Second District, Division 2 Stresses That Record Must Show Discretion Was Actually Exercised.
Although an order denying routine costs is reviewed under the deferential abuse of discretion standard, there is an important qualifier to application of this rule—there must be an indication that the trial court actually did exercise discretion. If a judge misreads a judgment so that arguments were not considered, a remand may be necessary so that discretion is actually exercised under the proper statutes. (Fassberg Construction Co. v. Housing Authority of City of Los Angeles, 152 Cal.App.4th 720, 767-768 (2007).) The next case is one where the Fassberg qualifier was triggered, requiring remand for reconsideration of a costs award denial.
In Tracy v. Tracy, Case No. B203084 (c/w B205335) (2d Dist., Div. 2 June 9, 2009) (unpublished), plaintiff won a jury verdict of $2 against his sister out of a $400,000 transfer/personal property retention battle. The trial court declined to award plaintiff his costs of $13,999.45, granting sister’s motion to tax costs on two grounds: (1) plaintiff recovered less than the jurisdictional limit of $25,000 in superior court, and (2) plaintiff’s $2 verdict was less than sister’s Code of Civil Procedure section 998 offer of $1,000. (The judgment, although awarding $2 to plaintiff and costs to be determined, also awarded sister her postoffer costs in an undetermined amount. However, sister was denied postoffer costs because she failed to delineate between pre and postoffer costs in her costs memorandum.) The lower court also determined that the judgment, as framed, excluded any costs to plaintiff. Only plaintiff appealed the costs denial order.
The Second District, Division 2 reversed the granting of sister’s motion to tax costs and remanded for the lower court to actually exercise its discretion as far as whether costs should be awarded to plaintiff brother.
The primary flaw was that the trial court misread the judgment as precluding any cost award to plaintiff. Not at all, ruled the appellate panel. Even though Code of Civil Procedure section 1033(a) does imbue the trial judge with discretion to deny costs where a superior court award falls below the $25,000 jurisdictional limit, the purpose of the provision is to encourage litigants to bring actions in the appropriate forum—with no one arguing that the $400,000-plus dispute should have been brought as a limited civil case. With respect to the Code of Civil Procedure section 998 offer, plaintiff was still entitled to preoffer costs even though sister was entitled to postoffer costs (but had not broken them out and did not appeal the adverse denial order).
The upshot was that the matter had to be remanded so the trial court could exercise discretion under the applicable statutes.