Friday, August 10, 2018
Court of Appeal:
Can’t Deny Costs Based on Losing Party’s Meager Resources
Opinion Rejects View of Los Angeles Superior Court Judge John Kralik That Inherent Powers Supported His Order Denying Award to Major Corporation Against Moribund Plaintiff
By a MetNews Staff Writer
A Los Angeles Superior Court judge abused his discretion in refusing to award costs to a prevailing defendant based on the losing plaintiff being moribund and his perception that she lacked the financial ability to pay, the Court of Appeal for this district has held.
Div. Four, in an unpublished opinion by Justice Audrey Collins, on Wednesday reversed Judge John Kralik’s denial of ordinary costs to the Colgate-Palmolive Company, which Elizabeth Alfaro sued in 2015, attributing her development of mesothelioma, in her lungs and abdomen, to exposure, as a child, to the company’s talcum powder.
The outcome in Colgate’s favor was not in issue; on Aug. 25, 2017, the Court of Appeal affirmed the 2016 defense judgment, pursuant to a jury verdict.
Wednesday’s opinion dealt solely with Kralik’s determination that Colgate should receive no costs, declaring in open court that due process demanded that outcome because the plaintiff did not “have fair notice of what the penalty” could be for bringing an unsuccessful action.
“[A]s far as I know, and I think it’s highly likely, [Alfaro] has no money....I think it’s admitted she has very little life left. And so I think that the state’s purposes for its statute are just not served here in any meaningful way....She’s being punished totally out of proportion to the act that she committed, which was to bring this case without being sure of the science. But she herself has no way of understanding that science.”
Kralik noted that “through the testimony, I got a pretty good idea of what her life is and where it’s going.”
(Alfaro died during pendency of the appeals, and her mother was substituted as plaintiff/respondent.)
Parties Provide Briefing
The judge received briefing by parties on the issue of his authority to deny costs, notwithstanding a prevailing party’s entitlement to them as a matter of course under Code of Civil Procedure §1032(b).
Kralik invoked §1033.5 of that code which says that costs must be “reasonable in amount” and reasoned that “such language requiring ‘reasonableness’ permits the discretion necessary to decline to award costs in a case such as this.”
He wrote that he has the “inherent power to remit costs whenever to do so would be in the interests of justice or where to do so would infringe upon the right to seek redress of grievances, and declared that the award of costs in the case before him would create “an inhumane and indecent result.”
Explaining the reversal, Collins said:
“Alfaro cites no authority, and we are aware of none, holding that the language of section 1033.5 allowing costs that are ‘reasonable in amount’ and ‘reasonably necessary to the conduct of the litigation’ also confers authority for the court to analyze whether costs are reasonable based on the losing party’s ability to pay. Instead, the cases analyzing costs under the applicable statutes focus on whether certain claimed costs were reasonable or necessary.”
She termed the 1999 Court of Appeal decision in Nelson v. Anderson “instructive.” In that case, in which actress Loni Anderson was a defendant, Div. Seven of this district’s Court of Appeal, in an opinion written for then-Justice Fred Woods, since retired, pointed to Code Civil Procedure §1032(b)’s declaration that:
“Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.”
The opinion says:
“This means that the prevailing party is entitled to all of his costs unless another statute provides otherwise….Absent such statutory authority, the court has no discretion to deny costs to the prevailing party.”
Ordinary costs sought by Colgate amounted to $195,553.39. Additionally, it claimed entitlement to $115,610.06 in expert witness fees based on Alfaro’s rejection of Colgate’s offer of compromise, pursuant to Code of Civil Procedure §998.
That section provides for such an award where a reasonable, good-faith offer is made and rejected, and the rejecting party fares less well at trial than if there had been an acceptance.
Colgate’s §998 offer was to settle the case by Alfaro dismissing her action and each side waiving a claim against the other for costs.
“Whether a section 998 offer was reasonable and made in good faith is left to the sound discretion of the trial court,” Collins wrote, observing:
“Here, there is no dispute that Alfaro failed to obtain a more favorable result at trial than the offer to compromise. However, the court expressly declined to reach the issue whether Colgate’s section 998 offer was made in good faith, nor did it make any findings as to whether that offer was reasonable, or whether the requested expert witness fees were reasonably necessary to the litigation.”
The matter was remanded for those determinations.
Collins said “there was insufficient evidence” upon which Kralik could have concluded that Alfaro “lacked the ability to pay any cost award.” Without explaining why, in light of her earlier utterances, that would be relevant, she specified that on remand, “the court is within its discretion to consider” the ability to pay.
The case is Alfaro v. Colgate-Palmolive Company, 2018 S.O.S. 3862.
Gary D. Sharp, Keith M. Ameele, Louis C. Klein, Peter M. Mularczyk and Margaret I. Johnson of Foley & Mansfield represented Colgate. Mark A. Linder was counsel on appeal for Elizabeth Alfaro’s successor-in-interest, Delgadina Alfaro.
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