4 15 l6 l7 l8 19 20 21 22 23 24 25 26 27 28 Plaintiff’s counsel has an address in Southern California: 960 South Westlake Blvd. Suite 209, Westlake Village, California 91361. The only means of delivery to Southern California from the Bay Area reasonably calculated to ensure delivery before the end of the next business day is by overnight Federal Express 0r UPS delivery. Although the USPS has a product entitled “Overnight Mail” there is no guarantee that overnight mail will be delivered overnight. The USPS says it will deliver in one t0 two days. “USPS Priority Mail Express is a guaranteed way tosend documents and packages to a destination overnight or in one to two days 0n any day 0f the year, including Sundays and holidays. If the US Postal Service doesn't deliver your package on time, they will refund the full delivery cost to you.” (Kenneth R. Van Vleck Declaration, para. 5.) A refund of the full delivery price for late delivery (entitling opposing counsel t0 move to strike the late-arriving documents) is inadequate, and simply using the USPS does not constitute using a delivery method reasonably calculated t0 ensure delivery the following day. Unlike FedEx, the USPS expressly states it cannot assure delivery the following day. Plaintiff relies upon Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 77; Ripley v. Pappadopoulos (1994) 23 Cal.App.4th 1616, 1627; and Nelson v. Anderson (1999) 72 Cal.App.4th 111, 132 for the argument Federal Express charges are not recoverable. It is true each 0f these cases, limited to its facts, found that Federal Express charges were not recoverable because they were found not to be necessary to the litigation. N0 supporting declaration of counsel explaihed Why documents could not have been sent by regular mail (also not a recoverable charge). None dealt with the issue before this Court: the mandatory provision 0f Code Civ. Proc. § 1005 compelling a party to deliver opposing and reply papers in a manner designed to ensure delivery the next business day. The authorities cited by Plaintiff are universally inapplicable here. Code Civ. Proc. § 1005 requires delivery 0f opposition and reply briefs t0 counsel in Southern California overnight. The Federal Express charges, not expressly prohibited by statute, were reasonably necessary t0 this litigation and, in this Court’s discretion, may be awarded. This Court should exercise its discretion to do so. 2. Westlaw Research was Necessary to the Litigation. Nguyen challenges the computer-assisted research charges incurred in the conduct of litigation. Nguyen relies upon Ladas v. California State Auto. Assn. (supra). Ladas is restricted t0 its facts, in MPA ISO OPPOSITION TO MOTION TO TAX COSTS -- Case N0. 18CV337760 - 4 10 ll 12 l3 l4 15 16 17 18 l9 go 21 22 23 24 25 26 2'7 28 which much 0f the disallowed costs were not supported by a declaration showing why they were necessary. “The declaration 0f CSAA Attorney Joseph Hunsader failed t0 demonstrate how any of these charges were necessary to conduct the litigation, as opposed to being merely convenient. The expenses should not have been allowed.” (Id., at 775-76.) Here the Van Vleck Declaration establishes the neceSSity 0f eaCh 0f the eXPenSGS- Nguyen argues $4,592.89 in Westlaw charges are not authorized by law. (Van Parys Decl., at para. 4.) Nguyen relies 0n Ladas, which was decided in 1993 in the infancy of computer-aided legal research. Ladas held awarding costs incurred in conducting computer-assisted research, which reduced the time and effort required by counsel t0 conduct the litigation, was akin to awarding attorney’s fees t0 the prevailing party where there was n0 prevailing party attorney’s fees provision. The court allowed CSAA's claim of $5,697.40 for “Computer Legal Research.” This was error. Subdivision (b)(2) precludes recovery of investigation expenses and attorney's fees are not compensable as casts in the absence of an agreement of the parties 0r statutory authority. (Code Civ.Proc., § 1021.) Fees for legal research, computer or otherwise,” may not be recovered under section 1033.5. (Ladas, at 776 (emphasis added).) Here, unlike in Ladas, there is an attorney fees provision in the Secured Note allowing for recovery of all costs not expressly prohibited by law. 4. ATTORNEYS FEES Should the indebtedness evidenced by this Note be collected at law or in equity or in bankruptcy, receivership, or any other court proceeding (whether at the trial or appellate level), or should this Note be place ln the hands of attorneys for collection upon default, Holder will have the right to be paid back by Borrower for all o_f Its costs and expenses in. enforcinq the Note to the extent not prohibited b_y appiicable m. Those expenses |nc|ude, for example, reasonabte attorneys' fees. As used herein. "reasonable attorneys' fees" shall mean the fees and expenses of counsel to Holder, which mgv inciude, without limiLation, printinq. duplicatinq and otherv exgenses, air freight charges. and fees billed for law clerks, paralegais, librarians and others not admitted to the bar but performing services under the supervision of an attorney and all such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings. and whether or not any action or proceeding is brought with respect to the matter for which said fees and expenses were incurred. (Van Vleck Decl., para. 9, emphasis added.) The computer-assisted research charges are not' “prohibited by applicable law.” Computer- assisted research is expressly included in the language stating “shall mean the fees and expenses of counsel t0 Holder, which may include, without limitation, printing, duplicating. and other expenses.” MPA ISO OPPOSITION TO MOTION TO TAX COSTS -- Case N0. 18CV337760 - 5 10 11 12 l3 l4 15 l6 1‘7 18 l9 20 21 22 23 24 25 26 2'7 28 ' Thus, unlike Ladas, here there jg a provision expressly allowing for recovery 0f all costs not expressly prohibited by law. Computer-assisted research costs are such an expense. . Ladas also found the charges were “[i]nvestigati0n expenses [incurred] in preparing the case for trial.” (Ladas, at 776.) The Ladas decision is distinguished because, unlike there, here (1) there is a prevailing party attorney fees clause,l(2) the description 0f research as “investigation” is inaccurate and inappropriate and in any case does not apply here where the case did not go to trial and the Westlaw research related to legal authorities necessary to prepare the demurrers and counter the numerous (federal truth in lending law) theories advanced by Plaintiff, and (3) because Ladds was decided well before the modem age 0f computer research, when lawyers routinely had available (and used, as Defendants’ couhsel recalls) books in libraries, with cross-reference books published by Sheppard’s. (Van Vleck Decl., para 7.) In the modern practice 0f law, it'is-simply unthinkable to rely upon bound copies of legal authorities. They are readily available and searchable in a fraction of the time using software from Westlaw or Lexis. Computer assisted research is not merely convenient, it is necessary to the modern practice 0f law. To the extent Ladas suggests otherwise, the twenty-five-year-old authority should be superseded by a modern reading of what is reasonably necessary t0 the practice of law, as opposed t0 merely convenient. Those bound paper copies are even disappearing from the Shelves 0f law libraries and, where they are maintained, are frequently not updated. They are largely unreliable sources of legal research. Electronic research is not expressly excluded, and this Court should exercise its discretion t0 find it is necessary to the practice 0f law, Computer-assisted research is the standard 0f practice for modem litigation, substantially reducing attorney’s fees incurred in a matter, and is far more than merely convenient. The guidance from Ladas is no longer relevant to the modern practice 0f litigation. Electronic research is necessary t0 the litigation, and the costs, not prohibited by law, should be awarded. IV. CONCLUSION The motion to tax costs is not specific which costs it seeks to tax and therefore does not carry the moving party’s burden. But if this Court overlooks that defect, the authority Plaintiff cites is MPA ISO OPPOSITION TO MOTION TO TAX COSTS -- Case N0. 18CV337760 ~ 6 10 11 12 l3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 inapplicable here and outdated. This Court may award the costs even if it believes they were properly challenged, and should do so here. Plaintiff should be ordered to pay costs of $7,876.62. DATED: November 7, 2019 GCA LAW E S LL By Kenneth R. Van Vleck k Attorneys for Defendants CJ INVESTMENT SERVICES, INC.; MADHU SRIDHAR; and SRIDHAR EQUITIES, INC. MPA ISO OPPOSITION TO MOTION TO TAX COSTS -- Case No. 18CV337760 - 7