Settlement Agreement Had No Waiver of Costs, Which Led to Reversal of an Order Denying Costs.
There definitely is a practice lesson is the next case where a prevailing defendant obtained reversal of an order striking/taxing routine costs in postjudgment proceedings.
Robertson v. St. John, Case No G043635 (4th Dist., Div. 3 Feb. 10, 2011) (unpublished) was a situation where the lower court granted plaintiff’s motion to strike/tax costs in entirety after a prior without prejudice dismissal of an unlawful detainer complaint and a later with prejudice dismissal of a later renewed complaint after the parties performed under a settlement agreement. The settlement agreement, however, did not have a waiver of costs provision. Plaintiff timely moved for recovery of $8,641.98 in an initial costs memorandum and later filed an amendment seeking an amended total of $10,237.65. The trial court denied costs because it felt that the settlement between the parties had taken care of the issue.
The Fourth District, Division 3, in a 3-0 panel opinion written by Justice Fybel, reversed the denial of the $8,641.98 costs memorandum request.
The main reason was that a with prejudice dismissal on the later complaint entitled defendant to seek routine costs as the prevailing party under Code of Civil Procedure section 1032(b). (After all, costs awards are statutory in nature, confirming recovery as a matter of right unless there is an issue of whether the claimed costs were “reasonable or necessary” to the litigation.) The settlement agreement conspicuously did not waive costs, so the trial court erred in denying costs on this basis. The object lesson here is to include a costs waiver provision in settlement agreements to avoid this type of postjudgment litigation.
However, costs were properly not allowable under the untimely amended costs memorandum or under the cross-complaint because defendant never timely sought them.
BLOG OBSERVATION–Jim McQueen of McQueen & Ashman was the winning appellate attorney on this one. Co-contributor Mike was a USC debate squad colleague of Jim when Mike was a junior and Jim was a senior. You don’t want to know how long ago!