Brea
Automotive Wheels
Filed 3/9/12 Brea Imperial v. Automotive Wheels CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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
FOURTH APPELLATE
DISTRICT
DIVISION THREE
BREA IMPERIAL, INC.,
Plaintiff and Appellant,
v.
AUTOMOTIVE WHEELS, INC.,
Defendant and Respondent.
G045241
(Super. Ct. No. 05CC06828)
O P I N I O N
Appeal from a
postjudgment order of the Superior Court
of
County, Franz E. Miller, Judge. Affirmed.
Hart, King &
Coldren, Robert S. Coldren, Christopher R. Elliott, and Rhonda H. Mehlman for
Plaintiff and Appellant.
Bononi Law Group,
William S. Waldo and Lizbeth Ochoa for Defendant and Respondent.
*
* *
Plaintiff
Brea Imperial, Inc. (BII), appeals from an order awarding costs on appeal to
defendant Automotive Wheels, Inc. (AWI), contending AWI wrongly recovered
almost $180,000 in appeal bond premiums.
But the court did not abuse its discretion by finding the bond was
necessary. Nor did it abuse its
discretion by finding it reasonable to allow AWI to recover all of the
premiums. We affirm.
FACTS
This case involves the
award of costs on appeal in Brea
Imperial, Inc. v. Automotive Wheels, Inc. (Nov. 8, 2010, G040674) [nonpub. opn.] (
At trial, BII showed AWI damaged the warehouse it had leased from
BII. The jury found AWI liable, awarding
total damages exceeding $4.3 million:
“(1) breach of contract, $689,945; (2) trespass, $840,000; (3)
negligence, $300,000; (4) fraudulent inducement, $279,970; (5) fraud, $279,970;
(6) waste, $248,690; and (7) conspiracy, $1,668,370.” It found AWI acted with malice, oppression,
or fraud, though the court later found the lease barred recovery of punitive
damages. The court entered judgment
notwithstanding the verdict for AWI on the waste and fraudulent inducement
causes of action, reducing BII’s damages to just under $3.8 million.
Both parties appealed,
and we reversed and remanded with directions to enter a reduced judgment for
BII. (Brea I, supra,
G040674) We held BII could recover all
of the contract and negligence damages, and some of the trespass damages: a total of about $1.14 million. The damages above this amount were
duplicative. Finally, we held the lease
did not bar recovery of punitive damages and directed the court to determine
the appropriate amount, if any. We
stated: “AWI shall recover its costs on
appeal.” (Ibid.)
Meanwhile, as
conducted proceedings to determine whether AWI’s parent corporation, Titan
International, Inc. (Titan), was its alter ego.
The court found it was, and we affirmed the order adding Titan as a
judgment debtor. (Brea Imperial, Inc. v. Automotive Wheels, Inc. (Feb. 10, 2011, G041803, G042385,
G041926, G042148, G042153) [nonpub. opn.] (
We reversed the judgment, though, for the limited purpose of allowing
the court to determine the amount of punitive damages, if any, to impose
against AWI and Titan.
AWI filed a memorandum
of costs to recover costs incurred on appeal in Brea I. BII moved to
tax. After the hearing, the court
awarded over $187,000 in costs to AWI — including $179,856 for about three
years of 1 percent premiums incurred to maintain a $5,995,152 appeal bond.
DISCUSSION
“[A] prevailing party is
entitled as a matter of right to recover costs in any action or proceeding.” (Code Civ. Proc., § 1032, subd. (b).)
In particular, “the party prevailing in the Court of Appeal in a civil case
other than a juvenile case is entitled to costs on appeal.” (Cal. Rules of Court, rule 8.278(a)(1).)
and only “if reasonable.”
(Rule 8.278(d)(1).)
Recoverable costs include “[t]he cost to procure a surety bond,
including the premium and the cost to obtain a letter of credit as collateral,
unless the trial court determines the bond was unnecessary.” (Rule 8.278(d)(1)(F).) In appeals, bonds are most typically posted
to stay execution of judgment. (Code
Civ. Proc., § 917.1, subd. (a)(1).)
“‘If the items on a
verified cost bill appear proper charges, they are prima facie evidence that
the costs, expenses and services therein listed were necessarily
incurred.’” (Seever v. Copley Press, Inc. (2006) 141 Cal.App.4th 1550, 1557 (
attack submitted costs by arguing that he thinks the costs were not necessary
or reasonable. Rather, the losing party
has the burden to present evidence and prove that the claimed costs are not
recoverable.” (Ibid.) We review the court’s
determination of necessity and reasonableness for an abuse of discretion. (Id.
at pp. 1556-1557.)
As a threshold matter,
AWI is generally entitled to recover its costs incurred on the
the Court of Appeal affirms the judgment without modification or dismisses the appeal. The prevailing party is the appellant if the
court reverses the judgment in its entirety.”
(Rule 8.278(a)(2).) “If the
Court of Appeal reverses the judgment in part or modifies it, or if there is
more than one notice of appeal, the opinion must specify the award or denial of
costs.” (Rule 8.278(a)(3).) “In the interests of justice, the Court of
Appeal may also award or deny costs as it deems proper.” (Rule 8.278(a)(5).) In Brea
I, each party filed a notice of appeal.
As for AWI’s appeal, we reversed the $4.3 million judgment for BII, and
remanded with directions to enter a new $1.14 million judgment for BII. As for BII’s appeal, we reversed the order
denying it punitive damages. For these
reasons, we were called upon to specify the award of costs. (See Rules 8.278(a)(3), 8.278(a)(5).) We did so, awarding costs on appeal to
AWI. AWI is thereby entitled to recover
its costs incurred in the Brea I
appeal. Nothing in Brea II changes this.
name="_ftnref2" title="">[2]
Turning now to the bond,
the court did not abuse its discretion by finding the bond was necessary. “[T]he necessity for the bond [is] measured
as of the time of perfecting the appeal.”
(Stockton Theatres, Inc. v.
Palermo (1958) 51 Cal.2d 346, 350 (Stockton).) And “necessity” is a loose term here. (See id.
at p. 348 [bond securing attachment pending appeal was necessary, given
judgment debtor’s uncertain assets]; Jewell
v. Bank of America (1990) 220 Cal.App.3rd 934, 940-941 [bond staying
execution pending appeal was necessary, though appellant could have pursued
other means for obtaining stay].) The
court has discretion to determine what is necessary, and may consider practical
considerations like expediency and risk.
(Jewell, at p. 941.)
BII contends it was
unnecessary for AWI to stay execution pending appeal because AWI had a negative
net worth and was thus judgment-proof.
still have assets to protect from execution.
Thus, to rebut the bond’s prima facie necessity, BII had “the burden to
present evidence” (Seever,
AWI had no assets that could satisfy a judgment “as of the time of perfecting
the appeal” (Stockton, supra, 51
Cal.2d at p. 350) — i.e., as of July 2008.
BII failed to offer any such evidence.
And nothing stated in the Brea I
and Brea II opinions forecloses the
possibility AWI had some unencumbered, nonexempt assets as of July 2008.
BII further contends the
bond must have been unnecessary for AWI because Titan paid for the bond. BII asserts Titan did so to advance its
position that BII’s judgment against AWI could be satisfied without imposing
alter ego liability on Titan. (See
G041926, G042148, G042153 [rejecting
Titan’s contention].) Even if so, the
source of AWI’s premiums is of no concern to BII.
And the court did not
abuse its discretion by finding it reasonable to award all of the bond premiums
to AWI. To be sure, the
$1.14 million judgment for BII. From
this, BII concludes the court should have apportioned the bond premiums
accordingly so it is not effectively paying to secure its own judgment. But how was AWI to know “as of the time of
perfecting the appeal” that part of BII’s judgment would survive intact (Stockton,
supra, 51 Cal.2d at p. 350.)
The kind of
apportionment that BII seeks was endorsed in Stockton only in dissent.
The dissent noted that “although plaintiff prevailed on the appeal, it
prevailed to the extent of an increase of
only $32,333.44 over its trial court judgment . . . and
increase which it had claimed on appeal and on which (doubled) the bond premium
was based. [Citation.] Thus the sum of $32,333.44 won by plaintiff
on the appeal was the only claim with respect to which it was justified in
fairness and in law to claim and recover ‘necessary’ costs on appeal.” (Stockton,
supra, 51 Cal.2d at p. 353 (dis. opn.
of Schauer, J.).) The dissent
lamented: “The majority must consider
the entire amount to be necessary as a matter
of law because they . . . remand the cause ‘with directions to the trial
court to allow the [entire amount of] premiums on said bond.’” (Ibid.) That is exactly what the Supreme Court
majority did. It allowed recovery of all
of the bond premiums, with no apportionment.
(Id. at p. 352.) Allowing AWI to recover all of its bond
premiums here is just as reasonable.
BII’s apportionment
claim is not supported by Heppler v. J.M.
Peters Co. (1999) 73 Cal.App.4th 1265, which arises from distinguishable
facts. Heppler reversed an order requiring the sole liable defendant to
pay all of the plaintiffs’ attorney fees and costs, including those incurred in
plaintiffs’ losing battle against three other defendants. (Id.
at p. 1297.) The four defendants were
subcontractors in the seven-week construction defect case, and the court could
have allocated at least some of the plaintiffs’ fees and costs among the
individual defendants. (
not “‘impossible’” — for example, the liable defendant was a roofer and “there
were multiple days of trial that were devoted exclusively to soil
issues”].) Unlike the situation in
BII to pay for costs that AWI incurred pursuing unsuccessful claims against
other parties. The court merely awarded
to AWI the premiums paid for reasonably bonding the entire judgment against it
pending appeal.
DISPOSITION
The order is
affirmed. AWI shall recover its costs
incurred on this appeal.
IKOLA,
J.
WE CONCUR:
BEDSWORTH,
ACTING P. J.
FYBEL, J.
name="_ftn1" title="">[1] All further rule
references are to the California Rules of Court.
name="_ftn2" title="">[2] In Brea II, we affirmed an order awarding contractual attorney fees to
BII as the prevailing party in this case.
We did not undo our Brea I
award of costs on appeal to AWI. BII
cites no persuasive authority that a cost award is ephemeral, dissipating if
the recovering party does not prevail at case’s end. To the contrary, we consider the award of
costs as each appeal is decided. (Rule
8.278(a)(1).)
