Opinion
NOT TO BE PUBLISHED
APPEAL from the San Bernardino County Super.Ct.No. CCHRS04417. J. Michael Gunn, Judge. Reversed.
The Law Offices of Adrienne D. Cohen, Adrienne D. Cohen and Sean R. Ferron, for Defendant and Appellant.
Jimmy L. Gutierrez and Angelica A. Arias for Plaintiff and Respondent
OPINION
HOLLENHORST, Acting P. J.
I. INTRODUCTION
Defendant and appellant San Bernardino Associated Governments (SANBAG) appeals from the trial court’s order awarding SANBAG expert witness fees from plaintiff and respondent City of Chino (City). SANBAG contends the trial court both (1) erred as a matter of law in refusing to award expert fees SANBAG incurred prior to SANBAG’s offer to compromise under Code of Civil Procedure section 998, and (2) abused its discretion in reducing the fees incurred after the offer to compromise.
All further statutory references will be to Code of Civil Procedure unless otherwise noted.
II. FACTS AND PROCEDURAL BACKGROUND
The City made a written request that SANBAG defend and indemnify the City in connection with underlying lawsuits for wrongful death and personal injury. SANBAG refused the request, and the City filed the current action seeking contractual indemnity. The City sought to recover $199,878 in attorney fees and costs it incurred in defending itself in the underlying lawsuits.
The background facts included in this opinion are based on our opinion in a prior appeal, No. E040570. In brief, SANBAG and the City were sued after three persons were killed and another person injured in a motor vehicle accident in 1996 in an intersection that was part of the designated detour relating to the reconstruction of State Route 71 into a state freeway.
A court trial was held in 2002, at which the trial court interpreted the indemnity provisions of the parties’ agreement to mean that the City had to prove liability on the part of SANBAG before a duty on the part of SANBAG to indemnify the City arose. Thereafter, the City filed a Second Amended Complaint for express contractual indemnity, which added allegations that incorporated and recognized Judge King’s ruling.
On December 23, 2005, SANBAG made an offer to the City under section 998 to settle the underlying lawsuit for a payment by SANBAG to the City of $25,000. The City did not accept the offer, and the matter proceeded to trial on the issue of SANBAG’s liability. The jury found on a special verdict that “the detour, as designed and constructed by SANBAG,” was “safe for the motoring public” on the date of the collision. The trial court thereafter entered judgment in favor of SANBAG.
SANBAG submitted a memorandum of costs in which it requested litigation costs including expert witness fees totaling $47,030.25. The City moved to tax costs and requested that the expert witness fees be stricken “because the Offer to Compromise was unreasonable and the amount sought is exorbitant.” The trial court (which was not the court that had presided over the trial in the underlying action) conducted two hearings and permitted the parties to file supplemental briefs to address the specific issue of whether all the expert fees incurred had been necessary to prepare for trial.
At the second hearing, the trial court announced its intended ruling to reduce expert witness fees from $47,325 to $29,781, a reduction of $17,249 from the requested amount. However, the trial court thereafter prepared a written ruling in which the court reduced the expert witness fee award to $10,000. The court explained, “Code of Civil Procedure Section 998(c)(1) provides: ‘If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her post offer costs and shall pay the defendant’s costs from the time of the offer.’ Assuming the offer was reasonable, the most SANBAG is entitled to is $29,781.00.” The court further stated, “The court finds, due to the tortured manner of fact finding available in this matter and the facts presented to this court, it is impossible for this court to rule with any exactitude as to the amount of the expert fees — although it appears reasonable to award some fees. As a result, the court estimates fees, based on facts submitted to the court and the arguments of the attorneys. The court will tax costs and witness fees, reducing the contested expert fees down to $10,000.00. . . . [¶] . . . [¶] 3. The expert witness fees are reduced from $47,030.25 to $10,000.00. The court’s ruling is not an ‘attempt to split the baby in half,’ but instead, the courts [sic] ruling is this court’s best approximation of fairness this court finds possible under the facts presented to this court.”
Other facts are set forth in the discussion of the issues to which they pertain.
III. DISCUSSION
A. Discretion to Award Pre-offer Expert Witness Fees
Section 998, subdivision (c)(1) grants the trial court discretion to require a plaintiff to pay a reasonable sum to cover the defendant’s costs of the services of expert witnesses actually incurred and reasonably necessary in preparation for trial or during trial. SANBAG contends the trial court erred in failing to consider the $17,249.00 in expert witness fees that SANBAG incurred before making its section 998 offer.
Section 998, subdivision (c)(1) provides: “If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer. In addition, . . . the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.
As noted above, the trial court’s ruling stated, “Code of Civil Procedure Section 998(c)(1) provides: ‘If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her post offer costs and shall pay the defendant’s costs from the time of the offer.’ Assuming the offer was reasonable, the most SANBAG is entitled to is $29,781.00.” (Italics added.) SANBAG contends the trial court overlooked the next sentence of section 998, subdivision (c)(1) which allows the trial court, in its discretion, to award, in addition to post offer costs, “a reasonable sum to cover costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.”
In Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006) 39 Cal.4th 507, 532 (Regency), the California Supreme Court confirmed that section 998, subdivision (c)(1) authorizes an award of expert witness fees incurred both before and after a compromise offer is made. The court explained: “The first sentence [of section 998, subdivision (c)(1)] limits recoverable ‘costs’ to those incurred from the time of the offer. The second sentence, which relates to the ‘costs of the services of expert witnesses,’ contains no such limitation.” (Regency, supra, at p. 532.) Thus, we conclude the trial court erred as a matter of law in ruling that “the most SANBAG [was] entitled to” was the amount of expert witness fees incurred after the section 998, subdivision (c)(1) offer.
We note that Regency, supra, 39 Cal.4th 507, was decided on August 6, 2006, several weeks after the trial court issued its ruling on the motion to tax costs, and thus the trial court did not have the benefit of the Supreme Court’s analysis of the issue.
The City argues, however, that SANBAG invited the error, and cannot complain of the error on appeal, because SANBAG stated in its supplemental brief in the trial court that “The Court has discretion to award SANBAG a reasonable sum for all of its expert fees incurred, however even if the Court only awards SANBAG’s . . . Section 998 post-offer expert fees, this amount totals $29,781.00” (Bold omitted.) We disagree that SANBAG’s argument in the trial court was an invitation to error. SANBAG clearly stated its position that the trial court had discretion under section 998 to award “all of its expert witness fees.”
We will therefore remand for the trial court to exercise its discretion in determining how much of those fees were reasonably incurred in preparation for trial.
B. Reduction of Requested Expert Witness Fees
SANBAG next contends that the trial court abused its discretion in reducing the amount of expert witness fees it actually awarded because the memorandum of costs was prima facie evidence that the fees were reasonable and necessary, and the City failed to show that any of the claimed fees were not proper. After concluding that the most SANBAG was entitled to recover was the fees incurred after the section 998 offer, as discussed above, the trial court further reduced the award to $10,000. SANBAG contends no evidence supported that decision.
In its memorandum of costs, SANBAG sought expert witness fees totaling $47,030.25. The declaration of SANBAG’s counsel submitted in support of the memorandum of costs stated, “SANBAG . . . retained the services of Edward Ruzak and Arnold Siegel as expert witnesses in this matter. Mr. Ruzak and Mr. Siegel reviewed materials relating to the subject lawsuit. Both Mr. Ruzak and Mr. Siegel testified at trial in this matter. Edward Ruzak submitted bills for his services in the amount of $13,262.50, which is a reasonable fee as said services were necessary in order to obtain pertinent expert information relating to the defense of this matter. Arnold Siegel submitted bills for his services in the amount of $33,767.75, which is a reasonable fee as said services were necessary in order to obtain pertinent expert information relating to the defense of this matter.” Copies of Ruzak’s and Siegel’s invoices were attached as exhibits to the declaration.
In its ruling, the trial court stated, “$29,781.00 for two weeks of work appears to be excessive, absent some documented verification. SANBAG has not presented any evidence or argument parsing out the experts’ work for this case in general verses [sic] the current indemnity controversy. In that sense, SANBAG has failed to present a credible argument that any of the expert work was required respecting the indemnity issues. In fact, it may be difficult to separate in any meaningful way the questions presumably litigated in the personal injury action versus the instant matter. At the very least, SANBAG has not made such a connection pursuant to this court’s previous request.” (Italics added.)
SANBAG contends the trial court misunderstood the issue in the underlying trial. SANBAG retained Ruzak as an expert traffic engineer and Siegel as an expert accident reconstructionist to establish that SANBAG had not been at fault. Ruzak and Siegel had been involved in the underlying personal injury lawsuits, but the billings SANBAG submitted in its memorandum of costs sought only fees that were incurred in the City’s indemnity action against SANBAG.
The trial court explained in its ruling that it reduced the fees requested because SANBAG did not show that “any of the expert work was required respecting the indemnity issues.” However, the indemnity issue presented in the City’s lawsuit did not, at this stage of the litigation, require expert testimony. Although the City was seeking express contractual indemnity from SANBAG, there were no indemnity experts or damages experts at that trial, because, based on Judge King’s earlier ruling, the City was required to prove that SANBAG was at fault in order to proceed on the City’s claim for indemnity.
The City argues, however, that SANBAG has forfeited the argument that the trial court did not understand the issues in the case because SANBAG did not raise the issue in the trial court. We disagree. Before the trial court issued its ruling, there was no way for SANBAG to know how the trial court viewed the case. Rather, in a “Guidance Re: Motion to Tax Costs” in which the trial court invited further briefing, the trial court correctly noted that Judge King had previously ruled on the interpretation of the indemnity agreement. We conclude the issue was not forfeited.
SANBAG’s expert traffic engineering and accident reconstruction testimony were directly relevant to its defense, whereas expert testimony on indemnity issues would have been irrelevant. We therefore conclude that the trial court abused its discretion when it reduced the fee award based on its conclusion that the fees did not relate to the indemnity issues. We will therefore remand the matter to the trial court to exercise its discretion as to the award of expert witness fees under section 998, subdivision (c)(1).
IV. DISPOSITION
The order appealed from is reversed and the matter is remanded for the trial court to reconsider the expert witness fee award consistent with this opinion.
We concur: MCKINSTER, J., MILLER, J.
In the City’s prior appeal (No. E040570), we held that the indemnity agreement between the parties required a finding of fault on the part of SANBAG before the City was entitled to indemnity from SANBAG.