Case Name: ?? The Irvine Company LLC v. Douglas Ross Construction, Inc., et al. (The Redwoods)
Case No.: ?????? 2012-1-CV-234516
This is a construction defect action regarding ?The Redwoods? apartment complex in San Jose.? On December 29, 2015, just before the scheduled trial, plaintiff The Irvine Company LLC filed a request for dismissal without prejudice of defendant Pinnacle Installations, Inc.? The dismissal was entered by the clerk on the same date.? Trial was ultimately vacated due to settlement of the entire action.
On April 22, 2016, Pinnacle filed a motion to recover attorney fees, expert fees, and other costs as the prevailing party under Code of Civil Procedure section 1032, along with a memorandum of costs.? Plaintiff opposes the motion.
- Request for Judicial Notice
Pinnacle?s request for judicial notice is GRANTED as to items 1, 2, and 5, which are court records.? (Evid. Code, ? 452, subd. (d).)? The request is DENIED as to items 3, 4, 6, and 7, since there is no basis for the Court to judicially notice documents exchanged between the parties; however, because these documents are properly authenticated by the declaration of Darrell V. Nguyen filed in support of Pinnacle?s motion, the Court will consider them.
- Pinnacle?s Asserted Agreement to Waive Fees and Costs
Plaintiff contends that the parties agreed to bear their own fees and costs in this matter and submits a declaration by its counsel Daniel L. Rottinghaus in opposition to Pinnacle?s motion.? Counsel explains that in December of 2015, plaintiff reached a settlement with defendant Collier Warehouse that was contingent upon Pinnacle remaining a party to the action.? (Decl. of Daniel L. Rottinghaus ISO Opp., ?? 3-5.)? As the holidays were approaching, the Court requested during a case management conference that plaintiff decide whether it would proceed to try its direct claims against Pinnacle as scheduled on January 4, or would instead dismiss the direct action and proceed via a subrogation claim it had been assigned by general contractor Douglas Ross Construction, Inc.? (Ibid.)
According to counsel, ?[p]laintiff then agreed to dismiss the direct action against Pinnacle by advising that it would dismiss said direct action with a waiver of costs in favor of pursuing solely the assigned subrogation costs and thereby avoid requiring Pinnacle to incur further costs and labor ramping up for a trial over the holidays.?? (Rottinghaus Decl., ? 5.)? ?Accordingly, at the Court?s request, I agreed that Pinnacle could be so informed of the dismissal, which would be memorialized in open Court, so that Pinnacle and the Court would know there would be no trial on January 4.?? (Ibid.)? ?At that time, Judge Kirwan met with Pinnacle?s counsel and carrier representative and thereafter I did the same.?? (Id. at ? 6.)? ?I informed Pinnacle why Plaintiff was no longer in a position to settle with Pinnacle, and also informed him that Plaintiff would not pursue Pinnacle in the direct action ?.?? (Ibid.)? ?Before counsel left the [mandatory settlement conference], Judge Kirwan?s clerk noted for the record the intended dismissal of the direct claim and notice was provided that the trial ? would be vacated.?? (Ibid.)? ?At that time, Pinnacle made no mention that it was demanding or reserving rights to pursue costs.?? (Ibid.)
Thereafter, plaintiff?s counsel ?filed a dismissal with prejudice of Pinnacle from the direct action, clearly stating on the dismissal form that each party was to bear its own fees and costs.?? (Rottinghaus Decl., ? 7.)? ?Pinnacle?s counsel never said that the dismissal form was incorrect, and Pinnacle specifically took the benefit of the dismissal and the vacating of the trial date without the corresponding obligation to advise that the dismissal was incorrectly stated and that it wanted to bring a motion for costs.?? (Id. at ? 8.)? ?Had it advised that it demanded costs[,]?? Plaintiff would not have filed the dismissal, nor agreed to vacate the trial date.?? (Ibid., emphasis original.)
At no point in his thorough discussion of the events leading up to Pinnacle?s dismissal does plaintiff?s counsel state that Pinnacle actually agreed to a waiver of fees and costs.? Counsel does not even indicate that Pinnacle was informed of plaintiff?s assumption that there would be a waiver before the dismissal was filed.? Plaintiff?s unilateral and improper modification of the form request for dismissal to state that each party will bear its own fees and costs is of no effect,[1] and, despite plaintiff?s characterization, there is no evidence of an agreement by Pinnacle to waive fees and costs.? Consequently, Pinnacle?s motion is not barred by any such agreement.
III.? Motion for Fees
In California, ?following the general American rule, ? each party to a lawsuit is responsible for his or her own attorney?s fees in the absence of an agreement between the parties for fees or a statute specifically authorizing fees.? ?(Pederson v. Kennedy (1982) 128 Cal.App.3d 976, 979.)
Pinnacle contends that it is entitled to fees because plaintiff requested them, citing ?case law? in the form of Manier v. Anaheim Business Center Co. (1984) 161 Cal.App.3d 503.? (See Code Civ. Proc., ? 1033.5, subd. (a)(10)(C) [attorney fees are allowable as costs when authorized by ?[l]aw?].)? Manier, however, addresses the recovery of fees pursuant to a contract ultimately held to be unenforceable, and does not state or stand for the proposition that a party who prays for attorney fees is ?equitably estopped from denying the prevailing defendant?s request for such fees? as Pinnacle claims. ?To the contrary, the law is clear that ?[t]he mere allegation in a complaint that the plaintiff is entitled to receive attorney fees does not provide a sufficient basis for awarding them to the opposing party if the plaintiff does not prevail.?? (Sessions Payroll Management, Inc. v. Noble Const. Co., Inc. (2000) 84 Cal.App.4th 671, 681-682, italics added.)
Alternatively, Pinnacle urges that the Court should award fees pursuant to its ?inherent equitable authority,? citing Trope v. Katz (1995) 11 Cal.4th 274 and its reference to the three exceptions to the American rule announced by the courts: ?the common fund, substantial benefit, and private attorney general theories of recovery.?? (At p.?279.)? Pinnacle does not contend that any of these three doctrines applies here, and the Court declines to create a new equitable exception to the American rule simply because Pinnacle incurred significant fees and costs in this action.? Such an exception would swallow the rule.
Finally, Pinnacle notes that the Court may award fees on its own motion where fees were incurred ?as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay.?? (Code Civ. Proc., ? 128.5.)? However, there is no evidence of bad-faith tactics here.
Pinnacle?s motion for attorney fees is consequently DENIED.
- Motion for Costs
- Timeliness of the Motion
As an initial matter, plaintiff argues that Pinnacle?s motion for costs is untimely.? A memorandum of costs must be filed and served ?within 15 days after the date of service of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first.?? (Cal. Rules of Court, rule 3.1700(a)(1).)? Here, judgment has not yet entered, and there is no indication that either the clerk or plaintiff ever served Pinnacle with a notice of entry of dismissal.[2]
Plaintiff notes that the clerk indicated in paragraph 7(a) of the Judicial Council form request for dismissal that the ?[a]ttorney or party without attorney [was] notified? of the dismissal on December 29, 2015.? According to plaintiff, this indicates notice to Pinnacle that triggered the 15-day deadline.? However, it is apparent from the rest of the form that the clerk?s notation is a reference to notice to plaintiff, who filed the request for dismissal and whose own attorney is the only one listed on the form.? There is no proof of service indicating that any other party was served by the clerk with the request for dismissal after dismissal was entered, nor was the clerk required to provide such notice by Code of Civil Procedure section 664.5.? (See Code Civ. Proc., ? 664.5, subds. (b) and (d) [clerk shall mail notice of entry of judgment in contested actions in which a prevailing party is not represented by counsel, or upon order of the court].)? To the contrary, it was plaintiff?s duty to serve and file written notice of entry of dismissal.[3]? (See Cal. Rules of Court, rule 3.1390 [?A party that requests dismissal of an action must serve on all parties and file notice of entry of the dismissal.?]; Van Beurden Ins. Services, Inc. v. Customized Worldwide Weather Ins. Agency, Inc. (1997) 15 Cal.4th 51, 63-64 [?The clerk ? ordinarily has no ?official duty? pursuant to Code of Civil Procedure section 664.5 to mail notice of entry of judgment?that is the ?duty? of the party submitting the order or judgment for entry ?. [T]o qualify as a notice of entry of judgment under Code of Civil Procedure section 664.5, the clerk?s mailed notice must affirmatively state that it was given ?upon order by the court? or ?under section 664.5? and a certificate of mailing the notice must be executed and placed in the file.?].)
Given that the Rules of Court specify it is ordinarily plaintiff?s duty to serve and file notice of entry of dismissal, and notice by the clerk must be made ?under Code of Civil Procedure section 664.5? to trigger the deadline under rule 3.1700(a)(1), any courtesy notice that may have been provided by the clerk did not trigger the deadline here.? Pinnacle?s motion is timely.
- Merits of Motion
A prevailing party, including a defendant in whose favor dismissal is entered, is generally entitled to recover costs as a matter of right.? (Code Civ. Proc., ? 1032, subds. (a)(4), (b).)? A party seeking costs need only submit a memorandum of costs with a statement by the attorney verifying that, to the best of his or her knowledge, the costs claimed are correct and were necessarily incurred in the case. ?(See Cal. Rules of Court, rule 3.1700(a)(1).) ?The party need not attach copies of bills, invoices, and so forth. ?(See Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1267.) ??[T]he 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.? ?(Id. at p. 1266.)? Failure to challenge a costs bill waives any objection to the costs claimed thereon.? (Douglas v. Willis (1994) 27 Cal.App.4th 287, 290.)
Here, Pinnacle seeks $3,085 in filing fees, $13,744.55 in deposition costs, and $251.85 in fees for service of process, for a total of $17,081.40 in costs.? These items are allowable as costs pursuant to Code of Civil Procedure section 1033.5, subdivision (a), and Pinnacle?s request is supported by the memorandum of costs filed with its motion.? Plaintiff does not challenge the type or amount of costs requested and did not file a motion to tax costs, so these costs will be awarded.
Pinnacle also seeks $113,518.55 in expert witness fees, but expert fees are not allowable as costs unless ordered by the court or expressly authorized by law.? (Code Civ. Proc., ? 1033.5, subd. (b)(1).)? Pinnacle does not claim that either exception applies here.? Consequently, expert fees will not be awarded.
The motion for costs is accordingly GRANTED IN PART as to the $17,081.40 in costs itemized in Pinnacle?s memorandum of costs.? The motion is DENIED as to expert fees.
[1] Notably, plaintiff added this language to a portion of the form meant for use to specify which part of the action was being dismissed.
[2] Pinnacle itself filed and served a notice of entry of dismissal on April 8, 2016, fewer than 15 days before it filed the instant motion.
[3] A separate Judicial Council form entitled ?Notice of Entry of Dismissal,? no. CIV-120, is provided for this very purpose.