Wsi Highland Investments, LLC vs. Traigh Etiwanda associates LLC

Opposition

Cal. Super. - 4th Dist.December 29, 2015

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP THOMAS E. GIBBS (BAR NO. 93819) BRIAN R. BAUER (BAR NO. 238368) 1900 Main Street, Fifth Floor Irvine, California 92614-7321 Phone: (949) 553-1313 Fax: (949) 553-8354 E-Mail: tgibbs@allenmatkins.com bbauer@allenmatkins.com ELECTRONICALLY FILED Superior Court of California, County of Orange 02/06/2018 at 04:11:00 PM Clerk of the Superior Court By & Clerk, Deputy Clerk Attorneys for Defendants and Cross-Complainants Traigh Etiwanda Associates, LLC; Tracy Etiwanda Associates, LLC; PW Etiwanda Associates, LLC SUPERIOR COURT OF CALIFORNIA COUNTY OF ORANGE, CENTRAL JUSTICE CENTER WSI HIGHLAND INVESTMENTS, LLC, a Delaware limited liability company and RICHLAND REAL ESTATE FUND, LLC, a Florida limited liability company, Plaintiffs, Vs. TRAIGH ETIWANDA ASSOCIATES, LLC, a Delaware limited liability company; TRACY ETIWANDA ASSOCIATES, LLC, a Delaware limited liability company; PW ETIWANDA ASSOCIATES, LLC, a Delaware limited liability company; and DOES 1 through 20, inclusive, Defendants. TRAIGH ETIWANDA ASSOCIATES, LLC, a Delaware limited liability company; and TRACY ETIWANDA ASSOCIATES, LLC, a Delaware limited liability company, Cross-Complainants, VS. WSI HIGHLAND INVESTMENTS, LLC, a Delaware limited liability company; RICHLAND REAL ESTATE FUND, LLC, a Florida limited liability company; and ROES 1 through 50, inclusive, Cross-Defendants. Case No. 30-2015-00827409-CU-CO-CJC ASSIGNED FOR ALL PURPOSES TO Judge Sheila Fell, Dept. C25 Date: February 21, 2018 Time: 10:00 a.m. Dept: C25 Reservation No.: 72714348 OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS [Filed concurrently with Declaration of Brian R. Bauer and Request for Judicial Notice in Support of Opposition] Complaint Filed: December 29, 2015 Trial Date: April 27,2017 -1- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP TABLE OF CONTENTS Page LL. WNT BCC TONITE ES ESR EE ER 4 II. THE SPECIFIC COSTS CHALLENGED BY RICHLAND ARE RECOVERABLE AND SHOULD BE AWARDED BY THIS COURT .........c.ccocueeuneee. 4 A. Item 12: Models, Enlargements And Photocopies Of Exhibits ...........cccccceveenneen. 5 B. Item 16(b): Trial TEChNICIAN .....cccoieiiieieciie ieee eee eee ee eevee eee 7 C. Item 16(c): Computer Research re Legal Authorities ..........coecceeeviiervieernieennneennns 8 D. Item 16(d): EXPErt WItNESSES ...c.uveriiiriieiiiiniietie siete seers sree seers 9 E. Item. 16(€)2 MEAIator FEES uu ss sumnuss ssvnson ss summssisasmasss.n svat soso 555596 2555.85 5357755 d5emsaes 12 III. CONCLUSION Lc. eects sect eeteeeesaeeateeeest ee sree sere eie estes sane sabe ese esses snee ens 13 1170730.01/0C 2- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP TABLE OF AUTHORITIES Page(s) California Cases Applegate v St. Francis Lutheran Church (1994) 23 Cal. APP.Ath 301 ....eeieiieiiieieeeee ee ceases eee est s sate sabes eees 5 Benach v County of Los Angeles (2007) 149 Cal. APP-Ath 836......eiiiiiiiiieeeiie eee eee eesti ee sabe esses 5 Bender v. County of Los Angeles (2013) 217 Cal APD AE DOB, nm covssn in swsns sonasnows ssn 0555557558 5455555 555555 05555558 S455 55-50 SH55550 HFRHI0A85 8 Gibson v. Bobroff (1996) 49 Cal. APP.Ath 1202......oiiiiieeie eee eee ete steers sabes 12 Ladas v. California State Auto. Assn. (1993) 19 Cal. APP.ALh TOL ....eeiiieiie eee 9 Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.dth O85... cee cece e ee essere area ee ee eeetabar ares ae ee ens 4 Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC (2010) 185 Cal. APD ATE TSO a usmssm.s sumsnsn sown snsmwsss essssmn sms 55555045 5553558 5055555 50 5455558 35 10, 11 California Statutes California Code of Civil Procedure SBetitn: 10321 Yuuamsessuss sssunas ss sunsssn sonsssn os sswsnss svsanss. so sonsssn sasassniss 4 California Code of Civil Procedure section 1033.5(8) ....ccccciveiiiiiuiiiieieieeeeiiiieeeee cec e 4,5 California Code of Civil Procedure section 1033.5(D) s sums sssssss sssansssn ssanss so snnssss sssansn sn snasss 4,9, 10 California Code of Civil Procedure section 1033.5(C) ...ueeeerruriiiiiiiiiieeiiieieeesieee ee e e e eevvee ens 4,12 Federal Cases Cataphora Inc. v. Parker, 2012 U.S. Dist. LEXIS 6449, 2012 WL 174817 cccouvviiiiiiieeeeeeeeeeeeeeeeee 11 Moore v. IMCO Recycling of CA, Inc. (C.D. Cal. 2005) 2005 U.S. Dist. LEXIS 45778 c.ueueeeeeieeeeeeieeeeeeeeeeceieeeee e e 9,12 3 1170730.01/0C OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION. As the prevailing parties, Tracy Etiwanda Associates, LLC, Traigh Etiwanda Associates, LLC, and PW Etiwanda Associates, LLC (collectively, "Tracy") timely filed a Memorandum of Costs properly seeking to recover $149,665.13 in costs necessarily incurred in this litigation. Rich- land Real Estate Fund, LLC and WSI Highland Investments, LLC (collectively, "Richland") now seek to tax $105,708.08 in costs listed in Sections 12 and 16 of Tracy's costs memorandum. Thus, $43,957.05 in costs are undisputed and should be awarded to Tracy. Richland challenges the remaining $105,708.08 on the wholly unsupported claim that such costs were not reasonably necessary to the conduct of the litigation, and, with respect to the requested expert fees only, are prohibited by statute. However, as explained below, under the facts! and established law, all the challenged costs are recoverable, were reasonably necessary, and should be awarded in full. Accordingly, Richland's motion to tax costs should be denied. II. THE SPECIFIC COSTS CHALLENGED BY RICHLAND ARE RECOVERABLE AND SHOULD BE AWARDED BY THIS COURT. "Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." Code Civ. Proc. § 1032(b); Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 989. Code of Civil Procedure section 1033.5(a) delineates specific recoverable costs. Section 1033.5(b) lists items that are specifically not allow- able as costs. Section 1033.5(c)(4) provides that an item neither specifically allowable under Section 1033.5(a) nor prohibited under Section 1033.5(b) may nonetheless be recoverable in the Court's discretion. To be recoverable, such discretionary costs need only be reasonable in amount and "reasonably necessary to the conduct of the litigation." Code Civ. Proc. § 1033.5(c)(2), (3). Here, with the exception of expert witness fees, Richland does not assert that any of the challenged costs are prohibited costs under Section 1033.5(b). Nor does Richland dispute that the For the facts, Tracy refers the Court to, and requests the Court take judicial notice of, Tracy's pending Motion for Attorneys’ Fees (and specifically the extensive history of this action detailed therein), as well as the Court's Statement of Decision and Judgment entered in this action on November 6, 2017. 4- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP requested costs were actually incurred by Tracy. Indeed, with the exception of the legal research charges, Richland's Motion does not even request supporting backup documentation. Nonetheless, the supporting backup documentation for each of the challenged cost items is attached to the Bauer Declaration filed herewith. Richland's Motion simply claims that the costs were not reasonably necessary to the conduct of the litigation. This claim does not withstand scrutiny. A. Item 12: Models, Enlargements And Photocopies Of Exhibits. Richland objects to Item 12 of Tracy's costs memorandum, totaling $3,492.98, for costs incurred for models, enlargements and photocopies of exhibits, on the grounds that Tracy has not shown that they "were actually used at trial" and the costs "are not reasonable in amount." Motion, p- 5(5-20). At the outset, there is no dispute that costs for models, enlargements, and photocopies of exhibits are expressly recoverable if they are reasonably helpful to aid the trier of fact. Code Civ. Proc. § 1033.5(a)(13). Moreover, numerous cases allow for the recovery of exhibit costs, regard- less of whether they were actually admitted at trial. See Benach v County of Los Angeles (2007) 149 Cal. App.4th 836, 856 (costs allowed when claiming party could not have anticipated exhibits would not be used), Applegate v St. Francis Lutheran Church (1994) 23 Cal. App.4th 361, 363 (costs allowed if necessary and reasonable). As explained in Benach: "[T]he parties specifically agreed to and completed a mutual exchange of exhibits in advance of trial, and prepared exhibit binders for use by the court, witnesses and Benach. Although the Department did not use the majority of its exhibits at trial, nothing indicates it could have anticipated that they would not be used. An experienced trial judge would recognize that it would be inequitable to deny as allowable costs exhibits any prudent counsel would prepare in advance of trial." Benach, 149 Cal. App.4th at 856 Here, like Benach, given the broad issues raised by Richland (Richland included 14 separate issues in its list of controverted issues) and the Court's requirement that all exhibits be lodged in advance of the trial, Tracy could not anticipate which exhibits would and would not ultimately be used. Declaration of Brian R. Bauer ("Bauer Decl."), 2. Indeed, Richland included -5- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP 292 exhibits in its own exhibit binders, over 100 more exhibits than Tracy. The costs for all exhibits (even those not actually used at trial) were reasonably incurred and should be recoverable.’ As to Richland's claim that the requested costs "are not reasonable in amount," the request- ed costs are supported by third-party invoices which detail the $3,492.98 in costs. See Bauer Decl., 92, Exh. "A." To summarize, the costs fall into two categories: 1. Exhibit Binder Costs. Each side prepared four sets of their own exhibits in binders - a court copy, a witness copy, and one set for each counsel. Tracy prepared 180 exhibits (301 to 481, with one skipped), with a total page count of 1,398 pages. Each of the exhibits was endorsed with a footer in a format agreed upon with Richland's counsel, and tabbed and assembled in binders, as required by the court. To save costs, the vendor was instructed to print in color only if significant information was in color (e.g., not just logos, inked signatures or deposition tags). As a result, only a small number of exhibits (i.e., 100 pages) were printed in color. The printing and endorsing of the exhibits was at the reasonable rate of $.06 (for black and white) and $.01 per page respectively. The total cost for the exhibit binders, including materials, labor for assembly and tax, was $1,363.96. Bauer Decl., | 2(a). 2. Demonstrative Exhibit Costs. For the court's convenience and effective presenta- tion, Tracy prepared approximately eight oversized exhibit boards for use at trial. The boards needed to be large enough to be visible by the court, witnesses and counsel and were therefore printed and mounted 3' x 4'. Almost all of these boards were presented and used throughout trial. Certain demonstrative exhibits depicting maps and aerial and land-based photographs of the prop- erty in dispute were printed in oversized mockups in order to assess visibility/legibility prior to trial. Some of these exhibit mockups were printed by Tracy's vendor, but to the extent feasible, some oversized demonstrative mockups were produced in-house by Tracy and not included in the costs Tracy seeks to recover. The charges incurred by Tracy for color enlargement and foam core mounting are per square foot. The total cost for the blowups, including materials and tax, was $2,129.02. Bauer Decl., {2(b). 2 Ultimately, 49 of 180 (or 27%) of Tracy's exhibits were admitted at trial. Bauer Decl., 2. -6- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Based on the above, the $3,492.98 for models, enlargements and photocopies of exhibits costs was reasonably necessary to the conduct of the litigation, is reasonable in amount and should be awarded to Tracy in full. B. Item 16(b): Trial Technician. Richland objects to cost Item 16(b) in the amount of $34,924.50 for Tracy's trial technician utilized during the trial on the grounds that the technician costs were "excessive" and "not reason- ably necessary to the conduct of litigation." Motion, p. 5(26-28). Yet, Richland provides no basis that those costs were excessive (they are not), and Richland's claim that the trial technician was not reasonably necessary is belied by the fact that Richland utilized its own trial technician throughout the trial. No doubt, if Richland had prevailed, it would be singing a different song - claiming that the trial technician was necessary for the conduct of the trial, and that it is entitled to those costs. As such, Richland's objection reeks of hypocrisy. In truth, Tracy's trial technician, like Richland's, played a very important and necessary role in the trial. Indeed, thanks to the excellent work of both, the trial was run essentially paperless, which was far more efficient and cost-effective for the Court and the parties. As to Tracy's trial technician, Max Herrera of United Support Associates, he performed numerous functions for the efficient running of the trial, including (1) preparing exhibits, video- taped deposition testimony and demonstratives, (2) setting up the equipment and other technology for trial presentations, and (3) attending every day of trial (as did Richland's technician) to display evidence and demonstratives. Bauer Decl., 3, Exh. "B." This work enhanced Tracy's trial pre- sentations, assisted in the trial flowing smoothly and efficiently, and ultimately resulted in lower costs to all parties due to time savings obtained in not getting bogged down in reams of paper. 1d. All of the technician costs are detailed and supported in the third-party invoice attached to the Bauer Declaration as Exhibit "B." Trial technician costs are clearly recoverable under the law. Effective January 1, 2018, CCP section 1033.5(a)(13) was amended to expressly allow the recovery of costs for "the elec- tronic presentation of exhibits, including costs of rental equipment and electronic formatting . . . if they were reasonably helpful to aid the trier of fact." But even before this amendment, such costs -7- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP were recoverable. In Bender v. County of Los Angeles (2013) 217 Cal.App.4th 968, 990, plaintiff requested $24,103.75 in costs for "Trial Video Computer, Powerpoint Presentation and Videotaped Deposition Synchronizing’ and the costs of a trial technician for nine days of trial." Like here, these costs included charges for creating designated excerpts from deposition transcripts and video, converting exhibits to computer formats and design and production of electronic presentations. Id. The Court of Appeal upheld the trial court's award of these costs, stating that "the use of technolo- gy in the courtroom has become commonplace (including a technician to monitor the equipment and quickly resolve any glitches)" and that "the trial technology enhanced counsel's advocacy and was reasonably necessary to the conduct of the litigation." Id. at 991. (Emphasis added.) Likewise here, Tracy's trial technician and equipment enhanced Tracy's ability to present evidence and was reasonably necessary to the conduct of the trial. Accordingly, Tracy should recover the $34,924.50 it incurred in technician costs. C. Item 16(c): Computer Research re Legal Authorities. Richland challenges $17,099.60 for Tracy's costs of computerized legal research on the grounds that "Tracy may not recover fees for the use of online services for legal research of any sort." Motion, p. 6(21-23); Bauer Decl., 4, Exh. "C." Once again, Richland's challenge is meritless. First, Tracy's use of computerized legal research was necessary to the conduct of the case. As detailed in Tracy's motion for attorneys’ fees (pp. 15(25)-16(13)), this action presented a wide array of often complex legal issues, claims and defenses requiring extensive legal research, includ- ing as reflected in Tracy's oppositions to Richland's summary judgment motions and Tracy's trial briefs. Bauer Decl., 4. Second, Tracy's use of computer research was not only necessary, it was far more efficient and considerably less expensive than the centuries’ old method of physically digging through case- books and treatises. No doubt, Richland's counsel makes similar use of computer legal research as do most practicing litigation attorneys in the 21* century. Indeed, computer research is now the standard research method and absolutely necessary for effective representation. As explained in -8- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Moore v. IMCO Recycling of CA, Inc. (C.D. Cal. 2005) 2005 U.S. Dist. LEXIS 45778 at *9-10 (emphasis added): "The Court finds that computerized research is not only "reasonably necessary, it is essential, to effective representation. The courts themselves regularly rely on computerized research tools to prepare opinions and orders. ... Numerous legal issues were raised and motions were filed that obviously contained the results of the research. ... The cost for automated research will be allowed." To avoid this result, Richland relies on 25 year-old case from the First Appellate District, Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761 and its holding that "[f]ees for le- gal research, computerized or otherwise, are not recoverable under Code of Civil Procedure section 1033.5." Id. at 776. However, this holding is founded on the flawed premise that computerized research constitutes "investigation expenses and attorneys fees," neither of which is accurate. As detailed in the attorney invoices attached to the Gibbs Declaration in support of Tracy's concur- rently-heard attorneys’ fees motion, computerized legal research is billed separate from attorneys’ fees, as an item of costs. Such an allocation is commonplace for this "essential" tool of modern litigation. See Moore, supra. Moreover, the Ladas court's refusal to allow costs for legal research is based on "the absence of an agreement of the parties or statutory authority" to the contrary. Ladas, supra, 19 Cal.App.4th 761, 776. Here, as detailed below (see pp. 10(17)-11(10)), the parties agreed in the numerous contracts at issue in this lawsuit that "all costs" in any dispute related thereto would be recoverable by the prevailing party. RFJIN, qq 1-5, Exhs. 1-5. That includes these legal research costs, since the costs recovery provision in the contracts could not be more broad. Thus, even under Ladas, legal research costs are recoverable here as statutory costs pursuant to Section 1033.5. For these reasons, this Court should award Tracy the $17,099.60 in costs it incurred for computer research. D. Item 16(d): Expert Witnesses. Richland challenges Tracy's costs of $46,245.00 in expert fees on the grounds that such fees are "expressly precluded by Code of Civil Procedure section 1033.5." Motion, pp. 6(25)-7(2); Bauer Decl, | 5, Exhs. D-F. However, Section 1033.5(b)(1)'s preclusion of expert witness fees not 9- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP ordered by the court is subject to an express carve out; namely, where such fees are "expressly authorized by law." CCP § 1033.5(b)(1). And as recently held by the Court of Appeal in the Fourth Appellate District (Division Three), expert fees, where expressly permitted under a con- tractual "provision permitting the recovery of expert witness fees," are, "indeed, a cost . . . ‘allowable as costs’ under Code of Civil Procedure section 1033.5, subdivision (b)(1)." Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC (2010) 185 Cal.App.4th 1050, 1065-1066 (emphasis added). In Thrifty, the losing party filed a motion to tax approximately $83,000.00 in expert fees on the grounds that such fees were not recoverable as an item of costs. The trial court denied the motion, which decision was affirmed by the Court of Appeal, on the grounds that the parties had expressly agreed to a contract provision providing that such expert costs were recoverable. The Thrifty court stated: "[W]here sophisticated parties knowingly and intentionally negotiate a broader standard into their contract - and particularly where, as here, the standard specifically includes 'witness and expert fees' - the intent of the parties should be upheld by the court . . .. We therefore see no reason why they should not be recoverable as costs when the parties specifically agree to such a provision in a freely negotiated contract." Thrifty, supra, 185 Cal. App.4th at 1066. Here, as in Thrifty, the Tracy/Richland contracts at issue in this litigation contain prevailing party clauses which expressly provide for the recovery of "experts' fees." They read: Section 13.14 in the CPA, Tracy PSA, PW PSA, Mitigation PSA (Trial Exhs. 76-79), which provides: "Legal Fees. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants or agreements . . . or any other dispute between the parties concerning this Agreement or the Property, then in that event, the prevailing party in such action or dispute, whether by final judgment or out of court settlement, shall be entitled to have and recover of and from the other party all costs and expenses of suit, including actual attorneys’ fees (collectively "Costs"). ... Costs shall include, without limitation, attorneys' and experts' fees. ..." RFIN, Exhs. "1-4," § 13.14 (emphasis added). Section 12 in the Note (Trial Exh. 85), which provides: "Section 12. In the event that this Note is placed in the hands of an attorney at law for collection after maturity or upon a default or an Event of Default or in the event that proceedings at law or in equity are instituted in connection herewith, or in the event that this Note is placed in the -10- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS [@ ) wn E a Ww No 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP hands of an attorney at law to enforce any of the rights or the agree- ments contained herein or in the Deed of Trust, Maker shall pay all costs of collecting or attempting to collect this Note or protecting or enforcing such rights, including, without limitation, reasonable attorneys' fees and expert witnesses and costs of investigation . . .." RFJN, Exh. "5," § 12 (emphasis added). Thus, Tracy's expert witness fees are recoverable. Nor is it required that Tracy plead and prove those expert costs at trial. As stated in Thrifty: "To require specially pleading and proving such costs 'at trial," . . . would frustrate the intent of parties who deliberately chose to include expert witness fees as an item of costs, not an item of special damages, in their contract. ... Thus, we deem it unnecessary to specially plead and prove expert witness fees, at least in a case where expert fees are explicitly included in the contract as recoverable costs." Thrifty, supra, 185 Cal. App.4th at 1067. See also Cataphora Inc. v. Parker, 2012 U.S. Dist. LEXIS 6449, 2012 WL 174817, at *8-9 (N.D. Cal. Jan. 20, 2012) ("where reimbursement hinges on which party is the ‘prevailing party,’ requiring costs to be pleaded and proven at trial would waste judicial resources and inject confusion because both parties would be required to put on evidence of their respective costs"). Here, the expert fees requested by Tracy are as follows: Richland Expert Orell Anderson - $2,475.00. Richland designated retained expert Orell Anderson to testify at trial on "the diminution of value and adverse impacts to the remaining par- cels of Tentative Tract Map No. 14749 if the District Property is not acquired by" Richland. As a result, Tracy was required to depose Mr. Anderson, which resulted in expert appearance fees of $2,475.00. Bauer Decl., {5(a). These fees should be recovered. Tracy Expert Jason Keller - $3,870.00. Tracy designated Jason Keller to rebut the adverse impacts testimony from Richland's experts Orell Anderson and Craig Cristina. Tracy in- curred expert fees related to Richland's deposition of Mr. Keller as well as Mr. Keller's time spent testifying at trial. This testimony was very important in rebutting Richland's claims, ultimately resulting in a complete victory for Tracy. Bauer Decl., 5(b). These fees should be recovered. Tracy Expert Larry Tucker - $39,900.00. Given the broad scope of issues raised by Richland, including Richland's assertion that it was entitled to the $6,111,111.00 principal reduction based on a distorted reading of numerous real estate contracts, Tracy retained expert -11- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS AN Un Bs W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Larry Tucker on real estate contract issues. While not ultimately called at trial, Mr. Tucker provided valuable insight and analysis, which Tracy used in its effective trial presentation. Tracy incurred expert fees as a result of Mr. Tucker's assistance, including for his time spent analyzing issues, preparing his expert opinions, and attending his deposition. Bauer Decl., | 5(c). These fees should be recovered. Accordingly, this Court should award Tracy the $46,245.00 in costs it incurred for expert witnesses. E. Item 16(e): Mediator Fees. Richland challenges Tracy's costs of $3,945.00 incurred for mediation before Jill Sperber at Judicate West (Bauer Decl., 6, Exh. "G"), arguing that such costs "are not included in the costs expressly authorized as recoverable under Code of Civil Procedure section 1033.5(a)." Motion, p. 7(4-6). However, Richland's motion ignores that the Court may award such costs under Section 1033.5(c) so long as they reasonable in amount and "reasonably necessary to the conduct of the litigation." As set forth in established case law, mediation fees are recoverable as a necessary part of litigation. As stated in Gibson v. Bobroff (1996) 49 Cal. App.4th 1202, 1209-1210: "Defendants take a distorted, myopic view of the mediation statute in arguing that since the purpose of mediation is to avoid trial, the expenses incurred in mediation cannot be construed to be reasonably necessary to the conduct of litigation. ... Encouraging the parties to resolve lawsuits at the earliest time and before a costly and time- consuming is a necessary part of litigation as conducted in this state. ... Accordingly, we reject defendants’ view that only those costs directly related to the preparation or the trial of a case are recoverable as being ‘reasonably necessary to the conduct of the litigation." (Bold and underlined emphasis added.) See also Moore v. IMCO Recycling of CA, Inc. (C.D. Cal. 2005) 2005 U.S. Dist. LEXIS 45778, *11-12 (finding mediation fees "to be a ‘reasonably necessary’ cost" pursuant to CCP section 1033.5(c)(4), including on the grounds that "[a] determination that the cost of an outside mediator was not reasonably necessary’ might inappropriately dissuade the parties from choosing this very effective method that assists in conserving judicial resources.") (Emphasis added.) -12- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS MOTION TO STRIKE OR TAX COSTS NO 0 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Here, Tracy participated in the mediation in a good faith effort to resolve the dispute prior to an expensive trial. As such, Tracy's mediation fees of $3,945.00 were necessary to the conduct of the litigation and should be awarded to Tracy in full. III. CONCLUSION. For the foregoing reasons, Tracy respectfully requests that the Court deny Richland's motion to tax costs in its entirety and award Tracy the sum of $149,665.13 in costs. Dated: February 6,2018 ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP THOMAS E. GIBBS BRIAN R. BAUER gp - BRIAN R. BAUER Attorneys for Defendants and Cross- Complainants Traigh Etiwanda Associates, LLC; Tracy Etiwanda Associates, LLC and PW Etiwanda Associates, LLC -13- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS MOTION TO STRIKE OR TAX COSTS aN ~ O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP PROOF OF SERVICE I am employed in the County of Orange, State of California. I am over the age of eighteen (18) and am not a party to this action. My business address is 1900 Main Street, Fifth Floor, Irvine, California 92614-7321. On February 6, 2018, I served the within document described as OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS on the interested parties in this action as stated below: Lisa N. Neal, Esq. Attorneys for WSI Highland Investments, LLC Bradley A. Chapin, Esq. and Richland Real Estate Fund, LLC Allina M. Amuchie, Esq. Rutan & Tucker, LLP Central Bank Tower 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626-1931 Phone: (714) 662-4664 Fax: (714) 546-9035 E-Mail: Ineal@rutan.com bchapin@rutan.com aamuchie@rutan.com x BY ELECTRONIC SERVICE VIA ONE LEGAL: By submitting an electronic version of the document to One Legal, LLC, through the user interface www.onelegal.com. My electronic notification address is eanderson@allenmatkins.com. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 6, 2018, at Irvine, California. ELIZABETH M. ANDERSON Zit I Lomi (Type or print name) | pees of Declarant) -14- OPPOSITION OF DEFENDANTS AND CROSS-COMPLAINANTS 1170730.01/0C TO PLAINTIFFS' MOTION TO STRIKE OR TAX COSTS