Healy & Associates, LLC vs. Island Breeze Farms, LLC

Case Number

22CV02338

Case Type

Hearing Date / Time

Wed, 09/06/2023 - 10:00

Nature of Proceedings

Defendant’s Motion To Strike Or, In The Alternative, To Tax Costs

Tentative Ruling

For Plaintiff Healy & Associates, LLC: Justin S. Draa, Draa & Lapcevic, LLP

For Defendant Island Breeze Farms, LLC: Gary M. Bright, Bright & Powell

RULING

For all reasons discussed herein, the motion to strike or, in the alternative, tax costs of Defendant Island Breeze Farms, LLC, is granted in part. The Court disallows recovery of costs for transcripts in the amount of $590 against Defendant.

Background

This is an action for breach of contract filed by Plaintiff Healy & Associates, LLC (Healy) on June 22, 2022. Defendant is Island Breeze Farms, LLC (Island Breeze). In the first amended complaint (FAC) filed by Healy on November 3, 2022, which is the operative pleading, Healy alleges that it entered into a verbal agreement with Island Breeze in October 2020, related to a mutual business relationship the parties intended to pursue. Pursuant to the verbal agreement, Island Breeze agreed to cure and process Healy’s raw product and sell the finished goods to third parties. Island Breeze would be reimbursed by Healy for labor and other costs and would earn a 10 percent commission on the sales transactions. From October 15, 2020, through November 5, 2020, Healy delivered fresh cannabis to Island Breeze in accordance with the parties’ agreement. Healy issued a final invoice to Island Breeze on November 17, 2021, in the amount of $131,240.80. The final invoice reflected price adjustments and discounts favorable to Island Breeze. Island Breeze did not pay the amount demanded in Healy’s final invoice.

The present matter proceeded to a bench trial on June 22, 2023, which concluded with closing arguments on July 6, 2023. The Court issued a final statement of decision (SOD) which was filed on July 17, 2023. In its SOD, the Court found that Healy was the prevailing party and awarded costs to Healy in an amount to be determined by the Court following submission of a cost memorandum. (SOD at pp. 10-11, ¶¶ A, F.)

On July 21, 2023, Healy filed a memorandum of costs (the memorandum) claiming costs in the amount of $4,513.70. On August 4, 2023, Island Breeze filed a motion to strike or, in the alternative, tax the costs claimed by Healy, which Healy opposes.

Analysis

“[Civil Code section] 1032 is the fundamental authority for awarding costs in civil actions. It establishes the general rule that ‘[e]xcept as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.’ [Citation.]” (Scott Co. of California v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108.) “ ‘Prevailing party’ includes the party with a net monetary recovery[]…. If any party recovers other than monetary relief and in situations other than as specified, the “prevailing party” shall be as determined by the Court, and under those circumstances, the Court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.” (Code Civ. Proc., § 1032, subd. (a)(4).) Unless otherwise provided by statute, “the Court has no discretion to deny costs to the prevailing party.” (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 128-129.)

Code of Civil Procedure section 1033.5, subdivision (a), sets forth items categorically allowable as costs, if incurred. (See Segal v. ASICS America Corp. (2022) 12 Cal.5th 651, 667 (Segal).) Costs not mentioned in section 1033.5 which are claimed under subdivision (c)(4), are allowable in the Court’s discretion. (Ibid.) “Costs are allowable . . . whether or not paid[,]”, and must be “reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation” and “reasonable in amount.” (Code Civ. Proc., § 1033.5, subd. (c)(1)-(3); see also Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 856 (Benach) [verified memorandum is prima facie evidence that costs were necessarily incurred].) “If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that were not reasonable or necessary. On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs.” (Ladas v. California State Auto Assn. (1993) 19 Cal.App.4th 761, 774; see also Benach, supra, 149 Cal.App.4th at p. 855 [trial Court’s first determination is whether the statute expressly allows item and if it appears proper on its face].)

Under item 4 of the memorandum, Healy claims deposition costs in the amount of $2,567.05. Under item 9 of the memorandum, Healy claims costs for Court-ordered transcripts in the amount of $590. Island Breeze requests that the Court strike the deposition and Court-ordered transcript costs claimed under items 4 and 9 of the memorandum.

(1) Deposition Costs:

Code of Civil Procedure section 1033.5 expressly allows costs relating to the taking and transcribing of necessary depositions. (Code Civ. Proc., § 1033.5, subd. (a)(3).) “The burden of proof that the deposition was unnecessary or that the costs of taking the deposition were unreasonable is on the party seeking to have that item taxed or reduced.” (County of Kern v. Ginn (1983) 146 Cal.App.3d 1107, 1113.)

Regarding the deposition costs claimed under memorandum item 4, Island Breeze contends that neither Healy nor its Court-reporting service made any effort to provide transcripts to any of the deponents to be reviewed or authenticated as required by Code of Civil Procedure section 2025.520, subdivision (a), and that certified copies of deposition transcripts were not made available to Island Breeze’s counsel. (Bright Decl., ¶ 3(a).) As a result, Island Breeze asserts, the Court ruled that the deposition of Carter Miller was inadmissible. (Id. at ¶ 3(b).) In addition, Island Breeze contends that the depositions of Robyn Miller and Stacey Wooten were never offered at trial for any purpose. (Ibid.) For these reasons, Island Breeze argues that the deposition transcripts served no useful purpose in this litigation.

In its opposition to the motion, Healy asserts that in Island Breeze’s responses to interrogatories that were served by Healy, Island Breeze identified Robyn Miller and Carter Miller as witnesses who possessed information relevant to this litigation. (Draa Decl., ¶ 2.) Island Breeze also identified Stacey Wooten as its retained expert. (Ibid.) Therefore, Healy argues, the depositions of Robyn Miller, Carter Miller, and Stacey Wooten, for which Healy claims costs under item 4 of the memorandum, were necessary to Healy’s preparation for trial.

Healy further asserts that, after the trial of this matter, it contacted the Court reporter who prepared the deposition transcripts to determine whether the transcripts were provided for the deponents’ review and authentication. (Draa Decl., ¶ 3 & Exh. A.) The Court reporter confirmed that letters were sent to Island Breeze’s counsel notifying counsel that the witnesses’ original transcripts were available for review. (Ibid.) Healy contends the witnesses either failed or refused to sign the deposition transcripts.

Available evidence tends to demonstrate that Island Breeze’s counsel was, at a minimum, notified that the transcripts of Robyn Miller and Carter Miller’s depositions were available for the witnesses’ review and signature. (See Draa Decl., Exh. A [letters from Talty Court Reporters].) In addition, “[t]he fact that the deposition was not finally signed does not, in our opinion, alter the situation of the parties. … It is frequently proper, and often it seems necessary, for a party to have a deposition taken, although afterward the case may take such a course as to make it unnecessary to use it. It is for the trial Court to determine whether, under all the circumstances, the taking of the deposition was reasonably essential to the protection of the rights of the party taking it.” (Hughes v. Hughes (1920) 49 Cal.App. 217, 218.)

In addition, the statute does not, by its express provisions, condition the recovery of costs for taking and transcribing depositions on whether a deposition transcript is presented to the trier of fact. (See Code Civ. Proc., § 1033.5, subd. (a)(3)(A); cf. Code Civ. Proc., § 1033.5, subd. (a)(13) [permitting costs for models and exhibits “if they were reasonably helpful to aid the trier of fact”]; see also Segal v. ASICS America Corp. (2022) 12 Cal.5th 651, 666 [noting that if the Legislature intended to exclude any item of costs that were not reasonably helpful to aid the trier of fact, it could have done so by including an express prohibition on recovery].) Furthermore, the fact that a deposition transcript is not used at trial does not require the Court to conclude, without more, that the deposition was not necessary. (Moss v. Underwriters’ Report (1938) 12 Cal.2d 266, 276 [“the fact that the Plaintiff did not offer [depositions] as evidence upon the trial does not necessarily indicate that he could have safely proceeded to trial without them”]; see also Doe v. Los Angeles County Dept. of Children & Family Services (2019) 37 Cal.App.5th 675, 695 [party challenging costs failed to present evidence demonstrating that deposition was not reasonably necessary to prepare for trial].) Rather, the relevant inquiry here whether the deposition costs claimed by Healy was necessary to the conduct of the litigation. (Code Civ. Proc., § 1033.5, subd. (a)(3)(A); Ceranski v. Muensch (1943) 60 Cal.App.2d 751, 755.)

Apart from asserting that the deponents and counsel never received copies of the deposition transcripts and that the transcripts were not used at trial, Island Breeze has not offered any evidence to demonstrate that the deposition transcripts were not reasonably necessary to allow Healy to prepare for trial, or that the amount of deposition costs claimed by Healy is unreasonable. Moreover, available information and evidence demonstrates that the depositions were reasonably necessary to enable Healy to prepare for trial based on the content of Island Breeze’s discovery responses. There is no evidence to suggest the amount of deposition costs is unreasonable. Therefore, and for all reasons discussed above, Island Breeze has not met its burden to demonstrate that the depositions for which Healy claims costs was unnecessary. Accordingly, the Court will deny the motion to the extent it seeks to strike or tax the deposition costs claimed under item 4 of the memorandum.

(2) Costs for Court-Ordered Transcripts:

Code of Civil Procedure section 1033.5 also expressly allows costs for Court-ordered transcripts. (Code Civ. Proc., § 1033.5, subd. (a)(9).) Island Breeze contends that it is unaware of any Court-ordered transcripts “on the record herein.” (Bright Decl., ¶ 4.) Therefore, Island Breeze argues, costs for Court-ordered transcripts claimed by Healy under item 9 of the memorandum should be stricken.

In its opposition to the motion, Healy does not dispute that the Court did not order transcripts in this matter. (See Opp. at p. 5, ll. 20-23.) Healy contends that because the Court instructed the parties to prepare proposed statements of decision, it was reasonable to order transcripts of the trial “to ensure an accurate recitation of the evidence at trial, particularly given the Court would be relying on same in entering judgment thereon.” (Id. at p. 5, l. 23-p. 6, l. 1.) Healy further asserts that without the trial transcripts, “counsel would be left to prepare a detailed summation of evidence based solely on recollection and notes taken ‘on the fly’ during the trial proceedings.” (Id. at p. 6, ll. 1-2.)

Costs for transcripts of Court proceedings which are not ordered by the Court are expressly prohibited under Code of Civil Procedure section 1033.5, subdivision (b)(5). Available information demonstrates that the costs claimed in item 9 of the memorandum relate to transcripts that were not ordered by the Court which are not statutorily authorized and expressly prohibited. Therefore, the Court has no discretion to award costs for transcripts claimed under item 9 of the memorandum. (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 773-774.) For these reasons, the Court will grant the motion to strike, in part, and will disallow the costs for transcripts claimed in item 9 of the memorandum in the amount of $590.00.