NORTH AMERICAN SPECIALTY v. PICKARD & BUTTERS

NORTH AMERICAN SPECIALTY v. PICKARD & BUTTERS

Procedural/Factual Background

On December 11, 2018, Plaintiff North American Specialty Insurance Company filed a

complaint against Defendants Pickard & Butters Construction, also known as Mark Alan Butters

and Dana R. Butters, also known as Dana Rayburn Butters alleging causes of action for: (1) breach

of indemnity contract; and (2) reimbursement. Defendants filed a cross-complaint against North

American alleging breach of contract. The parties’ claims arose out of payment and performance

bonds issued to Pickard by North American.

Trial of this action was bifurcated. On April 24, 2026, the Court entered judgment in North

American’s favor in the amount of $1,381,170,51.

Notice of Entry of Judgment was filed and serve on May 8, 2026, and North American

filed a Memorandum of Costs on May 26, 2026 seeking costs of $16,028.14.

Now before the Court is Defendants’ motion to tax North American’s Memorandum of

Costs. North American opposes. Defendants reply.

This matter originally came before the Court for hearing on June 22, 2026. At the hearing,

Defendants withdrew their timeliness objection, and the hearing was continued for North

American to submit an itemization of its costs and to allow the parties to brief the reasonableness

of the costs.

North American filed a supplemental Memorandum of Costs (Worksheet) identifying

$16,028.14 in total costs comprised of: 1. Filing and motion fees—$2,527.97; 5. Service of

process—$148; 11. Court reporter fees—$12,932.50; and 13. Models, enlargements, and

photocopies of exhibits—$420.23. Defendants reply. North American responds.

DISCUSSION

Legal Standard

Except as otherwise stated, a prevailing party 1 is entitled, as a matter of right, to recover

costs in any action or proceeding. (Code Civ. Proc., § 1032, subd. (b).) The costs allowed shall

be reasonably necessary to the conduct of the litigation and reasonable in amount. (Code Civ.

Proc., § 1033.5, subd. (c)(2)-(3).) The filing of a verified Cost Memorandum is sufficient to

establish that the sought costs are reasonable and necessary, thereby the prevailing party need not

submit any bills, invoices, statements, or other documents. (Jones v. Dumrichob (1998) 63

Cal.App.4th 1258, 1267.) If the items on the memorandum of costs appear to be proper charges,

then the party seeking to tax those costs bears the burden that the costs are unreasonable or

unnecessary, but if the items are properly objected to, then the burden of proof lies with the party

seeking to recover the costs to show their necessity and reasonableness. (Ladas v. California State

1 “Prevailing party,” for purposes of recovery of costs, is defined as “[T]he party with a net

monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary relief and in situations other than as specified, the “prevailing party” shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.” (Code of Civ. Proc., § 1032, subd. (4).) 3

Auto. Assn. (1993) 19 Cal.App.4th 761, 774; Perko’s Enterprises, Inc. v. RRNS Enterprises (1992)

4 Cal.App.4th 283, 243.)

The mere filing of a motion to tax costs may be a “proper objection” to an item, the

necessity of which appears doubtful, or which does not appear to be proper on its face. (Oak Grove

School Dist. v. City Title Ins. Co. (1963) 217 Cal. App. 2d 678, 698-699 (Oak Grove).) However,

“[i]f the items appear to be proper charges the verified memorandum is prima facie evidence that

the costs, expenses and services therein listed were necessarily incurred by the [party seeking

costs], and the burden of showing that an item is not properly chargeable or is unreasonable is

upon the [objecting party].” (Id. at p. 699; see also Miller v. Highland Ditch Co. (1891) 91 Cal.

103, 105-106.)

Analysis

North American filed a supplemental declaration with a worksheet itemizing its costs

(Guenther Decl. Exh. A) and invoices and billing in support of each cost included in the worksheet

(Guenther Decl. Exhs. B-E.)

In opposition, Defendants generally argue that they have objected to all costs and North

American has failed to carry its burden to establish that any of the requested costs are reasonable

or necessary. Defendants specifically object to item 11 (court reporter fees of $12,932.50

comprised of $9,273.50 paid to Lexias and $3,659.00 paid to Steno) arguing that the $12,932.50

claimed is unreasonable because North American paid Lexias $2,871 for its court reporting

services for phase 1 of the proceedings but Defendants was only charged $1,778.00 when it ordered

a certified copy of the transcripts Lexias reported. (Nichols Decl. ¶¶ 5-6.) Defendants argue that

this demonstrates North American overpaid Lexias in this instance which calls into question the

remaining court reporter fees.

In opposition, North American argues that court reporter fees are recoverable under the

statute and that the fees paid are reasonable because North American had to pay court reporters’

per diem fees and the fees to prepare and finalize the transcripts. (Guenther Decl. Exh. D.) North

American was not simply paying for copies of transcripts.

Defendants do not “properly object” to any of the costs in the Memorandum. Defendants

fail to identify any claimed costs that appear doubtful or are improper on their face. (Oak Grove,

supra, 217 Cal. App. 2d at pp. 698-699.) The court reporter fees that Defendants identify do not

appear doubtful or improper on their face as they are expressly identified as recoverable under the

statute. (Code Civ. Proc., §§ 1032, 1033.5, subdivision (a)(11).) Thus, lacking proper object, the

items included the North American’s Memorandum are prima facie evidence that the costs were

necessarily incurred and reasonable. The burden is on Defendants to show otherwise. (Ibid.)

Defendants did not meet their burden.

Contrary to Defendants’ assertion, the discrepancy between the amount Defendants paid

for copies of the proceeding transcripts and court reporters’ fees North American paid the court

reporter’s services is not evidence of unreasonableness. Court reporter fees “are not for transcripts.

They are for court reporter fees, an entirely different expense. The parties have to pay the court

reporter regardless of whether anyone orders transcripts.” (Chaaban v. Wet Seal, Inc. (2012) 203

Cal.App.4th 29, 58.)

Here, Defendants provide no evidence that court reporter fees, such as the per diem fee

paid by North American, was unnecessary or unreasonable. Further, by not addressing any other

costs, Defendants fail to meet their burden to show that any other costs sought by North American

are unreasonable or where unnecessary. Therefore, the Court DENIES Defendants’ motion.

CONCLUSION

Based on the foregoing, the Court denies Defendants’ motion to tax costs and awards

$16,028.14 to North American as reasonable and necessary costs.

Counsel for North American is ordered to provide notice.

IT IS SO ORDERED.

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