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Robertson v. John

California Court of Appeals, Fourth District, Third Division
Feb 10, 2011
No. G043635 (Cal. Ct. App. Feb. 10, 2011)

Opinion

NOT TO BE PUBLISHED

Appeal from an order of the Superior Court of Orange County No. 07CC07600, Robert J. Moss, Judge.

McQueen & Ashman and James A. McQueen for Defendant and Appellant.

Brown & Charbonneau, Gregory G. Brown and Michael Tran for Plaintiff and Respondent.


OPINION

FYBEL, J.

Introduction

Philip St. John appeals from the trial court’s order granting the motion of Gregory A. Robertson to strike and/or tax costs. We conclude St. John was entitled to recover costs as a matter of right pursuant to Code of Civil Procedure section 1032 (further code references are to the Code of Civil Procedure) because he was, as a matter of law, “a defendant in whose favor a dismissal is entered” (§ 1032, subd. (a)(4)). We therefore reverse and remand for the trial court to consider Robertson’s challenges to specific items of cost set forth in St. John’s memorandum of costs (the Cost Memorandum).

Facts and Proceedings in the Trial Court

In November 2000, Acacia Limited Partners leased space in an office building, called the Acacia Building, to Back Bay Medical, LLC. In January 2001, Robertson and St. John formed GARP Properties, LLC (GARP), which took possession of the Acacia Building and assumed the lease as lessor. Robertson and St. John each had a 50 percent interest in GARP.

Disputes arose between Robertson and St. John, and in July 2007, Robertson filed a complaint against St. John, alleging he had forfeited his interest in GARP and asserting causes of action for judicial dissolution of GARP, declaratory relief, and an accounting. In August 2007, St. John filed a cross complaint against Robertson, alleging Robertson had created a favorable lease arrangement with Back Bay Medical, LLC (of which Robertson was a member) in violation of his fiduciary duties as a member of GARP. St. John’s cross complaint sought damages and asserted causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duty. In January 2008, St. John filed a first amended cross complaint.

In September 2007, the trial court consolidated the complaint, cross complaint, and an unlawful detainer action that GARP had filed against Back Bay Medical, LLC. In July 2008, GARP filed a request for dismissal of the unlawful detainer action, and it was dismissed on the same day.

In August 2008, St. John was granted leave to file a second amend cross complaint deleting the cause of action for breach of the implied covenant of good faith and fair dealing and adding a cause of action for a judicial determination of the validity of the lease with Back Bay Medical, LLC.

When the parties appeared for trial in October 2008, they engaged in settlement discussions that culminated in a settlement agreement resolving their disputes. A written settlement agreement was prepared and signed that day. The settlement agreement stipulated that Robertson and St. John each had a 50 percent interest in GARP and called for the judicial dissolution of GARP, the sale of the Acacia Building, and a modification of the terms of the lease to increase the rent. The settlement agreement required Robertson to dismiss without prejudice the second and third causes of action of his complaint and St. John to dismiss without prejudice his entire cross complaint. The settlement agreement did not include a waiver of costs.

On October 29, 2008, the second and third causes of action of Robertson’s complaint were dismissed without prejudice pursuant to a request for dismissal. On November 14, 2008, St. John’s cross complaint was dismissed without prejudice pursuant to a request for dismissal.

On November 25, 2009, after the terms of the settlement agreement had been performed, Robertson filed a request for dismissal with prejudice of his complaint. The complaint was dismissed with prejudice the same day.

On December 10, 2009, St. John filed a notice of entry of dismissal. On the same day, St. John filed the Cost Memorandum with a supporting memorandum of points and authorities. The Cost Memorandum sought $8,641.98. In February 2010, St. John filed an amendment to the Cost Memorandum seeking additional costs. The Cost Memorandum and amendment together sought a total of $10,237.69 in costs.

Robertson moved to strike and/or tax costs, and filed an objection and request to strike the amendment to the Cost Memorandum.

After a hearing, the trial court granted Robertson’s motion to strike and/or tax costs in its entirety. The order granting the motion states, in part: “The entire cost memorandum is stricken. The case was settled. Both sides gained and lost something from the settlement and dismissals. The court does not find that St. John was the prevailing party.”

Discussion

I.

St. John Was Entitled to Recover Costs as a Prevailing Party Under Section 1032.

Section 1032, subdivision (b) states, “a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Section 1032, subdivision (a)(4) defines “prevailing party” to include “a defendant in whose favor a dismissal is entered.”

“Where a plaintiff voluntarily dismisses an action with prejudice, the defendant is ordinarily one in whose favor a dismissal has been entered, who therefore qualifies as a ‘prevailing party’ within the meaning of... section 1032, subdivision (b), and who is ‘entitled as a matter of right to recover costs’ unless another statute expressly provides otherwise.” (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 150.)

Robertson dismissed with prejudice his complaint against St. John. That fact is undisputed. As a matter of law, St. John is a defendant in whose favor a dismissal with prejudice was entered, and, therefore, he was entitled as a matter of right to recover costs incurred in defending the complaint.

Robertson argues, and the trial court found it significant, that the parties entered into a settlement agreement in which Robertson obtained some of the relief he requested in his complaint. However, if a party falls into one of the definitions of “prevailing party, ” that party is entitled to recover costs notwithstanding the results of settlement. (Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, 188.) “The definition of ‘prevailing party’ provided in section 1032 requires the court to award costs as a matter of right in specified situations. By precluding consideration of settlement proceeds as a ‘net monetary recovery’ when a dismissal is entered in favor of the defendant, only one party qualifies for a mandatory award of costs, consistent with the prior law.” (Ibid.)

II.

The Parties’ Settlement Agreement Did Not Include a Waiver of Costs.

Settling parties can protect themselves from the operation of section 1032 by including a waiver of costs in the settlement agreement. No waiver of costs was included in the settlement agreement between Robertson and St. John. Robertson asserts a cost and fee waiver was included in an early draft of the settlement agreement but was removed from the final agreement at St. John’s request “as [St. John] intended on filing a malicious prosecution action against Robertson.”

In essence, Robertson argues the settlement agreement includes a parol term that the parties agreed to waive prevailing party statutory costs and attorney fees, while St. John retained the right to sue for malicious prosecution. California’s parol evidence rule is codified in section 1856. Subdivision (a) of section 1856 provides: “Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.” As explained by Chief Justice Traynor, “[w]hen the parties to a written contract have agreed to it as an ‘integration’-a complete and final embodiment of the terms of an agreement-parol evidence cannot be used to add to or vary its terms.” (Masterson v. Sine (1968) 68 Cal.2d. 222, 225.)

“In considering whether a writing is integrated, the court must consider the writing itself, including whether the written agreement appears to be complete on its face; whether the agreement contains an integration clause; whether the alleged parol understanding on the subject matter at issue might naturally be made as a separate agreement; and the circumstances at the time of the writing. [Citations.] Whether a contract is integrated is a question of law when the evidence of integration is not in dispute. [Citations.]” (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 953 954.)

The settlement agreement in this case appears to be complete on its face and includes an integration clause stating, “[t]his Agreement contains the entire agreement and understanding between the parties, and supersedes and replaces all prior negotiations or proposed agreements, written or oral.” The parties’ agreement to waive prevailing party statutory costs while allowing St. John to sue for malicious prosecution would not “‘naturally be made as a separate agreement.’” (Masterson v. Sine, supra, 68 Cal.2d at p. 227.) Indeed, the parties understood the need for including a cost waiver provision in the written settlement because the original draft of the agreement had such a waiver.

III.

The Cost Memorandum Was Timely Filed; the Amendment to the Cost Memorandum Was Not.

Robertson argues St. John did not timely file the Cost Memorandum. A prevailing party seeking to recover costs must serve and file a memorandum of costs (1) within 15 days of the date of the mailing of the notice of entry of judgment or dismissal by the court clerk; (2) within 15 days of the date on which written notice of entry of judgment or dismissal is served; or (3) within 180 days after entry of judgment, whichever occurs first. (Cal. Rules of Court, rule 3.1700(a)(1).)

On November 25, 2009, Robertson’s complaint was dismissed with prejudice pursuant to request. On December 10, 2009, St. John filed and served a notice of entry of dismissal and the Cost Memorandum. The Cost Memorandum was filed timely. But St. John’s amendment to the Cost Memorandum, filed on February 11, 2010, was untimely; therefore, St. John may not recover the costs identified in the amendment.

Robertson argues the Cost Memorandum was untimely to the extent it sought costs on the cross complaint, which was dismissed more than a year before the Cost Memorandum was filed. Robertson is correct; moreover, Robertson would have been entitled to recover his costs on the cross complaint because the dismissal on the cross complaint was in his favor. (§ 1032, subd. (a)(4); see Great Western Bank v. Converse Consultants, Inc. (1997) 58 Cal.App.4th 609, 613.)

IV.

Conclusion

Under section 1032, St. John was entitled to recover costs based on the dismissal with prejudice of Robertson’s complaint; therefore, we reverse the order granting the motion to strike and/or tax costs and remand. The trial court did not rule on Robertson’s challenges to specific items in the Cost Memorandum because the court granted the motion to strike and/or tax costs in its entirety. On remand, the trial court may consider those specific challenges set forth in Robertson’s motion to strike and/or tax costs. St. John may not recover costs on his cross complaint and may not recover costs identified in the amendment to the Cost Memorandum.

Disposition

The order granting the motion to strike and/or tax costs is reversed and the matter is remanded for the trial court to consider Robertson’s challenges to specific items in the Cost Memorandum and for other proceedings consistent with this opinion. Appellant shall recover costs incurred on appeal.

WE CONCUR: ARONSON, ACTING P. J., IKOLA, J.


Summaries of

Robertson v. John

California Court of Appeals, Fourth District, Third Division
Feb 10, 2011
No. G043635 (Cal. Ct. App. Feb. 10, 2011)
Case details for

Robertson v. John

Case Details

Full title:GREGORY A. ROBERTSON, Plaintiff and Respondent, v. PHILIP ST. JOHN…

Court:California Court of Appeals, Fourth District, Third Division

Date published: Feb 10, 2011

Citations

No. G043635 (Cal. Ct. App. Feb. 10, 2011)