Farah vs. Dearmin

Legal Standard

Allowable costs must be reasonably necessary to the conduct of the litigation, rather than merely convenient or beneficial to its preparation. (Code Civ. Proc., § 1033.5, subd. (c)(2); see Moss v. Underwriters' Report (1938) 12 Cal.2d 266, 274; Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774 [whether cost item was reasonable and necessary presents question of fact for trial court and its decision is reviewed for abuse of discretion].)

Allowable costs must also be reasonable in amount. (Code Civ. Proc., § 1033.5, subd. (c)(3).)

If the items on their face appear to be proper charges, the verified memorandum of costs is prima facie evidence of their propriety, and the burden is on the party seeking to tax costs to show they were not reasonable or necessary. (Ladas v. California State Auto. Assn., supra, 19 Cal.App.4th at pp. 774-776; Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1266 [mere statements in points and authorities and Declaration of counsel insufficient to rebut prima facie showing].)

On the other hand, items that are properly objected to are put in issue, and the burden of proof is on the party claiming them as costs. (Ladas v. California State Auto. Assn., supra, 19 Cal.App.4th at pp. 774-776.) Whether an item listed on the cost bill was reasonably necessary is a question of fact for the trial court, whose decision is reviewed on appeal for abuse of discretion. (Bender v. County of Los Angeles (2013) 217 Cal.App.4th 968, 989.)

Even costs otherwise “allowable as a matter of right” may be disallowed if the court determines they were not “reasonably necessary.” Likewise, the court has power to reduce the amount of any cost item to an amount that is “reasonable.” [Perko's Enterprises, Inc. v. RRNS Enterprises (1992) 4 CA4th 238, 245—“intent and effect [of § 1033.5(c)(2)] is to authorize a trial court to disallow recovery of costs, including filing fees, when it determines the costs were incurred unnecessarily”.)

Coparties who prevail in the litigation against a single adversary need not file separate memoranda of costs, but may file a single memorandum setting forth their joint costs. (This is common where coparties are represented by the same counsel, present a joint case and share litigation expenses.) (Jonkey v. Carignan Const. Co. (2006) 139 Cal.App.4th 20, 26.)

As stated in the statute, a prevailing party that has incurred the legal liability to pay costs is entitled to seek recovery of those costs regardless of whether that party actually paid those costs—i.e., the actual payor is irrelevant. (Cell-Crete Corp. v. Federal Ins. Co. (2022) 82 CA5th 1090, 1095.)

Merits As an initial matter, Plaintiffs argue that this Memo is not supported by any evidence.

However, the initial verification, which the Memorandum contains, will suffice to establish the reasonable necessity of the costs claimed. There is no requirement that copies of bills, invoices, statements, or any other such documents be attached to the memorandum. Supporting documentation must be submitted only if costs have been put in issue by a motion to tax costs. (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1267.)

Thus, the Court moves to the merits of specific cost items.

1. Motion and Filing fees in the total amount sought of $2,720

Filing/motion fees are specifically an allowable item of costs. (CCP §1033.5(a)(1).)

In opposition, Defendants’ filing and motion fees are identified in the accompanying declaration Terese Harris and in the Memorandum of Costs Worksheet, Judicial Council form MC-011. (Harris Dec., ¶ 5, Ex. 4, ¶ 6, Ex. 5).

Based on the records presently available, Defendants can confirm and substantiate $589.80 in filing, motion, and related court filing costs identified in the Harris declaration and MC-011 worksheet. (Harris Dec., ¶ 5, Ex. 4). In addition, Defendants have located prior counsel’s cost records reflecting an additional $1,760.38 in filing, service, messenger, photocopy, court-copy, and related litigation costs, excluding deposition transcript charges that are addressed separately. (Harris Dec., ¶ 6, Ex. 5). Together, the currently confirmed and substantiated amount is $2,350.18.

Defendants acknowledge that the original amount of $2,720.00 listed for filing and motion fees within the Memorandum of Costs was prepared by former counsel, Attorney Mark Clausen. That amount appears to include filing fees, motion fees, and related litigation costs incurred while Mr. Clausen was handling the matter, as well as costs incurred during earlier stages of the case. But that cannot be confirmed.

Thus, the Court permits the substantiated amount of $2,350.18 and strikes the remaining portion of $369.82 of the requested motion and filing fees.

2. Deposition Costs in the total amount of $3,200

Deposition fees are specifically an allowable item of costs. (CCP §1033.5(a)(A) and (B).)

Allowable costs include:

(3)(A) Taking, video recording, and transcribing necessary depositions, including an original and one copy of those taken by the claimant and one copy of depositions taken by the party against whom costs are allowed. (B) Fees of a certified or registered interpreter for the deposition of a party or witness who does not proficiently speak or understand the English language. (C) Travel expenses to attend depositions.

(CCP §1033.5(a)(A), (B), (C).)

Plaintiffs argue that any deposition for a person who did not appear at trial is not necessary, without any citation to law.

California courts have consistently held that the recovery of deposition costs does not depend on whether the deponent ultimately testifies at trial. In Chaaban v. Wet Seal, Inc., the Court of Appeal held that a defendant's deposition of a plaintiff's expert witness was reasonably necessary to prepare for trial, even though a motion in limine subsequently precluded that expert from testifying at trial. (Chaaban v. Wet Seal, Inc. (2012) 203 Cal.App.4th 49.)

In opposition, Defendants provide the testimony of Terese Harris to show what expenditures were incurred, including $3,200.00 in costs for copies of five (5) deposition transcripts.

But in opposition, all that Defendant can substantiate is $1,318.40 for the deposition transcription of Mitchell Zogob and $475.32 for Volume II of the Mitchell Zogob deposition for a total of $1,793.72. (Harris Dec., ¶ 6, Ex. 5, pp. 6, 9).

Defense Counsel then argues:

“Defendants continue to believe the original $3,200.00 amount was incurred for

deposition transcripts in this matter, but because this action has been pending since February 2020, involved multiple counsel, and included periods where Defendants were representing themselves in pro per, current counsel does not presently have every receipt corresponding to the full amount originally claimed.”

(Opp., p. 7:1-7.)

But the Court will not award estimates for costs that are not substantiated.

Thus, the Court permits the substantiated amount of $1,793.72 and strikes $1, 406.28 of the requested deposition costs.

3. Court Ordered Transcripts in the total amount of $6,515.71

Costs for Court ordered transcripts are specifically an allowable item of costs. (CCP §1033.5(a)(9).)

Plaintiffs seek to tax Defendants’ Court reporter and trial transcript costs on the ground that there were no Court-ordered transcripts in this case.

The Court ordered all parties to prepare a proposed statement of decision, in Word format, on a USB drive, and to submit it to the clerk, it did not order the transcripts.

An item neither specifically allowable under CCP § 1033.5(a) nor prohibited under CCP § 1033.5(b) may nevertheless be recoverable in the court's discretion. (CCP § 1033.5(c)(4); Ladas v. California State Automobile Ass'n (1993) 19 Cal.App.4th 761, 773-774; Ripley v. Pappadopoulos (1994) 23 Cal.App.4th 1616, 1623—court had discretion to allow cost of overhead projector because “not an item specifically excluded from a cost award” under § 1033.5(b).)

Transcripts of court proceedings not ordered by the court are specifically not allowed. (CCP § 1033.5(b); see Davis v. KGO-T.V., Inc. (1998) 17 Cal.4th 436, 440-442 (disapproved on other grounds by Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 105- 107; Sanchez v. Bay Shores Med. Group (1999) 75 Cal.App.4th 946, 948-949; Baker-Hoey v. Lockheed Martin Corp. (2003) 111 Cal.App.4th 592, 599-600.)

Thus, the Court grants the Motion and strikes $6,515.71 in transcript costs.

4. Models, enlargements, and photocopies of exhibits in the total amount of $850

Plaintiffs argue that there should not be anything in this category because there were no models, enlargements, or photocopies used at trial.

Defendants correctly argue in opposition that the category is broader than what was used at trial. That is true. (See Rozanova v. Uribe (2021) 68 Cal.App.5th 392, 406—party may recover costs under § 1033.5(a)(13) not only for trial exhibits but for those used in motion to deem plaintiff vexatious litigant.)

Here, Defendants’ Memorandum of Costs Worksheet identifies this item as “Exhibits filed on successful motions by Defs. Some exhibits also used at trial.” (Harris Dec., ¶ 5, Ex. 4). The declaration of Terese Harris confirms that Defendants incurred $850.00 in costs for exhibits filed in connection with successful motions and additional exhibits used during trial. (Harris Dec., ¶ 3(t)).

But it is not clear to the Court what Exhibits for which Motions Defendants seek reimbursement. There is no evidence excepting a conclusory declaration.

Thus, the Court grants the Motion and strikes $850 in models, enlargements, and photocopies of exhibit.

5. Fees for electronic filing or service in the total amount of $2,210.21

Code of Civil Procedure §1033.5(a)(14) allows for recovery of fees for the electronic filing or service of documents through an electronic filing service provider if a court requires or orders electronic filing or service of documents.

But Defendants fail to provide invoices for each of the claims being challenged. It is not clear what charges were incurred for electronic filing based on the evidence and testimony presented.

For example, the Court has seen “convenience fees” charged by the e-filing providers to allow use of a credit card and other charges that are not reasonable or necessary.

The Court strikes these costs in the amount of $2,210.21 because it is not clear what these charges consist of as no invoices or detailed statements are provided.

6. Travel expenses in the total amount of $5,400

Defendants seek $5,400.00 in trial-related travel and lodging expenses for trial counsel, Mark Clausen, Esq. This amount consists of $1,533.00 in miscellaneous travel expenses and $3,867.00 in lodging expenses incurred during trial, supported by receipts attached to the Harris declaration. (Harris Dec., ¶¶ 3(q)–(r), Ex. 2).

The only travel expenses authorized by section 1033.5 are those to attend depositions. (Code Civ. Proc., § 1033.5, subd. (a)(3)(C).) Plaintiff cannot recover for mileage or parking associated with trial. (See Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 775–776.) “Nor can meal expenses be justified as ‘necessary to conduct the litigation’ since attorneys have to eat, whether they are conducting litigation or not.” (Id. at p. 774.)

Plaintiffs argue these costs should be denied because attorney travel and hotel expenses are not expressly listed as recoverable costs.

The Court does have discretion under Code of Civil Procedure section 1033.5, subdivision (c)(4).

Since these are not an allowable cost, Defendants bear the burden to show why the costs were reasonable and necessary.

Defendants have not cited any case law to show that these are compensable discretionary costs. The Court exercises its discretion to deny these costs.

Thus, the Court grants the Motion and strikes $5,400 in trial related travel and hotel expenses for counsel.

In sum, the Court awards costs in the amount of $150 for jury fees, $2,350.18 in filing and motion fees, $1,793.72 in deposition costs for a total of $4,293.90 in costs. The Court

strikes $16,752.02 from the Memorandum of Costs.

Plaintiffs are ordered to serve notice.

B. Motion to Strike re: Zogob Memorandum of Costs

The Court denies Plaintiffs Michael P. Farah, individually and doing business as Farah Advisory Services of Newport Beach and The Eric Wyser Charitable Trust (hereinafter collectively referred to as Plaintiffs”) Motion to strike portions of Defendant Mitchell Zogob’s Memorandum of Costs at ROA 1293.

At issue is expert witness fees.

Expert witness fees are generally not allowable. (See Olson v. Automobile Club of Southern Calif. (2008) 42 Cal.4th 1142, 1149-1150, 1156-1157.)

However, if a section 998 Offer is made and rejected, the Court has discretion to award expert witness costs.

The award of expert witness expenses where there is a failure to accept a pretrial CCP § 998 offer is discretionary, not automatic. (See Santantonio v. Westinghouse Broadcasting Co., Inc. (1994) 25 Cal.App.4th 102, 121-124; Rouland v. Pacific Specialty Ins. Co. (2013) 220 Cal.App.4th 280, 289.)

The court has discretion to award reasonable fees for time reasonably spent in preparation for trial as well as on the witness stand. (Santantonio v. Westinghouse Broadcasting Co., Inc. (1994) 25 Cal.App.4th 102, 123-124; Michelson v. Camp (1999) 72 Cal.App.4th 955, 974.)

The expert witness fee recovery under CCP § 998 is limited to the “reasonable and customary hourly or daily fee for the actual time consumed in the examination of that witness by any party attending the action or proceeding.” (Gov. Code § 68092.5(a); Michelson v. Camp (1999) 72 Cal.App.4th 955, 975.)

Here, in opposition, Mr. Lee provides a declaration indicating that he charges $770 per hour for deposition and $710 for trial. (Mr. Lee Decl., ¶3, Ex. A.) He includes invoices. (Id.)

Plaintiffs fail to file a reply and do not dispute the validity/reasonableness of the 998 Offer; nor have they challenged the fees after learning the hourly rate and activities undertaken.

The Court in its discretion finds that the expert witness fees requested are reasonable and necessary.

Therefore, the Motion is denied.

Defendants shall jointly prepare a proposed amended judgment to include the costs.

Plaintiffs are ordered to serve notice.

107 2025-01497783 1. Motion for Summary Judgment and/or Adjudication 2. Case Management Conference 3. Order to Show Cause re: Failure to Comply re:CCRC 3.110b