Remands Were In Order Because Costs Of Proof Sanctions Were Not Properly Tethered To The Proof Of The Matters Denied And Defense Section 998 Offer Impact Should Not Have Been Held In Abeyance Pending Appeal
Well, now that we are past the Thanksgiving holidays, the defense must be giving thanks for the results in Conrado v. CLS Landscaping Mgt., Inc., Case No. D081551 (4th Dist., Div. 1 Nov. 27, 2023) (unpublished).
What happened in this case was that plaintiff was awarded $181,605.61 by a jury in a motor vehicle negligence case where defendants were an employee and employer, with employee apparently running a red light while performing work in the course of his employment. During trial, the defense quickly conceded negligence and did not really contest causation, so that most of a lengthy trial focused on damages. The lower court then granted plaintiff prevailing party costs of $255,642.38, with the defense filing no motion to tax costs. (This order was affirmed on appeal.) Plaintiff filed a CCP § 2033.40 costs-of-proof sanction motion for the defense denying liability and causation RFAs, requesting $1,054,250 in attorney’s fees but the lower court awarded $500,000 in a contested proceeding at $500 hourly rates for the San Diego venue, although referencing Los Angeles and the Inland Empire in the ruling. Earlier, the defense had served a $250,001 CCP § 998 pretrial settlement offer, with the defense wanting the lower court to determine its impact but the trial judge stayed any determination until the RFA costs-of-proof sanctions issue on appeal was resolved. Defendants principally appealed the RFA and 998 issues, and they were rewarded for doing so.
The 4/1 DCA reversed the determinations on both issues.
On the RFA issue, there were multiple problems: (1) fees could not be awarded for work done before the RFA denials; (2) fees could not be awarded for work throughout the litigation and had to be calibrated for work proving the specific negligence and causation matters which were denied (rather than other general litigation work or trial work relating to damages); and (3) the $500 hourly rate was not properly substantiated because the trial court referenced data sets not involving the hourly rate in San Diego County. That left the intriguing question on the remedy—a remand or simply a reversal based on insufficiency of evidence. The appellate court decided that a remand was in order, distinguishing trial verdict insufficiency cases from RFA costs-of-proof sanctions proceedings.
The defense also won on the 998 issue because Oakes v. Progressive Transp. Services, Inc., 71 Cal.App.5th 486, 503-504 (2021) (a case found persuasive by the 4/1 DCA panel) established that a section 998 offer’s impact must be considered before judgment is entered because it might be an offset to the judgment amount. The defense did have an argument that it might have beaten the jury verdict when pre-offer costs were factored in, but that would be a remand issue for the lower court to decide along with a re-do on the RFA sanctions.