25 Cal.App.5th 1116
Cal. Ct. App.2018Background
- Elizabeth Alfaro sued Colgate-Palmolive (and others) alleging childhood exposure to asbestos in talcum powder caused her mesothelioma; trial against Colgate and Imerys resulted in jury verdict for defendants on exposure.
- Colgate sought $311,543.86 in postjudgment costs, including filing/jury fees, deposition and reporter costs, exhibit costs, travel, and $115,610.06 in expert fees claimed under Code Civ. Proc. § 998.
- Colgate had served a § 998 offer the day before a summary judgment hearing proposing mutual waiver of costs; Alfaro did not accept.
- The trial court, sua sponte concerned about due process and Alfaro’s terminal condition and limited finances, denied all costs to Colgate and did not decide whether the § 998 offer was in good faith.
- On appeal Colgate challenged the denial as beyond the trial court’s authority under §§ 1032 and 1033.5 and as a failure to exercise discretion on the § 998 issue.
- The Court of Appeal reversed the complete denial of costs, held Colgate is entitled as a matter of right to allowable costs under §§ 1032/1033.5, and remanded for the trial court to determine allowable and reasonable costs and to decide in the first instance whether the § 998 offer was reasonable and made in good faith (and, if so, what expert fees are recoverable).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a trial court may deny prevailing-party costs under §§ 1032/1033.5 based on losing party’s inability to pay | Court may consider Alfaro’s inability to pay and deny costs to protect access to courts and avoid disproportionate punishment | Sections 1032/1033.5 give prevailing party a right to costs; court may not refuse costs simply due to losing party’s finances | Court held trial court erred to deny all costs on that basis; prevailing party entitled to allowable costs and trial court must assess reasonableness under §§ 1032/1033.5 |
| Whether trial court properly failed to decide if Colgate’s § 998 offer was made in good faith | Denial of expert fees was justified by Alfaro’s inability to pay; § 998 discretion allows consideration of ability to pay | Colgate argued the court must determine good faith and reasonableness of the § 998 offer before denying expert fees | Court held trial court abused discretion by not determining good faith/reasonableness of the § 998 offer and remanded for that analysis |
| Whether expert witness fees are recoverable under § 998 | Alfaro contended offer was a bad-faith “token” offer and recovery of expert fees would be unjust given her finances | Colgate asserted expert fees are recoverable under § 998 because Alfaro did not obtain a more favorable outcome | Court: expert fees are recoverable if § 998 offer was reasonable and in good faith and fees were actually incurred and reasonably necessary; trial court must make findings on these points |
| Standard/scope of appellate review of trial court’s cost determinations | Trial court acted within discretion to consider equities | Colgate argued legal limits prevent factoring losing party’s finances into §§ 1032/1033.5 awards; appellate review de novo on whether such consideration is permitted | Court: review of abuse of discretion for costs generally; de novo whether court may consider ability to pay under § 1032—concluding it may not be a basis to deny statutory costs (but § 998 analysis differs) |
Key Cases Cited
- Nelson v. Anderson, 72 Cal.App.4th 111 (discusses limits on using losing party’s finances to deny costs under § 1032)
- Santantonio v. Westinghouse Broadcasting Co., 25 Cal.App.4th 102 (explains § 998 discretion permits consideration of ability to pay)
- Martin v. Superior Court, 176 Cal. 289 (court’s inherent power to waive fees/costs in limited contexts)
- First Nationwide Bank v. Mountain Cascade, Inc., 77 Cal.App.4th 871 (expert fees recoverable as costs only when statute expressly authorizes, e.g., § 998)
- Adams v. Ford Motor Co., 199 Cal.App.4th 1475 (trial court better positioned to determine whether expert fees were reasonably necessary under § 998)