Case Number: KC064066??? Hearing Date: August 29, 2016??? Dept: J
Re: Ron Nemetchek, et al. v. Jack Sissoyev, et al. (KC064066)
(1) MOTION FOR PREJUDGMENT INTEREST AND EXPERT WITNESS FEES; (2) MOTION TO STRIKE OR IN THE ALTERNATIVE TAX COSTS
Moving Parties: (1) Plaintiffs Ron Nemetchek, North River Outfitting, Ltd., North River Stone Outfitters, Ltd. and Maria Origoni; (2) Defendant Royal Custom Designs, Inc. (joinder by Defendant Jack Sissoyev)
Respondents: (1) Defendant Royal Custom Designs, Inc. (joinder by Defendant Jack Sissoyev); (2) Plaintiffs Ron Nemetchek, North River Outfitting, Ltd., North River Stone Outfitters, Ltd. and Maria Origoni
POS: (1) Moving, Opposing and Joinder OK; Reply served by regular mail contrary to CCP ? 1005(c); (2) Moving, Joinder, Opposing and Reply OK
In this action for trade libel, Plaintiffs allege that Defendants published a website containing false statements about Plaintiffs and their businesses. The Complaint, filed 6/15/12, was amended as of right. The operative complaint is the First Amended Complaint, filed on 9/26/12, which asserts causes of action for:
1. Libel
2. Slander
3. Trade Libel
This matter proceeded to jury trial on 3/15/16. On 4/29/16, plaintiffs filed their ?Memorandum of Costs.? On 5/2/16, judgment was entered. On 5/16/16, the Notice of Entry of Judgment was filed. On 8/4/16, an amended judgment was entered. On 8/5/16, Defendant Royal Custom Designs, Inc. filed its notice of appeal. On 8/8/16, Defendant Jack Sissoyev filed his notice of appeal.
(1) MOTION FOR PREJUDGMENT INTEREST AND EXPERT WITNESS FEES:
Plaintiffs Ron Nemetchek, North River Outfitting, Ltd., North River Stone Outfitters, Ltd. and Maria Origoni move the court, pursuant to CCP ? 998 and Civil Code ? 3291, for an order awarding prejudgment interest on the special verdict(s) in the amount of 10% per annum from the 9/14/15 date of service of plaintiffs? offers to compromise and for an award of expert witness fees in the amount of $28,450.00 (including $14,050.00 for James Christopoulos, $4,000.00 for Harry McCowan and $10,400.00 for Scott Hanevelt).
Post-CCP ? 998 Offer Expert Witness Fees
Plaintiffs Ron Nemetchek, North River Outfitting, Ltd., North River Stone Outfitters, Ltd. and Maria Origoni (?plaintiffs?) seek an award of post-CCP ? 998 offer expert witness fees in the amount of $28,450.00.
?Not less than 10 days prior to commencement of trial?, any party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time. The written offer shall include a statement of the offer, containing the terms and conditions of the judgment or award, and a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted. Any acceptance of the offer, whether made on the document containing the offer or on a separate document of acceptance, shall be in writing and shall be signed by counsel for the accepting party or, if not represented by counsel, by the accepting party.? CCP ? 998(b). ?If the offer is not accepted prior to trial?or within 30 days after it is made, whichever occurs first, it shall be deemed withdrawn?? CCP ? 998(b)(2). ?If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the plaintiff, in addition to plaintiff’s costs.? CCP ? 998(d).
?The policy behind section 998 ?to encourage the settlement of lawsuits prior to trial.? (T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 280; see Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 270). To effectuate this policy, section 998 provides ?a strong financial disincentive to a party?whether it be a plaintiff or a defendant?who fails to achieve a better result than that party could have achieved by accepting his or her opponent’s settlement offer.? (Bank of San Pedro v. Superior Court (1992) 3 Cal.4th 797, 804). At the same time, the potential for statutory recovery of expert witness fees and other costs provides parties ?a financial incentive to make reasonable settlement offers.? (Ibid.) Section 998 aims to avoid the time delays and economic waste associated with trials and to reduce the number of meritless lawsuits. (Culbertson v. R.D. Werner Co., Inc. (1987) 190 Cal.App.3d 704, 711; see Wilson [v. Walmart Stores, Inc. (1999)] 72 Cal.App.4th [382,] at p. 390).? Martinez v. Brownco Const. Co., Inc. (2013) 56 Cal.4th 1014, 1019. This provision ?is a cost-shifting statute which encourages the settlement of actions, by penalizing parties who fail to accept reasonable pretrial settlement offers. A plaintiff who refuses a reasonable pretrial settlement offer and subsequently fails to obtain a ?more favorable judgment? is penalized by a loss of prevailing party costs and an award of costs in the defendant’s favor.? Heritage Engineering Const., Inc. v. City of Industry (1998) 65 Cal.App.4th 1435, 1439.
On 9/14/15, plaintiffs made CCP ? 998 offers in the amount of $799,999.99 to Defendant Jack Sissoyev (?Sissoyev?) and $799,999.99 to Defendant Royal Custom Designs, Inc. (?RCD?). (Declaration of Iverson Matthew Jackson [?Jackson?], ? 5, Exhibits ?A? & ?B?). Both offers had a time limitation of thirty days as a deadline for acceptance. (Id.). Neither Defendant Sissoyev nor RCD accepted the 998 demands before the expiration of the thirty day deadline. (Id.).
On 3/25/16, the jury returned a special verdict in the amount of $17,657,420.00 in total in favor of plaintiffs against defendants; specifically, the jury awarded Plaintiff Ron Nemetchek $5,500,000.00 in non-economic damages, Plaintiff Maria Origoni $4,500,000.00 in non-economic damages, Plaintiff North River Outfitting, Ltd. $3,828,710.00 in economic damages and Plaintiff North River Stone Outfitters, Ltd. $3,828,710.00 in economic damages. (Jackson Decl., ? 7).
Defendant RCD contends that plaintiffs? request is excessive, unreasonable and unsupported by sufficient evidence to support their claim that the amounts incurred were reasonably necessary to either preparation for trial or trial itself. Defendant RCD seeks to limit plaintiffs? recoupment of expert fees on the basis of Government Code ? 68092.5, which limits experts to charging ?the reasonable and customary hourly or daily fee for the actual time consumed in the examination of that witness by any party.? However, CCP ? 998 expressly allows for the recovery of fees of expert witnesses ?reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration.? ?The trial court has discretion under Code of Civil Procedure section 998 to allow a prevailing party (as defined in the section) a reasonable sum to cover the costs of the services of expert witnesses. (Pomeroy v. Zion (1971) 19 Cal.App.3d 473).? Huber, Hunt & Nichols, Inc. v. Moore (1977) 67 Cal.App.3d 278, 315.
(a) Harry McCowan
Plaintiffs seek post-offer expert witness fees for Harry McCowan, their hunting reputation expert, in the amount of $4,000.00, including 16 hours at $250.00/hr. (Jackson Decl., ? 6, Exhibit ?4?). Plaintiffs, however, acknowledge that McCowan was disqualified as an expert during trial. (Motion, p. 8, fn. 1). McCowan?s testimony, then, was limited to that of a percipient witness. Plaintiffs? request for fees pertaining to McCowan?s actual trial testimony is denied.
(b) William Hanevelt
Plaintiffs seek post-offer expert witness fees for William Hanevelt, their accounting expert, in the amount of $10,400.00, including 16 hours at $650.00/hr. (Jackson Decl., ? 6, Exhibit ?5?). This amount is reduced to $5,600.00 (16 x $350).
(c) James Christopoulos
Plaintiffs seek post-offer expert witness fees for James Christopoulos, their economics/damages expert, in the amount of $14,050.00, including 35 hours at $350.00/hr. and 4 hours at $450.00/hr. (Jackson Decl., ? 6, Exhibit ?3?). This amount is awarded in full.
Prejudgment Interest
Plaintiffs also seek an award of prejudgment interest on the special verdict(s) in the amount of 10% per annum from the 9/14/15 date of service of plaintiffs? offers to compromise. ?In any action brought to recover damages for personal injury sustained by any person resulting from or occasioned by the tort of any other person, corporation, association, or partnership, whether by negligence or by willful intent of the other person, corporation, association, or partnership, and whether the injury was fatal or otherwise, it is lawful for the plaintiff in the complaint to claim interest on the damages alleged as provided in this section.? Civil Code ? 3291. ?If the plaintiff makes an offer pursuant to Section 998 of the Code of Civil Procedure which the defendant does not accept prior to trial or within 30 days, whichever occurs first, and the plaintiff obtains a more favorable judgment, the judgment shall bear interest at the legal rate of 10 percent per annum calculated from the date of the plaintiff’s first offer pursuant to Section 998 of the Code of Civil Procedure which is exceeded by the judgment, and interest shall accrue until the satisfaction of judgment.? Id.
?Under subdivision (c) of section 998, if ?an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment, the plaintiff shall not recover his or her costs and shall pay the defendant’s costs from the time of the offer.? (? 998, subd. (c).) Under subdivision (d) of section 998, if ?an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment,? the defendant may incur both expert witness fees and, under Civil Code section 3291, prejudgment interest from the time of the plaintiff’s first statutory offer. (? 998, subd. (d); Civ. Code, ? 3291).? Stallman v. Bell (1991) 235 Cal.App.3d 740, 747.
?Section 3291 serves two purposes. It encourages settlements in personal injury cases by creating ??an incentive for recalcitrant defendants to accept reasonable settlement offers in a timely manner.?? (Hess [v. Ford Motor Co. (2002) 27 Cal.4th [516,] at p. 533, quoting Governor’s Off., Dept. of Legal Affairs, Enrolled Bill Rep. on Sen. Bill No. 203, Apr. 6, 1982, p. 2; see also, Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 663). In addition, section 3291 has a compensatory purpose: ?to provide just compensation to the injured party for loss of use of the [damage] award during the prejudgment period ? in other words, to make the plaintiff whole as of the date of the injury.? (Lakin, at p. 663; accord, Steinfeld v. Foote-Goldman Protologic Medical Group, Inc. (1997) 60 Cal.App.4th 13, 20).? Cadlo v. Metalclad Insulation Corp. (2009) 172 Cal.App.4th 1040, 1046-1047.
?The words of the statute are clear and unambiguous: the judgment shall bear interest at the legal rate. Though two defendants [are] found liable by the jury, only one judgment resulted, and the interest imposed by section 3291 is to be calculated on that amount.? Cadlo, supra, 172 Cal.App.4th at 1046.
Defendants do not dispute that plaintiffs are entitled to prejudgment interest; rather, they argue only that (1) any award of interest must be calculated based on the reduced total damages award of $12,079,770 following the partial granting of a motion for judgment notwithstanding the verdict. (Opposition, 2:25-28) and that (2) ? 3291 provides for a single award of interest. They are correct. Civil Code ? 3291 ?carefully defines the time period for accruing interest using a date before the judgment ? the date of the section 998 offer ? and a date after the judgment ? the date the judgment is satisfied. (See Civ. Code, ? 3291). Thus, section 3291 provides for a single award of interest and expressly eschews any division of this award into separate pre-judgment and post-judgment components.? Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 531 (emphasis theirs).
Plaintiffs are granted prejudgment interest on the reduced judgment of $12,079,770.00, at the legal rate of 10% per annum, from the date of their 998 offer.
(2) MOTION TO STRIKE OR IN THE ALTERNATIVE TAX COSTS:
Defendant Royal Custom Designs, Inc. (?RCD?) moves for an order pursuant to CCP ?? 1032, 1033.5 and 998, striking or alternatively taxing certain costs sought by Plaintiffs Ron Nemetchek, North River Outfitting, Ltd., North River Stone Outfitters, Ltd. and Maria Origoni (?plaintiffs?) in their Memorandum of Costs, as follows:
1. Item No. 4.a-4.d and attachment 4.e (i.e., Deposition Costs) in their entirety. Alternatively,
a. Item 4.b: $505.45 (travel?Scott Ellis)
b. Item 4.b: $735.00 (videotaping?Scott Ellis)
c. Item 4.c: $603.52 (travel?Chris Brough)
d. Item 4.c: $339.25 (videotaping?Chris Brough)
e. Item 4.d: $812.32 (travel?Ron Nemetchek and Maria Origoni)
f. Item 4.e (attachment): $295.13 (travel?Harry McCowan)
2. Item 8.a.(1)-8.a.(5) (i.e., Witness fees) in the amount of $350
3. Item 8.b.(1) in the amount of $4,000
4. Item 8.b.(2) in the amount of $12,250
5. Item 8.b.(3) in the amount of $1,800
6. Item 8.b.(4) in the amount of $10,400
The ?prevailing party? is entitled as a matter of right to recover costs of suit in any action or proceeding. (CCP ? 1032(b).) The losing party may dispute any or all of the items in the prevailing party?s memorandum of costs by a motion to strike or tax costs. (CRC 3.1700(b)).
?If 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. ?On the other hand, if items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs.? (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 764, 774). However, whether a cost item was reasonably necessary is still a question of fact to be decided by the trial court. (Ibid.)? Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1266. ?Initial verification 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. Only if the costs have been put in issue via a motion to tax costs must supporting documentation be submitted.? Id. at 1267.
ITEM NO. 4 (DEPOSITION COSTS):
As an initial matter, plaintiffs concede that Harry McCowan?s travel expenses of $295.13 (set forth in Item 4.e (attachment) are not recoverable and withdraw their request for same. The motion is granted to that extent.
?Transcripts and video recordings of ?necessary? depositions, plus travel expenses to attend depositions, are allowable costs. [CCP ? 1033.5(a)(3)?].? Wegner, Fairbank, Epstein & Chernow, CAL. PRAC. GUIDE: CIV. TRIALS & EVIDENCE (The Rutter Group 2015) ? 17:113. The travel costs associated with Messrs. Ellis? and Brough?s depositions in British Columbia and Texas, respectively, as well as the videotaping of same, were reasonably necessary to the conduct of the litigation. Thus, the motion is denied as to Items 4.b and 4.c.
Plaintiffs are not entitled to recoup their own expenses relating to traveling to attend their depositions. CCP ? 2025.250(a) does not entitle the prevailing party to costs associated with having to travel beyond the 150 miles from their home, and does not amend or supplement CCP ? 1003.5; as such, the motion is granted as to Item 4.d.
ITEM NO. 8.a.(1)-8.a.(5) (ORDINARY WITNESS FEES):
?Ordinary witness fees pursuant to Section 68093 of the Government Code? are recoverable pursuant to CCP ? 1033.5(a)(7). Government Code ? 68093 provides that ?[e]xcept as otherwise provided by law, witness? fees for each day?s actual attendance, when legally required to attend a civil action or proceeding in the superior courts, are thirty-five dollars ($35) a day and mileage actually traveled, both ways, twenty cents ($0.20) a mile.? Here, each of plaintiffs? witnesses were sworn in and dismissed in one day and thus only ?legally required to attend? trial one day; as such, the motion is granted as to Item 8.a(1)-(5).
ITEM NO. 8.b.(1)-(4) (EXPERT FEES):
This motion is moot with respect to these items, based upon the ruling made on the preceding motion.