Plaintiff Also Hit With Some Costs, But Some Non-Statutory And Discretionary Costs Were Stricken.
Plaintiff borrowers brought a multi-count contractual/tort/statutory claim-based suit against construction loan participants, ultimately attempting to dismiss the action without prejudice during trial. The trial judge determined the dismissal was not authorized and set it aside as void, further granting the defense motion for $526,393 in attorney’s fees, $20,978 in statutory costs, and about $63,000 in non-statutory/discretion costs, in the aggregate, as to two defendants.
Plaintiff achieved about a $53,000 reduction on the costs award, but the substantial fee award was affirmed entirely in Emma Court LP v. United American Bank, Case No. A144462 (1st Dist., Div. 2 Mar. 3, 2017) (unpublished).
The appellate court agreed that the plaintiff could not invoke the benefit of the Santisas restriction by attempting to dismiss without prejudice during trial. Although section 1717 does not apply to non-contractual claims, the problem for plaintiff was that the contract/tort/statutory claims were all intertwined such that full fee recovery was proper—despite the fact that the construction loan fees clause was narrow and did not encompass noncontractual causes of action. Fee recovery was also correctly allowed to another loan participant which was joined in interest with the recovering lead bank which was a fees clause signatory.
The statutory costs of $20,978.80 were not even contested by plaintiff on appeal. However, plaintiff did challenge expert witness fees, copies, computer research, FedEx charges, postage, and telephone charges totaling $22,655.19 because they were not expressly authorized under the routine costs statute and based on Ripley v. Pappadopoulos, 23 Cal.App.4th 616 (1994) finding that non-statutory costs are not awardable unless pled and proven at trial versus being requested in a costs memorandum. (The 1/2 DCA found Ripley had been followed by numerous other intermediary appellate courts, notwithstanding Ripley disagreed with the contrary, earlier Bussey decision on the same issue.) However, the reviewing court had to then deal with Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC, 185 Cal.App.4th 1050, 1065-1067 (2010), a 4/3 DCA decision holding that non-statutory costs recoverable under the wording of a fees clause could be claimed via a costs memo rather than being pled/proven at trial. The 1/2 DCA believed that non-statutory costs could not be claimed under vague “legal expenses” fees clause language, but had to be pled and then proven at trial. (Although not directly stated, this DCA panel seems to disagree with Thrifty Payless.) So, the costs of $22,655.19 were stricken. As far as delivery service expenses, court filing service fees, outside mediation fees, parking, and travel expenses, the appellate court found a vast majority of these were not specifically prohibited under the routine costs statute, and properly awarded where found necessary and reasonable to the litigation in the trial judge’s discretion (which happened to be the case). But, there were two exceptions: (1) only defense costs related to local travel and parking for deposition or non-local travel were justified, requiring a further reduction; and (2) $29,979 for PLM Lender fees were not properly claimed based on their vagueness. Otherwise, the fee award was affirmed in full and some portions of the costs award were sustained on appeal.