Memorandum of Costs After Judgment California
In Bussey v. Affleck (1990) 225 Cal. App. 3d 1162 275 Cal. Rptr. 646 Division Four of the district held that when a contract includes an attorney fees and costs provision, the court may award disbursements of counsel to the prevailing party as attorney fees pursuant to a postjudgment cost memorandum as long as these expenses are ordinarily billed separately to the client. ( Id. at p. 1166.)
The Bussey court reasoned that to hold otherwise would impair the effectiveness of contractual fees and costs provisions and prevent the prevailing party from being made whole. (Ibid.)
The court concluded "The provisions of section 1033.5 do not dictate a contrary result. . . . Insofar as the disbursements are for expert witness fees that are not allowable under section 1033.5, subdivision (b), unless 'expressly authorized by law,' the requisite authority is found in the statutes that authorize contracting parties to stipulate for the payment of attorney fees and costs. (See Code Civ. Proc., 1021 leaving 'the measure and mode of compensation of attorneys' to 'the agreement, express or implied, of the parties'; Civ. Code, 1717 prevailing party on contract providing for attorney fees and costs entitled to reasonable attorney fees 'in addition to other costs'; and cf. Ecco-Phoenix Electric Corp. v. Howard J. White, Inc. (1969) 1 Cal. 3d 266, 274 81 Cal. Rptr. 849, 461 P.2d 33 cost award to be governed by prevailing party statute where contract provision was 'inapplicable'.)" (225 Cal. App. 3d at p. 1167.)
The Third District extended the Bussey reasoning to attorney fees awards in cases brought under a private attorney general theory pursuant to section 1021.5. ( Beasley v. Wells Fargo Bank (1991) 235 Cal. App. 3d 1407, 1420-1422 1 Cal. Rptr. 2d 459. Beasley is factually distinguishable because this action was not brought under such a theory.
The holding in Bussey was convincingly criticized by a panel from the Third District in Ripley v. Pappadopoulos (1994) 23 Cal. App. 4th 1616 28 Cal. Rptr. 2d 878 (Ripley) as an unwarranted departure from the plain language of Code of Civil Procedure section 1033.5, subdivision (b)(1).
The Ripley court reasoned "In Bussey the court attempted to avoid the statutory prohibition against the inclusion of expert witness fees in a cost award by equating expert witness fees and other nonallowable costs of litigation with attorney fees and by concluding that such costs may be included in an award of contractual attorney fees. We cannot adhere to that approach.
In the absence of some specific provision of law otherwise, attorney fees and the expenses of litigation, whether termed costs, disbursements, outlays, or something else, are mutually exclusive, that is, attorney fees do not include such costs and costs do not include attorney fees." (23 Cal. App. 4th at pp. 1625-1626.)
To the extent that the Bussey court bolstered its conclusions by pointing to the parties' contractual provision covering both attorney fees and costs, the Ripley court rejected this reasoning.
The court explained: "We are here concerned with the items of expense which may be included in a cost award after judgment and are not concerned with contractual remedies.
Special contract damages are subject to pleading and proof in the main action and cannot be recovered by mere inclusion in a memorandum of costs.
As an exception to this rule, the Legislature has chosen to provide for the recovery of contractual attorney fees in a cost award. ( Civ. Code, 1717; Code Civ. Proc., 1033.5, subd. (a)(10)(A); see Stats. 1990, ch. 804, 2.) But the Legislature has declined to adopt that procedure for the recovery of expert witness fees. (Code Civ. Proc., 1033.5, subd. (b)(1).)
Accordingly, assuming expert witness fees may be recovered under a contractual provision, they must be specially pleaded and proven at trial rather than included in a memorandum of costs.
Since plaintiffs did not specially plead and prove their right to recover expert witness fees under an appropriate provision of their contract, they were not entitled to such fees and it was error to include such fees in the cost award." (Ripley, supra, 23 Cal. App. 4th at p. 1627.)
Because of this failure in the plaintiffs' pleading and proof, the Ripley court concluded "It is unnecessary here to consider whether recovery may be permitted, and the contractual language that would be required to support recovery, of litigation expenses that are not allowable as costs when such damages are specially pleaded and proven at trial." ( Id. at p. 1627, fn. 18.)
In Davis v. KGO-T.V., Inc. (1998) 17 Cal. 4th 436, 446-447, footnote 5 71 Cal. Rptr. 2d 452, 950 P.2d 567 (Davis), our Supreme Court held that the prevailing party in a Fair Employment and Housing Act action was not entitled to recover expert witness fees for privately retained experts.
The high court acknowledged the intradistrict conflict evidenced by Bussey and Ripley, but declined to resolve the issue.
Instead, the court noted, "Our present analysis, which involves statutory construction, may not be dispositive in a matter involving the effect of a contractual agreement for shifting litigation costs, which turns on the intentions of the contracting parties." (Ibid.)