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Marta L. Perez v. Gustavo Davalos Torres

May 24, 2012

MARTA L. PEREZ, PLAINTIFF AND RESPONDENT,
v.
GUSTAVO DAVALOS TORRES, DEFENDANT AND APPELLANT.



APPEAL from an order of the Superior Court of Kern County. Sidney P. Chapin, Judge. (Super. Ct. No. S-1500-CV-261305)

The opinion of the court was delivered by: Cornell, J.

CERTIFIED FOR PUBLICATION

OPINION

Marta L. Perez was injured when the vehicle in which she was riding was struck by a vehicle driven by Gustavo Davalos Torres. The jury returned a verdict in Perez's favor. Thereafter, Torres filed a memorandum of costs claiming that he had made a valid offer pursuant to Code of Civil Procedure section 998 (hereafter section 998 offer)*fn1 for more than Perez recovered at trial. The trial court found the section 998 offer was invalid because it failed to include a statutorily required acceptance provision and granted Perez's motion to tax all of the costs sought by Torres. Torres asserts the trial court erred in finding his section 998 offer was invalid and in granting Perez's motion to tax costs. We disagree and affirm the order.

FACTUAL AND PROCEDURAL SUMMARY

This is an appeal from an order made after judgment was entered. Thus, the underlying facts, for the most part, are not relevant to the issue before us.*fn2

Relevant here is that Torres made a section 998 offer to settle the case against Perez for $100,000.49. Perez did not accept the offer. The jury returned a verdict in favor of Perez for $77,986 in compensatory damages and for $1,400 in punitive damages. Thereafter, Torres filed his memorandum of costs pursuant to section 998. Perez moved to tax those costs and the trial court granted the motion, concluding the section 998 offer was invalid.

DISCUSSION

The only issue is whether the section 998 offer made by Torres was valid. Resolution of this issue requires consideration of the right to recover costs in a civil action and the effect of section 998.

Statutory Right to Recover Costs

The right to recover costs is derived solely from statutes. In the absence of statutory authority, each party must pay his or her own costs. (Davis v. KGO-T.V., Inc. (1998) 17 Cal.4th 436, 439.) The general rule allowing recovery of costs is found in section 1032. (Guerrero v. Rodan Termite Control, Inc. (2008) 163 Cal.App.4th 1435, 1439; Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108 (Scott Co.) ["Section 1032 is the fundamental authority for awarding costs in civil actions"].) Section 1032 requires the trial court to award costs to the prevailing party in any action or proceeding, "[e]xcept as otherwise expressly provided by statute." (Id., subd. (b).) Section 1033.5 identifies the costs that are recoverable under section 1032. Under section 1033.5, subdivision (b)(1), fees paid to experts retained by the parties are not recoverable costs.

Section 998

"Section 998 modifies the general rule of section 1032." (Scott Co., supra, 20 Cal.4th at p. 1112.) Section 998, subdivision (a) states: "The costs allowed under Sections 1031 and 1032 shall be withheld or augmented as provided in this section." Costs are augmented pursuant to section 998 when an offer to compromise is rejected and the rejecting party fails to achieve a better outcome at trial. In this situation, "'section 998 establishes a procedure for shifting the costs upon a party's refusal to settle'" (Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 128) by "expand[ing] the number and type of recoverable costs and fees over and above those permitted by section 1032[, subdivision] (b)." (Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 1000.)

In the circumstances of this case, where the plaintiff refuses the defendant's offer and then fails to obtain a more favorable judgment, the plaintiff is precluded from recovering his or her costs incurred after the offer was made, and the defendant is entitled to recover his or her costs incurred after the offer was made. (ยง 998, subd. (c)(1).) In addition, the trial court has discretion to order the plaintiff to pay the costs the defendant incurred for the services ...


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