Opinion
E066241
05-11-2018
MARY GREGG et al., Plaintiffs and Appellants, v. CALIFORNIA HIGHWAY PATROL, Defendant and Respondent.
Aaron Charles Gregg for Plaintiffs and Appellants. Xavier Becerra, Attorney General, Kristin G. Hogue, Assistant Attorney General, Richard F. Wolfe and Terry R. Price, Deputy Attorneys General, for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. PSC1302321) OPINION APPEAL from the Superior Court of Riverside County. James T. Latting, Judge. Affirmed. Aaron Charles Gregg for Plaintiffs and Appellants. Xavier Becerra, Attorney General, Kristin G. Hogue, Assistant Attorney General, Richard F. Wolfe and Terry R. Price, Deputy Attorneys General, for Defendant and Respondent.
This appeal concerns an award of defense costs to a public entity pursuant to Code of Civil Procedure section 1038. The motion for such costs was not filed until after entry of judgment and was therefore not timely. However, because plaintiffs have failed to show how they were prejudiced by the late filing, we will affirm the judgment.
BACKGROUND
Plaintiffs and appellants Mary Gregg, Victoria Dailey and Jack Dailey sued several individuals and entities for damages arising from a multi-vehicle collision behind a traffic break conducted by defendant and respondent California Highway Patrol to allow a vehicle transporting an item of heavy equipment to enter the freeway. They asserted that defendant was negligent in conducting the traffic break. A motion for summary judgment was granted in favor of defendant. Judgment was entered on March 4, 2016.
On April 1, 2016, defendant filed a motion for recovery of defense costs, pursuant to Code of Civil Procedure section 1038. Plaintiffs opposed the motion, arguing that it was not timely and that the trial court had not made a required finding in a timely manner. The court granted the motion and on June 2, 2016, entered a separate judgment entitled "Judgment for Costs."
All further statutory citations refer to the Code of Civil Procedure.
Plaintiffs filed a notice of appeal, specifying that the appeal was taken from the May 9, 2016 order after judgment granting the motion for defense costs pursuant to section 1038.
Plaintiffs do not challenge the award of ordinary costs.
LEGAL ANALYSIS
1.
THE SECTION 1038 MOTION WAS NOT TIMELY, BUT PLAINTIFFS WERE NOT
PREJUDICED BY THE LATE FILING
A. The Trial Court Did Not Award Section 1038 Costs Before Entry of Judgment.
Section 1038 permits a trial court to award costs that would not otherwise be available, such as attorney fees, to a public entity that prevails on a frivolous lawsuit by means of a dispositive motion, such as a motion for summary judgment. (§ 1038, subds. (a), (b).) Section 1038 provides that such costs may not be awarded "except on notice contained in a party's papers" filed "before the discharge of the jury or entry of judgment . . . ." (§ 1038, subds. (a), (c).) Plaintiffs contend that the motion was not timely because it was filed after judgment was entered. Defendant contends that there was no final judgment until the court issued a judgment for costs. Plaintiffs are correct.
Here, as noted above, the court entered judgment for defendant on March 4, 2016, following the order granting the summary judgment motion. Defendant did not file its section 1038 motion until April 1, 2016. Defendant argued below, as it does on appeal, that the motion was timely because the March 4 judgment was merely a "proposed judgment" because it was subject to a later award of costs. Accordingly, defendant argues, it was not a final determination of the rights of the parties. (Code Civ. Proc., § 577.) Defendant contends that that determination was not made until entry of the June 2 "judgment for costs." The trial court apparently accepted that argument.
This argument is not supported by existing law. It has long been held that a judgment that expressly awards costs but leaves the determination of the amount of costs the prevailing party may recover to a later time and leaves a blank for the clerk to fill in after that determination has been made is a final, appealable judgment. (Grant v. List & Lathrop (1992) 2 Cal.App.4th 993, 996-998.) The original judgment finally disposed of all legal issues between the parties, and the subsequent order setting the amount of costs to be recovered is merely incidental because it makes no substantive change to the judgment. (Amwest Surety Ins. Co. v. Patriot Homes, Inc. (2005) 135 Cal.App.4th 82, 84, fn. 1; Green v. County of Riverside (2015) 238 Cal.App.4th 1363, 1373.) Indeed, under that circumstance, an appeal from the judgment subsumes the postjudgment order determining the amount of costs to be awarded, and no separate notice of appeal from the subsequent order is necessary. (Grant v. List & Lathrop, at p. 998.) In contrast, if the judgment does not determine the prevailing party's entitlement to costs or attorney fees, a subsequent order resolving that issue and awarding a specific amount of costs and/or fees must be appealed separately, as an order after judgment. (Silver v. Pacific American Fish Co., Inc. (2010) 190 Cal.App.4th 688, 692; Colony Hill v. Ghamaty (2006) 143 Cal.App.4th 1156, 1172.) Under that circumstance as well, the judgment is final and appealable without regard to the subsequent order for costs and/or attorney fees.
Here, the March 4 judgment states, "It is ordered, adjudged and decreed that plaintiffs . . . take nothing from their complaint in this matter against defendant CHP and that defendant CHP may recover from plaintiffs . . . its allowable costs and disbursements after submitting a memorandum of costs." It is clear that the trial court determined that defendant was entitled to ordinary costs, but left the amount to be determined by the normal procedure of filing a memorandum of costs. It does not address defendant's entitlement to section 1038 costs, which requires a written motion, rather than a cost memorandum, and requires a determination by the court that the action was not brought "with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint." (§ 1038, subd. (a).) The issue of section 1038 costs was first raised in defendant's section 1038 motion, filed on April 1, 2016. Accordingly, the March 4 judgment was final and appealable, and the subsequent order awarding costs was actually an order after judgment. (Silver v. Pacific American Fish Co., Inc., supra, 190 Cal.App.4th at p. 692; Colony Hill v. Ghamaty, supra, 143 Cal.App.4th at p. 1172.)
Defendant asserts that the fact that the court issued a second judgment, which incorporated the terms of the first judgment and additionally awarded a specific amount in costs, means that the court did not intend the original judgment to be a final judgment. We disagree. The second judgment, filed June 2, 2016, entitled "Judgment for Costs," addresses only defendant's entitlement to costs pursuant to section 1038 and the amount of such costs awarded, as well as the amount of ordinary costs awarded. It does not reiterate that defendant was awarded judgment on the complaint or in any way alter the March 4 judgment. The June 2 "judgment" is therefore not an independent judgment which superseded the March 4 judgment.
The order purports to award costs pursuant to section 338. This is clearly a typographical error.
Defendant points out that courts have held that section 1038 is to be construed broadly, in light of the "evils" it addresses—i.e., frivolous lawsuits against public entities. However, section 1038 states unambiguously that a motion for defense costs must be filed before entry of judgment (§ 1038, subd. (c)), and even Gamble v. Los Angeles Dept. of Water & Power (2002) 97 Cal.App.4th 253 (Gamble), on which defendant relies, holds that a section 1038 motion must be filed before entry of judgment. (Gamble, at p. 259.) Defendant has provided no authority that suggests that "judgment" has a different meaning for purposes of section 1038, nor that the statute's underlying purpose requires a different interpretation of what constitutes a judgment.
The issue addressed in Gamble, supra, 97 Cal.App.4th 253, is the interpretation of section 1038, subdivision (a), in which the statute provides that the trial court "shall, at the time of the granting of any summary judgment, motion for directed verdict, motion for judgment under Section 631.8, or any nonsuit dismissing the moving party other than the plaintiff . . . determine whether or not the plaintiff . . . brought the proceeding with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint, petition, cross-complaint, or complaint or answer in intervention," and subdivision (c), which provides that costs must be sought by means of a noticed motion. The court found the statute ambiguous as to when a section 1038 motion must be filed, since it is not possible that a noticed motion for costs could be determined at the same time as a motion for a directed verdict, a motion for judgment or a motion for nonsuit, all of which can be made orally and decided on the spot. (Gamble, at pp. 257-258.) The court concluded that to give effect to the Legislature's purpose in enacting section 1038 as a remedy for frivolous lawsuits against public entities, section 1038 must be construed to mean that a motion for costs must be filed "at the earliest practical time" prior to the discharge of the jury or the entry of judgment. (Gamble, at p. 259.) This holding does not resolve the question presented here, i.e., what constitutes entry of judgment.
A second question of timeliness, which plaintiffs asserted in the trial court but did not initially assert on appeal, is the provision in section 1038, subdivision (a), that in order to award defense costs, the trial court must, at the time of ruling on the summary judgment motion or other dispositive motion, "determine whether or not the plaintiff . . . brought the proceeding with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint." Here, the trial court was not asked to and did not make such a determination at the time it ruled on the summary judgment motion, but did so at the time it granted the section 1038 motion. We asked the parties to submit supplemental briefing on the effect, if any, of defendant's failure to obtain a determination on this point at the time of the ruling on the summary judgment motion.
As the court held in Gamble, supra, 97 Cal.App.4th 253, section 1038 is ambiguous with respect to the timing requirements for motions for defense costs. The statute provides both that the motion must be made either before the discharge of the jury or before entry of judgment and that the trial court must determine at the time it rules on the summary judgment motion or other specified dispositive motion whether the plaintiff acted in good faith. (Gamble, at pp. 256-258.) Judgment is generally not entered contemporaneously with a ruling granting summary judgment. With respect to summary judgment motions, therefore, section 1038 seems to provide both that the motion for defense costs must be made contemporaneously with the summary judgment motion (subd. (a)) and that the motion is timely as long as it is filed before entry of judgment (subd. (c)). It is plaintiffs' burden on appeal to demonstrate error, however. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Plaintiffs have provided no legislative history that enables us to determine what the Legislature intended by these seemingly contradictory provisions. Accordingly, because plaintiffs have not met their burden on appeal, we decline to resolve this issue. In any event, regardless of the timeliness of the determination that plaintiffs did not act with good faith and with reasonable cause, the motion was clearly not timely because it was filed after the entry of judgment.
We recognize that plaintiffs did not raise the issue on their own but only in response to our request for supplemental briefing. Nevertheless, the burden rests with them.
B. Plaintiffs Have Not Demonstrated Prejudice from the Belated Motion.
This does not, however, end the discussion. In their opening brief, plaintiffs asserted in effect, but without actually addressing the issue, that reversal is required simply because the section 1038 motion was not filed before entry of judgment. We asked the parties to provide supplemental briefing on the applicable standard of reversal. We now address that question.
As we framed the question to the parties, the issue is whether section 1038's requirement that a motion for defense costs be filed before entry of judgment is directory or mandatory. A mandatory rule is jurisdictional and thus requires no showing of prejudice to require reversal, we said, while a directory rule does require prejudice. In Kabran v. Sharp Memorial Hospital (2017) 2 Cal.5th 330 (Kabran), the California Supreme Court clarified prior holdings stating or implying this distinction and held that "mandatory" is not necessarily equivalent to "jurisdictional." (Id. at p. 340.) The court held that a time limitation or other provision in a statute is jurisdictional only if the Legislature has stated, or clearly indicated, that the trial court has no power to act if a party fails to meet the requirement expressed in the statute. Otherwise, even if a statute is mandatory, requiring a party to comply with its requirements to avoid a default or other penalty, the trial court is not divested of fundamental jurisdiction to act in the absence of compliance by the party. Thus, unless a time limitation clearly divests the trial court of the power to proceed, a party must demonstrate that he or she was prejudiced by the trial court's ruling on a matter that was not timely filed. (Id. at pp. 340-343.)
In construing section 1038, "we begin 'with the language of the statute, "giv[ing] the words their usual and ordinary meaning [citation], while construing them in light of the statute as a whole and the statute's purpose [citation]."' [Citation.]" (Kabran, supra, 2 Cal.5th at p. 343.) "'The context of the language, as well as other indicia of legislative intent, must be considered' along with the choice of 'may' or 'shall.' [Citation.] Legislative intent that a time limit be jurisdictional may be signaled where the statute sets forth time limits in 'unusually emphatic form,' by 'reiterat[ing] its limitations several times in several different ways,' or, for example, by asserting that '"no [relief] shall be allowed or made after the expiration of the period of limitation prescribed . . . unless a claim . . . is filed . . . within such period."' [Citation.]" (Kabran, at p. 343.)
Section 1038 does not contain any such indicia of a legislative intent to prohibit a court from entertaining a motion for defense costs unless the motion was filed before entry of judgment. Rather, it merely states, "This section shall be applicable only on motion made before the discharge of the jury or entry of judgment, and any party requesting the relief pursuant to this section waives any right to seek damages for malicious prosecution. Failure to make the motion shall not be deemed a waiver of the right to pursue a malicious prosecution action." (§ 1038, subd. (c).) The only limitation on the court's authority is the statement, "An award of defense costs under this section shall not be made except on notice contained in a party's papers and an opportunity to be heard." (§ 1038, subd. (a).) Thus, while section 1038 clearly prohibits a court from awarding costs on an oral motion or without affording the opponent an opportunity to be heard, it does not prohibit a court from acting on a late-filed written motion. Accordingly, there is no basis in the statutory language for concluding that an order granting a late-filed section 1038 motion is reversible per se because the trial court lacks jurisdiction to decide a motion for defense costs that is not filed before entry of judgment. This conclusion is also consistent with the underlying legislative purpose (Kabran, supra, 2 Cal.5th at p. 346), which is "to discourage frivolous lawsuits by allowing blameless public entities to recover their defense costs." (Hall v. Regents of University of California (1996) 43 Cal.App.4th 1580, 1587.)
Because the time limitation in section 1038 is not jurisdictional, plaintiffs must demonstrate prejudice in order to obtain relief. Prejudice exists where it is "reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." (People v. Watson (1956) 46 Cal.2d 818, 836; see Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800; Cal. Const., art. VI, § 13.) Plaintiffs assert that they suffered prejudice because the court ordered them to pay a substantial amount in attorney fees and other costs, which they would not have had to pay if the court had denied the motion as untimely. That is not, however, the appropriate measure of prejudice. If it were, any order granting a late-filed section 1038 motion would be prejudicial and therefore reversible per se. Rather, as defendant argues, plaintiffs must show that the delay in filing the motion somehow negatively affected their ability to oppose the motion. In that regard, plaintiffs assert that the finding that the action was brought and maintained without good faith and reasonable cause was "sprung" upon them in the order granting the section 1038 motion rather than being determined at the time the court ruled on the summary judgment motion. The issue was raised in defendant's section 1038 motion, however, and plaintiffs had the opportunity to dispute defendant's assertions in their opposition to the motion, but as noted above, they did not do so. They do not attempt to explain why they could have refuted defendant's argument if it had been made in the summary judgment motion but were unable to do so when it was raised in the section 1038 motion. Because plaintiffs did not meet their burden, reversal is not required on the basis of the late filing of the section 1038 motion.
2.
PLAINTIFFS HAVE WAIVED THE CLAIMS THAT THE TRIAL COURT ERRED IN
FINDING THAT THEY DID NOT BRING THEIR ACTION WITH REASONABLE
CAUSE AND THAT THE COURT AWARDED EXCESSIVE DEFENSE COSTS
As noted above, an award of costs under section 1038 requires a determination that the plaintiff did not bring or maintain the proceeding with reasonable cause or in the good faith belief "that there was a justifiable controversy under the facts and the law which warranted the filing of the complaint . . . ." (§ 1038, subd. (a); see Kobzoff v. Los Angeles County Harbor/UCLA Medical Center (1998) 19 Cal.4th 851, 861-862 (Kobzoff).) Before denying a section 1038 motion, therefore, the court must find that the plaintiff brought or maintained the action with a subjective "good faith belief in the action's justifiability and with an objective reasonable cause." (Kobzoff, at p. 862.)
Plaintiffs contend that the order for costs pursuant to section 1038 must be reversed because the record shows that they acted both in good faith and with reasonable cause. However, they did not oppose the motion in the trial court on that basis. Rather, the sole basis for their opposition was that the motion was not timely. Because they did not make this argument below, the issue is waived, and we will not consider it for the first time on appeal. (Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, 113.)
The trial court did not address plaintiffs' subjective good faith in granting the motion, but it did find that they did not bring or maintain the action with reasonable cause. This is sufficient. (Kobzoff, supra, 19 Cal.4th at pp. 861-863.) --------
We also reject plaintiffs' argument that the court awarded defendant its section 1038 defense costs without sufficient evidence: Plaintiffs did not contest the basis for the claimed costs in the trial court, and we will not consider the argument for the first time on appeal.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to defendant and respondent California Highway Patrol.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER
Acting P. J. We concur: CODRINGTON
J. SLOUGH
J.