Catherine Lovell vs. asset Data Direct, Inc.

Reply to Opposition

Cal. Super. - 4th Dist.October 20, 2015

OO Le N N un bh WwW N = N O N O N RN N N N N N N N = m e e e e m e d e s AEGIS LAW FIRM, PC SAMUEL A. WONG, State Bar No. 217104 CINDY PHAM, State Bar No. 286893 9811 Irvine Center Drive, Suite 100 Irvine, California 92618 Telephone: (949) 379-6250 Facsimile: (949) 379-6251 swong@aegislawfirm.com cpham@aegislawfirm.com ALI PARVANEH, State Bar No. 177901 MADISON LAW, APC 17702 Mitchell North Irvine, CA 92614 Telephone: (949) 756-9050 Facsimile: (949) 756-9060 aparvaneh@madisonlawapc.com Attorneys for Plaintiff Catherine Lovell ELECTRONICALLY FILED Superior Court of California, County of Orange 07/27/2017 at 03:42:00 Pi Clerk of the Superior Court By & Clerk, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE -- CATHERINE LOVELL, an individual, Plaintiff, VS. ASSET DATA DIRECT, INC., a California corporation, BR DIRECT MARKETING, INC., a California corporation; ACME ENVELOPE, INC., a California corporation; BART DAVIDSON, an individual; and DOES 1 through 20 inclusive. CENTRAL JUSTICE CENTER CASE NO.: 30-2015-00815822-CU-OE-CJC Assigned for all purposes to: Hon. Judge Randall J. Sherman Dept. C24 PLAINTIFF'S REPLY TO DEFENDANTS’ OPPOSITION TO MOTION TO STRIKE, OR IN THE ALTERNATIVE, TAX DEFENDANTS’ MEMORANDUM OF COSTS Hearing Date: August 3, 2017 Hearing Time: 1:30 p.m. Department: C24 Reservation No.: 72610987 Action filed: ~~ October 20, 2015 Trial Date: March 27, 2017 ie REPLY TO OPPOSITION TO MOTION TO STRIKE DEFENDANTS’ MEMORANDUM OF COSTS OO 0 N A N R W N O N RN O N N N N O N me = m m Em Em e m e e 0 ~~ O N Wn BR W N mem O O 0 N N RR W N = O L INTRODUCTION Pursuant to Williams v. Chino Valley Independent Fire Dist. (“Williams™) (2015) 61 Cal.4th 97, 100), which was decided after Holman v. Altana Pharma US, Inc. (“Holman™) (2010) 186 Cal. App. 4th 262, 281, ordinary litigation costs under California Code Civil Procedure (“CCP”) §§ 1031 and 1032 are subject to the standard adopted by the United States Supreme Court in Christianburg Garment Co. v. EEOC (“Christianburg™) (1978) 434 U.S. 412. Under Williams, because cases brought under the Fair Employment and Housing Act (“FEHA”) are expressly excepted from CCP §§ 1031 and 1032, CCP § 998 too does not apply, as it only “augments” the costs allowed under sections 1031 and 1032. Plaintiff Catherine Lovell (“Plaintiff”) concedes that Williams did not overturn the holding in Holman that additional costs not provided under CCP §§ 1031 and 1032, such as expert costs, are allowable under CCP § 998 and recoverable in FEHA actions by prevailing defendants without meeting the Christiansburg standard. Holman at *281. However, no expert fees or costs were incurred by Defendants Asset Data Direct, Inc., BR Direct Marketing, Inc., ACME Envelope, Inc. or Bart Davidson (collectively “Defendants™) in this action. Thus, the analysis stops there. In the event the Court finds that ordinary and non-expert costs are recoverable by Defendants in this action under CCP § 998, Defendants’ CCP § 998 offer in the amount of $10,000 (“998 Offer”) was not made in good faith and thus cannot serve as the basis for an award of the costs they are seeking. If the Court is inclined to award any costs, Plaintiff requests that the Court tax or strike unnecessary and unreasonable costs. II. LEGAL ARGUMENT A. DEFENDANTS ARE NOT ENTITLED TO AN AWARD OF ORDINARY COSTS UNDER CCP § 998 BECAUSE CCP § 998 AUGMENTS CCP § 1032 AND SECTION 1032 DOES NOT APPLY TO FEHA CASES Defendants argue in their Opposition to Plaintiff's Motion to Strike, or in the Alternative, Tax Defendants’ Memorandum of Costs (“Opposition”) that FEHA does not bar them from recovering ordinary costs under CCP § 998. See Opposition, Pgs. 4 - 7. However, this argument is not supported by case law. he REPLY TO OPPOSITION TO MOTION TO STRIKE DEFENDANTS” MEMORANDUM OF COSTS o e N N n n RA W N N O R N R N N O N N N N N e m e s s e e e e s 0 ~- 1 OO Wh Bs W N em OS 0 N Y N R W = O The Supreme Court’s opinion in Williams severely undermines, if not implicitly overturns, the Court of Appeals’ decision in Holman with respect to the recovery of ordinary costs by a prevailing defendant in a FEHA case. Holman held that CCP § 998 allows for a prevailing defendant to recover costs, including expert witness fees and costs, from a FEHA Plaintiff. The Court of Appeal examined the interplay between Government Code § 12965(b) and CCP sections 998, 1032 and 1033.5. In doing so, the Court of Appeal relied heavily on the Supreme Court’s reasoning in Murillo v. Fleetwood Enterprises, Inc. (“Murillo”) (1998) 17 Cal. 4th 985. In Murillo, the Supreme Court found that the Song-Beverly Consumer Warranty Act’s provision that only the prevailing buyer was entitled to recover costs and expenses (while silent as to the right of prevailing sellers to recover costs) did not constitute an “express exception” under CCP § 1032(b). That is, although CCP §1032(b) does not require an award of costs to the prevailing party where “otherwise expressly provided by statute,” Section 1794 of the Song- Beverly Act, which provides that only the prevailing buyer can recover costs and expenses, “does not provide an ‘express’ exception to the general rule permitting a seller, as a prevailing party, to recover its costs under section 1032(b).” Id. at 991. The Holman court found that “as in Murillo, there is nothing in section 12965 that expressly disallows an award of expert witness fees to a prevailing FEHA defendant under Code of Civil Procedure section 998.” Holman, 186 Cal. App. 4th at #281 (emphasis in original). | Post-Holman, the California Supreme Court in Williams, however, has now stated in no uncertain terms that Government Code § 12965(b) provides an express exception to the general cost-shifting provision of CCP § 1032. The Williams court distinguished Murillo, finding that section 12965(b), unlike the prevailing buyers provision of the Song-Beverly Act, “expressly states that both parties are allowed costs in the trial court’s discretion, a standard expressly differing from the entitlement to costs provided under CCP § 1032(b).” Williams, at *6. Accordingly, the Holman court’s reasoning that Government Code § 12965(b) does not create an express exception to the cost-shifting statute CCP § 1032 has been explicitly overturned. | Furthermore, the plain language of CCP § 998 states that it only applies where CCP § 1032 applies, as CCP § 998 “augments” the costs allowed under Sections 1031 and 1032. Where 2- REPLY TO OPPOSITION TO MOTION TO STRIKE DEFENDANTS’ MEMORANDUM OF COSTS o e N N nn R L N N r o N o N O N o [ \ ] r o nN N o nN - i jt - - - po [ - pr t - oo ~1 aN wn = Ww N o ba st << \ & oc ~ J aN wi i= Ww ND - << a case falls within an exception to those sections, it is also outside the ambit of CCP § 998. The Supreme Court has made it clear that sections 998 and 1032 are linked in this manner. As quoted extensively in the Holman opinion, the Supreme Court in Murillo reasoned, 17 Cal. 4th at 1000 (emphasis added an in original): Having concluded Civil Code section 1794(d) fails to set forth an express exception to the general cost-recovery rule set forth in section 1032(b), we likewise conclude it provides no exception to the provisions of section 998. Section 998 explicitly states that it “augment[s]” section 1032(b). Thus, the requirements for recovery of costs and fees under section 998 must be read in conjunction with section 1032(b), including the requirement that section 998 costs and fees are available to the prevailing party “[e]xcept as otherwise expressly provided by statute. As the Supreme Court has unequivocally held that Government Code § 12965 provides an exception to CCP § 1032, it is clear that CCP § 998 also does not apply to FEHA cases, including the instant case. B. DEFENDANTS HAVE NOT ARGUED NOR DOES THE RECORD SHOW THAT PLAINTIFF’S CASE WAS BROUGHT WITHOUT FOUNDATION | OR WAS FRIVOLOUS Defendants do not make any assertion or argument in their Opposition that Plaintiff’s case was brought without foundation or frivolous. Instead, Defendants spend a good amount of their Opposition arguing the reasonableness of their 998 Offer by claiming that as of November 18, 2016, Plaintiff had failed to establish any of her claims against Defendants while reiterating their success at the bench trial in this -- See Opposition, Pgs. 8 - 11. Defendants’ arguments, however, are unconvincing. Defendants would have sought summary judgment to dismiss the entire action before trial if, as of November 18, 2016, Plaintiff had indeed “failed to set forth facts” showing that she was discriminated based on her age/disability, wrongfully terminated, and/or was entitled to overtime. Instead and although Defendants filed a summary judgment motion, they only challenged Plaintiff’s alter ego claims. See Declaration of Cindy Pham in Support of Plaintiff's Motion to Strike, or in the Alternative, Tax Defendants’ Memorandum of Costs (“Pham Decl.”), P 15, Ex. 2. Defendants’ argument in their Opposition a. REPLY TO OPPOSITION TO MOTION TO STRIKE DEFENDANTS’ MEMORANDUM OF COSTS © 0 N N Wn BAR W N N O N N N N N N N N N = e d e m e m e m e m e e e e Ce ~~ O N Wn BRA W N R S D D E Y N R W N D = O that “as of November 18, 2016, Plaintiff had failed to establish alter ego liability or joint employer liability,” is also unworthy of credence. See Opposition, Pgs. 1 - 11. In fact, Defendants’ summary judgment motion was denied as to all defendants but Bart Davidson. See Pham Decl., P 16, Ex. 3. Additionally, the trial court did not reach the issue of alter ego or joint liability at trial and thus, there is no way of knowing who would have prevailed on those claims. See Pham Decl, P 17, Ex. 4. This all goes to show that Plaintiff did not bring this lawsuit against Defendants in bad faith; nor were her claims frivolous or without foundation. C. DEFENDANTS’ 998 OFFER WAS UNREASONABLE AND INVALID Should the Court find that Defendants are entitled to recover ordinary non-expert costs under CCP § 998, Plaintiff maintains that Defendants’ 998 Offer was unreasonable at the time it was made, was a token offer proffered with no reasonable expectation that it would be accepted, and is thus, invalid. 1. CCP 998 Offers Must Be Made in Good Faith, As Determined by the Reasonableness of Acceptance at the Time the Offer Was Made The California courts have long held that the Legislature, in enacting CCP § 998, intended for “only good faith settlement offers [to] qualify as valid offers under section 998.” Wear v. Calderon (“Wear”) (1981) 121 Cal. App. 3d 818, 821 (emphasis added). To qualify as a good faith offer, the offer must (1) “be realistically reasonable under the circumstances of the case” and (2) “must carry with it some reasonable prospect of acceptance.” Id. Where a party has no expectation that his or her offer will be accepted, the party “will not be allowed to benefit from a no-risk offer made for the sole purpose of later recovering [costs].” Mesa Forest Products, Inc. v. St. Paul Mercury Ins. Co. (1993) 73 Cal. App. 4th 324, 332. As explained in Elrod v. Oregon Cummins Diesel, Inc. (“Elrod”) (1987) 195 Cal. App. 3d 692, 699: An offeree cannot be expected to accept an unreasonable offer. Hence, any subsequent punishment of the offeree for nonacceptance does not further the purpose of section 998, because the offerce would not have acted differently at the time of the offer despite the threat of later punishment. In these circumstances, later punishment of the offeree merely provides a windfall to the offeror and does not encourage settlements. Whether an offer is reasonable “must be determined by looking at circumstances when -4- REPLY TO OPPOSITION TO MOTION TO STRIKE DEFENDANTS” MEMORANDUM OF COSTS O e N N N L h Rh W N N O N O N N N N N N N m e m e m e m e e e d e d d e 00 ~ O N Ww A W O N = Oo O W N N N nn R W = O the offer was made.” Ibid. First, the court must examine “whether the offer represents a prediction of the amount of money, if any, defendant would have to pay plaintiff following a trial.” Elrod at *¥699. If that test is satisfied, the second test considers “whether defendant’s information was known or reasonably should have been known to plaintiff.” Id. The offer must be analyzed at the time the offer was made, not by hindsight. Fortman v. Hemco, Inc. (1989) 211 Cal. App. 3d 241, 264. The determining factor is whether there was a reasonable chance of acceptance based on “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, 129-130. 2. Defendants’ CCP § 998 Token Offer Was Not Made in Good Faith and There Was No Reasonable Prospect of Acceptance, Given the Circumstances of This Case Under the FEHA’s fee and cost-shifting provision, a successful plaintiff can recover attorneys’ fees and costs, including expert witness costs. As provided in Plaintiff’s Motion, Defendants served an offer pursuant to CCP 998 on November 18, 2016, more than a year after the lawsuit had been filed and only a few months before trial was scheduled to commence. Defendants’ 998 Offer was for $10,000, inclusive of costs and attorneys’ fees. However, at that time, Plaintiff's attorneys’ fees were over $28,000! and her costs had exceeded $1,427.25. See Pham Decl., PP 6 - 10. Defendant even acknowledges in their Opposition to Plaintiff’s Motion that by November 18, 2016, a substantial amount of work had been performed, including the taking of Plaintiff's deposition, Plaintiff’s propounding and reviewing of over 300 written discovery requests, and’ Plaintiff’s drafting of her opposition to Defendants’ Motion for Summary Judgment. See Opposition, Pg. 2, Lines 25 - 27. Defendants were or should have been aware that Plaintiff’s fees and costs were over $10,000, as Defendants’ own fees and costs were likely comparable, if not more. By offering merely $10,000.00 after more than a year into the litigation, Defendants 998 Offer essentially assumed that if Plaintiff won, she would receive no damages at all whatsoever and her attorneys’ fees would be substantially reduced. This is the ! The estimated $28,000 in attorneys’ fees is exclusive of the time spent on opposing Defendants” Motion for Summary Judgment. -5. REPLY TO OPPOSITION TO MOTION TO STRIKE DEFENDANTS’ MEMORANDUM OF COSTS NO 0 N N Wn BR W N no N N ND No N o N o [N S] no - - - jt p- - -_ - - a oo ~J aN wn » Ww Wo - o \O oo ~J aN Wn NS Ww No - o epitome of a “token” offer under the rules established in Wear and Pineda v. Los Angeles Turf Club, Inc. (“Pineda”) (1980) 112 Cal. App. 3d 53. | In Wear, one defendant offered $1, which was rejected, and the defendant prevailed at trial. The Court of Appeal reversed the trial court’s award of costs under § 998, finding that the offer was a “token offer” not made in good faith. Wear, supra, 121 Cal. App. 3d at 820-822. Similarly, in Pineda the defendant made an offer for $2,500 where the plaintiff sought $10 million in damages in a wrongful death action. The plaintiff rejected the offer and the defendant prevailed at trial. The Court of Appeal in Pineda recognized that, even though liability in that case was “tenuous”, given the potential damages, the defendant could not have had any expectation that an offer of $2,500 would be accepted. Id. at *63. In Pineda, “the sole purpose of the offer was to make [the defendant] eligible for the recovery of large expert witness fees at no real risk.” | Based upon the foregoing, Defendants’ 998 Offer was not “modest,” by any means. It was nothing more than a token offer that does not serve to “effectuate the I of the statute.” Plaintiff should not be punished for failing to accept an unreasonable offer that carried no reasonable prospect of acceptance. 1 in 1 1 1 1 -6- REPT.Y TO OPPOSITION TO MOTTON TO STRIKE DEFENDANTS” MEMORANDUM OF COSTS OO 0 3 NN Wn BR W N N O N O N O N N N N N N m= e m e e e m e e e m e e © ~~ AN WU R W N = O O 0 N N R W = O nl. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests the Court deny any award of costs because Defendants cannot meet the requisite standard established by the California Supreme Court in Williams, and because CCP § 998 does not allow for a recovery of non-expert costs. Should the Court find that Defendants are entitled to ordinary non-expert costs under CCP § 998, Plaintiff maintains that the 998 Offer was unreasonable and thus, invalid. If the Court does award any costs to Defendants, Plaintiff requests that the Court strike or tax all unnecessary and unreasonable costs, including those costs that are unrecoverable under CCP § 1033.5. Dated: July 27, 2017 AEGIS LAW FIRM, PC By - Souddpduk Samuel A. Wong Cindy Pham Attorneys for Plaintiff CATHERINE LOVELL oF PTAT WV TA ADNNACTTTARNT TO AMNTTION TN QTRIFE NMEEENDANTR? MEMOR ANNI TM OF CNQTR NO 0 N O N W n BR W N ) N O N N O N N N N N N mm mm e m e m e m pm pe e e = pe c e ~~ O N nn R W N = DO O e N N ls W N = O CERTIFICATE OF SERVICE I, the undersigned, am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action; am employed with Aegis Law Firm PC and my business address is 9811 Irvine Center Drive, Suite 100, Irvine, California 92618. On July 27, 2017, 1 served the foregoing document entitled: . PLAINTIFF'S REPLY TO DEFENDANTS’ OPPOSITION TO MOTION TO STRIKE, OR IN THE ALTERNATIVE, TAX DEFENDANTS’ MEMORANDUM OF COSTS on all the appearing and/or interested parties in this action by placing [| the original [X] a true copy thereof enclosed in sealed envelope(s) addressed as follows: Todd R. Wulffson Ali Parvaneh Emily K. Borman aparvaneh@madisonlawapc.com Carothers DiSante & Freudenberger LLP MADISON LAW, APC 2600 Michelson Drive, Ste. 800 17702 Mitchell North Irvine, CA 92612 Irvine, CA 92614 twulffson@cdflaborlaw.com eborman(@cdflaborlaw.com Attorneys for Defendants: | Co-Counsel for Plaintiff Asset Data Direct, Inc.; BR Direct Marketing, Inc.; ACME Envelope.; and Bart Davidson [] (BY MAIL) I am readily familiar with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at Irvine, California in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postage cancellation date or postage meter date is more than one day after date of deposit for mailing this affidavit. (Cal Code Civ. Proc. § 1013(a); Fed. R. Civ. Proc. 5(a); Fed. R. Civ. Proc. 5(c).) Cl (BY OVERNIGHT MAIL) I am personally and readily familiar with the business practice of Aegis Law Firm PC for collection and processing correspondence for overnight delivery, and I caused such document(s) described herein to be deposited for delivery to a facility regularly maintained Federal Express for overnight delivery. (Cal Code Civ, Proc. § 1013(c); Fed. R. Civ. Proc. 5(c).) X (BY ELECTRONIC TRANSMISSION) I caused said document(s) to be served via electronic transmission to the addressee(s) listed above on the date below. (Cal. Code Civ. Proc. § 1010.6(6); Fed. R. Civ. Proc. 5(b)(2)(E); Fed. R. Civ. Proc. 5(b)(3).) I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct Executed on July 27, 2017, at Irvine, California. NON Kathyan Alvarez CERTIFICATE OF SERVICE