Section 17709.02 Does Not Trump The CCP § 1032 Trial Routine Costs Statute Or The CRC 8.891 Appellate Routine Costs Provision.
In Barrios v. Chraghchian, Case No. B341773 (2d Dist., Div. 8 Jan. 20, 2026) (published), a defendant brought a bond motion under Corporations Code section 17709.02 to have a derivative lawsuit plaintiff furnish security up to a $50,000 capped amount, losing the motion. Later, defendant prevailed in the lawsuit and moved for an award of trial level routine costs (CCP § 1032) and appellate level routine costs (CRC 8.891). Those requests were granted by the lower court.
On appeal, plaintiff argued that the defendant could not collect these costs because the bonding statute blocked ordinary costs that go to the victors. The 2/8 DCA, in a 3-0 opinion authored by Justice Wiley, rejected that argument because section 17709.02 has no language trumping the routine costs recovery provisions, even where a prior bond motion was lost. (Brusso v. Running Springs Country Club, Inc., 228 Cal.App.3d 92, 100-102 (1991).)
BLOG QUERY: So what happens when the prevailing defendant in a derivative lawsuit had previously won a bond motion—is the result the same? Answer: It depends. If the bond statute is the only basis for fee and cost recovery, then the $50,000 cap applies. However, if fees and costs exceed the cap, then the defendant victor can obtain recovery if there is an independent basis for it under a contract or another statute. (West Hills Farms, Inc. v. RCO Ag Credit, Inc., 170 Cal.App.4th 710 at n. 3 (2009).)