18131 Ventura Blvd v. 5223 Lindley CA2/7 ( 2021 )

Filed 12/14/21 18131 Ventura Blvd v. 5223 Lindley CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
18131 VENTURA BLVD, LLC B307958
et al.,
(Los Angeles County
Plaintiffs and Respondents, Super. Ct. No. LC106325)
v.
5223 LINDLEY, LLC,
Defendant and Appellant.
APPEAL from a postjudgment order of the Superior Court
of Los Angeles County, Shirley K. Watkins, Judge. Affirmed.
Law Office of Matthew Shayefar and Matthew Shayefar for
Plaintiffs and Respondents.
Anderson, McPharlin & Conners and William R. Larr for
Defendant and Appellant.
______________________________
5223 Lindley, LLC (Lindley) appeals the postjudgment
order granting in part the motion to tax costs filed by
18131 Ventura Blvd, LLC and Ventana Medical Center, LP
(collectively Ventura). Lindley contends the court erred in
finding Lindley’s Code of Civil Procedure section 998 1 settlement
offer was not reasonable and in denying recovery of Lindley’s
expert witness costs as a result. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. Ventura’s Complaint
As set forth in more detail in our prior opinion affirming
the judgment in favor of Lindley (18131 Ventura Blvd, LLC v.
5223 Lindley, LLC (Sept. 21, 2021, B304458) [nonpub. opn.]
(18131 Ventura Blvd, LLC I)), this dispute concerns two parcels
of commercial real estate: 18131 Ventura Boulevard (the
Ventura property) and the adjoining property to the east,
5223 Lindley Avenue (the Lindley property). In 1989 the prior
owners of the Lindley property executed an easement granting
the prior owner of the Ventura property “an exclusive perpetual
easement and right of way for . . . one or more underground
utility lines.” (18131 Ventura Blvd, LLC I, at p. 2.)
In 2017 Ventura sued Lindley for wrongful interference
with an easement and nuisance after discovering utility lines
servicing the Lindley property located in the easement area
above Ventura’s utility lines. Ventura argued Lindley’s use of the
easement area was prohibited by the plain language of the
easement and constituted unreasonable interference with
Ventura’s use of the easement. Because of Lindley’s refusal to
1 Statutory references are to this code.
2
move its utility lines, Ventura had been unable to install a
gravity-fed drainage system and instead had to install a more
expensive pump-fed system above Lindley’s utility lines. The
complaint sought compensatory damages of at least $600,000,
representing the increased costs of the pump-fed system, plus the
diminution in value of the property resulting from having a
pump-fed drainage system.
2. Denial of Summary Judgment and Lindley’s Section 998
Offer
In March 2019 the trial court denied Lindley’s motion for
summary judgment or, in the alternative, summary adjudication.
The court stated the grant of an “exclusive” easement appeared to
prevent Lindley from using the easement area for its utilities.
However, the court noted that the undisputed facts demonstrated
Lindley’s predecessor had placed its utility lines in the easement
area prior to executing the easement. Accordingly, the court
stated, “[T]here is a colorable argument that the intent of the
Defendant’s predecessors in interest [was] to not grant an
‘exclusive’ use of the easement. However, determining the intent
of the parties would necessarily require a weighing of these
contradictory facts (i.e.: express language of the grant of
easement vs. the reality of the placement of the two parties’
utilities). This is an issue for the fact finder.”
Two weeks after denial of its summary judgment motion
Lindley served on Ventura, pursuant to section 998, an offer to
compromise by payment of $10,000. Ventura did not accept the
offer.
3. Judgment and Appeal
In November 2019, after a nine-day bench trial, the court
issued a statement of decision, finding the term “exclusive
3
perpetual easement” as used was ambiguous, the grantor and
grantee had intended to allow the Lindley property to use the
easement area for its utilities, and Lindley had not unreasonably
interfered with Ventura’s use of the easement. Judgment was
entered in favor of Lindley on December 27, 2019. We affirmed
the judgment on appeal.
4. The Postjudgment Award of Costs
Following entry of judgment Lindley submitted a
memorandum of costs totaling $84,126.95, which included
$28,250.22 for expert witness fees. Ventura moved to tax costs,
arguing, in part, Lindley was not entitled to expert costs
pursuant to section 998 because Lindley’s settlement offer was
not made in good faith. On September 4, 2020 the trial court
granted the motion to tax costs as to the expert witness fees,
stating, “The court agrees that viewing the case at the time the
[section] 998 offer was made, that given the dispute and
complicated/factual and legal issues, the offer was not reasonable
at the time it was made and the defendant should have had no
reasonable expectation that it would be accepted.” After taxing
costs for other items not at issue here, the court awarded Lindley
costs of $45,492.97.
DISCUSSION
1. Governing Law and Standard of Review
Ordinarily expert witness fees are not recoverable as costs
in a civil action unless the expert was ordered by the court. (See
§ 1033.5, subd. (b)(1).) Nonetheless, because Ventura failed to
receive a judgment more favorable than Lindley’s $10,000 offer to
compromise pursuant to section 998, the court, “in its discretion,”
was authorized to require Ventura to pay Lindley’s reasonable
4
costs of trial, including expert witness fees incurred after the
offer was made. (§ 998, subd. (c)(1).)2
Section 998 “is designed to encourage the settlement of
lawsuits before trial.” (Regency Outdoor Advertising, Inc. v. City
of Los Angeles (2006) 39 Cal.4th 507, 528.) “‘Its effect is to punish
the plaintiff who fails to accept a reasonable offer from a
defendant.’” (Najah v. Scottsdale Ins. Co. (2014) 230 Cal.App.4th
125, 143.) “[T]o accomplish the legislative purpose of
encouraging settlement of litigation without trial [citation], a
good faith requirement must be read into section 998.” (Wear v.
Calderon (1981) 121 Cal.App.3d 818, 821 (Wear); accord, Licudine
v. Cedars-Sinai Medical Center (2019) 30 Cal.App.5th 918, 924
(Licudine) [“[a] 998 offer is valid only if it is made in ‘good faith’”];
Najah, at p. 143 [same]; see also Regency Outdoor Advertising,
Inc., at p. 531 [“[a]ssuming without deciding” section 998 entails
a good faith requirement].)
A section 998 offer “is made in good faith only if the offer is
‘“realistically reasonable under the circumstances of the
particular case”’ [citations]—that is, if the offer ‘carr[ies] with it
2 Section 998, subdivision (c)(1), states: “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, in any action or proceeding
other than an eminent domain action, the court or arbitrator, in
its discretion, may require the plaintiff to pay a reasonable sum
to cover postoffer 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.”
5
some reasonable prospect of acceptance.”’” (Licudine, supra,
30 Cal.App.5th at p. 924.) “[A] party having no expectation that
his [or her] offer will be accepted ‘will not be allowed to benefit
from a no-risk offer made for the sole purpose of later recovering
large expert witness fees.’” (Adams v. Ford Motor Co. (2011)
199 Cal.App.4th 1475, 1483; see Licudine, at p. 924 [“[t]he good
faith requirement prevents this perversion of section 998”].)
The determination whether an offer was reasonable and
made in good faith “turns on the particular circumstances of each
case.” (Licudine, supra, 30 Cal.App.5th at p. 930.) Courts
generally consider two factors: First, whether the offer was
“within the ‘range of reasonable possible results’ at trial,
considering all of the information the offeror knew or reasonably
should have known.” (Id. at pp. 924-925; accord, Adams v. Ford
Motor Co., supra, 199 Cal.App.4th at pp. 1485-1486 [“Ford’s offer
could not be evaluated simply in comparison to the judgment
Adams sought, but it should have been measured in light of the
likelihood that Adams would prevail at trial”].) Second, “whether
[the offeror’s] information was known or reasonably should have
been known to [the offeree]” such that the offeree had
“information necessary to evaluate the offer.” (Elrod v. Oregon
Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699-700; accord,
Najera v. Huerta (2011) 191 Cal.App.4th 872, 878 [offeree must
have “a fair opportunity to intelligently evaluate the offer”].)
“Whether a section 998 offer was reasonable and made in
good faith is left to the sound discretion of the trial court.
[Citation.] ‘Similarly, the decision to award expert witness fees,
and the determination of whether these fees were reasonably
necessary, are issues left to the discretion of the trial court.’
[Citation.] The trial court, having heard the entire case and
6
observed the expert witnesses’ testimony, is in a far better
position than an appellate court to exercise this discretion and
determine what fees were reasonably necessary. [Citation.]
Thus, an appellate court ordinarily should reverse the trial
court’s determination only if it finds ‘in light of all the evidence
viewed most favorably in support of the trial court, no judge could
have reasonably reached a similar result.’” (LAOSD Asbestos
Cases (2018) 25 Cal.App.5th 1116, 1126; see also Regency
Outdoor Advertising, Inc. v. City of Los Angeles, supra, 39 Cal.4th
at p. 531 [applying abuse of discretion standard to award of fees
and costs].)
2. The Trial Court Did Not Abuse Its Discretion in Refusing
To Award Expert Fees to Lindley
Lindley concedes its section 998 settlement offer was
“modest in amount,” representing only 1.6 percent of the total
damages sought in the complaint. Nonetheless, Lindley argues
the offer was reasonable because “there was never any practical
possibility [Ventura] would prevail on the liability issue in this
action.” While Lindley is correct a modest offer may be
reasonable if there is no likelihood the offeree will prevail at trial
(see Bates v. Presbyterian Intercommunity Hospital, Inc. (2012)
204 Cal.App.4th 210, 220 [“‘[e]ven a modest or “token” offer may
be reasonable if an action is completely lacking in merit’”]), we
cannot say such was the case here.
Only two weeks prior to the settlement offer the trial court
denied summary judgment based on its assessment that issues of
fact needed to be decided, including the parties’ intent at the time
the easement was granted. The court recognized Lindley had
made a “colorable” argument for its interpretation of the
easement, but that is hardly equivalent to a finding Ventura’s
7
claims were completely lacking in merit. Lindley has not
presented any evidence of a change in circumstances between the
time of the summary judgment ruling and its offer that would
suggest it was “absolutely clear that no reasonable possibility
exists that the defendant will be held liable.” (Wear, supra,
121 Cal.App.3d at p. 821.)
Lindley’s arguments to the contrary are not persuasive.
Lindley contends that, at the time of the offer, Ventura was
aware “there was no possibility [the grantors] intended” to grant
an easement excluding their own use and “all parties to the
Easement only intended it to allow [the grantee] to continue to
use its pre-existing drain line.” However, testimony of only one of
three grantors had been submitted in support of the summary
judgment motion; and it appears the grantee’s attorney, who had
drafted the easement language, had not yet been deposed at the
time of the summary judgment ruling. Given that the trial court
had not reviewed testimony from these individuals, let alone
assessed their credibility, the trial court acted well within its
discretion when it concluded that, at the time of the offer, Lindley
could not have reasonably expected Ventura would accept its
offer. (See Wear, supra, 121 Cal.App.3d at p. 821 [“if there is
some reasonable possibility, however slight, that a particular
defendant will be held liable, there is practically no chance that a
plaintiff will accept a token or nominal offer of settlement from
that defendant”]; see also Essex Ins. Co. v. Heck (2010)
186 Cal.App.4th 1513, 1528 [“[a] token or nominal offer made
with no reasonable prospect of acceptance will not pass the good
faith test”].)
8
DISPOSITION
The postjudgment order is affirmed. The parties are to
bear their own costs on appeal.
PERLUSS, P. J.
We concur:
SEGAL, J.
IBARRA, J.*
* Judge of the Santa Clara County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
9