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Court of Appeal:
Defendant May Only Seek FEHA Costs by Noticed Motion
Opinion Says Plaintiff Did Not Waive Right to Contest Cost Award by Failing to Oppose Memorandum of Costs
By a MetNews Staff Writer
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AMANDA NEEBLE-DIAMOND psychologist |
Div. Three of the Fourth District Court of Appeal has reversed a post-judgment order awarding $180,369.41 in costs to a prevailing defendant in a whistle-blower retaliation case, holding that costs were forfeited by the defendant by failing to seek them through a noticed motion.
Such a motion is required where a defendant fends off an action brought under California’s Fair Employment and Housing Act (“FEHA”), Acting Presiding Justice Thomas M. Goethals wrote, because costs are awardable only upon the court’s finding that the litigation lacked arguable merit.
Rather than bringing such a motion, defendant Hotel California By the Sea, a health care provider that treats persons with substance-abuse and mental problems, filed a memorandum of costs after it defeated a lawsuit by clinical forensic psychologist Amanda Neeble-Diamond, who claimed she was fired for reporting improprieties on the part of the facility. After a five-week trial, a jury determined that Neeble-Diamond was an independent contractor, not an employee, and was thus not covered by the FEHA.
Provision in Judgment
The judgment provided:
“Costs to be determined pursuant to any timely-filed memorandum and/or motions.”
Hotel California filed a memorandum of costs. Neeble-Diamond did not move to tax costs but, after she was served with a proposed amended judgment that included costs, she moved for leave to file late opposition. Orange Superior Court Judge Deborah C. Servino denied the motion and signed the amended judgment.
Reversal of the order adding costs came on Jan. 11 in an unpublished opinion. It was certified for publication on Monday—ironically, not at the request of the prevailing party, but in response to one made by a lawyer for Neeble-Diamond.
Goethals’s Opinion
Rejecting Hotel California’s contention that Neeble-Diamond forfeited the right to contest the award by not timely challenging the cost memorandum, Goethals wrote:
“While the prevailing defendant in an ordinary civil case is entitled to an award of statutory costs as a matter of right—and the filing of a cost memorandum is the proper means of securing a cost award in such cases—a different rule applies to a defendant in a FEHA case: the court has discretion to make such an award, but it must first make a finding that the plaintiff’s FEHA claims are frivolous.
“Here, Hotel California recognized it needed to file a noticed motion asking the court to award it discretionary attorney fees, but it made no similar motion to obtain an award of discretionary costs. Instead, Hotel California filed a cost memorandum, which operated as a request for the court clerk to enter a mandatory cost award and provided no opportunity for the court to exercise its discretion. The cost memorandum was an ineffective means of requesting a discretionary award of costs, and Neeble-Diamond was under no obligation respond to it. Since Hotel California failed to file a noticed motion requesting a discretionary cost award, the trial court erred when it ordered that costs be added to the judgment.”
He added that because Hotel California failed to file the necessary motion, it forfeited any such claim to costs.
No Fee Award
Servino, in acting on Hotel California’s motion for attorney fees denied the motion on the ground that the requisite showing had not been made.
The case is Neeble-Diamond v. Hotel California By The Sea, LLC, 2024, G061425.
Kaveh S. Elihu and Samuel J. Moorhead of Employee Justice Legal Group in downtown Los Angeles represented Neeble-Diamond. Joshua M. Robbins of the Irvine office of Buchalter and Costa Mesa attorney Adam Sechooler acted for Hotel California.
Other Proceedings
The judgment in favor of Hotel California was affirmed on Dec. 5, 2022, in an unpublished opinion by Goethals. The opinion specified that Hotel California is “entitled to its costs on appeal.”
Back in the Superior Court on remand, Neeble-Diamond moved to strike or tax costs on appeal. Servino ruled last Aug. 25 that aside from the motion being untimely, she does not have the power to deny costs in light of the Court of Appeal’s direction to award them. She added:
“There is no reason for the court to tax the cost items that appear reasonable on the face of the verified memorandum.”
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