BANK OF SAN PEDRO v. GOODSTEIN

Reset A A Font size: Print

Court of Appeal, Second District, Division 7, California.

BANK OF SAN PEDRO, Petitioner, v. SUPERIOR COURT of Los Angeles County, Respondent. Wallace A. GOODSTEIN, M.D., Real Party in Interest.

No. B057133.

Decided: July 17, 1991

Epport & Richman, and Steven N. Richman, Los Angeles, for petitioner. No appearance for respondent. Smith, Polson & Elstead and Edward W. Polson, Pleasanton, for real party in interest.

OPINION AND ORDER FOR PEREMPTORY WRIT OF MANDATE

The facts are not in dispute and no question of substantive evidence has been raised, thereby relieving this court of the necessity to present in a plenary fashion, factual citations to the record.   The question presented on this petition is one of law, i.e., is the real party in interest, Wallace A. Goodstein, M.D., entitled to an automatic stay of enforcement of an award of costs for expert witness fees against him under Code of Civil Procedure section 998, subdivision (c) pending his appeal or is he required to post an appeal bond or other sufficient undertaking to entitle him to such a stay.   The issue is one of first impression, of considerable significance to the day-to-day operation of the trial courts statewide and is one in which the adequacy of an appeal is questionable since real party in interest could render the expert witness fees awarded uncollectable pending a lengthy appeal by sequestration and transfer of his assets.

I.

FACTUAL AND PROCEDURAL SYNOPSIS

On or about November 2, 1984, Wallace A. Goodstein, M.D. (“Goodstein”) commenced this litigation.   In 1985, Bank of San Pedro (“Bank”) was named as a defendant in various causes of action.   The matter went to trial in September 1989, at which time a judgment of nonsuit was entered in favor of Bank and against Goodstein.   An appeal is pending from the judgment of nonsuit.

After the judgment of nonsuit was entered, Bank filed a motion to recover expert witness fees.   The motion was made pursuant to Code of Civil Procedure section 1 998.   The motion was based upon the fact that Bank had served a statutory offer of compromise upon Goodstein, in which Bank offered to pay $150,000 in cash to Goodstein in full settlement of the action.   The offer was rejected by virtue of Goodstein's failure to accept the statutory offer within the statutory time period.   Thereafter, the matter proceeded to trial, with a judgment of nonsuit eventually being entered in favor of Bank as previously indicated.   The trial court ruled that Bank was entitled to reimbursement of its expert witness fees in the full amount of $116,184.05 pursuant to section 998, subdivision (c).

Goodstein filed an appeal from the order of the superior court of September 11, 1990, granting Bank's motion to recover expert witness fees.   Goodstein refused to file an appeal bond or other undertaking.   Bank then filed a motion for an order directing the clerk of the court to issue (1) a writ of execution, and (2) an abstract of judgment to allow Bank to initiate collection of the expert witness fees awarded to Bank.   On March 1, 1991, respondent superior court denied Bank's motion.   In denying the motion, the trial court did acknowledge that the issue presented was novel and “a cutting-edge issue in the law.”

On April 4, 1991, this court issued an order to show cause why the relief requested by Bank in its petition for writ of mandate and other relief should not be granted.

II.

ISSUES PRESENTED

The issues presented are as follows:

1. Whether a trial court is obligated to issue a writ of execution to allow a judgment creditor to collect extraordinary costs, such as expert witness fees (as opposed to routine costs, such as filing fees), pending an appeal where the appellant has not filed an appeal bond or other undertaking pursuant to section 917.1;

2. Whether Vadas v. Sosnowski (1989) 210 Cal.App.3d 471, 258 Cal.Rptr. 374, prevents the collection of nonroutine costs pending an appeal since Vadas dealt with routine costs only.2

III.

DISCUSSIONA. The appellate court must issue a writ of mandate where there is not a plain, speedy and adequate remedy in the ordinary course of law.

 Section 1086 provides that a writ of mandate “must be issued in all cases where there is not a plain, speedy, and adequate remedy, in the ordinary course of law.”  (See also, Running Fence Corp. v. Superior Court (1975) 51 Cal.App.3d 400, 408, 124 Cal.Rptr. 339.)

In interpreting section 1086, the courts have held:  “the intervention of an appellate court may be required to consider instances of a grave nature or of significant legal impact, or to review questions of first impression and general importance to the bench and bar where general guidelines can be laid down for further cases.   In such cases, the statutory requirement of inadequacy of appellate remedy may have been relaxed in favor of immediate review of a question of statewide importance so that lower decisions in other cases will be uniform.  [Citations.]   Indeed, where ‘the issues presented are of great public importance and must be resolved promptly’ [citations], the existence of an alternative appellate remedy will not preclude the original jurisdiction conferred by the California Constitution [citations].”  (Fns. omitted.   Emphasis added.)  (Hogya v. Superior Court (1977) 75 Cal.App.3d 122, 129–130, 142 Cal.Rptr. 325.)

Bank filed its motion to allow a writ of execution to be issued against Goodstein so as to secure reimbursement of Bank's expert witness fees of $116,184.05.   Any delay, such as forcing Bank to await resolution of Goodstein's appeal, could result in irreparable injury and harm to Bank.   Such delay may very well diminish Bank's chance of ever recovering the expert witness fees from Goodstein, as Goodstein would be afforded the opportunity to sell, encumber, transfer or conceal his assets during the interim.   Thus, even if this court, after the delay of a normal appeal, were to rule in favor of Bank and allow Bank to secure a writ of execution for its expert witness fee award, such relief may very well be meaningless as there may be no assets on which the writ of execution may be levied.

In addition, the issue presented in this petition will become moot if Bank is forced to await this court's decision on the pending appeal or file its own appeal.   As the issue presented in this petition pertains to the right of a judgment creditor to collect nonroutine costs pending an appeal, the only avenue for addressing this issue is via a petition.   Otherwise, the issue will always be moot since resolution of the underlying appeal will always resolve the matter:  if the appellate court affirms the decision of the trial court, the judgment creditor would undoubtedly have the right to collect the award, while the appellate court's reversal of the trial court would result in further litigation.   The issue can only be properly addressed via a petition for extraordinary relief.

B. A judgment for expert witness fees may be collected pending an appeal.

 Section 917.1 provides that the perfecting of an appeal does not stay enforcement of a money judgment unless an undertaking is given by the party.   Section 917.1, subdivision (b) provides that the undertaking must be for double the amount of the judgment or order, unless given by an admitted surety insurer (in which event it is for one and one-half times the amount of the judgment or order).   Thus, California statutory law indicates that an ordinary money judgment is not stayed pending appeal.

 A conflict in the law has resulted from a recent decision which holds that a judgment for ordinary costs is subject to a stay on appeal without the filing of an undertaking.  (See Vadas v. Sosnowski, supra, 210 Cal.App.3d 471, 473, 258 Cal.Rptr. 374.)   In Vadas, however, the only issue before the court was whether the collection of a defense judgment for “routine costs” of $11,120.76 is stayed pending appeal.   The court in Vadas did not address the issue of the collection of extraordinary costs pending appeal, nor did it interpret prior case law as prohibiting the collection of items “not routinely a part of most judgments” pending an appeal.  (Id., at p. 474, 258 Cal.Rptr. 374.)

The Vadas court expressly based its decision upon the reasoning of the court in Chamberlin v. Dale's R.V. Rentals, Inc. (1986) 188 Cal.App.3d 356, 360–362, 232 Cal.Rptr. 785, which provided that the collection of a defense judgment for routine costs was stayed pending appeal.   Neither Chamberlin nor Vadas restricts the collection of nonroutine costs.   Indeed, the Chamberlin court indicated that the collection of costs not routinely a part of most judgments would not be stayed pending appeal without the filing of an undertaking.   This reasoning is further elaborated upon by the Chamberlin court, as follows:  “the cost awards excluded from the money judgment bond requirement under the early cases were those types of costs awarded in virtually every case.   Such cost awards did not pass on matters directly involved in the litigation but instead were merely incidental to litigated issues.   Such cost awards did not include attorney fees and the early cases do not purport to apply to attorney fees.”  (Emphasis added.)   (Id., at p. 361, 232 Cal.Rptr. 785.)

In distinguishing attorney fees awards as a type of cost not ordinarily awarded in litigation, the Chamberlin court further went on to state that:  “We conclude the attorney fee award to Chamberlain under Civil Code section 1717 is not the type of cost award contemplated by the early cases as constituting an exclusion from the money judgment bonding requirement of former section 942 or current section 917.1.   Unlike the costs involved in the early cases, such attorney fees are in the nature of a directly litigated issue rather than merely incidental to the judgment.   Further, attorney fees are not the type of costs involved in virtually every case.   Attorney fees are awarded only in limited situations․   Because attorney fees are awarded as costs only in certain limited cases, our holding is consistent with the intent of the early cases․”  (Emphasis added.)  (Id., at pp. 361–362, 232 Cal.Rptr. 785.)

Bank received an award of $116,184.05 for expert witness fees.   Expert witness fees, like attorneys' fees, are not ordinarily a part of costs awarded at trial.   Further, the award of expert witness fees (1) is not the type of cost included in virtually every case and (2) was a directly litigated issue, as opposed to being an incidental matter.   Specifically, the record reflects that two separate hearings were conducted, involving two motions.   Formal discovery was also undertaken relating to this issue.   Additionally, expert witness fees are rarely awarded, and then only when the special factual prerequisites of section 998, subdivision (c) have been fulfilled.   It would be a distortion of reality to classify expert witness fees as ordinary costs.   We conclude that collection of expert witness fees should not be automatically stayed pending appeal by classifying them as are ordinary costs.

C. A distinction is made in section 998 between expert witness fees and costs.

We conclude that judgment creditors are only prohibited from collecting routine costs pending the existence of an appeal, and not extraordinary awards such as expert witness fees.   Our conclusion is further buttressed by the distinction drawn between “costs” and “expert witness” fees in section 998, subdivision (c).   This section expressly draws a distinction between costs on the one hand and expert witness fees on the other, without attempting to define them.   Specifically, section 998, subdivision (c) provides:  “the court, in its discretion, may require the plaintiff to pay the defendant's costs from the date of filing of the complaint and a reasonable sum to cover costs of the services of expert witnesses, ․” (Emphasis added.)

We find the distinction drawn in section 998, subdivision (c) to be significant.   We also adopt the view that the holdings in Vadas and Chamberlin are consonant with the distinction provided in section 998, subdivision (c).   Therefore, according to the reasoning of the Chamberlin and Vadas courts, as expert witness fees are not ordinarily part of costs awarded at trial, a party awarded expert witness fees should be allowed to collect them pending appeal.

The order to show cause issued by this court on April 4, 1991, is discharged.   A peremptory writ of mandate is hereby ordered directing respondent superior court to vacate its order of March 1, 1991, denying Bank's motion for issuance of a writ of execution and for an abstract of judgment and to enter a new and different order granting said motion.   Costs of these proceedings are awarded to petitioner.

FOOTNOTES

FN1. Unless otherwise indicated, all statutory references are to the Code of Civil Procedure..  FN1. Unless otherwise indicated, all statutory references are to the Code of Civil Procedure.

2.   The trial court felt bound to follow Vadas, even though the court acknowledged that Vadas may not be applicable to the facts of this case.   Among the court's comments were the following:“Well, I would say to you, although agreeing with your comments, that this court feels bound by that decision with respect to the motion ․ it may be that some other appellate decision would clarify this.  [¶] But I believe, looking at the opinion, that it is binding on this court.”“You make a good argument, Mr. Richman, very carefully thought-out argument, and you may be right.   But as of this time it may be a cutting-edge issue in the law.  [¶] This is how law is made, but I would believe that [Vadas ] would prevent this court from giving a writ of execution under the factual context here.”“I don't believe, by any means, it necessarily is cut and dried where one would say that it would be a frivolous appeal if [petitioner] were to go to an appellate court on this issue.  [¶] I don't know whether [petitioner] is going to, but I would not believe this is an irresponsible point to raise [on appeal].”

FRED WOODS, Associate Justice.

LILLIE, P.J., and JOHNSON, J., concur.

Copied to clipboard