The Spartan associates, Inc. vs. Gary Humphreys

Motion to Strike or Tax Costs

Cal. Super. - 4th Dist.August 21, 2015

J. ScoTT RUSSO (STATE BAR NO. 155631) Russo & DUCKWORTH, LLP 9090 Irvine Center Drive, 2" Floor Irvine, California 92618 Telephone No. (949) 752-7106 Facsimile No. (949) 752-0629 Attorneys for Plaintiff/Cross-Defendant ELECTRONICALLY FILED Superior Court of California, County of Orange 05/08/2017 at 02:10:00 Ph Clerk of the Superior Court By Danielle Jurado, Deputy Clerk THE SPARTAN ASSOCIATES, INC. and Cross-Defendant SURETEC INSURANCE COMPANY SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF ORANGE- CENTRAL JUSTICE CENTER THE SPARTAN ASSOCIATES, INC., Plaintiffs, VS. GARY HUMPHREYS, an individual, KAREN HUMPHREYS, an individual; and DOES 1 through 25, inclusive, Defendants. Case No.: 30-2015-00805807 Assigned for all purposes to Hon. David R. Chaffee Dept. C-20 AND RELATED CROSS-ACTION RESERVATION NO. 72585093 THE SPARTAN ASSOCIATES, INC.'S AND SURETEC INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO TAX COSTS DATE: June 9, 2017 TIME: 9:30 a.m. DEPT.: C-20 Action Filed: August 21, 2015 Trial Date: March 27, 2017 PLEASE TAKE NOTICE that on June 9, 2017, at 9:30 a.m., or as soon thereafter as the matter may be heard in Department C-20 of the above-entitled court, Plaintiff/Cross-Defendant The Spartan Associates (“Spartan”) and Cross-Defendant THE SPARTAN ASSOCIATES, INC.’S AND SURETEC INSURANCE COMPANY’S NOTICE OF MOTION AND MOTION TO TAX COSTS © NN oO 10 11 12 13 14 L5 16 17 18 19 20 21 22 23 24 25 26 27 28 Suretec Insurance Company (“Suretec”) will and hereby do move this Court for an order striking and/or taxing the costs of Gary Humphreys and Karen Humphreys (collectively, the “Humphreys”). This motion will be made pursuant to California Code of Civil Procedure section 1034 and California Rules of Court Rule 3.1700(b) on the ground that the majority of the costs sought by the Humphreys were not incurred in the defense of the Complaint, but were spent in prosecuting the Cross-Complaint. Further, judgment on the Cross-Complaint was not entered against Spartan. Also, a majority of the costs simply are not allowable and/or recoverable. Finally, Suretec is a prevailing party and the Humphreys are not entitled to costs against Suretec. This motion will be based upon this notice, the points and authorities, the complete files and records of this action and such oral and documentary evidence as may be presented at or before the hearing on this motion. DATED: May 8, 2017 RUSSO & DUCKWORTH, LLP io J/ Scott Russo Att ys for Plaintiff/Cross-Defendant THE S TAN ASSOCIATES, INC. and Cross-Defendant SURETEC INSURANCE COMPANY =D a THE SPARTAN ASSOCIATES, INC.’S AND SURETEC INSURANCE COMPANY’S NOTICE OF MOTION AND MOTION TO TAX COSTS 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MEMORANDUM OF POINTS AND AUTHORITIES l INTRODUCTION AND STATEMENT OF RELEVANT FACTS The Spartan Associates, Inc. (“Spartan”) filed its original action alleging one cause of action for Quantum Meruit. Gary Humphreys and Karen Humphreys (collectively, the “Humphreys”) filed a Cross-Complaint against Spartan, Adam Bereki (“Bereki”) and Suretec Insurance Company (“Suretec”). The Humphreys filed a First Amended Cross-Complaint alleging a cause of action against Bereki for disgorgement. Trial commenced on March 27, 2017. This Court ultimately determined that the construction contract at issue was not between Spartan, a licensed contractor and the Humphreys, but was between Bereki, who the Court concluded was unlicensed, and the Humphreys. Based on this ruling, the Court ordered the disgorgement by Bereki of all monies earned. On April 20, 2017, the Court entered the judgment. Judgment as to Spartan’s Complaint was entered in favor of the Humphreys. Judgment as to the Humphreys’ first cause of action for disgorgement was entered in favor of the Humphreys and against Bereki only. The Humphreys dismissed their causes of action two (2) through eight (8), which were the only causes of action against Spartan and/or Suretec. As such, as it relates to the Humphreys’ Cross-Complaint, Spartan and Suretec are the prevailing parties. Spartan does not dispute that the Humphreys incurred filing fees in responding to the complaint filed by Spartan. However, Spartan does dispute that all of the costs incurred by the Humphreys in this action as claimed in their Memorandum of Costs were incurred in the defense of Spartan’s Quantum Meruit claim. Unless and until the Humphreys can show that the individual costs set forth in the Memorandum of Costs were incurred in the defense of Spartan’s action, those costs cannot be recovered as the Humphreys did not prevail against Spartan on their cross-action. Suretec was only a named party in the Humphreys’ Cross-Complaint. The Humphreys dismissed the only cause of action brought against Suretec. The -3 - THE SPARTAN ASSOCIATES, INC.’S AND SURETEC INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO TAX COSTS 10 1 12 13 14 15 16 17 18 19 20 21 9 23 24 25 26 27 Humphreys were not the prevailing party and therefore are not entitled to an award of any costs against Suretec. Il. LEGAL ARGUMENT A. Authority To Award Costs. It is the general rule that attorneys’ fees and costs are not recoverable from the opposing party in the absence of an express statute or a contractual provision that they can be paid. Code of Civil Procedure § 1021; Reynolds Metal Company v. Anderson (1979) 25 Cal.3d 124, 127. Spartan will concede that the Humphreys are entitled to recover their First Appearance fee of $902.57. However, as is seen below, the Humphreys are not entitled to recover most, if not all, of the remaining costs they are claiming. As it relates to Suretec, the Humphreys did not prevail against it. As such, the Memorandum of Costs should be stricken in its entirety as to Suretec. B. The Humphreys Bear The Burden Of Proof That The Costs They Seek Were Necessarily Incurred In The Defense Of Spartan’s Quantum Meruit Claim. If items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs. Ladas v. California State Automobile Association (1993) 19 Cal.App.4" 761, 774; Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 624; Oak Grove School Dist. V. City Title Ins. Co. (1963) 217 Cal.App.2d 678, 698-699. In the context of an award of trial court costs under section 1032, the court in Wakefield v. Bohlin (2006) 145 Cal.App.4th 963, 986, disapproved on another ground in Goodman v. Lozano (2010) 47 Cal.4th 1327, stated, “A prevailing party is entitled to recover only those costs actually incurred by that party or on that party’s behalf in prosecuting or defending the action.” 1. Filing and Motion Fees. Again, Spartan concedes that the Humphreys are entitled to their first appearance fee of $902.57 as their Answer was in response to Spartan’s Complaint and ~4 = THE SPARTAN ASSOCIATES, INC.’S AND SURETEC INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO TAX COSTS 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Judgment was entered in favor of the Humphreys on Spartan’s Complaint. However, the balance of the filing and motion fees did not relate to the action filed by Spartan, but to the cross-action filed by the Humphreys. The causes of action against Spartan raised in the Humphreys’ Cross-Complaint were dismissed. As such, unless and until the Humphreys can prove that the remaining filing and motion fees were incurred in the defense of Spartan’s action, the Court should tax the amount sought by the Humphreys in the amount of $846.79. 2 Jury Fees. Spartan never requested a trial by jury of its action. The “jury fees” sought by the Humphreys in their memorandum of costs are associated with their cross-action. Once again, the Humphreys did not prevail against Spartan and therefore are not entitled to costs expended for “jury fees”. Spartan requests that this item be stricken/taxed in its entirety. 4. Deposition Costs. The Humphreys took the deposition of Adam Bereki. They did not take the deposition of Spartan. While Spartan acknowledges that Mr. Bereki is its sole shareholder, the question once again is “what portion of the deposition of Mr. Bereki was directed to Spartan’s Quantum Meruit claim?” Until the Humphreys can show that the costs associated with Mr. Bereki’'s deposition were necessarily incurred in defending Spartan’s claim, they are not entitled to the $1,743.35 they seek. 5. Service of Process The Humphreys claim that they incurred $522.75 in costs for service of various persons/entities during this action. But were these services necessary for their defense of Spartan’s action or the prosecution of their own cross-action? Once again, the Humphreys must prove that these expenses were incurred in the defense of Spartan’s action. 8. Expert Fees. For the most part, costs associated with expert witnesses are only allowable - 5 - THE SPARTAN ASSOCIATES, INC.’S AND SURETEC INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO TAX COSTS 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 27 when one party rejects an offer to compromise and fails to obtain a more favorable judgment. Code of Civil Procedure section 998. On December 4, 2015, the Humphreys served an Offer to Allow Judgment to be entered against both Spartan and Bereki. This offer was as to the Humphreys’ Cross- Complaint only and offered that Judgment be entered against Spartan and Bereki in the amount of $55,000. As a result of the dismissal of the only causes of action brought by the Humphreys against Spartan (Causes of Action two (2) through seven (7)), Spartan is the prevailing party. As such, the Humphreys are not entitled to any costs in connection with their retention of expert witnesses. 11. Models, blowups, and photocopies of exhibits. The Humphreys seek $4,071.95 for models, blowups and photocopies of exhibits. First, to be entitled to any portion of this exorbitant sum, the Humphreys must show that these costs were incurred in the defense of Spartan’s action. Further, costs for exhibits not actually used at trial are not recoverable under CCP § 1033.5(a)(13) because the exhibits are not “reasonably helpful to aid the trier of fact.” Ladas v. California State Auto. Ass’n (1993) 19 Cal.App.4th 761, 774; see Great Western Bank v. Converse Consultants, Inc. (1997) 58 Cal.App.4th 609, 615. The number of exhibits referenced and/or admitted at trial was miniscule. The Humphreys bear the burden of proving that the exhibits that they seek reimbursement for were in defense of Spartan’s claim. They cannot seek reimbursement of their expenses associated with their cross-action against Spartan as Spartan is the prevailing party. Unless the Humphreys can meet this burden, the $4,071.95 they seek should be stricken/taxed in its entirety. 12. Court Reporter Fees. The Humphreys seek reimbursement of the $375 they claim to have incurred in court reporter fees. However, the only issue that ever arose during the trial of this matter related to the Humphreys’ First Cause of Action for disgorgement against Bereki. The Court never reached a discussion, factual or legal, as to Spartan’s claim. -6- THE SPARTAN ASSOCIATES, INC.’S AND SURETEC INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO TAX COSTS 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Accordingly, they are not entitled to recovery of the $375. C. Suretec Is A Prevailing Party. Accordingly, The Humphreys’ Memorandum Of Costs Should Be Stricken In Its Entirety As Against Suretec. Only a prevailing party is entitled to an award of costs. Code of Civil Procedure section 1032. Suretec was named in the seventh cause of action only of the Humphreys’ Cross-Complaint. The seventh cause of action was dismissed. Suretec was not a party to Spartan’'s Complaint. As such, Suretec is a prevailing party and no award of costs may be had in favor of the Humphreys and against Suretec. Ml. CONCLUSION Based on the foregoing, Spartan requests that the Court tax the costs sought by the Humphreys in the amount of $30,331.74. Suretec requests that the Court strike the entirety of the Humphreys’ Memorandum of Costs. DATED: May 8, 2017 RUSSO & D By: / 7). Bébtt Russo Attorneys for Plaintiff/Cross-Defendant THE SPARTAN ASSOCIATES, INC. and Cross-Defendant SURETEC INSURANCE COMPANY NORTH, LLP =F THE SPARTAN ASSOCIATES, INC.”S AND SURETEC INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO TAX COSTS PROOF OF SERVICE (CCP §1013A(3) Revised) STATE OF CALIFORNIA, COUNTY OF ORANGE I am employed in the above County, State of California. Iam over the age of 18 and not a party to the within action. My business address is 9090 Irvine Center Dr., 2"% Floor, Irvine CA 92618. On May 8, 2017, I served the foregoing document(s) described as THE SPARTAN ASSOCIATES, INC.’S AND SURETEC INSURANCE COMPANY’S NOTICE OF MOTION AND MOTION TO TAX COSTS on the interested party in this action in the manner indicated below and as further indicated on the attached Service/Mailing List: [XXX] by placing a true copy thereof enclosed in a sealed envelope addressed to the interested party as indicated on the attached Service/Mailing List. [1] BY MAIL: I deposited such envelope in the mail at Irvine, California on May 8, 2017. The envelope was mailed with postage thereon fully prepaid. Iam aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than one (1) day after date of deposit for mailing in affidavit. [] BY PERSONAL SERVICE: I caused such envelopes to be personally delivered to the offices of the addressee listed on the attached Service/Mailing List. [1 BY FACSIMILE: I served the above document via facsimile to the interested party at the facsimile number noted on the attached Service/Mailing List. The transmission report indicated the transmission was complete and without error or interruption. [] BY OVERNITE DELIVERY: I am readily familiar with Law Offices of Russo & Duckworth, LLP’s practice for collection and processing of correspondence for overnight delivery with Overnite Express. Pursuant to such practice, all correspondence is deposited in a regularly maintained box or delivered to any authorized Overnite Express in the ordinary course of business on the date it is generated. I know that the envelope was sealed, and with delivery fees thereon fully prepaid, placed for collection on September 14, 2016, following ordinary business practices in the United States, at Irvine, California. [X] BY ELECTRONIC SERVICE: I transmitted the above document by electronic means to the electronic service address authorized by the parties on the attached service list on May 8, 2017, at Irvine, California. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on May 8, 2017, at Irvin California \ / iN 1 re J Nil Ng Blyblira ots SERVICE/MAILING LIST Attorney for Defendants Gary and Karen Humphreys: William G. Bissell, Esq. Attorney at Law 14 Corporate Plaza Drive, Suite 120 Newport Beach, CA 92660 Email: wbissell@wgb_law.com Adam Bereki abereki@gmail.com