Respondent Dave Jones' Notice of Motion And Motion To Strike And Tax Bill of Costs; Memorandum of Points And Authorities

Motion

Cal. Super. - 4th Dist.July 10, 2014

O O 0 N N O N W n b h W N N O N N D O N N N N O N O N m m e m e m e m e d e m e m e m e m e e 0 ~ J O N W n H S W N = O O V X N N N N R A W N = O XAVIER BECERRA Attorney General of California Lisa W. CHAO Supervising Deputy Attorney General LAURA E. ROBBINS Deputy Attorney General State Bar No. 234652 300 South Spring Street, Suite 1702 Los Angeles, CA 90013 Telephone: (213) 269-6254 Fax: (213) 897-5775 E-mail: Laura.Robbins@doj.ca.gov Attorneysfor Respondent and Defendant Dave Jones, in his capacity as Insurance Commissioner ofthe State ofCalifornia Exempt From Filing Fees Pursuant to Government Code Section 6103 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE PACIFICARE LIFE AND HEALTH INSURANCE COMPANY, Petitioner and Plaintiff, DAVE JONES,IN HIS CAPACITY AS INSURANCE COMMISSIONER OF THE STATE OF CALIFORNIA, Respondent and Defendant. Case No. 30-2014-00733375-CU-WM-CXC RESPONDENT DAVE JONES’ NOTICE OF MOTION AND MOTION TO STRIKE AND TAX BILL OF COSTS; MEMORANDUM OF POINTS AND AUTHORITIES Date: August 8, 2018 Time: 1:30 p.m. Dept: CX104 Judge: The Honorable Kim G. Dunning Trial Date: January to February 2017 Action Filed: July 10, 2014 TO PETITIONER AND PLAINTIFF PACIFICARE LIFE AND HEALTH INSURANCE COMPANY AND ITS ATTORNEYS OF RECORD: Please take notice that Respondent and Defendant Dave Jones,in his capacity as Insurance Commissioner of the State of California (“the Commissioner”) will move in Department CX 104 of the above entitled court located at 751 W. Santa Ana Blvd, Santa Ana, CA 92701 on August 8, 2018 at 1:30 p.m., or as soon as counsel can be heard, for an order to strike and tax the costs claimed by Petitioner and Plaintiff PacifiCare Life and Health Insurance Company (“PacifiCare”) MOTION TO TAX COSTS (30-2014-00733375-CU-WM-CXC) S H O W N N O 0 N N N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in this action under Rule 3.1700 of the California Rules of Court. The Commissioner seeksto strike and tax the following: Item No. “16. Other”in the amount of $49,827.50 on the ground that, as no authority was provided to support attorney’s fees, they have not been shown to be reasonable or necessary. Item No. “16. Other”in the amount of $49,827.50 on the ground that, as no support was provided for the hourly rates used to compute attorney’s fees, they have not been shown to be reasonable or necessary. Item No. “16. Other” in the amount of $49,827.50 on the ground that, as no diced showing exactly what work was done were provided to support the number of hours used to compute attorney’s fees, they have not been shown to be reasonable or necessary. This Motion is based on this Notice, the accompanying Memorandum of Points and Authorities, the papers and records on file herein, and on such evidence as may be presented at the hearing of this Motion. Dated: June 6, 2018 Respectfully Submitted, XAVIER BECERRA Attorney General of California Lisa W. CHAO Supervising Deputy Attorney General md LAURA E. ROBBINS Deputy Attorney General Attorneysfor Respondent and Defendant Dave Jones in his Capacity as Insurance Commissioner ofthe State ofCalifornia LA2014512258 62850813.docx 2 MOTION TO TAX COSTS (30-2014-00733375-CU-WM-CXC) w v H A W N N O 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 INTRODUCTION This Memorandum of Points and Authorities is submitted on behalf of the Commissionerin support of his motion to strike and tax costs claimed by PacifiCare. Specifically, the Commissioner’s motion seeks to strike and/or tax PacifiCare’s cost entry “16. Other,” for which PacifiCare wrote in “Preparation of Administrative Record (CCP § 1094.5, subd. (a); Gov. Code § 11523),” as unsupported and improper. PacifiCare has not shown the amount of $49,827.50 to be reasonable or necessary to the preparation of the administrative record, and has provided no authority or information to support the amount ofthe attorney’s fees and the hourly rates used to compute the attorneys’ fees. FACTS Thisis a writ proceeding in which PacifiCare challenges the Commissioner’s administrative decision pursuant to Code of Civil Procedure 1094.5. A bench trial in this matter occurred in January and February 2017. After Judge Dunning issued a statement of decision, the Court entered judgment on March 23, 2018. On May 21, 2018, PacifiCare filed its Memorandum of Costs seeking a total of $54,479.44 in costs, including $49,987.50 in category “16. Other.” The Commissioner challenges the $49,827.50 of sought in attorney’s fees for preparation of the administrative record. ARGUMENT I. PACIFICARE MUST SHOW THAT COSTS WERE REASONABLY NECESSARY AND REASONABLE IN AMOUNT Sections 1032 and 1033.5 of the Code of Civil Procedure permit the prevailing party in an action to recovercertain costs. However, the “[a]llowable costs shall be reasonably necessary to the conduct ofthe litigation rather than merely convenient or beneficial to its preparation.” (Code Civ. Proc., § 1033.5, subd. (c)(2).) The cost also “shall be reasonable in amount.” (Code Civ. Proc., § 1033.5, subd. (¢)(3).) The determination of reasonableness and necessity “is within the broad discretion of the court.” (Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal.App.4th 238, 243.) Indeed, the court may disallow an item expressly recoverable under section 1033.5(a) of the Code of Civil Procedure if it determines that the cost was not necessary. 3 MOTION TO TAX COSTS (30-2014-00733375-CU-WM-CXC) O o 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (Id. at p. 245 [court may disallow filing fee].) A party may object to the costs claimed by the prevailing party pursuant to the procedures set forth in Rule 3.1700 of the California Rules of Court. The filing of a motion to tax cost alone is a proper objection to a cost whose necessity is doubtful or which does not appear proper on its face. (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131, citing Oak Grove Sch. Dist. v. City Title Ins. Co. (1963) 217 Cal.App.2d 678, 698-99.) “[I]f the items are properly objected to, they are put in issue and the burden of proofis on the party claiming them as costs.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.) II. PACIFICARE HAS NOT SHOWN THAT IT IS ENTITLED TO ATTORNEY'S FEES TO PREPARE AN ADMINISTRATIVE RECORD PacifiCare cites Code of Civil Procedure section 1094.5, subdivision (a) and Government Code section 11523 as the basis for the request for attorney’s fees. Neither section states that attorney’s fees are recoverable as costs to prepare the administrative record. Code of Civil Procedure section 1094.5, subdivision (a) states, in relevant part, “If the expense of preparing all or any part of the record has been borne by the prevailing party, the expense shall be taxable as costs.” Government Code section 11523 states, in relevant part, “On request of the petitioner for a record of the proceedings, the complete record of the proceedings, or the parts thereofas are designated by the petitioner in the request, shall be prepared by the Office ofAdministrative Hearings or the agency.” (Emphasis added.) It continues, in relevant part, “If the petitioner prevails in overturning the administrative decision following judicial review, the agency shall reimburse the petitioner for all costs oftranscript preparation, compilation of the record, and certification.” Neither Code of Civil Procedure section 1094.5(a) nor Government Code section 11523 provide for the recovery of attorney’s fees. In fact, Government Code section 11523 does not even provide an option for a petitioner to prepare the administrative record, much less authorize a petitioner to be awarded attorney’s fees for doing so. It is the Office of Administrative Hearings or the agency that is charged with record preparation. PacifiCare has not cited any other authority that allows for a petitioner’s attorney’s fees to be recovered under these circumstances where a statute requires that the governmental agency prepare the record. As a 4 MOTION TO TAX COSTS (30-2014-00733375-CU-WM-CXC) N o N O 0 N N O N n n B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 2 24 23 26 27 28 result, PacifiCare has not met its burden of proof and has not shown that attorney’s fees may be recovered as a reasonable and necessary expense. III. ASSUMINGARGUENDO THAT PACIFICARE CAN RECOVER ATTORNEY'’S FEES, PACIFICARE HAS NOT INTRODUCED SUFFICIENT EVIDENCE TO SUPPORT THE DESIRED ATTORNEY’S FEES A. PacifiCare Has Not Provided Evidence to Support the Rates It Lists The Declaration of Joseph Gorman summarily lists the hourly rates andtitle (paralegal, associate attorney, or partner) of each person they seek to recover attorney’s fees for. PacifiCare has not provided any information to support the hourly rates sought such as the education or years of experience of each person. Moreover, PacifiCare has not provided rate surveys to show that these rates are reasonablerates in the community for persons with their education and experience levels. The rates of $365 per hour for a paralegal, Lolita Gadberry, $665 per hour for an associate attorney, Joseph Gorman, $760 per hourfor a partner, Kahn Skolnick, and $985 per hour for a partner, Dan Kolkey, seem excessively high for the largely mechanical task of preparing and _ organizing an administrative record. PacifiCare has not shown that they are justified. Furthermore, this is clerical work rather than attorney-level work. B. PacifiCare Has Not Provided Detailed Time Entries to Support the Hours For Which It Seeks Attorney’s Fees Assuming that PacifiCare may recover attorney’s fees forits costs in preparing the administrative record,it has not provided detailed time entries that demonstrate that the work done was necessary. Detailed specification ofcostsis required because costs may be recoverable only if they are “reasonably necessary” and “reasonable in amount.” (Code Civ. Proc., § 1033.5, subds. (c)(2), (3).) Without detailed time entries, it is impossible to discern whether the costs were reasonable and necessary. (See, e.g., Nelson v. Anderson, supra, 72 Cal.App.4th at p. 132 [“Since MPG’s memorandum of costs does not show how the subpoenas were served,it cannot be determined from the face of the cost bill whether the items are proper.”]; Ladas v. California State Auto Assn., supra, 19 Cal App.4th at pp. 774-776 [fax charges, meals unrelated to depositions, and other costs not authorized by statute unrecoverable].) 5 MOTION TO TAX COSTS (30-2014-00733375-CU-WM-CXC) 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 While the Declaration of Joseph Gorman explains that a pleading index, hearing transcript index, and exhibit index were created and that 11 hearing transcripts (out of 230) were added,it is not clear exactly what was done, on which dates the work was done, and who performed each task. It is also not clear why these indices were reasonably necessary as opposed to convenient or beneficial. And even if they were a necessary part of preparing the administrative record, PacifiCare provides no explanation why it took it upon itself to perform this task, rather than having the Office of Administrative Hearings or the Department of Insurance do so as required by Government Code section 11523. Nor has PacifiCare explained whythis is reimbursable work as opposed to administrative work that is part of its overhead. Given the large amount of money sought, detailed time entries are necessary to determine whether any portion of the work was reasonably necessary. PacifiCare has not provided sufficient detail for the nature, propriety, necessity, and reasonableness of the costs claimed to be determined as to each task completed and each attorney/paralegal. CONCLUSION For the reasons set forth herein, the Commissioner requests that the Court grant its motion and strike or tax the attorney’s fees sought for preparation of the administrative record in the amount of $49,827.50. Dated: June 6, 2018 Respectfully Submitted, XAVIER BECERRA Attorney General of California Lisa W. CHAO Supervising Deputy Attorney General nieBB LAURA E. ROBBINS Deputy Attorney General Attorneysfor Defendant Dave Jones in his Capacity as Insurance Commissioner ofthe State ofCalifornia 6 MOTION TO TAX COSTS (30-2014-00733375-CU-WM-CXC) DECLARATION OF SERVICE BY E-MAIL AND OVERNIGHT COURIER Case Name: Pacificare v. Jones, Ins. Commissioner (DOI) No.: 30-2014-00733375-CU-WM-CXC I declare: [ am employed in the Office of the Attorney General, which is the office of a member ofthe California State Bar, at which member's direction this service is made. 1 am 18 years of age or older and not a party to this matter; my business address is: 300 South Spring Street, Suite 1702, Los Angeles, CA 90013. Iam familiar with the business practice at the Office of the Attorney Generalfor collection and processing of correspondence for overnight mail with the FED EX. In accordance with that practice, correspondence placed in the internal mail collection system at the Office of the Attorney Generalis deposited with the overnight courier that same day in the ordinary course of business. On June 7, 2018, I served the attached RESPONDENT DAVE JONES’ NOTICE OF MOTION AND MOTION TO STRIKE AND TAX BILL OF COSTS; MEMORANDUM OF POINTS AND AUTHORITIES by transmitting a true copy via electronic mail. In addition, I placed a true copy thereof enclosed in a sealed envelope, in the internal mail system of the Office of the Attorney General, for overnight delivery, addressed as follows: Daniel M. Kolkey, Esq. Kahn Scolnick, Esq. Gibson, Dunn & Crutcher, LLP - San Francisco 555 Mission Street, Suite 3100 San Francisco, CA 94105 dkolkey@gibsondunn.com kscolcick@gibsondunn.com Steven Velkei, Esq. Felix Woo, Esq. Dentons US LLP - Los Angeles 601 S. Figueroa Street, Suite 2500 Los Angeles, CA 90017-5704 Steven.velkei@dentons.com felix.woo(@dentons.com I declare under penalty of perjury under the laws ofthe State of California the foregoing is true and correct and that this declaration was executed onCL les2018, at Los Angeles, California. Carol D. Adams etLErsas Declarant Signature LA2014512258 62851179.docx