Opinion
No. A8810656.
Decided March 5, 1993.
Jeffrey S. Bakst, for plaintiffs.
Dinsmore Shohl, Thomas S. Calder, K.C. Green and Jana B. Deen, for defendants.
The issue before the court is the meaning of the word "costs" in Civ.R. 54(D), which provides:
"Costs. Except when express provision therefor is made either in a statute or in these rules, costs shall be allowed to the prevailing party unless the court otherwise directs."
The underlying case is a products liability case. The plaintiff, Brian Maynard, a minor, was seriously burned as the result of an explosion while watching a friend do an "experiment" using a chemical set manufactured by the defendants. The case was filed in 1988 and extensive discovery was conducted both locally and around the country by both parties. The case went to trial in March 1992, and after nine days of hearing the jury returned a verdict in favor of the defendants. Pursuant thereto, the court entered judgment for the defendants and assessed costs to plaintiffs.
Approximately a month later, defendants filed a "Motion for Bill of Costs," moving to tax as costs the sum of $29,287.01 of defendants' fees and expenses. Their motion was supported by a memorandum and the affidavit of Thomas S. Calder, one of their counsel. Plaintiffs filed a memorandum in opposition thereto and a motion for sanctions under Civ.R. 11, asking that defendants be sanctioned on the basis that the motion for costs was frivolous. Defendants responded thereto.
The expenses that defendants ask the court to assess as costs fall into the following categories:
1. Cost of video deposition of defense witness played at trial.
2. Transcript of same filed with court.
3. Amount paid reporting service to play the video at trial.
4. Fees paid plaintiffs' and defendants' expert witnesses.
5. Travel expenses to foreign cities to take depositions.
6. Cost of copies of depositions taken by plaintiffs.
7. Discovery depositions not used as trial testimony.
8. Transcripts of trial proceedings.
9. Cost of exhibits used.
The defendants maintain that all these expenditures were necessary and vital to the litigation and therefore they are entitled to have them included in costs on the basis of the court's decision in Jones v. Pierson (1981), 2 Ohio App.3d 447, 2 OBR 542, 442 N.E.2d 791.
The court there said at 449, 2 OBR at 545, 442 N.E.2d at 794:
"[N]ecessary litigating expenses are taxable costs pursuant to Civ.R. 54(D); that is, as much of the funds expended by a party as are necessary and vital to the litigation must be characterized as taxable costs which will normally be awarded to the prevailing party." (Emphasis added.)
The court cited no authority for this definition of "costs" other than the Staff Note to Civ.R. 54(D). A Staff Note is not authority but should be considered. The Jones court interpreted the note's statement that a trial court had discretion to assess costs to mean not only that the court had discretion to determine against whom costs should be assessed, but also discretion to determine what should be included in the costs. On its face this is a misinterpretation of Civ.R. 54(D).
The test suggested by Jones that one determines what are allowable "costs" by deciding whether the funds expended were "necessary and vital to the litigation" provides no test at all. Obviously, a party is not going to expend its own funds in connection with a case unless it feels that such expense is "necessary and vital" to its case. One attorney might honestly feel it was a waste of his client's money to take a large number of discovery depositions. Another attorney with equal sincerity could feel he was not representing his client properly unless he took a deposition of everyone who might possibly be called as a witness. A party with unlimited assets could afford to be unconstrained in employing experts, conducting discovery and preparing material for the trial while his opponent, of limited means, could not afford that luxury. What might be "necessary and vital" at the opening of trial might prove not to be so as the trial progressed.
One of the cases which the court in Jones cited as its authority was Terry v. Burger (1966), 6 Ohio App.2d 53, 35 O.O.2d 156, 216 N.E.2d 383. This case was effectively overruled by the unanimous decision of the Supreme Court in Benda v. Fana (1967), 10 Ohio St.2d 259, 39 O.O.2d 410, 227 N.E.2d 197. Benda cited the dissenting opinion of Judge J.J.P. Corrigan in the Terry case as "correctly assessing this difficult problem." Judge Corrigan in his dissent points to a number of examples showing how meaningless the test of "necessary and vital to the litigation" is.
It should also be noted that the court's words in Jones were dicta. The court held in fact that none of the expenses plaintiff sought to include in costs was allowable. The decision in Jones was thoroughly analyzed in an article entitled Note, Hosner v. The Gibson Partner Warning: "Free" Dismissals under 41(A)(1)(a) Can Really Cost (1990), 19 Cap.U.L.Rev. 233, at 237. The Note states at 238, fn. 22:
"The opinion in Jones is analytically flawed. Among its most obvious errors are string cites, citing an overruled ( sub silentio) case, and expounding new and broad propositions of law without citing authorities."
Unfortunately, the test for determining what should be included in costs set out in Jones v. Pierson has been used in a number of other appellate decisions. Interestingly, using the same tests, these courts have reached a variety of contradictory conclusions as to what is or is not includable in "costs." See Equip. Distrib., Ltd. v. T.W. Smith Engine Co. (Aug. 29, 1984), Hamilton App. No. C830738, unreported; Horne v. Clemens (1985), 25 Ohio App.3d 44, 25 OBR 118, 495 N.E.2d 441; Bookatz v. Kupps (1987), 39 Ohio App.3d 36, 528 N.E.2d 961; Baby Tenda v. Jessup (Mar. 16, 1988), Hamilton App. No. C870158, unreported, 1988 WL 32092; Griffith v. University (Aug. 11, 1989), Ct. of Claims No. 87-12804, unreported; Glover v. Massey (Jan. 11, 1990), Cuyahoga App. Nos. 56351 and 56802, unreported, 1990 WL 1328; Ilick v. Ohio State Highway Patrol (Mar. 19, 1990), Ct. of Claims No. 85-07064, unreported; Hamilton v. Heine (May 9, 1990), Pickaway App. No. 89CA12, unreported, 1990 WL 71881; Rosenbaum v. Voorhees (May 18, 1990), Geauga App. No. 89-G-1522, unreported, 1990 WL 67763; Troulos v. Prod. Abrasives (June 21, 1990), Cuyahoga App. Nos. 56975 and 57317, unreported, 1990 WL 84323; Glavan v. Lincoln Elec. Co. (1992), 78 Ohio App.3d 227, 604 N.E.2d 233.
Why some courts seem to want to load the winner's litigation expenses onto the loser is something of a mystery. It may be simply the court's irritation at the loser for not settling the case. In any event, it is contrary to what we have always considered the American rule that each side pays its own expenses. Any other rule will inevitably have the effect of closing the courts to those whose funds are limited, in violation of Section 16, Article I of the Constitution of Ohio.
What is certainly controlling in a determination as to what can properly be included in "costs" is the position of the Supreme Court of Ohio. That court has never deviated from the proposition that the word "costs" refers to those costs that are fixed and taxable according to statute. It does not include expenses of litigation that are not specifically provided for by statute.
This principle was first enunciated in Benda v. Fana (1967), 10 Ohio St.2d 259, 39 O.O.2d 410, 227 N.E.2d 197, the syllabus of which states:
"1. Costs are generally defined as the statutory fees to which officers, witnesses, jurors and others are entitled for their services in an action and which the statutes authorize to be taxed and included in the judgment.
"2. Those portions of Sections 2311.17 and 2311.18, Revised Code, which provide that a plaintiff must pay costs where he has refused an offer of settlement and then subsequently fails to obtain judgment for more than was offered refer to the costs which shall be fixed and taxed according to statute and not to other expenses of litigation."
While this decision preceded the Civil Rules and dealt with a statute that provided that a plaintiff who got less than the amount for which the defendant was willing to confess judgment "must pay all costs of the defendant incurred after the offer was made," the language and the rationale are equally applicable to Civ.R. 54(D).
The Civil Rules became effective July 1, 1970 and the next case dealing with the definition of the word "costs" was Centennial Ins. Co. v. Liberty Mut. Ins. Co. (1982), 69 Ohio St.2d 50, 23 O.O.3d 88, 430 N.E.2d 925. In that case, the syllabus enunciated:
"A court of appeals may not tax as a cost the premium paid by an insurance company for a supersedeas bond."
In the opinion, Justice Locher wrote:
"This court has consistently limited the categories of expenses which qualify as `costs.' `Costs, in the sense the word is generally used in this state, may be defined as being the statutory fees to which officers, witnesses, jurors and others are entitled for their services in an action * * * and which the statutes authorize to be taxed and included in the judgment * * *. * * * They are allowed only by authority of statute * * *.
"Today, we reaffirm the principle that `[t]he subject of costs is one entirely of statutory allowance and control.'" Id. at 50-51, 23 O.O.3d at 89, 430 N.E.2d at 926.
The court's decision was unanimous. Although it is not mentioned in the opinion, the court was presumably interpreting the word "costs" in App.R. 24, which is indistinguishable from "costs" in Civ.R. 54(D).
The principle was again expressed in Ohio Edison Co. v. Franklin Paper Co. (1985), 18 Ohio St.3d 15, 18 OBR 13, 479 N.E.2d 843, the court's opinion stating: "Generally, an unsuccessful litigant is not liable for the litigation expenses, including attorney fees, of its adversary in the absence of the statute providing for their allowance."
In Muze v. Mayfield (1991), 61 Ohio St.3d 173, 573 N.E.2d 1078, the court dealt with the meaning of the word "costs" under Civ.R. 41(D). The syllabus states: "Attorney fees are not included as costs of a previously dismissed action under Civ.R. 41(D)." In his opinion, Chief Justice Moyer echoed the language from Benda and Centennial quoted above.
One could certainly argue that the court should interpret the word "costs" more broadly under Rule 41 than under Rule 54. Where the plaintiff has dismissed a prior action before a trial and then refiled it, it is more likely that a large portion of the defendant's expenses in trial preparation are wasted and have to be repeated. Logically, therefore, if the Supreme Court restricts costs under Civ.R. 41(D) to those allowed by statute, it certainly would do the same under Civ.R. 54 when both sides have had their day in court.
Following Muze came In re Election of November 6, 1990 for the Office of Attorney General of Ohio (1991), 62 Ohio St.3d 1, 577 N.E.2d 343. This was an election contest determined by the Supreme Court for which the winning contester moved for his costs under the provisions of R.C. 3515.09. He claimed the following as "all the costs of the contest" under the statute:
1. attorney fees in defending against the contest petition and in complying with this court's ballot security order;
2. attorney travel expenses to attend depositions and to comply with the ballot security order;
3. expenses to copy materials for submission to this court, and others;
4. expenses to deliver materials to this court, contestor's counsel, and others;
5. court reporter charges;
6. videotape technician charges for attending, recording, editing, and filing two videotaped depositions;
7. witnesses' fees and mileage;
8. computerized legal research expenses;
9. expert witness fees; and
10. long-distance telephone and facsimile transmissions charges.
Despite the broad language of the statute that the loser should pay "all costs," the court held only expenses 5, 6 and 7 were includable in "costs." All others were not. Although specifically stating that the rules governing election contest proceedings, not those governing trials generally, should be applied, the court gave to the word "costs" the exact meaning set out in paragraph one of the syllabus in Benda v. Fana. Wrote Chief Justice Moyer: "In other words, a particular litigation expense will not qualify as part of `costs' unless it is `fixed and taxable according to statute.'" In re Election, supra, 62 Ohio St.3d at 4, 577 N.E.2d at 346.
The most recent Supreme Court case is Skaggs v. Lima Mem. Hosp. (1991), 62 Ohio St.3d 296, 581 N.E.2d 1085. In that case, a unanimous Supreme Court affirmed the decision of the appellate court "on authority of Muze v. Mayfield and Benda v. Fana, paragraph one of the syllabus." The case was presented and argued by four of Ohio's most prominent law firms on behalf of the parties involved and amicus curiae briefs on each side were filed by the Ohio Academy of Trial Lawyers and the Ohio Hospital Association.
The trial court had ruled that $52,000 as "costs," including the defendants' litigating expenses, had to be paid under Civ.R. 41(D) before the plaintiffs could proceed with their refiled case. This decision was appealed to the Third District Court of Appeals, the assignment of error being:
"The trial court erred to the substantial prejudice of plaintiffs-appellants in ruling that the `costs' referred to in Ohio Civil Rule 41(D) include a defendant's `litigating expenses', including attorney fees incurred in defending a claim made against that defendant."
The appellate court sustained the assignment of error and remanded the case. The appellate court relied on the Supreme Court's decision in Centennial Ins. Co. v. Liberty Mut. Ins. Co. (1982), 69 Ohio St.2d 50, 23 O.O.3d 88, 430 N.E.2d 925, and quoted Justice Locher to the effect that "Today, we reaffirm the principle that `[t]he subject of costs is one entirely of statutory allowance and control.'" Id. at 51, 23 O.O.3d at 89, 430 N.E.2d at 926. The appellate court went on to state: "While the trial court may be correct in its analysis of the direction of the law, we believe that authority to bring `litigating expenses' within the ambit of `costs' must come from the Ohio Supreme Court."
The Supreme Court stated:
"The cause is affirmed on authority of Muze v. Mayfield (1991), 61 Ohio St.3d 173, 573 N.E.2d 1078, and Benda v. Fana (1967), 10 Ohio St.2d 259, 39 O.O.2d 410, 227 N.E.2d 197, paragraph one of the syllabus."
In other words, the Supreme Court, in deciding Skaggs, had before it the question: Should the meaning of the word "costs" be expanded? The court unanimously held that it should not be expanded.
This court would suggest that the decision in Skaggs should put to rest once and for all the baseless concept in Jones v. Pierson and its progeny that costs include whatever the trial court decides in its untrammeled discretion is "necessary and vital to the litigation."
It is almost weird that the appellate court in Jones v. Pierson made no mention of the Supreme Court's decision in Benda and that other appellate courts have followed Jones v. Pierson likewise without any analysis of the Supreme Court decisions on the meaning of the word "costs."
While it is true that the Supreme Court decisions involved either Civ.R. 41(D) or App.R. 24 or a statutory reference to costs, none of the appellate courts which followed Jones made any attempt to distinguish the meaning of the word "costs" in one or the other Civil Rules or statute.
The only case which we have found where the appellate court considered both Civ.R. 41(D) and Civ.R. 54(D) is Howard v. Wills (1991), 77 Ohio App.3d 133, 601 N.E.2d 515. It held that the word "costs" means the same thing in each rule and the meaning given it by the Supreme Court is its only meaning. Presiding Judge Stephenson, speaking for the court, there stated:
"The dispositive issue here is whether those items specified in the court orders below were actually `costs' within the meaning of these two rules. [Civ.R. 41(D) and Civ.R. 54(D).] If so, then the trial court is generally afforded broad discretion in assessing such costs and its ruling will not be overturned absent a showing of an abuse of that discretion. * * *
"On the other hand, if those items specified in the court orders do not fall within the general rubric of `costs,' then the court below was without authority under either Civ.R. 41(D) or Civ.R. 54(D) to enter such an order with respect to those items." Id. at 137, 601 N.E.2d at 517.
The court then held the rule is that laid down in Muze v. Mayfield and Centennial Ins. Co. v. Liberty Mut. Ins. Co. that the subject of "costs" is one entirely of statutory allowance and control.
Civ.R. 41(D) provides:
"Costs of Previously Dismissed Action. If a plaintiff who has once dismissed an action in any court commences an action based upon or including the same claim against the same defendant, the court may make such order for the payment of costs of the action previously dismissed as it may deem proper and may stay the proceedings in the action until the plaintiff has complied with the order."
Civ.R. 54(D) provides:
"Costs. Except when express provision therefor is made either in a statute or in these rules, costs shall be allowed to the prevailing party unless the court otherwise directs."
App.R. 24 provides:
"Except as otherwise provided by law, if an appeal is dismissed, costs shall be taxed against the appellant unless otherwise agreed by the parties or ordered by the court; if a judgment is affirmed, costs shall be taxed against the appellant unless otherwise ordered; if a judgment is reversed, costs shall be taxed against the appellee unless otherwise ordered; if a judgment is affirmed or reversed in part, or is vacated, costs shall be allowed only as ordered by the court."
All three of these rules leave in the sound discretion of the court against which parties "costs" shall be assessed. None, however, defines "costs" or appears to grant to the court discretion as to what does or does not properly constitute an element of costs. It certainly would seem unarguable that the Supreme Court in prescribing the Civil and Appellate Rules could not have intended that the word "costs" have a different meaning in different rules.
Accordingly, this court concludes that the test set out in Jones v. Pierson and followed in the other decisions is in error and we are bound to abide by the meaning of the word "costs" as defined by the Supreme Court of Ohio.
This court comes then to a consideration of defendants' expenditures, listed above, which they seek to have taxed as costs.
Expenditures falling into categories 1 and 7 are governed by the court's decision in Barrett v. Singer Co. (1979), 60 Ohio St.2d 7, 14 O.O.3d 122, 396 N.E.2d 218. The court there held that the expense of taking depositions, whether stenographically or by videotape, is to be borne by the party taking such depositions and is only taxed as costs in the action when used as evidence at trial. Use in the cross-examination of a witness is not use as evidence. Accordingly, expenditures under category 1 are and those under category 7 are not taxable as costs.
Hamilton County Common Pleas Rule 11(J) requires the filing of a transcript of any videotape deposition filed. Logically, the same rule whether the expense of such transcript should be taxed in costs should be applied as is applied to the videotape itself. Therefore, transcripts falling in category 2 where the deposition itself was used as evidence may be taxed as costs.
C.P.Sup.R. 12(D)(1)(c) provides:
"The expense of playing the videotape recording at trial shall be borne by the court."
For that reason, defendants' expenditures in category 3 should be reimbursed by the clerk of courts.
No statutory authority has been given us for taxing as costs defendants' expenditures in categories 4 through 9 and we know of none. For these reasons defendants' motion to tax as costs those expenditures in categories 1 and 2 should be granted and the motion should be denied as to those in categories 3 through 9. Expenditures in category 3 should be reimbursed by the clerk of courts.
Plaintiffs' motion for credit for expenditures for playing videotapes at trial should likewise be granted.
Plaintiffs' motion for sanctions will be denied. Even though defendants' motion to tax their expenditures as costs left the sour impression that they were "piling on," it did have a thin and partial legal basis.
Entries should be presented accordingly.
Judgment accordingly.