Filed 1/23/24 Romero v. Brocca CA2/1

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

CESAR ROMERO et al., 

Plaintiffs and Appellants,

v.

VICTOR DANIEL BROCCA et al., 

Defendants and Respondents.

 B316715

 (Los Angeles County

 Super. Ct. No. BC590284)

CESAR ROMERO et al., 

Plaintiffs and Appellants,

v.

VICTOR DANIEL BROCCA et al., 

Defendants and Appellants.

 B320296

 (Los Angeles County

 Super. Ct. No. BC590284)

APPEAL from a judgment and orders of the Superior Court 

of Los Angeles County, Holly J. Fujie, Judge. Affirmed.
2

Cesar Romero, in pro. per., for Plaintiff and Appellant

(B316715 and B320296).

Tatiana Romero, in pro. per., for Plaintiff and Appellant

(B316715 and B320296).

Burton V. McCullough for Defendants and Respondents 

(B316715)/Defendants and Appellants (B320296).

____________________

Cesar Romero and Tatiana Romero (the Romeros) contracted 

with Victor Daniel Brocca, who operates a carpentry business under 

the name of Brocca Custom Finish Carpentry (BCFC), for carpentry 

work in connection with a residential remodeling project.1 The 

Romeros subsequently terminated the contract and sued Victor,

Victor’s wife Ida Brocca,

2 and Victor’s son-in-law Jerry Guzman

(collectively, defendants). The Romeros sought damages, 

disgorgement of sums paid under the contract, and other relief.

Victor filed a cross-complaint against the Romeros for breach 

of contract and torts arising from the Romeros’ termination of their 

contract.

The Romeros moved for summary judgment on Victor’s 

cross-complaint, which the court granted. Although Victor held

1 Some of the pleadings in the underlying case refer to Brocca 

Custom Finish Carpentry, Inc., a corporation. During trial, the 

court accepted the parties’ stipulation that the correct name of 

the contracting party is “Victor Daniel Brocca dba Brocca Custom 

Finish Carpentry.”

2 Because plaintiffs Cesar and Tatiana Romero share a last 

name and defendants Victor Brocca and Ida Brocca share a last 

name, we will refer to them by their first names to avoid confusion. 

No disrespect is intended.
3

a contractor’s license while he and his employees performed work 

for the Romeros, the court found that his failure to have workers’ 

compensation insurance for the employees during that time 

resulted in the suspension of his license. (See Bus. & Prof. Code, 

§ 7125.2, subd. (a)(2).) He could not, therefore, recover on his 

claims.

The Romeros’ claims were tried to the court, which found in

favor of defendants on the contract and tort causes of action. On a 

cause of action for disgorgement of money paid under the contract, 

the court found that the suspension of Victor’s contractor’s license 

entitled the Romeros “to a refund of the $6,500 paid by them under 

the contract, plus applicable prejudgment interest.” (Capitalization 

omitted.) The court calculated the interest on the refund based 

on a 7 percent interest rate and determined that the defendants 

had repaid all amounts owed to the Romeros prior to trial. 

Consequently, the Romeros were “not entitled to any restitution.” 

The court initially determined that no one was a prevailing 

party. Later, the court granted in part the Romeros’ motion to set 

aside the judgment and ruled that the Romeros were “the prevailing 

party in this action due to their partial monetary recovery prior to 

the trial.”

The Romeros filed a memorandum of costs seeking $41,487.20. 

Defendants moved to strike the memorandum of costs, which the 

court treated as a motion to tax costs, and for sanctions against the 

Romeros. The court granted the motion to tax costs, declined to 

award any costs to the Romeros, and denied the defendants’ motion 

for sanctions.

The Romeros appeal from the judgment (appeal No. B316715) 

and from the order granting the motion to tax costs (appeal 

No. B320296). The defendants cross-appeal (appeal No. B320296)
4

from the order denying their motion for sanctions. We consolidated 

the appeals for purposes of argument and decision.

In appeal No. B316715, the Romeros contend the court 

erred by: (1) Applying 7 percent prejudgment interest, instead 

of 10 percent, and in calculating the amount of restitution; 

(2) Concluding that the Romeros failed to prove breach of contract; 

(3) Finding that defendants owed no duty under tort law to the 

Romeros; (4) Concluding that the Romeros failed to prove negligent 

misrepresentation; (5) Preemptively denying the Romeros’ attorney 

fees in the statement of decision; and (6) Failing to award treble 

damages under Code of Civil Procedure section 1029.8.3

In appeal No. B320296, the Romeros contend that the court

erred in denying them the recovery of any costs. The Broccas, 

in their cross-appeal, contend that they are the prevailing parties 

and the court erred in denying their motion for sanctions. 

We affirm the judgment and the orders from which the 

appeals are taken.

FACTUAL AND PROCEDURAL SUMMARY

A. Factual Summary

On August 5, 2014, the Romeros signed a written “Woodworks 

Agreement,” which we will refer to as the contract. The ostensible 

counterparty is “Brocca Custom Finish Carpentry” (BCFC), a 

fictitious business name used by Victor.4 On August 15, 2014, 

3 Unless otherwise indicated, subsequent statutory references 

are to the Code of Civil Procedure.

4 BCFC is not a distinct legal entity and, as such, cannot hold 

a contractor’s license. (See Twenty-Nine Palms Enterprises Corp. v. 

Bardos (2012) 210 Cal.App.4th 1435, 1450; Ball v. Steadfast-BLK

(2011) 196 Cal.App.4th 694, 701.) It is a fictitious business name 
5

Guzman signed the document on behalf of BCFC. The parties 

do not dispute that Guzman’s signature bound Victor under the 

contract. 

According to the contract, BCFC agreed to fabricate and 

install kitchen cabinets, a first-floor bathroom vanity, a master 

bathroom vanity, and doorway casings, and perform other carpentry 

work in connection with a home remodeling project for the Romeros.

Among other specifications, the contract required the vanities have

U-shaped drawers under the sinks. Victor’s work on the project was 

to “be completed within 55 days . . . upon receiving down payment 

provided that [the] site project is in safe and workable conditions

and the cabinets are not in risk of being damaged by other 

contractors or foreign persons not from [BCFC].” The down 

payment of $9,500 “is required in order to officially start” work 

on the project. An additional $2,400 is due upon the completion 

of certain work, and $5,000 is due upon the completion of other 

specified work. A final payment of $7,013 is “due upon final 

installation of cabinets and hardware and verification [that the] 

project is working correctly.”

The Romeros paid Victor $4,000 on August 21, 2014, and 

$2,500 on August 28, 2014, entirely by credit card. They did not 

pay any additional sums toward the down payment or the contract 

price.

The parties agreed that BCFC would install the bathroom 

vanities before beginning work on the kitchen cabinets. In 

September and October 2014, the Romeros and Guzman exchanged 

numerous emails regarding the color and design of the vanities. 

associated with Victor’s former contractor’s license. Nevertheless, 

we, like the parties and the trial court, will refer to BCFC at times 

as a shorthand way of referring to Victor’s carpentry business.
6

Some of the emails from Guzman included reminders to the 

Romeros that $3,000 of the deposit remained unpaid.

According to Guzman, BCFC’s work on the Romeros’ house 

could not begin until the Romeros chose colors, and work by other 

contractors was completed. On November 4, 2014, the Romeros 

informed Guzman that the work of other contractors on the second 

floor of the house had been completed and the house was “ready 

for casings, baseboards and moldings, in addition to the vanity.” 

Although Guzman brought the vanity the next day, a pipe 

protruding from the wall prevented him from installing it. The 

vanity was also unacceptable to the Romeros because it lacked 

the U-shaped drawer specified in the contract. Guzman agreed 

to modify or rebuild the vanity and said it would be ready to install 

on November 15.

On November 10, 2014, Tatiana informed Guzman by 

email of the Romeros’ “picks for the baseboard, crown molding 

and casing.” Later that day, Guzman thanked Tatiana for that 

information and again reminded her of the need to pay the balance 

due on the deposit. Guzman also informed Tatiana that the 

individual who was working on the modification to the master 

vanity “quit,” and the installation of the vanity would need be 

delayed one week to November 22.

Between November 10 and 14, 2014, the Romeros and 

Guzman exchanged further emails clarifying the design and 

materials to be used for baseboards, crown molding, and door 

casings.

On November 14, 2014, Victor was seriously injured 

when he fell off a ladder. He was hospitalized for a period of 

time and unable to work for a “couple month[s].” During his 

recovery, Guzman operated the carpentry business and Ida, 
7

who ordinarily operated a cake baking business out of her home,

also communicated with the Romeros about the project.

On November 15, 2014, Cesar sent an email to Guzman 

stating that he would look at baseboard options that day and 

email his decision. In the email, he also accused Guzman of 

“coming up with excuses and non[-]sense and not enough time 

properly managing anything with [the] project.” Cesar said he 

would “cancel [the] contract” and expect BCFC to return all money 

previously paid if it takes “longer than next week to FINISH” the 

baseboards, door casings, and vanities.

The next morning, Guzman responded to Cesar: “If base 

chosen today and is in stock I will pick up Monday and casing 

and base installed Monday. Vanity is scheduled for Saturday 

[November 22] install.”

On November 17, Ida arranged for workers whom Victor 

had hired to install door casings at the Romeros’ residence. The 

next day, the Romeros sent Ida a photograph of an installed door 

casing. Ida responded to Tatiana: “[Victor] couldn’t believe this!!! 

Terrible!!!” She told the Romeros that they would fix the problem.

On November 19, 2014, Cesar sent Ida a document described 

as an “addendum to the contract” (capitalization omitted), which 

stated that it “supersedes the original contract between BCFC 

and [the Romeros].” If accepted, the document would have made 

substantial changes to the contract terms, including a $2,750 

reduction of the contract price, Victor’s agreement to “comply with a

strict timeline outlined by [the Romeros],” payment to the Romeros 

of $150 per day until the work is completed, and an additional 

“$2,000 discount for all of the issues, damages and expenses caused 

by BCFC.” The proposed addendum stated: “Failure to agree to 

the following terms will immediately cancel current contract based 

on breach of contract and fraud caused by BCFC, its employees and 
8

contractors; and BCFC will be liable to any and all moneys owed 

to [the Romeros] including but not limited to all expenses incurred 

while waiting for these services to be performed by BCFC.”

On November 20, Ida spoke with the Romeros by telephone. 

According to the Romeros, Ida told them that “she would not do 

the kitchen cabinets.” According to Ida, she spoke to the Romeros 

about how BCFC can “fix the problem,” and said she would

talk with Victor about what they will do. She denied telling the 

Romeros that she “did not want to do the kitchen cabinets.”

On November 21, 2014, Cesar emailed Ida and Guzman 

stating that no response had been received to the proposed 

addendum and giving them “formal notice of [their] breach 

of contract.” Cesar demanded $8,500—$2,000 more than the 

Romeros had paid to BCFC—plus $150 for each day they “delay 

in returning [the Romeros’] money.”

On November 26, 2014, Cesar informed Guzman and Ida 

that if Cesar did not receive $8,500 by the end of that day, they 

would “now be liable for ALL costs and expenses [Cesar] incurred 

because of your breach and negligence since the start of [the]

contract. This amounts to tens of thousands of dollars.”

The Romeros thereafter falsely reported to their credit 

card issuer that the payments they had made to Victor were 

“unauthorized.” As a result, the credit card company debited 

BCFC’s bank account by $2,500. The Romeros asserted that 

they never received the corresponding credit.

During the time the contract was in effect, Victor had a 

contractor’s license issued by the Contractors State License Board 

(CSLB), which with BCFC’s name was associated. The CSLB 

issued the license based on Victor’s certification that it had no 

employees and was therefore exempt from the requirement of 

having workers’ compensation insurance.
9

In March 2015, the Romeros retained a private investigator 

to determine “how many employees [BCFC] has,” and thereafter 

reported the results of the investigation to the CSLB. In April 

2017, the CSLB issued a citation against Victor with respect to the 

Romeros’ project for, among other violations, failing to provide and 

maintain workers’ compensation insurance and for including in the 

contract a requirement that the Romeros make a down payment of 

more than $1,000. As a result, the CSLB suspended Victor’s license 

effective November 20, 2017.

The Romeros eventually hired Ramon Gutierrez to complete 

the kitchen and bathroom cabinets and Luis Lopez to complete 

the casings, baseboards, crown moldings, and to refinish doors 

and stairs. The documentary evidence of this work consists of 

a receipt by Gutierrez dated May 26, 2015, for $37,000 “cash,” 

and a receipt by Luis Lopez dated June 19, 2015 for $9,900 “cash.” 

(Capitalization omitted.) The Romeros also introduced a written 

proposal dated April 6, 2015 to Tatiana for “new kitchen cabinets” 

prepared by Sawdust Ltd, for $22,148.

Regarding the Romeros’ damages, Tatiana testified that, in

addition to the partial down payment of $6,500 paid to Victor and

the money paid to Gutierrez and Lopez, their damages included 

payments on their mortgage between August 2014 and May 2015, 

the cost of “having to stay in hotels” and “eat out every day because 

[they] didn’t have a kitchen,” attorney fees, and “legal costs.”

Tatiana and Cesar also sought compensation for the loss of their 

time in dealing with the litigation, which they estimated to be 

worth a combined $350,000.

B. Procedural History

The Romeros commenced the underlying action in August

2015. In October 2016, the Romeros filed the operative second 
10

amended complaint against defendants and others seeking

disgorgement of sums paid to BCFC under Business and 

Professions Code section 7031, and other relief under contract, 

negligence, fraud, and negligence misrepresentation causes of 

action.

5 The fraud and negligent misrepresentations causes of 

action were based on allegations that the defendants represented:

(1) “that they had a legitimate and lawful carpentry shop that 

was properly registered, insured and protected with the [S]tate 

of California and in good standing with all regulatory boards”; 

and (2) that they “had fully qualified and legal workers working 

in their shop.”

In their answer to the second amended complaint, the 

defendants asserted, among other affirmative defenses, that the 

Romeros failed to mitigate their damages.

In January 2017, Victor filed a first amended cross-complaint

against the Romeros alleging contract and tort causes of action 

arising from the Romeros’ termination of the contract and BCFC’s 

work on the project.

6 The Romeros moved for summary judgment 

on the cross-complaint on the ground that Victor could not maintain 

his causes of action because he was not a licensed contractor. (See 

Bus. & Prof. Code, § 7031, subd. (a).)

5 The Romeros named Brocca Custom Finishing Carpentry, 

Inc., Daniel V. Brocca, Aida Brocca, Jerry Guzman, Claudio Cruz, 

Victor Daniel Brocca as defendants. By the time judgment was 

entered, it appears that the corporation and Claudio Cruz had been 

dismissed as parties and the names of other defendants corrected 

to be Victor Daniel Brocca, Ida Brocca, and Jerry Guzman.

6 Brocca Custom Finish Carpentry, Inc., a California 

corporation, was named as a cross-defendant. Victor later stated 

that the corporation was erroneously named as a cross-defendant. 
11

On November 27, 2017, the trial court granted the Romeros’

summary judgment motion. The court found that although Victor 

produced evidence that he had a contractor’s license while the 

contract was in effect, he had employees but did not carry workers 

compensation insurance, as required by law. (See Bus. & Prof. 

Code, § 7125.2.) That failure, the court concluded, “results in the 

automatic suspension of [Victor’s] license as a matter of law” and 

bars his action against the Romeros.

On June 5, 2018, following a mediation session, Victor 

delivered to the Romeros a check for $5,400, noting that it was 

a “payment on disputed claim.” The amount of the check was 

intended to cover repayment of the Romeros’ $4,000 partial down 

payment plus interest. The Romeros cashed the check.

The Romeros’ causes of action were tried to the court during 

nine days in February and March 2021. Although it does not 

appear from our record that any party requested a statement 

of decision, the court issued a proposed statement of decision 

in June 2021. The Romeros filed objections, which the court 

overruled. The court issued its final statement of decision in 

July 2021.

C. The Court’s Statement of Decision

In the court’s final statement of decision, the court made the 

following findings and conclusions of law relevant to this appeal.

The court stated that it did not find the Romeros to be 

credible witnesses. This finding was based in part on the Romeros’

demeanor and evasiveness while testifying, and in part on evidence 

indicating that the Romeros acted with a “vindictive and punitive 

motivation” toward the defendants, and “were often overreaching 

in their claims and their demands.” The court found Victor’s 

“testimony to be more credible than that of [the Romeros].” 
12

Guzman’s testimony “was not entirely credible, being at times 

self-serving and not supported by the exhibits or his prior discovery 

responses.” Ida was generally “credible although often confusing 

and unclear.”

The court rejected the Romeros’ contention that the 

defendants did not perform their work on the contract in a timely 

and satisfactory manner. The court explained that the contract 

called for a 55-day schedule, which “was not to commence until the 

full down payment of $9,500 was made.” The Romeros, however, 

“never paid the full $9,500.” Therefore, “no schedule applied under

the contract” and there was thus “no factual basis for [the Romeros’] 

delay claim.” (Capitalization omitted.)

The court found that BCFC’s “door casing work was not 

performed in a workmanlike manner” and “the upstairs master 

vanity was not as specified, both in lacking a U-Drawer and in 

its length and fitting around the pipe end.” The defects, however, 

constituted “a minor curable, not a material[,] breach,” which BCFC 

had offered to cure. Instead of responding to the offer, however, 

the Romeros “attempted to renegotiate and then terminated the 

contract.” (Capitalization omitted.) To the extent the Romeros had 

been damaged by any breach, the court found that they “failed to 

prove the amount of such damage and failed to adequately mitigate 

those damages.”

Regarding the Romeros’ negligence cause of action, the court 

stated that the Romeros “established only the basis for a breach 

of contract or a statutory damages claim under [Business and 

Professions Code, section] 7031[, subdivision] (b),” which they had

asserted under other causes of action, not the violation of “a duty 

independent of the contract arising from principles of tort law.” The

court thus rejected the negligence claim because it “is an attempt to 

recover in tort for a mere breach of contract.”
13

Regarding the Romeros’ statutory disgorgement cause of 

action, the court found that BCFC was “technically” an unlicensed 

contractor during the contract period and the Romeros were thus

“entitled to a refund of the $6,500 paid by them under the contract, 

plus applicable prejudgment interest” at the rate of 7 percent. 

(Capitalization omitted.) The court found that the Romeros 

received a $2,500 credit via a chargeback in January 2015. After 

accounting for that credit and applying the 7 percent interest rate, 

the court calculated the amount due the Romeros as of June 5, 

2018 to be $5,173.99. The defendants’ payment to the Romeros of 

$5,400 on that date thus amounted to an overpayment of $226.01. 

Therefore, the Romeros were “not entitled to any restitution on 

their cause of action.”

The court determined that the Romeros failed to prove their 

cause of action for negligent misrepresentation because they did not 

establish that the allegedly false representations were false when 

made or, if any were false when made, that the Romeros reasonably 

or actually relied on them.

The court rejected the Romeros’ request, under section 1029.8,

for an award of treble damages and attorney fees.

7 Section 1029.8 

authorizes such damages and fees when a person “causes injury 

or damage to another person as a result of providing goods or 

performing services for which a [contractor’s] license is required.” 

(§ 1029.8, subd. (a).) The court denied the claim because the 

only physical damage the Romeros suffered was “the improperlyinstalled door casings,” and they failed to prove “the amount 

7 The Romeros did not request treble damages or attorney 

fees under section 1029.8 in their second amended complaint. It 

appears from our record that the Romeros first sought such relief 

in the trial brief filed shortly before trial.
14

of any damages incurred as the result of defendants’ work.” 

(Capitalization omitted.)

The court exercised its discretion in denying the Romeros’

claim for attorney fees because: (1) the Romeros “massively overlitigated” the case and “continually overreached in their claims”; 

(2) the Romeros had previously received all money they were 

entitled to receive under their statutory cause of action; and 

(3) the Romeros, who represented themselves in the case, “failed 

to establish that they paid attorney’s fees.”

The court found that no one is a prevailing party and ruled 

that each party shall bear their own costs.

On September 16, 2021, the court entered judgment for 

defendants on the second amended complaint and judgment 

in favor of the Romeros on the cross-complaint. 

D. Postjudgment Events

On October 7, 2021, plaintiffs filed a motion for new trial 

and a motion to set aside/vacate the judgment. On November 4, 

2021, the court denied the motion for new trial and granted in 

part the motion to set aside and vacate the judgment by modifying 

the judgment to reflect that the Romeros are the prevailing party 

because they received the $6,500, plus interest, on their statutory 

claim for disgorgement.

The Romeros timely appealed from the judgment on 

November 12, 2021. 

On November 17, 2021, the Romeros filed a memorandum 

of costs requesting $41,487.20. The defendants filed a motion 
15

to strike the memorandum of costs, which the court treated as a 

motion to tax costs, and a motion for sanctions.

8

In granting the motion to tax costs, the court explained that 

it was exercising its discretion to deny costs because of “indicia that 

the [memorandum of costs] is grossly inflated with unreasonable 

and/or unrecoverable costs, the evidence that several of the claimed 

costs were never incurred and the proportion of [the Romeros’] total 

recovery from defendants before the trial compared to the amount

sought in the [memorandum of costs].” (Capitalization omitted.)

The court denied the defendant’s motion for sanctions because 

the motion “[did] not squarely address whether [challenged] costs 

were fraudulently claimed” and because “the court has granted 

the [motion to tax costs].” (Capitalization omitted.)

The Romeros timely appealed from the order granting the 

motion to tax costs, and the defendants timely cross-appealed from 

the order denying their motion for sanctions.

DISCUSSION

A. Prejudgment Interest on Disgorged Funds

Under Business and Professions Code section 7031, 

subdivision (b), generally, “a person who utilizes the services of an 

unlicensed contractor may bring an action in any court of competent 

jurisdiction in this state to recover all compensation paid to the 

unlicensed contractor for performance of any act or contract.” 

The “provision generally requires an unlicensed contractor to 

disgorge all the moneys paid to it by a project owner” and applies 

8 A motion to strike a memorandum of costs is directed at the 

entire cost bill; whereas a motion to tax costs challenges particular 

items or amounts. (Wegner et al., Cal. Practice Guide: Civil Trials 

and Evidence (The Rutter Group 2023) ¶ 17:517.) “But the terms 

are often used interchangeably.” (Ibid.)
16

“ ‘regardless of the quality of the work or the reasons for the failure 

of licensure.’ ” (San Francisco CDC LLC v. Webcor Construction 

L.P. (2021) 62 Cal.App.5th 266, 277.)

Although Victor held a contractor’s license while the contract 

with the Romeros was in effect, the court found that his failure to 

have workers compensation insurance rendered him an unlicensed 

contractor at that time. Based on this conclusion, the court found 

that the Romeros were entitled under Business and Professions 

Code section 7031, subdivision (b) to a refund of the $6,500 they 

had paid to Victor, “plus applicable prejudgment interest” at the 

rate of 7 percent. The Romeros contend that the applicable rate 

should be 10 percent. We disagree. 

Generally, under Civil Code section 3287, subdivision (a),

“[a] person who is entitled to recover damages certain, or capable 

of being made certain by calculation, and the right to recover which 

is vested in the person upon a particular day, is entitled also to 

recover interest thereon from that day.” The parties do not dispute 

that the $6,500 Victor was obligated to return to the Romeros was 

“certain,” and that the Romeros were thus entitled to prejudgment 

interest.

Under our state Constitution, “the default prejudgment 

interest rate [is] 7 percent, unless otherwise provided by statute.” 

(Soleimany v. Narimanzadeh (2022) 78 Cal.App.5th 915, 924; 

see Cal. Const., art. 15, § 1 [unless the parties otherwise agree in 

writing, the “rate of interest . . . on accounts after demand . . . shall 

be 7 percent per annum”]; see also Bullock v. Philip Morris USA, 

Inc. (2011) 198 Cal.App.4th 543, 573 [“[a]bsent a statutory provision 

specifically governing the type of claim at issue, the prejudgment 

interest rate is 7 percent”].) We have not been referred to a 

statute that specifies a different rate of interest applicable to 
17

the disgorgement of funds under Business and Professions Code 

section 7031. 

The Romeros argue that disgorgement under Business and 

Professions Code section 7031 is “ ‘fundamentally contractual 

in nature,’ ” and they are thus entitled to interest at the rate of 

10 percent. The statutory basis for 10 percent prejudgment interest

on contract claims is Civil Code section 3289, which specifies 

that rate applies “after a breach” of contract if the parties did not 

stipulate to a rate of interest in the contract. (Civ. Code, § 3289, 

subd. (b).) Here, the court determined that the Romeros failed 

to establish a breach of contract, a conclusion we affirm below. 

The only cause of action on which the Romeros prevailed is their 

statutory claim for disgorgement of money based on the suspension 

of Victor’s contractor’s license. Therefore, the 7 percent rate set 

forth in our Constitution, not the 10 percent rate applicable to 

breaches of contract, applies. Because the court applied the 

constitutionally established rate, it did not err.

The Romeros further contend that the court calculated 

the amount of interest erroneously. According to the Romeros, 

the court failed to calculate the interest that accrued for seven 

days on the $4,000 payment made on August 21, 2014. They 

are incorrect. In its statement of decision, the court included 

a detailed calculation showing how the initial $4,000 payment 

accrued interest of $0.77 per day between August 21, 2014, when 

the payment was made and August 28, 2014, when the Romeros 

paid the additional $2,500 payment. The seven days of interest 

amounted to $5.39. The court then calculated the interest that 

accrued after August 28, 2014, on the new principal balance of 
18

$6,500 ($1.25 per day) and added the previously earned $5.39 

to the total. We therefore reject the Romeros’ argument.9

B. The Court’s Finding that the Romeros 

Received $2,500 Chargeback

The court’s determination that the Romeros had received 

all they were due from the defendants prior to trial was based in 

part on the court’s finding that the Romeros had received $2,500 

from Victor via a chargeback process initiated by the Romeros. 

The Romeros contend that the court’s finding is not supported 

by substantial evidence. We disagree.

The Romeros paid BCFC $2,500 toward the down payment 

with their American Express credit card in August 2014. After 

terminating the contract, the Romeros disputed the charge 

to the credit card issuer. Guzman testified that, as a result,

in January 2015 the $2,500 was returned to the Romeros “via 

American Express chargeback.” Guzman’s testimony is supported 

by a January 9, 2015, email from a payment system operator 

informing Victor of the $2,500 chargeback to the Romeros’ credit 

9 Victor argues that the start date for the accrual of 

interest should be the date the Romeros terminated the contract

in November 2014, not the August 2014 dates when the payments 

were made. The defendant’s argument is supported by the 

constitutional provision governing prejudgment interest, which 

establishes the 7 percent rate of interest “on accounts after 

demand.” (Cal. Const., art. 15, § 1, italics added.) The Romeros 

did not make a demand for the return of their payments until they 

terminated the contract in November 2014. We need not determine 

the particular date from which prejudgment interest accrued, 

however, because regardless of whether the August 2014 payment 

dates or the November contract termination date are used, Victor 

overpaid his debt to the Romeros and the court’s determination that 

no further restitution is owed is correct. 
19

card account and a bank statement for BCFC showing a debit from 

the account in the amount of $2,525 on January 12, 2015.

10 Victor 

authenticated these documents during trial and testified that the 

chargeback to the Romeros was never reversed.11 The court could 

reasonably infer from such evidence that the $2,500 debited from 

BCFC’s bank account pursuant to the chargeback was ultimately 

credited to the Romeros’ credit card account.

Although Cesar testified that he did not receive the 

chargeback credit, the court “did not find this testimony credible” 

“based on his demeanor and the other evidence.” The court also 

relied on Evidence Code section 412, which provides: “If weaker 

and less satisfactory evidence is offered when it was within the 

power of the party to produce stronger and more satisfactory 

evidence, the evidence offered should be viewed with distrust.” In 

particular, the court noted that it had, prior to trial, “ordered the 

parties to submit evidence regarding the chargeback of the $2,500,” 

including “credit card statements.” The Romeros submitted some 

credit card statements, but none that covered transactions after 

December 2014, which would have shown whether they received 

the disputed credit to their account in January 2015.

12 When 

10 According to defendants, the additional $25 reflects a 

service fee related to the chargeback.

11 The Romeros argue that the bank statement and email 

were unauthenticated and that they objected to them at trial. The 

documents, however, were admitted into evidence without objection.

12 The Romeros submission of their credit card statements 

is discussed by the court during trial. Although the court’s docket 

reflects the filing of a document titled, “plaintiffs’ submission of 

additional evidence re[garding] credit card payments as ordered 

by court” (capitalization omitted), the Romeros did not include 
20

asked whether the Romeros ever obtained the relevant credit card 

statements, Tatiana testified that Cesar “might know,” and Cesar 

testified that he did not obtain them. Under these circumstances, 

the court’s application of Evidence Code section 412 is appropriate.

Guzman’s and Victor’s testimony regarding the chargeback, 

the defendants’ documentary evidence of the chargeback, and 

the failure of the Romeros to produce documents they could have 

obtained to support their claim provide sufficient evidence to 

support the court’s finding that the Romeros “received a credit 

for the $2,500 payment on the contract.” (Capitalization omitted.)

C. Breach of Contract

According to the Romeros’ second amended complaint, the 

defendants breached the contract “by failing, and continuing to 

fail, to produce any work. Defendants continued to come up with 

excuses and ignored [the Romeros’] calls, emails and other attempts 

at communication with defendants. To this day, the defendants

failed to provide any work as agreed in contract.” (Capitalization 

omitted.) In the statement of decision, the court stated that the 

Romeros failed to prove that the defendants “did not ‘produce 

any work’ ”; “defendants did in fact produce work on the project, 

including the two bathroom vanities and the unsatisfactory door 

casings.” (Capitalization omitted.) The Romeros do not dispute 

this finding.

The court proceeded to consider two other grounds for 

breach of contract the Romeros asserted during trial: The work 

the defendants performed was untimely because it was not finished 

this document in the appellate record. Nor did the Romeros include 

in our record the bank statement submitted by the defendants 

showing the $2,500 debit. 
21

within 55 days, and that the work on the vanities and door casings 

was unsatisfactory.

As to timeliness, the court found that the 55-day period for 

completing BCFC’s work had not commenced because the contract 

provided that the period begins when the $9,500 down payment 

is received, and the Romeros never paid more than $6,500. 

Therefore, “no schedule applied under the contract” (capitalization 

omitted), and there was “no factual basis for [the Romeros’] delay 

claim arising therefrom.” Even if the down payment requirement is 

excused, the court explained, the Romeros “did not provide evidence

at trial as to how they calculated the 55-day schedule based upon 

the contract language.” (Capitalization omitted.)

The Romeros do not dispute that they never paid the full 

down payment, but contend that the down payment requirement 

is unlawful and should not be enforced. They rely on Business 

and Professions Code section 7159, which requires that, if a down 

payment is required for a “home improvement” project, the contract

shall state that the down payment “may not exceed $1,000 or 

10 percent of the contract price, whichever is less.” (Bus. & Prof. 

Code, § 7159, subd. (d)(8)(C), capitalization omitted.) Failure 

to include such language in a contract “is cause for discipline” 

(Bus. & Prof. Code, §§ 7159, subd. (a)(5), 7159.5, subd. (a)), and 

a misdemeanor (Bus. & Prof. Code, § 7159.5, subd. (b)).

Even if we assume that the $9,500 down payment 

requirement was illegal and that such illegality excused the 

Romeros from performing the down payment condition to BCFC’s 

obligation to commence work, the commencement of BCFC’s work 

was further conditioned on the project site being in a “safe and 

workable condition[ ] and the cabinets [not being at] risk of being 

damaged by other contractors or foreign persons not from [BCFC].” 

The evidence shows that other contractors were working on the 
22

project site, and that the Romeros were not prepared to have BCFC 

install the vanities and door casings until November. It was not 

until November 4, 2014, that Cesar informed Guzman that work 

by others on “the second floor of the house is completely done and 

[it is] ready for casings, baseboards and moldings, in addition to the

vanity.” Indeed, the Romeros did not make their initial selection 

of the design of their baseboards, casings, and crown molding until 

November 10, less than two weeks before terminating the contract.

Therefore, even if the Romeros had alleged breach of contract based 

on delay, and regardless of whether the down payment condition 

to the commencement of the 55-day period is excused, there is 

no substantial evidence to support a breach of contract based on 

delay in performance.

As for whether BCFC breached the contract based on the

nature and quality of their work, the court found that “the door

casing work was not performed in a workmanlike manner” and

that “the upstairs master vanity was not as specified, both in

lacking a U-drawer and in its length and fitting around the 

pipe end.” (Capitalization omitted.) These defects, however, 

amounted to “a minor curable [breach], not a material breach,”

and the Romeros refused the defendants’ offer to cure the problems. 

To the extent the Romeros were damaged, the court further found, 

they did not prove their breach of contract claim because they failed

to prove the amount of their damages and failed to adequately 

mitigate their damages. In particular, the court found the Romeros’

testimony regarding damages and mitigation efforts “not credible,” 

and noted the “lack of any documentary evidence that [the 

Romeros] made a timely search, or any search whatsoever for a 

substitute contractor, bids being obtained[,] or a contract being 

entered into” after they terminated the BCFC contract in November 

2014. Indeed, “the only document which purported to describe the 
23

work” was a purported estimate from a company unrelated to 

the persons who supposedly did the work.

We need not address the issues concerning the materiality 

of the breaches or the legal significance of the Romeros’ refusal to 

allow BCFC to cure the defective work because the Romeros do not 

challenge or address the court’s finding on the affirmative defense 

that they failed to mitigate their damages. 

“A plaintiff who suffers damage as a result of either a 

breach of contract or a tort has a duty to take reasonable steps 

to mitigate those damages and will not be able to recover for any 

losses which could have been thus avoided.” (Shaffer v. Debbas

(1993) 17 Cal.App.4th 33, 41.) On appeal, the Romeros abandon 

their reliance on the cash receipts from Gutierrez and Lopez as 

proof of damages. Instead, they point to their “mortgage expenses” 

of more than $24,500, “thousands of dollars in hotel stays,” and 

undocumented and unspecified “expenses for having to eat out.” 

Aside from issues as to whether such expenses would be recoverable 

at all for the alleged breaches (see Civ. Code, § 3300),

13 the 

Romeros present no argument challenging the court’s failure-tomitigate finding. They have thus failed to meet their burden on 

appeal of affirmatively establishing reversible error. (Denham v. 

Superior Court (1970) 2 Cal.3d 557, 564; Boeken v. Philip Morris, 

Inc. (2005) 127 Cal.App.4th 1640, 1658.)

The Romeros further contend that in November 2014, after 

Victor was injured and hospitalized, Ida informed the Romeros that 

“she would not do the kitchen cabinets”—a statement Ida denied 

13 “Contract damages are generally limited to those within 

the contemplation of the parties when the contract was entered into 

or at least reasonably foreseeable by them at that time.” (Applied 

Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 

515.)
24

making. In their objections to the court’s proposed statement of 

decision, the Romeros objected on the ground that the court failed 

to make a finding as to whether Ida’s statement constituted an 

anticipatory breach of the contract. The court did not address 

this point in the final statement of decision. The Romeros argue 

that the absence of a finding on this point is reversible error. We 

disagree. 

In a statement of decision, a court must address “ ‘ “principal 

controverted issues at trial as are listed in the request” ’ ” for a 

statement of decision. (Ribakoff v. City of Long Beach (2018) 

27 Cal.App.5th 150, 163.) Here, the Romeros did not allege an 

anticipatory breach in the operative pleading, they did not raise 

the theory in their trial brief, and, so far as our record reveals, 

they did not request a statement of decision or seek a finding on 

the issue prior to the court’s proposed statement of decision. (See 

§ 632 [party “shall specify those controverted issues as to which the

party is requesting a statement of decision”]; Cal. Rules of Court, 

rule 3.1590(d) [“principal controverted issues must be specified in 

the request”].) Even if we deemed their objection to the proposed 

statement of decision as a request for a finding on the issue of 

anticipatory breach, the issue cannot reasonably be considered a 

principal controverted issue at trial as it was not raised beforehand. 

Even if it had been, the Romeros failed to demonstrate that the 

error requires reversal. The only evidence to support the Romeros’ 

assertion that Ida told them that “she would not do the kitchen 

cabinets” was the Romeros’ testimony, which the court found 

lacking in credibility. Ida, whom the court found more credible,

disputed the Romeros’ assertion. It is not reasonably probable, 

therefore, that if the court had made the requested finding, it would 

have found in favor of the Romeros. (See People v. Watson (1956) 46 

Cal.2d 818, 836 [reviewing court will reverse “only when the court, 
25

‘after an examination of the entire cause, including the evidence,’ 

is of the ‘opinion’ that it is reasonably probable that a result more 

favorable to the appealing party would have been reached in the 

absence of the error”].)

D. Negligence

The Romeros contend that the court erred in rejecting their 

negligence cause of action when it found that defendants owed 

no duty to them independent of the obligations arising from the 

contract.

“[C]onduct amounting to a breach of contract becomes tortious 

only when it also violates a duty independent of the contract arising 

from principles of tort law.” (Erlich v. Menezes (1999) 21 Cal.4th 

543, 551.) Thus, “[t]ort damages have been permitted in contract 

cases where a breach of duty directly causes physical injury 

[citation]; for breach of the covenant of good faith and fair dealing 

in insurance contracts [citation]; for wrongful discharge in violation 

of fundamental public policy [citation]; or where the contract was 

fraudulently induced. [Citation.] In each of these cases, the duty 

that gives rise to tort liability is either completely independent of 

the contract or arises from conduct which is both intentional and 

intended to harm.” (Id. at pp. 551–552.) 

Here, the Romeros based their negligence cause of action on 

the same facts upon which they based their contract claim. They 

did not allege that defendants caused any physical injury to them

or other facts that could give rise to an independent tort cause of 

action. 

On appeal, the Romeros contend that the defendants owed

to them “a duty to know the law and [the] principles of contracting 

business.” (Boldface & capitalization omitted.) The defendants, 

for example, had a duty to know “that the $9,500 deposit was 
26

illegal.” Although charging such an “illegal” down payment may

render the contractor subject to discipline and misdemeanor 

liability (Bus. & Prof. Code, § 7159.5, subd. (b)), nothing in the 

applicable statutes supports an independent tort action for the 

statutory violation. 

Even if the statutory limitations on down payments establish

a duty in tort not to impose a down payment requirement of more 

than $1,000, it appears that the only damages proximately caused 

by the breach of that duty would be the amount of the down

payment that exceeds that limit. (See Civ. Code, § 3300 [tort 

damages limited to “the amount which will compensate the party 

aggrieved for all the detriment proximately caused thereby”].) The 

Romeros, however, recovered their entire down payment prior to 

trial. Their negligence claim, if based on this alleged duty, thus 

fails.

E. Negligent Misrepresentation

In their third cause of action for fraud, the Romeros alleged

that the defendants falsely and fraudulently represented to the 

Romeros “that they had a legitimate and lawful carpentry shop 

that was properly registered, insured and protected with the 

[S]tate of California and in good standing with all regulatory 

boards” and that they “had fully qualified and legal workers 

working in their shop located in Ontario[, California].” The same 

alleged misrepresentations are the basis for the Romeros’ seventh 

cause of action for negligent misrepresentation.

In its statement of decision, the court rejected the fraud 

claims based on its findings that Victor, whose contractor’s license 

was in effect during the time the contract was in effect, “had a 

reasonable basis for believing that the business was in fact ‘properly 

registered’ and ‘in good standing with all regulatory boards.’ Such 
27

alleged representation was not proven to have been false at the 

time it was made because it was only later that [Victor’s] license 

was suspended retroactively. The court also finds that [the 

Romeros] have failed to prove that defendants made a specific 

representation that defendants ‘had a legitimate and lawful 

carpentry shop’ or that BCFC was somehow ‘protected with the 

[S]tate of California.’ In any event, those purported statements 

are insufficiently certain and understandable statements of fact 

to support a fraud claim.” (Capitalization omitted.)

Regarding the allegation that the defendants misrepresented 

that they had “fully qualified and legal workers,” the court found 

that the Romeros failed to prove that the representation, if made, 

was false.

In addressing the Romeros’ cause of action for negligent 

misrepresentation, the court referenced its earlier findings on the 

fraud cause of action and further stated that the Romeros failed to 

prove that the alleged representations, if made at all, were false 

when they were made, or that the Romeros “reasonably or actually 

relied upon” the representations.

On appeal, the Romeros do not challenge the court’s finding 

as to representations concerning Victor’s contractor’s license. They 

assert, however, that the defendants “made representations that 

they were fully insured,” and that this representation was not 

true. They point to a statement on a BCFC brochure given to the 

Romeros in 2014 stating that the business is “insured [and] bonded”

(capitalization omitted), and to Victor’s and Guzman’s responses

to interrogatories admitting that they did not have a policy of 

insurance in effect at the relevant time that would cover the 

Romeros’ claims. The Romeros do not, however, point to any 

evidence that they relied on the misrepresentation of insurance; 

they state, without citation to the record, only that, if BCFC had 
28

insurance, they “could have made a claim to [defendants’] insurance 

company.” This is not evidence of reliance. Nor do they point to 

any evidence in the record that the defendants did not have “fully 

qualified and legal workers” available to BCFC at the time they 

entered into the contract. The Romeros have thus failed to show 

that the court erred in finding that they failed to prove their 

negligent misrepresentation claim.

F. Treble Damages and Attorney Fees

The Romeros contend that the court erred in failing to award 

them treble damages under section 1029.8. Under that statute, 

“[a]ny unlicensed person who causes injury or damage to another 

person as a result of providing goods or performing services for 

which a license is required under [the Contractors License Law] 

shall be liable to the injured person for treble the amount of 

damages assessed in a civil action in any court having proper 

jurisdiction.” (§ 1029.8, subd. (a).) Section 1029.8 also permits 

the court, “in its discretion, [to] award all costs and attorney’s fees 

to the injured person if that person prevails in the action.” (Id., 

subd. (a).) For purposes of this statute, an “unlicensed person,” 

does not include a person “providing goods or services under the 

good faith belief that [the person is] properly licensed and acting 

within the proper scope of that licensure.” (Id., subd. (d)(1).)

Initially, we note that, because section 1029.8 is penal in 

nature (see Rony v. Costa (2012) 210 Cal.App.4th 746, 757; G.H.I.I. 

v. MTS, Inc. (1983) 147 Cal.App.3d 256, 277), a plaintiff who seeks 

treble damages must “make a clear demand for the penalty” in the 

operative pleading. (34 Cal.Jur.3d (2023) Forfeitures and Penalties,

§ 36). And where, as here, the statute includes an exception to its

application, “the plaintiff must show that the defendant does not 

come within it.” (Ibid.) The Romeros did not make a demand 
29

for treble damages or refer to section 1029.8 in their operative 

pleading. Nor did they seek a finding on the issue whether Victor 

acted under a good faith belief that he was properly licensed at the 

relevant time.

14

Even if the claims asserted under section 1029.8 were 

properly before the trial court, the court did not err in rejecting 

them. As the court explained, the only damage to the Romeros’

property was the improperly-installed door casings, for which the 

Romeros submitted no evidence of the cost of repair or replacement. 

The Romeros do not challenge this finding on appeal. There was

thus no substantial evidence of an amount to be trebled.

The Romeros argue, however, that they should be entitled 

to recover treble the amount of the $6,500 they paid to Victor, up 

to the statutory maximum of $10,000. The partial down payment, 

they contend, is their “injury.” They offer no authority for the 

proposition that down payments to a contractor can constitute 

“injury or damage to another person as a result of providing goods 

or performing services” or, if such payments could constitute “injury 

or damage” to them, that the payments, which were a prerequisite 

to the commencement of work, were “cause[d]” by the defendants’ 

provision of goods or services. (§ 1029.8, subd. (a).) The text of 

the statute does not suggest the construction urged by the Romeros, 

and we decline to adopt it. The Romeros’ claim for an award of 

discretionary attorney fees under section 1029.8 fails for the same 

reason.

The Romeros further contend that the court should not have 

decided the issue of attorney fees until after they filed a separate, 

14 Although the claims made under section 1029.8 appear 

to be fatally defective for these reasons, neither the trial court nor 

defendants relied on this point.
30

posttrial motion for such fees and the court held a hearing on the 

motion. Nothing in section 1029.8 requires a separately noticed 

motion before deciding whether to award attorney fees, however, 

and the Romeros offer no apposite authority to suggest otherwise. 

G. Order Granting Defendants’ Motion to Tax Costs

The court granted the defendants’ motion to tax costs in its

entirety denying all of the Romeros’ claimed costs. The Romeros 

contend that the court’s ruling is error. We disagree.

Initially, we address an argument the defendants assert. 

In their motion to tax costs, the defendants argued that they, 

not the Romeros, are the prevailing parties—an argument 

they reassert on appeal. The trial court summarily rejected 

the argument because it had previously determined the Romeros 

had prevailed on their disgorgement cause of action “due to their 

partial monetary recovery prior to the trial.” The Romeros argue 

that the defendants cannot challenge the court’s prevailing party 

finding because that finding was part of the judgment, from 

which the defendants did not timely appeal.15 The defendants, 

however, contend that the prevailing party issue was relitigated in 

connection with their motion to tax costs and can be challenged in 

their cross-appeal from the ruling granting their motion. Even if 

the defendants are correct as to the appealability and timeliness of 

their challenge, the court did not abuse its discretion in finding that 

the Romeros were the prevailing parties based on the defendants’ 

pretrial payment to settle the statutory disgorgement cause of 

action. (See Reveles v. Toyota by the Bay (1997) 57 Cal.App.4th 

15 The Romeros filed a motion in this court in case 

No. B316715 to strike portions of the defendants’ respondents’ brief 

that asserted that defendants were the prevailing parties. We deny 

the motion.
31

1139, 1151 [plaintiff who receives payment to settle claim prior to 

trial is prevailing party]; see also DeSaulles v. Community Hospital 

of Monterey Peninsula (2016) 62 Cal.4th 1140, 1158 [plaintiff who 

receives monetary settlement from defendant in exchange for 

dismissal of action is the prevailing party].) 

Turning to the Romeros’ contentions, the court, in exercising 

its discretion to deny the Romeros’ costs, relied on section 1033, 

subdivision (a), which provides that “[c]osts or any portion of 

claimed costs shall be as determined by the court in its discretion 

in a case other than a limited civil case in accordance with 

Section 1034 where the prevailing party recovers a judgment that

could have been rendered in a limited civil case.” The purposes 

of this statute are “to encourage plaintiffs to bring their actions 

as limited civil actions whenever it is reasonably practicable to 

do so” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 988) 

and “ ‘to discourage plaintiffs from “over filing” their cases’ and 

thereby ‘wast[ing] judicial resources’ ” (Carter v. Cohen (2010) 188

Cal.App.4th 1038, 1053).

In exercising its discretion to deny the Romeros’ costs, the

court noted: (1) The Romeros sought costs in an amount that 

substantially exceeded their recovery, which they obtained prior 

to trial; (2) Several of the claimed costs are not recoverable as a 

matter of law, such as more than $7,500 in fees for experts not 

ordered by the court and fees for photocopies of documents other 

than trial exhibits (section 1033.5, subd. (b)(1) & (3)); (3) There are 

“several indicators that the claimed costs are overstated,” citing, 

as examples, the Romeros’ claims for the recovery of “filing fees for 

motions that do not appear to have ever been filed,” and “filing fees 

[for] . . . filings that do not require filings fees”; (4) There is evidence 

that some claimed costs were never incurred; and (5) Approximately 

$4,000 of fees allegedly paid to a court reporter were never paid. 
32

On this last point, the court stated that Cesar’s testimony 

that he paid the court reporter “was unconvincing, inconsistent, 

uncorroborated[,] and lacked credibility.” The court suggested 

a further reason for its exercise of discretion by citing to Karton v. 

Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734, which 

held that, in determining the amount of attorney fees to award 

a prevailing party, a court may consider whether the attorney 

“overlitigated the case.” (Id. at p. 738.)

Here, the Romeros brought their action as an unlimited civil 

case and obtained no monetary recovery in the judgment. Indeed, 

the court found that Victor had overpaid the Romeros by $226. 

Even if the Romeros are deemed to have recovered the $6,500

they received from the defendants prior to trial as a result of their 

litigation, that recovery is far below the $25,000 jurisdictional 

minimum for unlimited civil actions. (See §§ 85, 88.)16 The 

additional reasons the court gave for denying costs, set out above, 

are supported by the record and not meaningfully challenged by 

the Romeros. Indeed, it appears that the memorandum of costs

is a reflection of the “overreaching” that the court attributed to the 

Romeros’ prosecution of the underlying case generally. The court’s 

ruling is not an abuse of discretion.

The Romeros contend that, even if the court had discretion 

as to costs related to the prosecution of their claims, the court 

did not have the discretion authorized under section 1033 with 

respect to their “cross-complaint costs to which [they] were entitled 

as a matter of right.” They appear to argue that costs incurred in 

16 At the time the Romeros commenced the underlying action, 

the jurisdictional limit for limited civil cases was $25,000. (Former 

§ 85.) As of January 1, 2024, the limit is $35,000. (Stats. 2023, 

ch. 861, § 2; Sen. Bill. No. 71 (2023–2024 Reg. Sess.) § 2.) 
33

defending against Victor’s cross-complaint that can be separated 

from those incurred in prosecuting their own claims are recoverable 

because the court granted their mid-litigation motion for summary 

judgment on the cross-complaint. They refer us to cases that 

hold, generally, that a defendant or cross-defendant who prevails 

by virtue of the dismissal of the complaint or cross-complaint 

is a prevailing party entitled to costs. (See, e.g., Brown v.

Desert Christian Center (2011) 193 Cal.App.4th 733, 738; City 

of Long Beach v. Stevedoring Services of America (2007) 157 

Cal.App.4th 672, 679; Crib Retaining Walls, Inc. v. NBS/Lowry, 

Inc. (1996) 47 Cal.App.4th 886, 890; see also § 1032, subd. (a)(4) 

[prevailing party includes “a defendant in whose favor a dismissal 

is entered”].) None of the cited cases, however, involves the 

application of section 1033 or the factual situation presented here: 

The parties who seek to recover costs are both plaintiffs who filed 

an unlimited civil action and recovered less than the jurisdictional

minimum for an unlimited civil action and cross-defendants who 

prevailed on the cross-complaint. 

Even if section 1033 is construed as the Romeros contend, 

their memorandum of costs does not clearly distinguish between 

costs incurred prosecuting their action and costs incurred defending 

against Victor’s cross-action, and their opposition to the motion to 

tax does not raise the argument they assert on appeal. Nor have 

they identified in their opening brief on appeal which costs are 

attributable solely to the defense of the cross-complaint. Neither 

the trial court nor this court is required to scour the memorandum 

of costs and the approximately 1,200 pages of supporting exhibits 

to determine sua sponte which costs were incurred in connection 

with the cross-complaint and which were incurred on the Romeros’ 

action. (Cf. Sharabianlou v. Karp (2010) 181 Cal.App.4th 1133, 

1149; In re Podesto (1976) 15 Cal.3d 921, 928, fn. 4.) Moreover, 
34

in light of the court’s findings as to Cesar’s lack of credibility, 

the Romeros’ misrepresentations as to certain claimed costs, 

and that other costs were “grossly inflated,” “unreasonable,” or 

“unrecoverable,” the court did not err in rejecting the Romeros’ 

claims in their entirety.

H. The Defendants’ Motion for Sanctions

In response to the Romeros’ memorandum of costs, 

the defendants filed a motion for sanctions under section 128.7, 

contending that the “costs claimed by [the Romeros] . . . are 

fraudulent and dishonest, unnecessary and unreasonable, and 

made in bad faith with a view to harass defendants and needlessly 

increase the costs of litigation.” The defendants sought a monetary 

sanction of $41,487.20.

The court denied the motion on the ground that the 

defendants failed to address whether the Romeros “fraudulently

claimed” the costs they sought to recover.

“ ‘We review a section 128.7 sanctions award under the abuse 

of discretion standard. [Citation.] We presume the trial court’s 

order is correct and do not substitute our judgment for that of the 

trial court.’ ” (Kumar v. Ramsey (2021) 71 Cal.App.5th 1110, 1121

(Kumar).)

Section 128.7 “should be utilized only in ‘the rare and 

exceptional case where the action is clearly frivolous, legally 

unreasonable or without legal foundation, or brought for an 

improper purpose.’ [Citation.] ‘Because our adversary system 

requires that attorneys and litigants be provided substantial 

breathing room to develop and assert factual and legal arguments, 

[section 128.7] sanctions should not be routinely or easily awarded

even for a claim that is arguably frivolous’ [citation], and instead 
35

‘should be “made with restraint.” ’ ” (Kumar, supra, 71 Cal.App.5th

at p. 1121.)

As discussed above, the Romeros’ memorandum of costs 

seeks the recovery of some expenses not allowable under the law 

and lacks evidentiary support for others. Nevertheless, based on 

our review of the record, we conclude that the court did not abuse 

its discretion in determining that these and other defects in the 

memorandum of costs did not warrant the imposition of sanctions. 

We therefore affirm the order denying the defendants’ motion.
36

DISPOSITION

The judgment, the order granting the respondents’ motion 

to tax costs, and the order denying the respondents’ motion for 

sanctions are affirmed.

The respondents are awarded their costs on appeal in case 

No. B316715. The parties shall bear their own costs on appeal in 

case No. B320296.

NOT TO BE PUBLISHED.

ROTHSCHILD, P. J.

We concur:

BENDIX, J.

WEINGART, J.