*1 S219236. Mar. [No. 2016.] DeSAULLES,
MAUREEN Plaintiff and v. Appellant, PENINSULA, THE COMMUNITY HOSPITAL OF MONTEREY Defendant and Respondent.
Counsel Joachim for Plaintiff and
Henry Josefsberg Appellant. Firm, David, Emmer; Greines, Martin, The David S. Dana Stein & Henry Joy Richland, Karton, Robert A. Olson and Edward L. Xanders for David S. Amicus Curiae on behalf of Plaintiff and Appellant.
Fenton & Keller and Edward Panetta for Defendant and Christopher Respondent.
Opinion LIU, (a)(4) Code ofCivil Procedure section subdivision defines J. in to include “the with a net “prevailing party” litigation party monetary (All in and “a defendant whose favor a dismissal is entered.” recovery” code.) A references are to this so undesignated statutory “prevailing party,” defined, in “is entitled as a matter of to recover costs action or right (§ (b).) subd. this case is whether a proceeding.” question who dismisses an action after into a plaintiff voluntarily entering (a)(4) (here- settlement is a under section subdivision prevailing party 1032(a)(4)). after section affirmative,
The Court of below answered that the Appeal reasoning definition of includes a that obtains a “net statutory “prevailing party” and that a settlement which a defendant monetary recovery” pays some amount of is a net at least under the money monetary recovery, conclusion, circumstances of this case. this the Court of reaching Appeal KMR with Chinn v. disagreed Property Management {Chinn), which held that the defendant is the 586] where a settlement results a dismissal. Chinn reasoned that “ definition of includes ‘a defendant whose statutory “prevailing party” ” favor a dismissal is entered’ and that a settlement is not a ‘net monetary ” (Id. 187-188.) recovery.’ pp. We conclude that the Court of below was correct: When a Appeal case, defendant to a order to settle a pays money obtains a “net and a dismissal to such a monetary recovery,” (§ 1032(a)(4).) “in settlement is not a dismissal favor.” As [the defendant’s] below, rule; this sets forth a default are emphasized holding settling parties free to make their own costs. arrangements regarding
I. (the Peninsula hired Community Hospital Monterey Hospital) Maureen deSaulles 2005 as a business services February part-time patient In June she about her work shift registrar. began complaining assign- ments to the room. The deSaulles on a leave of emergency Hospital placed absence 2006 and terminated her 2006. January employment July *6 (1) deSaulles filed a that the had July complaint alleging Hospital failed to accommodate her or medical condition physical disability (suscepti- cancer); (2) to infection as a result of retaliated her for bility against her under the California Fair and Act exercising rights Employment Housing Code, 12900, (Gov. (3) et breached condihons of an seq.); implicit employ- § contract; (4) ment breached an covenant of faith and fair implied good distress; (6) and inflicted emotional and dealing; negligently intentionally terminated her violation of wrongfully public policy. After the motion for and Hospital’s summary judgment adjudication limine, motions the court ruled that deSaulles would be subsequent from evidence and cause of precluded introducing argument regarding any action, action the third and fourth causes of breach of contract and except breach of the covenant of faith and fair implied good dealing.
At the conclusion of those and before a was rulings jury empaneled, settlement on the record to the court to parties placed following permit retain under section 664.6: consideration for dismissal with jurisdiction ‘“[I]n covenant, of the two claims of breach of contract and breach of prejudice $23,500.” Defendant will Plaintiff within 10 Defense counsel ‘“will pay days on the claims which references the dismissal prepare judgment remaining with and which of the of this prejudice preserves right appeal rulings court on the causes of action.” will not file remaining any “[T]he fees[,] motions or memoranda for costs or off until the attorney holding completion appeal 6, 2008, settlement,
On October deSaulles filed a request for dismissal with of the breach of contract and breach of covenant prejudice 6, 2009, claims. On the trial court entered an amended January written, said: considered the oral and of all the ‘“Having arguments, parties, herein, the records and file and the motions and thereto pretrial oppositions herein, filed defendant’s Motion Limine No. having granted Preclude That Defendant Failed to Accommodate Plaintiff’s Any Argument Process, or to the Interachve or That Plaintiff Was Disability Engage Harassed, Therewith, Discriminated or Retaliated Connechon Against Court finds that will be unable to introduce evidence that would retaliahon, establish second cause of action for her fifth and sixth plaintiff’s distress, causes of action for intenhonal and infliction of emotional negligent or her seventh cause of achon for termination violation of wrongful public and, The Court policy; having previously granted summary adjudication [¶] accommodate; and, of Plaintiff’s first cause of action for failure to [¶] settled third cause of achon for breach of parties having plaintiff’s implied fact contract and Fourth cause of action for breach of the covenant of good [] that, IT HEREBY
faith and fair IS ADJUDGED 1. Plaintiff dealing, [¶] *7 defendant; recover from 2. The Parties shall defer nothing seeking [¶] of costs and fees on this final after the time any recovery Judgment coming for all appeals.”
DeSaulles filed an from the amended and the Court of appeal judgment, affirmed the an After the Court of Appeal judgment unpublished opinion. remittitur, court, issued a returned to the trial and each Appeal parties claimed to be the entitled to of costs. After a recovery the trial court said: ‘“TheCourt believes it can exercise its discretion hearing, which did and because determining prevail, Hospital] prevailed [the on causes of action and thereafter entered into a settlement on significant costs, the Court finds that is the remaining Hospital] prevailing [the $12,731.92 The trial court awarded the costs of and denied party.” Hospital deSaulles’s for costs. request reversed,
The Court of that deSaulles had obtained a net Appeal concluding and was therefore the As to the monetary recovery prevailing party. Hospital’s dismissal, that it was entitled to costs because it had obtained a argument Court of observed that a final dismissal had not of this case: Appeal disposed ‘“The did not end the action favor. The summary adjudication Employer’s favor, limine motions did not end the action sustaining Employer’s two causes of action remained for trial. The case ended without a trial on the merits because to dismiss her two causes of Employee agreed remaining action, but the entered did not to dismiss the entire action. judgment purport was intended its terms to judgment preserve Employee’s right the court’s on her other claims. did indeed appeal rulings Employee appeal an unsuccessful to resurrect those causes of action. ultimately attempt [¶] dismissed two causes of action and a was Employee voluntarily judgment entered on the causes. obtained at most a remaining Employer partial dismissal, not, more, which we conclude did without voluntary trigger costs award to mandatory Employer.”
The Court of further ‘“The this case Appeal explained: judgment shall recover and also recited that the provided Employee nothing had settled two of the seven causes of action. But the failed to judgment $23,500 in mention that was those Employee paid exchange dismissing causes of action.” The court cited Friends the Trails v. Blasius 193], which awarded costs to a who Cal.App.4th had obtained a declaration that a easement had been created an public ditch, the fact that the stated that relief is irrigation despite ‘[n]o ” (Id. in favor of defendant.’ “Blasius granted plaintiffs against illustrates that a costs award should be based on all of a lawsuit’s aspects final rather than on an isolated so disposition phrase judgment.” Chinn, the court with holding, expressly disagreed 175.
We review. granted
II. In contrast to the American rule that to a lawsuit parties ordinarily fees, their own costs have been awarded pay attorney litigation traditionally “Costs are allowances which are authorized to prevailing party. reimburse the successful to an action or and are party proceeding nature of incidental to a damages indemnify party against expense 416, his v. Johnson successfully asserting rights.” (Purdy Cal.App. fees, 181]; P. see 1033.5 include witness filing ordinary [280 § [costs fees, costs related to and and certain costs recording transcribing depositions, exhibits].) ‘The which are allowed to a preparing theory upon [costs] him; is that the default of the defendant made it to sue necessary defendant, him to a that the sued without cause. Thus the to party ” Johnson, blame costs to the without fault.’ v. pays party (Purdy
Section 1032 codifies this to costs: approach allocating “Except statute, otherwise is entitled as a expressly provided by 1032, (§ matter of to recover costs action or right any proceeding.” (b).) subd. The statute that “unless the context provides clearly requires “ ‘ otherwise,” the term includes the with a net [prevailing party’ entered, a defendant whose favor a dismissal is monetary recovery, relief, defendant where neither nor defendant obtains and a any defendant as those who do not recover relief against plaintiffs any against that defendant. When recovers other than relief and any party situations other than as shall be as determined specified, ‘prevailing party’ court, circumstances, court, discretion, and under those its may and, if allow costs or not allowed costs between the on may apportion parties the same or adverse sides to rules under Section 1034.” adopted (§ 1032(a)(4).) control, however,
Section 1032’s definition of does not “prevailing party” when another statute for different means of costs. provides allocating (Williams v. Chino Fire Dist. 61 Cal.4th Valley Independent 976].) 347 P.3d The definition of Cal.Rptr.3d “prevailing party” section 1032 is to that statute and does not to particular necessarily apply fee statutes or other statutes that use the attorney prevailing party concept. (Heather (1994) 21 Farms Homeowners Assn. v. Robinson Moreover, 758].) section 1032 establishes a default only (§ (c) rule. subd. 1032 does not from “prohibit parties stipulating [§ case, costs”].) alternative When settle a procedures awarding they fit, are free to allocate costs manner see must do so they although they Chinn, (Cf. such allocation. language specifically addressing *9 1148 184-185 offer was silent on costs and pp. [compromise costs].)
therefore did not the from preclude seeking A. case, in to be the this claiming Hospital principally There, Chinn)
relies on Chinn. a tenant and her sued a boyfriend (collectively, KMR), and the owner property management company property (collectively, breach of a of care to for the of their tenants. alleging duty provide safety 998, KMR After declined to Chinn’s offer made to section accept pursuant $23,500 (coinci- KMR made its own section 998 offer to settle the case for case) in the same amount as the settlement and to waive dentally present in all costs for dismissal of the action. Chinn this offer and exchange accepted 998, filed a notice of settlement to section and the trial court costs, KMR dismissed the action. Chinn then an award of which sought on the that Chinn was not the The trial court opposed ground prevailing party. $4,036.58 KMR in with and awarded Chinn costs. disagreed reversed, The Court of that Chinn was not the Appeal concluding prevail- in and therefore could not recover costs. The court did not discuss ing party 1032(a)(4), in detail the of section nor did it find language ambiguity Instead, in term “net the court construed this term the monetary recovery.” context of section 1032’s That useful legislative history. history provides this case. background understanding 1933,
“In enacted sections 1031 and 1032 to consolidate Legislature enacted, several cost statutes. As section 1031 provided municipal courts, ‘the a defendant as to whom the justice prevailing party, including dismissed, 1933, 744, 190, (Stats. action is is entitled to his costs . . . .’ ch. § 924].) matter contained former 831d & Section p. [consolidating §§ for an award of costs as a matter of court to provided right superior actions, (1) who had a his favor ‘an party judgment specified including action for the or as the met recovery money damages,’ long judgment limit; (2) the trial court’s or a defendant as to whom the action jurisdictional 1933, 744, 191, (Stats. was dismissed. ch. former [consolidating § 1022, actions, 1024-1026].) In all other the court had discretion under §§ 191, (Stats. section 1032 to award and allocate costs. ch. § 1901.) The cost statutes codified case law apparently interpreting dismissal as a the defendant’s favor v. voluntary judgment (Spinks Superior Court P. dismissal Cal.App. voluntary 798] [a suit, determines the action favor of the defendant and ends the dicta noting 299]]). v. Court 136 Cal. P. Hopkins Superior 1032, ‘If “Under former section had claims for competing then the with a net his favor was the sole damages, party *10 claims, entitled to costs. But even without a competing monetary [Citations.] who received was still found to be the sole only partial recovery successful entitled to costs. The defendant was not entitled to setoff any (Michell for his v. Olick partial victory. Cal.App.4th [Citations.]’ 227].)” (Chinn, 1198-1199 186-187, omitted.) fns. pp. in section 1032 was and reenacted its form repealed present by Sess.). (1985-1986 Bill
Senate No. 654 As Chinn recounted: ‘“The Reg. Sess.) (1985-1986 Bill of Senate No. 654 does not legislative history Reg. indicate the law to consider settlement or any change proceeds provide costs to a after a dismissal. The Council’s Legislative Digest printed on the bill states law contains numerous simply pertinent part: ‘Existing for the and court provisions prevailing party superior, municipal, justice actions to receive costs . . . . This bill would those and repeal provisions [¶] law, instead as otherwise a provide except provided by prevailing party, defined, is entitled as a matter of to recover costs action or right This bill would for the determination of fees and costs proceeding. provide Amend, (Assem. Bill the court to Sen. No. 654 specified instances[.]’ Sess.) (1985-1986 Reg. Apr. Bill
‘“The Senate Committee on of Senate No. 654 Judiciary, Analysis 15, 1986, Sess.) (1985-1986 as amended noted that the of Reg. April purpose the bill was ‘to consolidate the relevant law of costs and governing recovery costs, to these reliev- simplify present procedure determining thereby court and workload.’ The bill ing congestion easing judicial required Judicial Council to a uniform set of promulgate guidelines governing courts, award of costs all and ‘it is assumed that the rules would reflect and case law.’ Three minor law were existing statutory changes existing noted: would be entitled to recover court prevailing party reporter eliminated, $5 $100 bonus to the would be and a expenses, cost item libel and slander cases would be eliminated. Sess.) (1985-1986 Bill
‘“Senate No. 654 was introduced on behalf of Reg. the California Association Civil Law and Procedure Committee. On Judges 20, 1984, Breiner, Richard H. who was the chairman of the January Judge committee, civil law and to a call procedure responded writing telephone from consultant Earl Cantos. Breiner stated Assembly Republican Judge ‘The bill pertinent part, proposed merely synthesizes simplifies clear, statutes into which is and located myriad existing language simple, in one You concern that the allow an award place. expressed proposal might law, of costs not under current when an against plaintiff presently permitted law, action is dismissed. Under costs are allowed to a defendant present[] when action is dismissed v. Gordon plaintiff’s (City Industry *11 1150 206]), whether it is a dismissal with
Cal.App.3d Cal.Rptr. voluntary [105 64]) (Fisher v. Eckert P.2d or prejudice Cal.App.2d Industries, (International (1978) without Inc. v. Olen Cal.3d 218 prejudice 691, 1031]). 577 P.2d bill for no Cal.Rptr. proposed provides result, dismissal, in different but rather cases of for costs to a simply provides ’ “defendant on dismissal.” in the materials amend “Nothing background accompanying proposed ment mentioned settlement or the definition of proceeds suggested ‘prevailing in section 1032 would law to an award of costs party’ change existing permit (See to a a dismissal. Sen. Com. on plaintiff following Judiciary, Analysis 15, 1986; Sess.) (1985-1986 Bill Sen. No. 654 as amended Sen. Reg. Apr. (1985-1986 Bill Com. on bill file on Sen. No. 654 Judiciary, legis. Reg. Sess.); (1985-1986 Bill Assem. Com. on of Sen. No. 654 Judiciary, Analyses 17, 1986; Sess.) as amended Mar. 31 and Office of Assem. Floor Reg. Apr. Sess.) (1985-1986 Bill 3d of Sen. No. 654 Analyses, reading analyses Reg. (Chinn, 1986.)” as amended June and Apr. July supra, 189-190.) Cal.App.4th pp. of section Chinn light language legislative history
concluded that the dismissal of an action makes the defendant the prevailing and that settlement do not as a “net party proceeds qualify monetary that would make the “Con- recovery” settling plaintiff prevailing party: context, the term ‘net we conclude that the struing monetary recovery’ did not intend to include settlement received Legislature proceeds for a dismissal favor of the defendant. The definition exchange section 1032 the court to award ‘prevailing party’ provided requires costs as a matter of situations. consideration right specified By precluding of settlement as a ‘net when a dismissal is proceeds monetary recovery’ defendant, entered favor of the one for a only party qualifies mandatory costs, award of consistent with the law. prior “Chinn contends that the commonsense of the isolated term ‘net meaning However, includes settlement Chinn’s monetary recovery’ proceeds. interpre result, tation would lead to an absurd as both and defendants would (Chinn, be entitled to an award of costs as a matter of right.” Chinn reasoned that because the intended Legislature one to be the must be the defendant only prevailing party, party whose favor the dismissal was entered.
B. We first address whether a dismissal obtained for a exchange settlement be considered a dismissal a defendant’s favor within the may 1032(a)(4). of section meaning
In this we with Chinn that absent addressing question, begin by agreeing indications to the intended the 1986 reenacted contrary, Legislature version of section 1032 to law defendants as incorporate existing regarding (Chinn, 190.) after a dismissal. at prevailing parties supra, Cal.App.4th p. In Goodman v. 47 Cal.4th 1336-1337 Lozano {Goodman), 223 P.3d we such a indication when recognized contrary 77] we held that the definition of as the a “net “prevailing party” party receiving in the 1986 version of the statute monetary recovery” effectively repudiated if case law that had deemed a to be a it had obtained a prevailing party Here, of offsets from defendants. monetary recovery regardless settling contrast, there is no indication that under the law that existed prior in a defendant who obtained a dismissal for a exchange was considered a of the payment plaintiff purposes costs statute. Court, on v. the court
Relying Spinks Superior supra, Cal.App. Chinn observed that cost statutes codified case law inter apparently “[t]he (Chinn, a dismissal as a the defendant’s favor.” preting voluntary 187.) But illustrates the limited Spinks scope case, this rule. that a dismissed a lawsuit without a plaintiff voluntarily settlement on the eve of trial. The defendant that “a dismissal so made argued entered, does not interfere at all with his to have a it right judgment following did, him as he which would secure to incurred the action and expenses which were their nature costs.” The court said: proper (Spinks, “We are accord with this contention and think that it but complete proposes a fair and reasonable construction for the statute. . . . While the matter of the statutes, of costs is one which rests recovery wholly upon authority it cannot be that the and contemplated legislature, having provided authority means for the of costs to intended to leave a defendant securing litigants, remediless who chose to an action and against bring put defendant to costs to meet the same and then dismiss the great preparing suit. This case is a illustration of the which result. typical hardship might Here the filed several defendant made his verified complaints, answer, Then, and were had to set the case for trial. on the proceedings day before the trial was to take at the clerk’s office and place, plaintiff appeared dismissed its action. The defendant himself for the trial presumably prepared and his witnesses on the that the would subpoenaed assumption A at the time set. construction of the statute which will proceed regularly allow the of costs such cases is one that will to the sense recovery appeal of fairness and and is the one which we will assume the justice everyone (Id. intended should be to its declarations legislature given upon subject.” 795-796.) at pp.
This rationale for costs to a defendant after a dismissal equitable awarding its favor also a case decided before the 1986 appears shortly repeal *13 1152 (1984) In
reenactment of section 1032. Catello v. I.T.T.General Controls 152 4], 1013 the court said: defendant is Cal.App.3d Cal.Rptr. [200 “[A] unfounded, if entitled to its costs is as much as a complaint just however, successful is entitled to its costs. It is not that costs enough, should be awarded on the final the action. To so limit solely judgment would an with chance recovery permit unscrupulous plaintiff only marginal action, at and fee to commence an recovery investing only filing forcing to to dismiss the opposing party engage expensive discovery, only action to final when it the case was prior judgment appeared sinking, dike, Titanic beneath the waves of adverse evidence. Undoubt- overwhelming it was with this evil mind that the included an award of edly, Legislature costs to the defendant when the dismissed its action.” plaintiff voluntarily
Thus, the rationale for costs to a defendant on dismissal was awarding if rooted that would result who dismissed an injustice unmeritorious action before could evade an award of costs to the defendant for the costs of for trial. Such an award compensate preparing “ costs, is an of the basic rationale for that ‘the to application awarding party ” Johnson, blame costs to the without fault.’ v. 100 pays (Purdy supra, 418.) at That rationale does not extend to dismissals to Cal.App. p. pursuant settlements which a obtains relief. monetary The statement Breiner above— by Judge quoted legislative history law, ‘[ujnder costs are allowed to a defendant when present[] plaintiffs Gordon[, action is dismissed v. 29 90 (City Industry supra,] Cal.App.3d of 206]), whether it is a dismissal with Cal.Rptr. voluntary prejudice [105 Eckert[, 64]) (Fisher v. 94 890 P.2d or without supra,] Cal.App.2d [212 Industries, Olen[, (International 21 Inc. v. Cal.3d 218 prejudice supra,] [145 1031])’ (Chinn, 577 P.2d ”—is not to the 166 Cal.Rptr. contrary. supra, at None of those cases involved a dismissal to p. (See a settlement. at dismissed after City Industry, p. failing [case of in Fisher, the action to trial five files bring years]; [plaintiff Olen, consent]; [same].) dismissal without defendant’s The same is (See, true of other cases. McMahan’s Beach v. pre-1986 e.g., Long McMahan Service 608-609 P.2d Corp. Cal.App.2d 847] for lack of v. Heebner prosecution]; Hauptman [dismissal settlement].) P.2d dismissal without Cal.App.2d [voluntary 48] cites no Hospital contrary example. of section 1032’s basic costs on the light purpose imposing of the case law that the statute was intended to losing party, light we conclude that the definition of as ‘“a incorporate, ‘“prevailing party” defendant whose favor a dismissal is entered” was not intended to defendants that entered into a settlement encompass exchange
1153 dismissal. The definition was intended to rule that promote equitable unsuccessful could not evade the costs statute their plaintiffs by dismissing suit. That rule does not to that have achieved some apply plaintiffs litigation success settlement of the case. through concluded that a defendant is not a as a matter of
Having prevailing party situations, in these we must next determine whether a who right obtains a settlement is a monetary prevailing party.
C. noted, 1032(a)(4) As section defines the with a “net party monetary ” “ as the ‘The word “recover” means “to recovery” ‘[prevailing party.’ ’ ” or “to obtain a final one’s favor.” gain by legal process” legal judgment 1334.) (Goodman, 47 Cal.4th at cites some cases that supra, Hospital (See, would define a that settlement “recovery” way precludes proceeds. 557, (1992) Gebelein v. Ill.Dec. e.g., Ill.App.3d [173 Blumfield 265].) 597 N.E.2d We see no reason a settlement cannot fit within the why monetary definition of settlement is some “monetary recovery.” Although monetary contract, like a a settlement is obtained as a means of ways private resolving Moreover, and a lawsuit. settlement terminating agreements pursuant section 664.6 or section 998 result not contractual but also only agreements (See that resolve the issues between the judgments conclusively parties. State Auto. Assn. Inter-Ins. Bureau v. Court Superior California Cal.3d 788 P.2d State Auto. Cal.Rptr. (California 1156] Assn.); Milicevich v. Sacramento Center Municipal Cal.App.3d sense, 484].) In this settlement is Cal.Rptr. monetary “ ‘ ’ ” (Goodman, 47 Cal.4th at “gain[ed] by legal process.”
Other section 1032 a broad of the word language suggests understanding is defined to include “the with “recovery.” Again, “prevailing party” entered, a net a defendant whose favor a dismissal is monetary recovery, relief, a defendant where neither nor defendant obtains and a any defendant as those who do not recover relief against plaintiffs against defendant. When recovers other than any party monetary relief situations other than as shall be as determined specified, ‘prevailing party’ statute, added.) (§ 1032(a)(4), the court . . . .” italics “monetary relief’ is with “net since a is a synonymous monetary recovery” if as a matter of he or she obtains relief’ but prevailing party right “monetary if will be considered a at the court’s discretion she “recovers “Relief,” other than relief.” like is a broad term that can “recovery,” include obtained a settlement. This court used the term that money through *15 1154 Olen, 1032, a case the 1986 revision of section where we
way predating said: dismiss before trial because he “Although plaintiff may voluntarily merit, learns that his action is without other reasons exist obviously may him to terminate the action. For the defendant causing example, may grant of trial—all or all . . . .” plaintiff—short substantially sought relief Industries, Olen, 224, (International 21 Inc. v. Cal.3d at italics (Olen).) added 1032(a)(4)
We conclude that the term section encom “recovery” situations which a defendant settles with a for some or all passes plaintiff of the that the This money plaintiff sought through litigation. understanding is with the of section 1032 discussed above. “recovery” keeping purpose Just as a cannot avoid a cost award an action on the plaintiff by dismissing trial, eve of so a defendant cannot avoid a cost award on merely by settling (1997) the eve of trial. Reveles v. 57 1139 Toyota by Bay Cal.App.4th 543], on other Gavaldon v. Cal.Rptr.2d disapproved grounds [67 1246, 793, (2004) 32 Cal.4th 1261 DaimlerChrysler Corp. Cal.Rptr.3d [13 752], 90 P.3d the defendant on the of trial to agreed morning pay $9,300 the entire that the had offered to to settle previously accept the case. The court a cost award for the “it cannot be upheld plaintiff, saying ... did not obtain a ‘net seriously argued plaintiff] [the ” (Reveles, Other courts have concluded that recovery.’ similarly (See obtain a net a lawsuit. plaintiffs may monetary recovery by settling 1252, 1257, (2012) v. Inc. 207 1264 Wohlgemuth Caterpillar Cal.App.4th [144 1079, Power, 545]; (2007) On-Line Inc. v. 149 Cal.Rptr.3d Mazur 698].) [57 This of “net is further reinforced understanding monetary recovery” by case law the 1986 and reenactment of section 1032. The predating repeal if cases make clear that a settlement offer agreement, compromise 998, costs, section or is silent on the matter of stipulated judgment County (See is not barred from costs. Folsom v. Butte Assn. seeking 589, (1982) Governments 32 Cal.3d 652 P.2d Cal.Rptr. [186 437] Service, (Folsom); v. Sea-Land Inc. Rappenecker Cal.App.3d 263-264 Slater v. Court Cal.Rptr. (Rappenecker); Superior [155 516] (Slater); P.2d v. Gold Co. Cal.App.2d Rapp Spring Valley 32] (1888) 74 Cal. P. The reason for this rule is that (Rapp)) 325] and settle such matters and differ compromise agreements ‘regulate only ences as to be them the intention of the appear clearly comprehended by thereof, and the and do not extend to matters parties necessary consequences therein, which the never intended to include at the although existing time.’ Thus conclude all matters issue they ordinarily put [Citations.] is, that otherwise would have been resolved at pleadings—that questions not, (absent trial. do however affirmative They agreement [Citation.] *16 conclude matters incident to the that were no parties), judgment part 677.) (Folsom, cause of the action.” at p. in this line of cases is the well established before
Implicit principle, statute, the 1986 and reenactment of the costs that a who repeal plaintiff settles a lawsuit for of or other benefits be payment money tangible may considered a the or prevailing party. Nothing language legislative history of the statute indicates an intention to that The change principle. Hospital above, Folsom, that the cases with the of involved objects exception judg ments entered the favor rather than dismissals. plaintiffs Rappenecker, involved a offer to section 998. example, compromise pursuant (Rappenecker, 262-263.) at the of a section supra, Cal.App.3d pp. Although acceptance (§ (b)(1)), 998 offer leads to the of a subd. a section 998 entry judgment offer also the to dismiss the action as a condition of may require Chinn, 184; (See settlement. at 166 at Goodstein v. Bank supra, Cal.App.4th p. 740].) San Pedro 906-907 Cal.App.4th of the that a offer was not valid under rejecting argument compromise section 998 because it called for of to the payment money favor, dismissal of the action rather than a the judgment plaintiffs Goodstein said: between the thereto and for parties purposes ”[A]s enforcement of settlement a agreements, compromise agreement contemplat defendant and dismissal of the action is the ing payment by by plaintiff legal 907.) (27 of a favor.” The equivalent judgment plaintiff’s p. Chinn, cites no other than that the determina Hospital authority, suggesting tion of whether a was or could be a would turn on of whether a section 998 settlement or a technicality stipulated judgment, favor, addition to a settlement also resulting plaintiffs dismissal of the action. required other cases cited above awarded costs after a stipulated judg 533; Slater,
inment favor. 74 Cal. at plaintiffs (Rapp, supra, true, It is as the Cal.App.2d Hospital suggests, stipulated be entered like and that the judgments may regular judgments plaintiffs cited cases obtained a while the defendants did not obtain a judgment motion, (See dismissal. 664.6 the court enter [upon may judgment § settlement].) to the terms of a But when a settlement to a pursuant pursuant case, of the entire a dismissal of the action stipulated judgment disposes Court, (Cal. 3.1385(b).) follows as a matter of law. Rules of rule generally Whether or not a settlement stipulated judgment encompassing monetary dismissal, calls for a the effect is the same: a payment money followed a termination of the action. The of a plaintiff, entry judgment to section 664.6 enables to enforce a settlement agreement without to file a lawsuit. Inc. v. Wood having separate (ViejoBancorp, 620].) This is true whether the Cal.App.3d Cal.Rptr. not; calls for a dismissal or difference is that where a only *17 dismissal, includes a the must ask the trial court stipulated judgment to retain before the dismissal the court of that jurisdiction deprives jurisdic (Wackeen tion. v. Malis 439-440 502].)
Where, here, before the court that the parties stipulate plaintiff action, has been a sum of for the dismissal of an paid money exchange is as entitled to receive from the defendant as a plaintiff legally money who obtains a without a dismissal. The former plaintiff stipulated judgment is bit as much a as the latter. Chinn’s rule that plaintiff every prevailing party if a defendant is the a section 998 offer includes an action, to dismiss the no matter how favorable the offer is to agreement is and inconsistent with the of section 1032. plaintiff, inequitable purpose There, Folsom additional for this conclusion. provides support plaintiffs entered into a settlement with defendants agreement government promising dismiss the case when the defendants established four new transit systems. 675.) (Folsom, 32 Cal.3d at The was silent as to costs as agreement fees, costs, well as and the trial court awarded the attorney plaintiffs “ that ‘this action has resulted the enforcement of an concluding important ” (Id. affirmed, interest.’ This court right affecting public that the had the to costs where the settlement concluding right (Id. 677-678.) was silent as to costs. agreement pp.
The notes two differences between Folsom and the case: Hospital present first, second, that the dismissal was conditional and and that the delayed, relief was But neither of those differences matters here. granted nonmonetary. In of the of section there is no reason light equitable purpose why that conditions dismissal of the case on the future fulfillment of some of its should be considered the but not a litigation objectives prevailing party, that dismisses the action for the exchange present payment money. case, contends that Goodman its Hospital supports position.
homeowners sued a home builder and various other defendants for construc- $230,000 tion defects. settled with some of the defendants for They $146,000 defendant, obtained a verdict another Lozano. The trial against (a), court to section subdivision which that a provides good faith settlement with some tortfeasors will serve to reduce the claims against tortfeasors, reduced the award Lozano to zero. The remaining against was whether Goodman had obtained a net question monetary recovery against Lozano for costs. The court concluded that Goodman purposes awarding had not and affirmed an award of costs to Lozano: common meaning ‘[T]he “the with a net is the who phrase monetary recovery” party gains *18 A that is “free from . . . all deductions.” . . . who obtains a money plaintiff [¶] verdict a defendant that is offset to zero settlements with other against defendants does not free from deductions. Such a gain any money plaintiff ” (Goodman, because the deductions reduce the verdict to zero.’ gains nothing 1334.) 47 Cal.4th at supra, contends that settlement funds were included the term Hospital “[i]f
‘net the Goodman would have been monetary recovery,’ plaintiffs necessarily the because settlement funds an amount prevailing parties they obtained] $230,000. Instead, of the court looked to the final alone to determine whether the obtained a net But the plaintiff monetary recovery.” in Goodman was not whether the obtained a net question plaintiffs monetary defendants, from the but rather whether the recovery settling plaintiffs Here, obtained such a It is clear did not. recovery they Lozano. from $23,500 deSaulles obtained a settlement from the Goodman Hospital. Although us, does not before its is not inconsistent with dispose question holding the conclusion that deSaulles obtained a net from the monetary recovery Hospital. course,
Of settlement favor of a does not monetary plaintiff necessarily lawsuit; a meritorious defendants settle cases with little merit suggest may However, order to be of trial. the rule is that a spared expense partial as it is a net entitles a to costs. recovery, long monetary recovery, Olick, (See Michell v. at 1198-1199 supra, pp. [al successful, 11 of the causes of action were not though plaintiff’s plaintiff’s $63,000 success on the 12th cause of action for a award of entitled a jury costs].) A to determination of whether a was merito complaint truly (Olen, rious “would the court to the entire case.” Cal.3d require try We need not this burden on courts. Section 1032 place merely rule, establishes a default and a defendant is a far better settling position settlement, costs, calibrate the terms of a allocation of with including in the settlement appropriate provisions agreement.
Our contend that a and defendant dissenting colleagues settling plaintiff if should both be considered the settlement calls for a prevailing parties dismissal, and that an award of costs should be left to the court’s discretion. if But a of this is that settlement does not call corollary position dismissal, (ante, 1155-1156), for a which is sometimes the case then pp. should be considered the even only plaintiffs prevailing party, though settlement, former, latter like the results payment money and the termination of the action. We decline to treat the two situations when the difference is a matter of form and not differently moreover, substance. Such an would not serve the statute’s approach, goal costs and workload. simplifying procedures determining easing judicial 1148-1149.) (Ante, at pp.
We that sometimes overlook the issue of costs recognize parties may inadvertence, their settlement defendants find agreements. Through may themselves with a bill for costs that increases the amount owed substantially Trial courts should take these realities into account when plaintiff. (See their function to section 664.6. performing gatekeeping pursuant Assn., 664). State Auto. 50 Cal.3d at not Although California law, it is advisable that trial courts into whether the required by inquire case have resolved the allocation of costs their settlement parties given issue, or whether wish to have the court resolve the before agreement, they on the placing judicial imprimatur agreement. sum, we hold that a dismissal to a settlement monetary
is not a dismissal the defendant’s “favor” as that term is used section 1032(a)(4). We further hold that a that enters into a stipulated to be for a dismissal has obtained a “net judgment paid money exchange 1032(a)(4), within the of section whether or not monetary recovery” meaning mentions the settlement. Our establish a default rule judgment holdings when the have not resolved the matter of costs applies only parties their settlement or have not “to alternative agreement stipulated procedures (§ (c).) costs.” subd. We awarding disapprove contrary holding KMR of Chinn v. Property Management, supra, 185-190.
Conclusion of the Court of is affirmed. Appeal J., Chin, J., J., Cuéllar, J., C. concurred. Cantil-Sakauye, Corrigan, KRUGER, J., with the that a who Dissenting.—I agree majority receives a settlement for the dismissal of her claims exchange has received a “net and is therefore a monetary recovery,” “prevailing party” entitled to costs under Code of Civil Procedure section presumptively statute, so, too, (a)(4). subdivision But the terms of the is the “defendant by Proc., 1032, (Code (a)(4) in whose favor . . . dismissal is entered.” Civ. subd. § (section 1032(a)(4)).) Because both cannot be entitled to costs as of such cases are covered the next sentence of the which right, provision, court, “in the trial situations other than as to determine permits specified,” (Ibid.) which has fact and to allocate costs prevailed accordingly. statute, it, I Thus the as read does not treat settling plaintiffs automatically entitled to costs—no matter how minimal their or how unmeritori- recovery ous their claims—but courts to take into account circum- permits special stances that render a costs award or Because neither may inequitable unjust. the trial court nor the Court of considered whether such circumstances Appeal here, I are would reverse and remand for further consideration. present
1159 ” include, 1032(a)(4) Section defines the term to ‘[prevailing party’ here, {Ibid.) in In relevant “a defendant whose favor a dismissal is entered.” we that a dismissal is entered a defendant’s favor when ordinary usage, say of the dismissal is ‘“to the or benefit of’ that entry special advantage (Webster’s (2002) “in defendant. 3d New Internat. Dict. p. [defining of’].) favor We thus refer to an order a claims generally dismissing plaintiff’s (See, a defendant as an order entered that defendant’s favor. against e.g., (1996) Desai v. Farmers Ins. Exchange
276]; v. Alhambra Dominguez City Cal.App.3d of 345].) This is true of the reason for the dismissal— Cal.Rptr. regardless demurrer; whether to the abandonment of her pursuant plaintiff’s voluntary claims; or, case, Indeed, inas this a settlement. it is difficult to negotiated know how else one would describe the dismissal at issue this case. Surely we would not describe the dismissal of a own claims as a dismissal plaintiff’s entered favor. plaintiff’s conclusion, asserts,
In its without further reaching contrary majority elaboration, a defendant to a order to pays money “[w]hen case, settle a ... a dismissal to such a settlement is not a dismissal pursuant ” ante, 1144; accord, ‘in defendant’s id. at (Maj. opn., p. [the favor].’ 1158.) this the means to that a dismissal Perhaps by majority suggest entered to a settlement is not a dismissal that “favors” the pursuant defendant, because, it, as the elsewhere has also majority puts (Id. “achieved some success settlement of the case.” litigation through 1032(a)(4) But section does not of a dismissal speak “favoring” defendant, if it of a dismissal “entered” favor of a defendant. Even speaks a settlement for dismissal not be favorable to the calling might wholly because it also calls for the defendant to some amount defendant—e.g., pay would have to that the dismissal has money—we acknowledge resulting nevertheless been entered the defendant’s favor. event, when to settle a it is because parties agree dispute, generally Hazard, (Cf.
both sides believe that settlement is to their advantage. Settlement Black Box 75 B.U. L.Rev. settlement [“[T]he area consists of a wide band of different at which it will benefit both prices matter, settle.”].) And as a it is not uncommon practical certainly for the terms of a settlement to the defendant far more than the advantage If, for to dismiss a million-dollar plaintiff. example, plaintiff agrees $10, claim for a nuisance with no admis damages exchange payment sion of it would be difficult to that the dismissal liability, dispute resulting favor, was not entered the defendant’s but was entered to a only settlement “favorable” to the defendant as well. end, 1032(a)(4)’s
In of section dismissal clause majority’s reading rests not on the text of the but on inferences about intent provision, legislative *21 1160 1032,
based on the The reasons that section both provision’s history. majority 1986, in in as enacted 1933 and as reenacted was to originally designed case law the status of defendants as codify existing concerning prevailing and “there is no indication that under the law that existed to parties, prior 1986, a defendant who obtained a dismissal for a exchange was considered a payment purposes ante, 1151.) costs statute.” at (Maj. opn., p. course, clear,
Of as we have made of a statute repeatedly interpretation text, with its as is the best necessarily “begin[s] statutory language typically (Larkin and most reliable indicator of the intended v. Legislature’s purpose.” 152, 80, (2015) Workers’ Bd. 62 Cal.4th 157 Comp. Appeals Cal.Rptr.3d [194 552].) If I 358 P.3d text answers the before us—as statutory question matter; if believe it does here—dial is the end of the there is no generally or we need “not resort to ambiguity uncertainty language, legislative (1994) to cloud a text that is clear.” United States history statutory (Ratzlaf v. 135, 615, omitted; 655], 114 510 U.S. 147-148 L.Ed.2d S.Ct. fn. [126 accord, 1261, 837, (2012) v. Cornett 53 Cal.4th 1265 People Cal.Rptr.3d [139 if 274 P.3d controls there is no plain meaning ambiguity 456] [“The statutory language.”].) on which the relies is not legislative history majority especially event. The relies on the Court of
revealing majority principally (2008) KMR observation Chinn v. 166 Appeal’s Property Management that Code of Civil Procedure section Cal.App.4th [82 586] “ enacted, codified case law a originally ‘apparently interpreting ” dismissal as a the defendant’s favor.’ voluntary judgment (Maj. opn., ante, Chinn, at quoting citing 798]; v. Court P. see also Spinks Superior Cal.App. Catello v. I.T.T. General Controls Cal.App.3d that the intended to Cal.Rptr. [observing Legislature [undoubtedly” 4] thwart the with chance at danger “unscrupulous plaintiff[s] only marginal . . . recovery forcing opposing party engage expensive discovery, to dismiss the action to final when it became clear the only prior judgment” trial].) case would an adverse From this the yield judgment majority concludes that the must have intended to limit the reach of section Legislature 1032(a)(4)’s dismissal clause to circumstances to those comparable Spinks, if order to address “the that would result who dismissed injustice an unmeritorious action before could evade an award of costs to the defendant for the costs of for trial.” compensate preparing (Maj. opn., ante, at p. concern, if
But even the scenario was the Spinks Legislature’s primary does not mean it was the concern. Legislature’s only Although legislators
1161 mind, draft with a the statutes frequently legislation particular problem enact “often the evil to cover they go beyond principal reasonably compa evils, rable and it is the of our laws rather than the ultimately provisions (Oncale concerns of our which we are v. principal legislators by governed.” (1998) Sundowner Servs. 523 U.S. L.Ed.2d 118 [140 Offshore 998].) S.Ct. It well be that the that enacted Code of Civil may Legislature Procedure section 1032 was concerned with the unfairness that particularly would result from defendants of a costs award when a depriving I dismisses her unmeritorious claim at the 11th hour. But see no clear basis for that the did not also address the unfairness that concluding Legislature would result from an inflexible rule defendant to the requiring settling pay costs, no matter the circumstances of the case. plaintiffs Certainly extent there is doubt on the the text of the statute to subject, ought control. short, I A would conclude that the meant what it said: Legislature
defendant whose favor a dismissal is entered—whether as a result of a settlement or otherwise—is a within the monetary “prevailing party” meaning clear, 1032(a)(4). of section But to be that a defendant is a say settling does not mean that it is the “prevailing party” “prevailing party,” thereby entitled to of costs as of As the payment right. majority explains, 1032(a)(4) is also a within the of section because “prevailing party” meaning he or she has received a “net the form of settlement monetary recovery” ante, 1153-1157.) (§ 1032(a)(4); see Because both proceeds. maj. opn., pp. cannot be entitled to costs as of we must to the next parties right, proceed 1032(a)(4), sentence of section which “When recovers provides: any party other than relief and situations other than as specified, court, shall be as determined and under those ‘prevailing party’ circumstances, court, discretion, and, if its allow costs or not may allowed costs between the on the same or adverse may apportion parties “In sides . . . .” cases where both achieved a status that Code of Civil Procedure section 1032 defines as a the action ‘falls into the prevailing party, “situation other than as for an exercise of the trial specified” category, calling ” if court’s discretion’ to determine which should receive costs. party, any, v. Inc. (Wohlgemuth Caterpillar Cal.App.4th Power, 545], On-Line Inc. v. Cal.Rptr.3d quoting Mazur 698]; 1032(a)(4).)1 see § Appeal disagree explained The Court of in this case did not with this conclusion. The court hospital qualified ‘prevailing party,’ among that if defendant “had as a this case could be costs,” specified’ purposes awarding mandatory ‘situations other than as and the court party prevailed could “exercise discretion to determine which based on the merits of the case.” ultimately hospital qualify “prevailing party” The court concluded that the did not as a within 1032(a)(4) meaning only plaintiff’s the claims; of section because the settlement dismissed some of through entry the remainder of the claims were resolved in defendant’s
The that this conclusion elevates form over substance majority suggests insofar as it turns on whether the settlement calls for a dismissal. agreement reasons that some settlement will call for of majority agreements entry action, a defendant and not dismissal of the both forms judgment against yet of will result the of agreement payment money ante, termination of the action. But the difference (Maj. opn., between an for a dismissal and one for the of agreement calling calling entry the defendant is not a mere Whether the settle- judgment against formality. ment of the claim will result a the defendant could have judgment against for the and for that reason practical consequences may frequently event, In serve as an of however we important point negotiations. any might differences between for dismissal and judge practical agreements calling defendant, those for a we are not entitled to calling entry judgment against statute, overlook the which treats a defendant whose plain language favor a dismissal is entered as a “prevailing party.” a trial court’s discretion when cases are dismissed
Recognizing a settlement also serves the Code of monetary equitable objectives underlying case, Civil Procedure section 1032. is correct that typical majority will favor the who has achieved some measure of equities settlement, success and thus can to be through reasonably expect compen ante, 1152-1153.) sated for her costs. But this litigation (Maj. opn., pp. is, will not be so. It a truth that defendants invariably example, simple sometimes settle even frivolous lawsuits “because the cost of simply litiga tion—either financial or terms of relations—would be too public great.” Home, (Buckhannon Board & Care Inc. v. West Health and Virginia Dept. of Human Resources 532 U.S. L.Ed.2d S.Ct. Scalia, J.); 1997) (cone. (7th cf. Fisher v. Cir. 105 F.3d opn. Kelly 1835] 350, 352 mere fact that obtained some does not recovery [“[T]he make her a because defendants often settle automatically prevailing party lawsuits.”].) If even meritless to extract a plaintiff manages lawsuit, in settlement of a meritless hers is a brand of success we recovery hesitate to as conduct we hesitate to might recognize legitimate—and might reward her to of costs. by entitling payment it, 1032(a)(4)
IAs read section no to award imposes rigid requirement costs to a such circumstances. The statute instead settling plaintiff permits trial courts to determine whether the of the case warrant deviation equities from the usual rule to costs. It allows trial courts entitling settling plaintiff prevailing party negotiated favor. But if a defendant would have been entitled to status if it had action, statute, why, dismissal of the entire it is not clear under the the defendant should cease where, here, negotiated actually to be a it has dismissal of some claims and (See 1032(a)(4) prevailed respect [defining ‘[prevail- on the merits with to the remainder. § ” ing party’ to include both “a defendant in whose favor a dismissal is entered” and “a defendant”].) against plaintiffs against defendant as those who do not recover relief *24 whether, to allocate costs a manner that takes into account example, frivolous, claim is is de plaintiffs underlying plainly plaintiffs recovery minimis, or the success is otherwise insubstantial relative to plaintiff’s clearly (and the nature and of the claims the costs incurred scope brought them). The would not the trial court to prosecuting inquiry require ‘try ” ante, 1157.) entire case.’ Nor would it from (Maj. opn., prevent parties (See their own with to the allocation of costs. making arrangements respect ibid.; Proc., (c).) Code Civ. subd. But the absence of an express § it would trial courts to refrain from costs to agreement, permit awarding circumstances which a costs award would be settling plaintiffs inequi Granted, table or this not unjust. approach may simplify procedures ante, same extent as the rule. But it is the majority’s (Maj. opn., that is most consistent with both the text of the statute and its approach To the extent the concludes other underlying equitable purposes. majority wise, I dissent. respectfully J., concurred.
Werdegar,