Woodland Hills personal injury lawyer Barry P. Goldberg is both careful about incurring costs and spends a significant amount of time explaining how costs work to clients. Clients need to understand what costs they will recover by going to trial and which ones they will not. This analysis should be part of the decision-making process in deciding whether to settle or go to trial.
“Under Code of Civil Procedure section 1032,[] the prevailing party is entitled as a matter of right to recover costs. Section 1033.5 identifies cost items that are allowable under section 1032 (§ 1033.5, subd. (a)); identifies items that are not allowable (id., subd. (b)); and further provides that ‘[i]tems not mentioned in this section . . . may be allowed or denied in the court’s discretion’ (id., subd. (c)(4)). Any allowable costs must be ‘reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation,’ and reasonable in amount. (Id., subd. (c)(2), (3).)” (Bender v. County of Los Angeles (2013) 217 Cal.App.4th 968, 989-990.)
As a practical matter, after the case is concluded, the prevailing party file a Memorandum of Costs listing things like filing fees, deposition costs, exhibit costs and other specifically allowable items. If an item is neither specifically listed by the statute nor specifically excluded by the statute, the Court has discretion to allow the cost. If the non-prevailing party disagrees or contests the cost item, he must bring a Motion to Tax costs.
“‘In ruling upon a motion to tax costs, the trial court’s first determination is whether the statute expressly allows the particular item and whether it appears proper on its face. “If so, the burden is on the objecting party to show [the costs] to be unnecessary or unreasonable.” [Citation.] Where costs are not expressly allowed by the statute, the burden is on the party claiming the costs to show that the charges were reasonable and necessary. [Citation.]’” (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 71, citing Foothill-De Anza Community College Dist. v. Emerich (2007) 158 Cal.App.4th 11.)
It gets a bit tricky when the case does not actually go trial and is either summarily determined or settled with an Offer to Compromise. For example, under section 1033.5, subdivision (a)(13), “[m]odels and blowups of exhibits and photocopies of exhibits may be allowed [as costs] if they were reasonably helpful to aid the trier of fact.”
There is a split in authority as to whether costs for exhibits not actually used at trial are recoverable. On the one hand, Applegate v. St. Francis Lutheran Church (1994) 23 Cal.App.4th 361 and Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, hold costs for exhibits not used at trial may be allowed in the trial court’s discretion under subdivision (c)(4). Applegate held although costs for exhibits not used at trial might not be allowed under section 1033.5, [former] subdivision (a)(12), they may be allowed in the trial court’s discretion under subdivision (c)(4). (Applegate, supra, 23 Cal.App.4th at p. 363.) The court explained: “Until a dismissal was filed, defendants were forced to continue preparing for trial in the matter. The exhibits prepared were ‘reasonably necessary to the conduct of the litigation.’ An experienced trial judge recognized that it would be inequitable to deny as allowable costs exhibits which a prudent attorney would prepare in advance of trial, and which were not used only because the action was dismissed by the opposing party on the day of trial.” (Id. at p. 364.)
Benach held costs for exhibits not used at trial were properly awarded under the discretionary authority of section 1033.5, subdivision (c)(4). (Benach, supra, 149 Cal.App.4th at pp. 856-857.) Without substantive analysis, the court stated: “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.” (Id. at p. 856.)
On the other hand, Ladas v. California State Auto Assn. (1993) 19 Cal.App.4th 761 , held costs for exhibits not used at trial were not allowed as “reasonably helpful to the trier of fact” under section 1033.5, [former] subdivision (a)(12). Ladas held, “because the right to costs is governed strictly by statute [citation] a court has no discretion to award costs not statutorily authorized.” (Id. at p. 774.) “Since the case was dismissed before trial, [the defendant] failed to qualify for recovery of exhibit costs under” [[former] subdivision (a)(12)]. These items should have been disallowed in their entirety.” (Id. at p. 775.)
Clients should be aware that Section 1033.5, subdivision (b), provides, “The following items are not allowable as costs, except when expressly authorized by law: (1) Fees of experts not ordered by the court. (2) Investigation expenses in preparing the case for trial. (3) Postage, telephone, and photocopying charges, except for exhibits. (4) Costs in investigation of jurors or in preparation for voir dire. (5) Transcripts of court proceedings not ordered by the court.”
In every case I have in litigation, I serve a CCP § 998 Offer to Compromise in an amount I think I can beat at trial specifically so I can recover the above costs on behalf of my client. In fact, “Fees of experts not ordered by the court” can be the single largest line item and recovery of those fees can make the difference between whether a trial verdict is also a financial win, as well.
It is recommended that trial attorneys meet and go over these costs with clients well before trial. In addition, the client would be well served to authorize a 998 Offer to Compromise in order to increase the chances of receiving substantial costs, including expert fees.