H-B-S Partnership v. Aircoa Hospitality Services, Inc.H-B-S Partnership v. Aircoa Hospitality Services, Inc.
OPINION
{1} In this appeal, we resolve a conflict between the Rules of Civil Procedure and local district court rules pertaining to the time for filing a cost bill in favor of the Rules of Civil Procedure. We also address the district court’s discretion under
INCONSISTENCY IN THE RULES
{2} The parties, H-B-S Partnership, Arnold Horwitch, Burton Horwitch, Elliott Horwitch, and Stuart C. Sherman (HBS) and AIRCOA Hospitality Services, Inc. (AHS), engaged in lengthy litigation resulting in trial before the district court over the right of first refusal provision of the parties’ partnership agreement. The district court concluded that the provision had been activated and entered judgment in favor of HBS for the price of exercising the right of first refusal with adjustments for distributions and interest. Both sides filed notices of appeal, and this Court affirmed the district court on appeal. H-B-S P’ship v. AIRCOA Hospitality Servs., Inc.,
{3} Sixteen days after the district court entered its judgment, HBS filed a cost bill. The filing was within the twenty days allowed by Local
{4} We initially address the inconsistency of the provisions, which are essentially identical except for their time frames for filing. We then turn to the district court’s discretion in interpreting the timeliness of the cost bill under Rules 1-001 and 1-006.
{5} LR1-307 reads:
Within twenty (20) days after filing of final judgment, the party recovering costs shall file with the clerk of the court an itemized and verified cost bill, with proof of service of a copy on opposing counsel. Any party failing to file a cost bill within the said twenty (20) days shall be deemed to have waived costs. If no objections are filed within ten (10) days after service of the cost bill, the clerk of the court shall tax the claimed costs which are allowable by law. The judge shall settle any objections filed.
Rule 1-054(D)(4) reads:
Within fifteen (15) days after filing of the final judgment, the party recovering costs shall file with the clerk of the district court an itemized cost bill, with proof of service of a copy on opposing counsel. Any party fading to file a cost bill within fifteen (15) days after the filing of the final judgment shall be deemed to have waived costs. If no objections are filed within ten (10) days after service of the cost bill, the clerk of the district court shall tax the claimed costs which are allowable by law. The judge shall settle any objections filed.
Our analysis requires us to interpret these rules along with
HISTORY OF THE RULES
{6} The history of these rules is relevant to our analysis. LR1-307 was adopted prior to September 1993, when it was recompiled. At that time, the Supreme Court rule enabling individual rules of the district courts permitted each district court to adopt rules of practice in civil eases that were “not inconsistent” with the Rules of Civil Procedure.
{7} In 1998, the Supreme Court made revisions to Rule 1-083, which became effective on January 1, 1999. Under the revised rule, which is the version that is currently in force, a district court may recommend local rules governing procedure in civil cases to the Supreme Court. Rule 1-083(A). The Rules of Civil Procedure Committee must review any proposed rule “for content, appropriateness, style and consistency with the other local rules, statewide rules and forms and the laws of New Mexico” and must make recommendations to the Supreme Court. Id. Any proposed local rule must be approved by the Supreme Court before it takes effect. Id. The current rule contains a provision that requires local rules “not [to] conflict with, duplicate or paraphrase statewide rules or statutes.” Id.
{8} The Supreme Court did not add Paragraph (D)(4) to Rule 1-054 until 1999. Thus, when the First Judicial District Court adopted it, LR1-307 did not conflict with any rule of statewide application, and the revision of Rule 1-083 did not create any conflict. Of course, when it added Paragraph (D)(4) of Rule 1-054 in 1999, the Supreme Court did not have to follow the procedure of Rule 1-083 because it was not adding a local rule at that time.
INTERPRETATION OF THE RULES
{9} HBS argues on appeal that the revision of Rule 1-083 mandates the continued vitality of LR1-307 notwithstanding the adoption of Paragraph (D)(4) in Rule 1-054. HBS recognizes the language of the revised rule that no local rule may “conflict with, duplicate or paraphrase” a statewide rule, but it contends that the Supreme Court’s adoption of LR1-307 establishes that the rule does not “conflict with, duplicate or paraphrase” Rule 1-054(D)(4), enabling both rules to coexist. HBS is correct that, with the revision of Rule 1-083, the Supreme Court took over the authority to promulgate local rules. However, HBS’s argument presupposes that the Supreme Court adopted or promulgated LR1-307 after it revised Rule 1-083. The Supreme Court took no such action. LR1-307 is a local rule that was adopted under the procedure of the prior version of Rule 1-083 in which the Supreme Court did not act to approve proposed local rules that did not conflict with statewide rules. Indeed, LR1-101 NMRA states that the local rules of the First Judicial District Court, including LR1-307, were “adopted and promulgated” by the judges of the First Judicial District Court, not by the Supreme Court.
{10} Because there is no indication that the Supreme Court approved LR1-307, we consider only the Rules of Civil Procedure in order to give effect to the Supreme Court’s intent. See Roark,
DISCRETION UNDER RULE 1-001
{11} As a result, we do not agree with HBS that LR1-307 is the applicable rule in this case. As the statewide rule adopted by the Supreme Court, Rule 1-054(D)(4) super-ceded LR1-307 when it was adopted. HBS did not file a timely cost bill in this case. We therefore must consider whether the lack of timeliness requires reversal.
{12} The district court observed the inconsistency between the rules and, without determining which rule applied, ruled that the cost bill was timely. The district court stated:
I do so primarily based on the trial court’s ability to interpret the rules in a way that secure[s] the just, speedy and inexpensive determination of every action.
... When we have a situation here where 54(D)(4) is, on its face, seems to be in conflict with the Local Rule, I think it’s incumbent upon the Court to exercise its discretion to achieve the goals that exist behind the various rules. And recovery of costs is an important goal in connection with litigation to encourage settlement, to provide some relief to the prevailing party in litigation.
So, I think, in general terms of justice, it would be inappropriate to preclude the recovery of costs here where the rules seem somewhat inconsistent. So to the extent I have discretion, I’m exercising it to allow consideration of these costs.
{13} Rule 1-001(A) provides that the Rules of Civil Procedure “shall be construed and administered to secure the just, speedy and inexpensive determination of every action.” Generally, this construction enables our district courts to adjudicate on the merits rather than on technicalities of procedure. See Las Luminarias of the N.M. Council of the Blind v. Isengard,
{14} We address in this case the tension between the need for flexibility in the rules in order to ensure a “just, speedy and inexpensive determination,”
{15} Both
{16} The application of the federal rule by other courts illustrates this intent. The federal circuit courts have most commonly utilized the rule to liberally construe or allow the amendment of pleadings, see, e.g., Trentacosta v. Frontier Pac. Aircraft Indus., Inc.,
{17} Similarly, New Mexico appellate opinions have recognized, without citing
{18} The inconsistency between LR1-307 and
{19} There is, however, a place for the exercise of judicial discretion and the application of
{20}
{21} Although HBS relied solely on its belief that LR1-307 controlled the filing of its bill of costs and did not move the district court under
{22} Although HBS did not file a motion under
MERITS OF THE COST BILL
{23} We therefore turn to the merits of AHS’s arguments regarding HBS’s bill of costs. The district court awarded costs of $39,840.68. AHS challenged the following costs: $1242.00 for transcripts, $631.00 for photocopy and staff expenses, $16,827.00 for expert fees, and $1762.00 for depositions.
{24} District courts have the discretion to grant a prevailing party the necessary and reasonable costs incurred in litigating a case. Dunleavy v. Miller,
{25}
{26} HBS requested transcript costs from official court reporters for portions of the proceedings. In allowing the request, the district court adopted the argument that HBS made in its response to AHS’s objections. In that response, HBS cited Key v. Chrysler Motors Corp.,
{27} AHS contends that the requested transcript costs at issue are not covered by Rule l-054(D)(2)(d) because the district court did not request or approve them. Indeed, the record does not reflect any such prior request or approval. However,
{28} We next consider expert witness fees, photocopy expenses, and staff expenses together. HBS’s request for costs included the fees of its expert witness, Tom Burrage, CPA. The photocopy and staff expenses were for Burrage’s investigation in his preparation to testify as an expert witness. At the hearing on the cost bill, the district court expressly addressed AHS’s challenge to these costs, which argued that Burrage and his staff were acting as support staff of counsel rather than in expert witness capacities. The district court concluded that Burrage’s work was for the creation of his expert opinion and that it would allow the ordinary expenses in connection with the creation of that opinion, including support staff expenses. Because the district court affirmatively explained its reasons justifying any deviation from
{29} AHS also argues that the fees that were incurred related to the time that Burrage spent “waiting” for a non-party to produce documents that were expected to aid him in his preparation to testify were wrongly awarded. In making this assertion, AHS relies on
{30} We lastly consider HBS’s request for deposition costs. Again, the district court adopted HBS’s response to AHS’s objections to the cost bill in allowing these costs. According to HBS, the request involved depositions that were used for the preparation of HBS’s examination of witnesses at trial. In its reply brief on appeal, AHS contends that HBS has not provided “authority for the conclusion that deposition transcripts helpful to a party in preparing an examination of a witness at trial has been ‘used’ at trial” in order to justify cost recovery. We agree that
CONCLUSION
{31} We affirm the district court’s allowance of HBS’s cost bill.
{32} IT IS SO ORDERED.